Medicare’s Oncology Care Model Demonstrated Modest Payment Reductions for Patients Receiving Chemotherapy

Key Takeaways

• Medicare’s Oncology Care Model (OCM) was developed in order to reduce care costs and improve care quality for patients receiving chemotherapy.
• From 2016 to 2022, the OCM reduced total 6-month episode payments by $616, but program and performance-based payments offset this reduction and led to net losses for Medicare.
• The OCM had no significant impact on health care utilization or quality of care.

The Centers for Medicare & Medicaid Services (CMS) ran the OCM, an alternative payment model for patients receiving chemotherapy, from 2016 to 2022. The program was designed to reduce Medicare costs and improve care quality.

Study Methods and Outcomes

Researchers evaluated the impact of OCM on Medicare spending, utilization, and quality of care. The study included patients undergoing 6-month chemotherapy episodes who were treated at OCM or propensity-matched comparison practices.

The study’s outcomes were total episode payments and episode payments for Medicare Parts A, B, and D along with hospitalizations, emergency department (ED) visits, and measures of quality.

The patient population included 739 735 fee-for-service Medicare beneficiaries across 202 OCM settings and 830 165 beneficiaries across 534 comparison practices.

The Impact of OCM on Medicare Spending and Utilization

Episode payments increased from $29 206 to $36 190 for OCM practices and from $28 788 to $36 388 for comparison practices.

The OCM was associated with a $616 reduction in total episode payments. Meaningful reductions in spending occurred in Medicare Part A and B, but not Part D.

The OCM did not have any significant effect on hospitalizations, ED visits, or care quality.

Overall, the OCM yielded a net loss of $639 million for Medicare. This net loss is due to service payments and performance-based incentives.

Implications for Oncology Care

The authors said, “Reductions in Medicare payments associated with the OCM increased over time but were insufficient to fully offset model incentive payments over the course of the model.”

While the OCM resulted in modest payment reductions, it had no effect on health care utilization. Furthermore, it failed to reduce total episode spending and was associated with significant losses for Medicare.

Reference

Brooks GA, Trombley M, McClellan S, et al. The oncology care model and Medicare payments, utilization, and quality. JAMA. 2026;335(15):1332-1340. doi:10.1001/jama.2026.2075