The Oncology Care Model (OCM) was a large-scale demonstration project developed by the Centers for Medicare & Medicaid Services (CMS) to transform how cancer care is delivered and paid for in the United States. Initiated by the Center for Medicare and Medicaid Innovation (CMMI), the model’s fundamental goal was to move away from the traditional fee-for-service system, which pays for volume, toward a value-based payment approach. This shift aimed to incentivize oncology practices to provide higher quality, more coordinated care while managing the total cost of care for Medicare beneficiaries receiving chemotherapy. The model incorporated financial and performance accountability for episodes of care, encouraging a focus on the patient’s entire treatment journey rather than just individual services.
Defining the Episode of Care
The foundational structural unit of the Oncology Care Model was the “episode of care,” which served as the period of financial and clinical accountability for the participating oncology practice. An episode was officially triggered by the administration of chemotherapy for a specified cancer diagnosis in a Medicare beneficiary. This initial chemotherapy claim acted as the starting point for the defined period of care management and cost tracking.
The standard duration established for a single episode of care was a fixed six-month period. This duration was set to capture the most intense and costly phase of treatment following a new cancer diagnosis or recurrence. The OCM required practices to manage the overall costs and quality of all related services provided to the patient throughout this six-month window, not simply the costs incurred during office visits.
All related medical services a patient received during this period, including hospitalizations, emergency room visits, and services from other specialists, were bundled and tracked against a target price. If a patient required further chemotherapy treatment after the initial six months, a new, renewable episode of care would be initiated. The episode concept focused the practice’s attention on comprehensive, longitudinal management rather than fragmented, service-by-service billing.
Required Practice Enhancements
To participate in the OCM, oncology practices were required to implement specific operational changes, known as “Enhanced Services,” designed to improve patient support and care coordination. These services were mandatory requirements for participation:
- Providing patients with 24-hour, 7-day-a-week access to an appropriate clinician who had real-time access to the patient’s electronic medical records. This requirement aimed to reduce avoidable emergency department visits and hospital admissions by managing patient symptoms proactively, even outside of normal business hours.
- Practices were mandated to use certified electronic health record (EHR) technology and continually use patient data for quality improvement initiatives. The model specified that all care delivered must be consistent with nationally recognized clinical treatment guidelines.
- A comprehensive care management plan for each patient was required, documenting the patient’s treatment plan, pain management strategies, and psychosocial needs. This documentation was often aligned with the 13 components outlined in the Institute of Medicine’s (IOM) care planning recommendations.
- Patient navigation services were required to help patients and their families navigate the often-complex healthcare system. These services included assistance with scheduling appointments, coordinating with other providers, and addressing potential barriers to care.
How the Model Pays for Quality
The Oncology Care Model introduced a two-part payment structure intended to incentivize both the provision of enhanced services and the efficient management of total episode costs. The first component was the Monthly Enhanced Oncology Services (MEOS) payment. This provided practices with a fixed per-patient, per-month fee, initially set at $160, paid for the duration of the six-month episode to support the infrastructure and personnel needed to deliver the required Enhanced Services.
The second financial mechanism was the Performance-Based Payment (PBP), which introduced the risk and reward element. Each practice was assigned a risk-adjusted target price for the total cost of care for each episode, based on their historical spending and the complexity of their patient population. If a practice delivered care with total Medicare spending below this target price while meeting specific quality metrics, they became eligible to receive a portion of the savings, known as shared savings.
Conversely, if a practice’s total episode costs exceeded the target price, they could be required to repay the difference to Medicare, depending on the specific track chosen. Practices could select between a one-sided risk arrangement, where they only shared in savings, or a two-sided risk arrangement, where they were eligible for greater shared savings but also faced downside risk. This PBP structure created a direct financial incentive for practices to improve care coordination, reduce waste, and avoid unnecessary services.
The Model’s Conclusion and Successors
The Oncology Care Model was designed as a time-limited demonstration project and concluded with episodes ending by June 30, 2022, after several extensions. The model fostered significant transformation in participating oncology practices, leading to greater adoption of care coordination and patient support services. The lessons learned from the OCM were leveraged by the CMS Innovation Center to design its successor.
The Enhancing Oncology Model (EOM) launched in July 2023, building upon the foundational episode-based payment structure of the OCM. The EOM maintains the six-month episode and the two-part payment system, but focuses more on managing risk and promoting health equity. The MEOS payment amount in EOM was reduced, and the model more aggressively requires participating practices to take on downside financial risk. Furthermore, the EOM introduced new requirements, such as systematically screening for health-related social needs and collecting electronic patient-reported outcomes, underscoring a commitment to addressing health disparities.