Oncology Care Model Tied to Reduced Chemotherapy, Lower Medicare Spending in Poor-Prognosis Cancers

The CMS Oncology Care Model (OCM) was associated with reduced chemotherapy initiation and lower Medicare spending among patients with poor-prognosis cancers, according to a study published today in JAMA Internal Medicine.¹

Unaddressed Incentives in Episode-Based Payment Models

Payers have been experimenting with alternative payment models (APMs) that financially reward clinicians and provider organizations for delivering high-quality, cost-effective care. Episode-based payment models are one type of APM that sets spending targets for a defined episode of care tied to a specific procedure or diagnosis.

One example is the CMS OCM. Launched in July 2016, the OCM was an episode-based payment model for patients with cancer receiving systemic therapies, including targeted therapy, immunotherapy, cytotoxic chemotherapy, and hormonal therapy. Episodes were triggered by the initiation of systemic therapy and lasted for 6 months.

The 202 practices that voluntarily participated received care coordination payments of $160 per patient per month and were required to provide enhanced services. Practices meeting quality benchmarks were eligible to share in savings if total Medicare spending during the 6-month episode fell below a historically based, trend-adjusted target. Before 2019, all practices operated under 1-sided risk arrangements, meaning they could earn shared savings but faced no penalty for exceeding spending targets.

OCM was associated with modest, gradually increasing reductions in total episode spending compared with nonparticipating practices. Savings were estimated at $297 per episode after 3 years, $499 through 2021, and $616 through the full model period, which ended in 2022. Quality measures, however, showed no significant change.

The researchers highlighted a key concern about episode payment models triggered by the use of a specific service: the financial incentives may prompt an increase in the number of episodes, particularly lower-cost ones, especially under one-sided risk arrangements that also provide additional care coordination revenue.² Conversely, episode-based payment may discourage initiation for patients whose costs are expected to exceed the spending target, especially among models with 2-sided risk.

To examine this, researchers assessed whether OCM changed the likelihood of initiating systemic cancer therapy.¹ The quasi-experimental study used matched difference-in-differences analysis of serial cross-sections of Medicare beneficiaries with an index visit for cancer between 2010 and 2019, treated at either OCM or matched practices. They followed patients for 1 year, comparing changes in outcomes before vs after OCM began in July 2016. Data were analyzed from October 2021 to November 2025.

The primary outcome examined systemic therapy initiation in the year following an index visit for newly diagnosed or poor-prognosis cancer. Meanwhile, a secondary outcome measured total Medicare payments over the same period.

“Understanding how episode payment models may influence the number of episodes initiated provides important context beyond evaluations that examine spending and care once episodes are initiated,” the authors wrote.

OCM Impact on Systemic Therapy Initiation, Costs

They studied 754,182 patient episodes, with 750,483 patients in the incident population and 517,858 in the poor prognosis cohort treated at 197 intervention and 197 control practices. Incident population episodes had a mean (SD) age of 74.1 (9.0) years, and 62% (n = 467,071) were female. In the poor prognosis population, patients had a mean age of 72.4 (9.7) years, and the majority (52.2%; n = 270,416) were female.

The proportion of patients initiating systemic anticancer therapy increased slightly over time for patients with both incident and poor-prognosis cancers. The researchers highlighted that this modest increase was greater for patients in control practices than in OCM practices after the initiation of OCM in 2016.

They found a non-statistically significant differential decrease in the likelihood of systemic therapy initiation among patients with incident cancers in adjusted analyses examining the association of OCM with initiation of systemic therapy within 1 year of the index date (−0.9 percentage points; 95% CI, −2.2 to 0.3; P = .14). Meanwhile, there was a statistically significant differential decrease among those with poor-prognosis cancers (−1.5 percentage points; 95% CI, −2.8 to −0.2; P = .03).

Average spending in the year after the index date increased over time, particularly in later years, coinciding with the expanded use of high-cost therapies such as immune checkpoint inhibitors. When examining the association of OCM and total spending in the year after the index date, the researchers found a non-statistically significant relative decrease in total payments for OCM vs patients with incident cancers, regardless of systemic therapy initiation (−$898.23; 95% CI, −$1890.31 to $93.80; P = .08). For patients with poor-prognosis cancers, OCM was associated with a statistically significant relative decline in total Medicare spending in the year following the index date (−$2192.15; 95% CI, −$3550.66 to −$833.63; P = .002).

What These Findings Mean for Future Episode-Based Payment Models

The researchers acknowledged several limitations, one being that they only studied patients enrolled in fee-for-service Medicare. Therefore, their findings may not be generalizable to APMs for commercial or Medicare Advantage plans. Still, they expressed confidence in their results.

“These findings provide additional evidence that episode payment models have promise for controlling spending for patients requiring high-cost specialty care over a defined episode and suggest that by focusing only on patients who initiated chemotherapy and not considering potential changes to the decision to initiate chemotherapy, the OCM evaluation may have underestimated savings associated with the model,” the authors concluded.

References

1. Keating NL, Lam MB, Landrum MB, et al. The Oncology Care Model and initiation of systemic therapy for cancer. JAMA Intern Med. Published online April 27, 2026. doi:10.1001/jamainternmed.2026.1085
2. Weeks WB, Rauh SS, Wadsworth EB, Weinstein JN. The unintended consequences of bundled payments. Ann Intern Med. 2013;158(1):62-64. doi:10.7326/0003-4819-158-1-201301010-00012