While the implementation of the Oncology Care Model (OCM) led to notable savings in cancer care, the program failed in a couple of ways.

Over six years, the alternative oncology payment model tested by the Centers for Medicare & Medicaid Services (CMS) showed a net loss of more than $600 million and no significant improvements in quality of care, according to a report recently published in JAMA Network Open.

Despite the net loss, the study showed evidence that “spending reductions grew over time for practices participating in OCM,” first author Gabriel A. Brooks, MD, of the Department of Medicine, Geisel School of Medicine, and Dartmouth Cancer Center in Lebanon, New Hampshire, told Medscape Medical News. 

Ultimately, “value-based care delivery transformation takes time to implement, but over time, real savings can start to accrue, especially for common cancer types where it is easier to define the approach for high-quality, high-value care,” he said. 

The OCM, representing the first cancer-focused alternative payment model to be developed by the CMS, was implemented between 2016 and 2022 with the goals of improving patient care for patients receiving chemotherapy while lowering the cost of care.

Under the voluntary program, oncology physician practices were able to bill Medicare for Monthly Enhanced Oncology Services (MEOS) payments of $160 for each patient receiving chemotherapy during an active 6-month episode of care involving a qualifying anticancer therapy in the outpatient setting.

The payments were provided to help facilitate the variety of care coordination conditions that were required under the program, such as having a physician with access to patients’ medical records available 24 hours a day, 7 days per week, and following medical society clinical guidelines.

The participating practices could further earn performance-based payments with reductions in spending, conditional upon achieving quality-of-care benchmarks.

For the current, final report, assessing the program’s effects on Medicare spending, utilization, and quality of care, Brooks and colleagues evaluated the data on 739,735 Medicare beneficiaries, with a mean age of 73.2, and 59.2% female, who underwent chemotherapy at 202 OCM practices. Those patients were compared with 830,165 beneficiaries treated at 534 (non-OCM) comparison practices.

Comparisons were assessed based on the 6-month chemotherapy episodes measured in the program, with the observation periods grouped at baseline, including those initiated between January 2014 and January 2016, and throughout the intervention, from July 2016 to June 2022.

The results showed that spending in the OCM group over the course of the study was $616 less per episode than in the non-OCM group.

Specifically, payments increased from $29,206 per episode in the baseline period to $36,190 per episode in the intervention period in the OCM group, compared with $28,788 to $36,388 per episode for the comparison episodes. This represented increases of $6,984 and $7,600, respectively.

Notably, there were greater reductions in total episode payments over time as practices became more efficient. Estimated cost savings of more than $1,000 per episode compared with the non-OCM group were seen for three of the model’s last four six-month performance periods.

By the final six-month performance period, an even greater reduction in spending of $1,282 per episode was seen in the OCM group, compared with the other group.

However, after factoring in the MEOS, performance-based incentive and other payments, the OCM program resulted in an estimated net loss to Medicare of $639 million over its 6 years of implementation, through the end of 2022.

Meanwhile, no significant changes, either positive or negative, were observed in the OCM group in terms of outcomes of hospitalizations, emergency department visits, or quality.

“Despite pay-for-performance quality measures targeting prevention of emergency department visits and timely hospice referral, the OCM was not associated with measurably better outcomes for either of these domains or for other measures of quality,” the authors report.

Of note, there was also no evidence that the OCM incentives to curb spending resulted in any of the adverse changes that might have been a concern, such as delays in or withholding of recommended care, the authors add.

Savings Attributed to Few Practices, Later Years of the Model

Importantly, the majority of the savings in the program were attributable to the 24 participating practices that had elected to continue in the OCM after CMS began requiring “two-sided risk” of practices that had not earned performance-based payments, according to findings in a previous evaluation.

The two-sided risk rule specifically required practices to pay back the difference to Medicare if their actual expenditures for cancer episodes exceed the target price. 

As many as 80 of the 202 practices overall dropped out of OCM before its completion, including many when the two-sided risk requirement took effect in January 2020.

“The concept of two-sided risk is new to most practices, and the prospect of owing large repayments to CMS was very worrisome to many practices, as they weren’t confident that the cost of care was necessarily something that they had adequate control over,” Brooks said.

Meanwhile, the substantial increase in savings in the later years of the program among the practices that did choose to remain “suggests that the participating practices got better at finding ways to reduce low-value care and cut spending while maintaining quality of care,” Brooks explained.

“The increasing per-episode spending reductions were especially evident among patients with common cancer types, including breast cancer, lung cancer, colorectal cancer, and lymphoma,” he said.

Many Prefer Conditions That Apply to All Payers

A key sentiment expressed among the many practices that did not complete the full study period was an uneasiness with having to work within the conditions and restrictions that pertained specifically to OCM and Medicare, Brooks noted.

Specifically, “most practices that participated in OCM were clear that they did not want to design their care delivery processes around specific payer policies,” he said.

“They wanted to have an overarching approach to the delivery of high-value care that they could use consistently for all of their patients, regardless of the payer, such as Medicare or commercial insurance.”

Follow-Up EOM Model: Enrollment Underwhelming

As a follow-up of the OCM, the CMS launched the subsequent voluntary Enhancing Oncology Model (EOM) in July 2023, focusing on a narrower range of common, high-cost cancer types that were shown in the OCM to have high-cost episodes and the highest potential for savings.

This time, the monthly payments were smaller and the two-sided risk arrangement, requiring practices to pay back spending beyond targets, was mandatory. 

Only 41 practices had enrolled as of May 2024, and while monthly payments were subsequently increased and the model was extended, only 28 practices were reportedly enrolled as of March 2026, according to the CMS.

Commenting on the findings, Ravi B. Parikh, MD, of the Emory University School of Medicine in Atlanta, Georgia, noted that the concerns raised by the OCM oncology practices regarding the Medicare-specific conditions speak of the interest in a more “holistic” solution to reducing spending.

“There’s a bit of cognitive dissonance towards trying to treat your Medicare patients differently than you treat all of your patients,” he told Medscape Medical News.

“Once models can be designed in collaboration with high-penetration commercial payers to create an all-payer model, as opposed to one that only targets Medicare patients, then you're going to start to see these models have more holistic success,” he said.

Net Loss Masks Key Successes That Should Serve as Lessons

However, as argued in an editorial published along with the current report, Parikh and colleagues underscore that the OCM’s take-home message should not be defined by the striking net loss that was incurred, but the important lessons that were learned.

“The general finding of the net loss masks a lot of really cognizant successes of the OCM that should be considered in future alternative payment models but were not in the designing of the current EOM,” he said, noting the “very good cost savings observed that accelerated over the course of the of the evaluation” for the practices that stayed until the end. 

Furthermore, as detailed in a 2025 evaluation of the OCM that Parikh co-authored, many of the successful practices had transformations in practice policies that were not necessarily restricted to their Medicare patients, with a spillover effect that improved care on a broader level.

“In fact, we saw a spillover effect with practices making positive investments for all of their patients, including non-Medicare patients,” Parikh said.

Specifically, “clinical pathways, patient navigation, triage protocols, and palliative care integration were sometimes implemented practice-wide, and OCM-associated spending reductions among commercially insured and Medicare Advantage members were large compared with traditional Medicare beneficiaries,” Parikh and his colleagues point out in the study. 

“These spillover effects represent value that the CMS’s net-loss ledger does not capture,” they add.

Furthermore, a key factor that was out of clinicians’ control in the OCM, and that could not be overcome by practice strategies, was the often skyrocketing cost of chemotherapy drugs, Parikh added.

“A practice could have been doing a great job in measures such as keeping their patients out of the hospital, but nevertheless still be facing these exponentially rising costs that may not be fully accounted for by the comparison model that was used in the evaluation,” he noted.

Ultimately, Parikh and colleagues assert that “the OCM’s legacy is not failure so much as it was an incomplete experiment whose most promising signals were interpreted prematurely and applied to a successor model now struggling to gain traction.”

In the long run, “value-based oncology care is possible,” they add. “The question is whether policymakers will allow it the time and resources to succeed.”

The study authors were contracted by the Centers for Medicare & Medicaid Services to evaluate the OCM. Brooks and Parikh had no disclosures that were not outside of the submitted work.