Centers for Medicare and Medicaid Services: Using an Episode-Based Payment Model to Improve Oncology Care

Purpose: Cancer is a medically complex and expensive disease with costs projected to rise further as new treatment options increase and the United States population ages. Studies showing significant regional variation in oncology quality and costs and model tests demonstrating cost savings without adverse outcomes suggest there are opportunities to create a system of oncology care in the US that delivers higher quality care at lower cost. Design: The Centers for Medicare and Medicaid Services (CMS) have designed an episode-based payment model centered around 6 month periods of chemotherapy treatment. Monthly per-patient care management payments will be made to practices to support practice transformation, including additional patient services and specific infrastructure enhancements. Quarterly reporting of quality metrics will drive continuous quality improvement and the adoption of best practices among participants. Practices achieving cost savings will also be eligible for performance-based payments. Savings are expected through improved care coordination and appropriately aligned payment incentives, resulting in decreased avoidable emergency department visits and hospitalizations and more efficient and evidence-based use of imaging, laboratory tests, and therapeutic agents, as well as improved end of life care. Conclusion: New therapies and better supportive care have significantly improved cancer survival in recent decades. This has come at a high cost, with cancer therapy consuming $124 billion in 2010. CMS has designed an episode-based model of oncology care that incorporates elements from several successful model tests. By providing care management and performance based payments in conjunction with quality metrics and a rapid learning environment, it is hoped that this model will demonstrate how oncology care in the US can transform into a high value, high quality system.