Design Challenges of an Episode-Based Payment Model in Oncology: The Centers for Medicare & Medicaid Services Oncology Care Model
Open accessAbstract
The Centers for Medicare & Medicaid Services developed the Oncology Care Model as an episode-based payment model to encourage participating practitioners to provide higher-quality, better-coordinated care at a lower cost to the nearly three-quarter million fee-for-service Medicare beneficiaries with cancer who receive chemotherapy each year. Episode payment models can be complex. They combine into a single benchmark price all payments for services during an episode of illness, many of which may be delivered at different times by different providers in different locations. Policy and technical decisions include the definition of the episode, including its initiation, duration, and included services; the identification of beneficiaries included in the model; and beneficiary attribution to practitioners with overall responsibility for managing their care. In addition, the calculation and risk adjustment of benchmark episode prices for the bundle of services must reflect geographic cost variations and diverse patient populations, including varying disease subtypes, medical comorbidities, changes in standards of care over time, the adoption of expensive new drugs (especially in oncology), as well as diverse practice patterns. Other steps include timely monitoring and intervention as needed to avoid shifting the attribution of beneficiaries on the basis of their expected episode expenditures as well as to ensure the provision of necessary medical services and the development of a meaningful link to quality measurement and improvement through the episode-based payment methodology. The complex and diverse nature of oncology business relationships and the specific rules and requirements of Medicare payment systems for different types of providers intensify these issues. The Centers for Medicare & Medicaid Services believes that by sharing its approach to addressing these decisions and challenges, it may facilitate greater understanding of the model within the oncology community and provide insight to others considering the development of episode-based payment models in the commercial or government sectors.
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To develop the $160 monthly case management payment ($960 per 6-month episode), the analysts used the US Bureau of Labor Statistics wage estimates to model the costs for the additional staff and spread the costs across the average number of episodes per practice.
“To develop the $160 monthly case management payment ($960 per 6-month episode), the analysts used the US Bureau of Labor Statistics wage estimates to model the costs for the additional staff and spread the costs across the average number of episodes per practice [48].”
From Translating economic evaluations into financing strategies for implementing evidence-based practices (2021) · cites this paper as [48]
The simulation revealed challenges of creating statistically reliable benchmarks for determining performance incentives.
“the simulation revealed challenges of creating statistically reliable benchmarks for determining performance incentives”
From Translating economic evaluations into financing strategies for implementing evidence-based practices (2021) · cites this paper as [48]
The budget impact simulation found that Medicare could break-even on case management payments if practices reduced other service utilization costs by roughly 4%, which was deemed feasible.
“The budget impact simulation found that Medicare could break-even on case management payments if practices reduced other service utilization costs by roughly 4%, which was deemed feasible [48].”
From Translating economic evaluations into financing strategies for implementing evidence-based practices (2021) · cites this paper as [48]
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- Authors
- Kline, R. M., Muldoon, L. D., Schumacher, H. K., Strawbridge, L. M., York, A. W., Mortimer, L. K., Falb, A. F., Cox, K. J., Bazell, C., Lukens, E. W., Kapp, M. C., Rajkumar, R., Bassano, A., & Conway, P. H.
- Affiliations
- Centers for Medicare and Medicaid Services (US)
- Venue
- Journal of Oncology Practice
- Published
- 2017-07
- Volume
- 13
- Issue
- 7
- Pages
- e632-e645
- ISSN
- 1554-7477 (ISSN-L)
- 1935-469X
- PMC
- PMC5508445
- OpenAlex
- W2619825499
- Cited by
- 61
- References
- 9
- Citations by year
- 2026: 4 · 2025: 1 · 2024: 2 · 2023: 1 · 2022: 6 · 2021: 15 · 2020: 9 · 2019: 15 · 2018: 8
- FWCI
- 15.75
- Type
- journal article
- Language
- en
- Open access
- green
- www.ncbi.nlm.nih.gov
- Locations
- Journal of Oncology Practice (publishedVersion)
- Europe PMC (PubMed Central) (publishedVersion)
- PubMed Central (publishedVersion)
- PubMed (publishedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Healthcare Policy and Management
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Financial Impacts of Cancer
- Health Sciences › Health Professions › Health Information Management › Healthcare Quality and Management
- Keywords
- Oncology Care Model, bundled payment, Medicare, chemotherapy, risk adjustment, care coordination, quality measurement, cost variation
- MeSH terms
- Humans, Medical Oncology, Neoplasms, United States, Centers for Medicare and Medicaid Services, U.S., Fee-for-Service Plans, Models, Economic
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