The Oncology Care Model (OCM) was a Medicare payment program that changed how oncology practices got paid for cancer treatment. Run by the Centers for Medicare and Medicaid Services (CMS) from July 2016 through June 2022, it organized cancer care into six-month episodes triggered by chemotherapy and rewarded practices for keeping costs down while meeting quality standards. The program covered nearly all cancer types and involved both Medicare and commercial insurance plans.
How the Payment Model Worked
Traditional Medicare pays oncology practices for each individual service: every office visit, every lab test, every infusion. OCM layered a different structure on top of that. Care was organized into six-month episodes that began the day a patient received their first chemotherapy drug, whether administered in the office (covered under Medicare Part B) or filled at a pharmacy (covered under Part D). If a patient was still receiving chemotherapy after six months, a new episode automatically started.
Practices received two new streams of income under the model. First, a Monthly Enhanced Oncology Services (MEOS) payment of $160 per patient per month, meant to fund better care coordination, patient navigation, and around-the-clock clinician access. Second, a performance-based payment at the end of each episode. CMS compared what Medicare actually spent on a patient’s care during the six months against a risk-adjusted target. If spending came in below the target, the practice kept a share of the savings. The size of that share depended on quality scores.
Practices could choose between one-sided risk, where they could earn bonuses but never owed money back, or two-sided risk, where they could also lose money if spending exceeded targets. Two-sided risk came with a lower required discount (2.5% to 2.75% below the benchmark instead of 4%), making it easier to earn savings, but practices faced potential repayment to CMS if costs ran too high.
What Practices Had to Change
Joining OCM wasn’t just a billing arrangement. Practices committed to specific care redesign requirements that changed how they operated day to day.
- 24/7 clinician access: Patients could reach a clinician at any hour who had real-time access to their medical records, not just an answering service.
- Patient navigation: Each patient received help coordinating appointments, managing side effects, understanding their treatment plan, and connecting with support services.
- Comprehensive care plans: Every patient needed a documented care plan containing 13 components outlined by the Institute of Medicine, covering everything from diagnosis and treatment goals to psychosocial support.
- Guideline-based treatment: Therapies had to align with nationally recognized clinical guidelines.
- Electronic health records: Practices were required to use certified EHR technology meeting federal standards.
- Data reporting for quality improvement: Practices reported clinical and quality data to CMS and received feedback reports to guide ongoing improvements in patient care.
How Quality Was Measured
Performance-based payments weren’t automatic. CMS calculated an Aggregate Quality Score for each practice based on up to 14 measures spanning four areas: communication and care coordination, patient and caregiver experience, clinical quality, and patient safety. The data came from three sources: Medicare claims, a practice-reported data registry, and patient experience surveys.
That quality score determined a multiplier applied to any savings the practice generated. A practice with strong quality scores could keep 100% of their savings below the target. A practice with poor scores might keep only 50%, or nothing at all. This was the core incentive design: cost reduction alone wasn’t enough. You had to deliver measurable quality alongside it.
The Multi-Payer Structure
OCM was designed as a multi-payer model, not just a Medicare program. Commercial insurers and state Medicaid agencies could sign memorandums of understanding with CMS to participate alongside Medicare. The care transformation requirements stayed consistent across all payers, though quality measures for performance payments could differ. CMS prioritized selecting practices that proposed working with Medicare and at least one additional payer, reinforcing the idea that better oncology care shouldn’t depend on which insurance card a patient carries.
What the Results Showed
The final CMS evaluation, released in 2024, delivered a mixed verdict. OCM did produce modest reductions in per-episode spending compared to similar practices outside the model. But those savings were smaller than the MEOS payments and performance bonuses CMS paid out. Across the full six years, OCM resulted in cumulative net losses for Medicare of $639 million.
The clinical results were similarly modest. Despite emphasizing reductions in unnecessary hospital visits, the model did not reduce the overall likelihood of emergency department visits, inpatient hospital stays, readmissions, or ICU admissions. There was one small bright spot: ED visits that led to an inpatient admission dropped by about 1.8% relative to baseline. And for some patients, chemotherapy-related ED visits that didn’t require hospitalization declined slightly, roughly two fewer visits per 1,000 patient episodes. But hospitalizations related to chemotherapy side effects were unchanged.
The Successor: Enhancing Oncology Model
CMS replaced OCM with the Enhancing Oncology Model (EOM), which launched after OCM ended in 2022. EOM kept the six-month episode structure but made several significant changes based on what OCM revealed.
First, EOM narrowed its focus to a smaller set of higher-risk cancer types rather than covering nearly all cancers. Second, all participating practices must accept two-sided financial risk from the start, meaning they can owe money back to CMS if costs exceed targets. OCM had allowed practices to stay in one-sided risk indefinitely, which contributed to the net losses. Third, EOM added new care requirements: practices must collect electronic patient-reported outcomes so patients can flag symptoms between visits, and they must screen patients for health-related social needs like food insecurity, housing instability, and transportation barriers.
The MEOS payments also evolved under EOM. As of 2025, the base monthly payment is $110 per patient, rising to $140 for patients who are dually eligible for both Medicare and Medicaid, reflecting the higher care coordination needs of that population.