Examining Trends in Outpatient Cancer Costs in Medicare During Last 6 Months of Life

Drug costs, particularly for immunotherapies, contributed to the rising cost of care during the last 6 months of life for a fee-for-service Medicare beneficiary, according to a recent study.

Medicare Part B payments to providers caring for individuals with cancer during the last 6 months of life have been relatively stable while costs for drugs soared, according to a recently published report.

The retrospective cohort study examined trends in medical services and supplies for Medicare fee-for-service beneficiaries over the last 6 months of life from 2015 through 2019, in an effort to see if there are ways to optimize value-based care for this population.

Outpatient cancer care makes up 60% to 70% of health care costs over the last 6 months of life, which is when one becomes eligibile for hospice benefits under Medicare.

“Recent approvals for expensive biologics and growing support for lower-cost hypofractionated radiotherapy in the palliative management of advanced cancer have introduced offsetting spending effects on end-of-life care that may shift overall expenditures for this patient cohort,” the authors noted.

Using CMS data, 84,744 Medicare beneficiaries with a cancer diagnosis were identified as having died between January 1, 2016, and December 31, 2019, and Medicare Standard Analytic Files were abstracted for their paid claims during their last 6 months of life.

Payments to providers were totaled by service/supply category; comparisons of service and supply utilization and costs between patient groups were analyzed using Pearson's χ2 test.

Cancer claims were categorized by the type of disease beneficiaries had, either disseminated/aggressive or localized/indolent. The aggressive category included claims with a diagnosis code indicating secondary or metastatic disease; aggressive lymphoma; multiple myeloma not in remission; and leukemia not in remission.

Of the nearly 85,000 beneficiaries with cancer, 50,319 (59.4%) were diagnosed with a disseminated or aggressive cancer, and 34,425 (40.6%) were diagnosed with localized or indolent disease.

Results showed that during the last 6 months of life:

  • The average total Medicare Part B payments per treated beneficiary rose by 12.0% between 2016 to 2019, from $14,487 to $16,227.
  • The medical oncology category saw the greatest absolute cost increase, increasing 34.2% from $7030 to $9436.
  • Within this category, drug utilization shifted toward more costly immunotherapy agents, accounting for 84% of the increase in total Part B payments for all categories during the period, although they were administered to fewer than 20% of patients.
  • Utilization of immunotherapies rose from 11.8% to 17.1% of beneficiaries while Medicare payments per treated beneficiary increased nearly 30%, by $4193.
  • There was an average payment decline of 2.4% for radiation oncology, although it maintained a nearly constant 15% utilization rate.

Except for immunotherapy and oncology drug costs overall, costs related to end-of-life care for nearly all cost categories remained stable, the authors said.

The study noted several initiatives that have tried to tackle these costs, from the Oncology Care Model (now called the Enhancing Oncology Model), to accountable care organizations. CMS is creating a process to implement negotiations with drug manufacturers under the Inflation Reduction Act for some of the highest-priced drugs. And biosimilars may represent yet another path to lowering the costs of care while ensuring quality.

However, another avenue that deserves more focus is the communication that should take place between the provider and the patient with terminal illness, keeping patient wishes and treatment goals in mind, the authors said.

“Early discussions of therapeutic benefits and risks with terminal patients may enable mutual development of treatment goals and avoid expensive, burdensome medical interventions as end-of-life approaches,” the authors wrote.


Mantz CA, Yashar CM, Bajaj GM, Sandler HM. Recent trends in Medicare payments for outpatient cancer care at the end of life. Int J Radiat Oncol Biol Phys. Published online January 17, 2023. doi:10.1016/j.ijrobp.2023.01.005

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