Report: Practices in Two-Sided Risk Drove Savings in Oncology Care Model
Oncology practices that participated in two-sided risk in the latter half of the Oncology Care Model (OCM) were the main driver of payment reductions in the model, according to an evaluation prepared for the Center for Medicare & Medicaid Innovation.
In February 2015, the Centers for Medicare & Medicaid Services (CMS) invited oncology physician group practices to participate in the OCM, an alternative payment model based on six-month episodes for cancer care for Medicare fee-for-service (FFS) beneficiaries undergoing chemotherapy treatment. The six-year OCM began with six-month chemotherapy treatment episodes, starting on July 1, 2016, and operated for 11 consecutive six-month performance periods (PPs). The last episodes ended on June 30, 2022.
OCM tested whether payment reform and healthcare delivery redesign can improve quality and reduce Medicare spending for patients undergoing chemotherapy for cancer, by combining attributes of medical homes—patient-centeredness, care coordination, accessibility, evidence-based guidelines, and continuous quality improvement—with financial incentives for providing services efficiently and with high quality.
This report estimates separate impacts for five distinct groups of practices based on their level of OCM participation, as broken out by how long they remained in the model and whether they eventually elected a two-sided risk component to their financial incentive. This contrasts with the Final Evaluation Report, which aggregated impacts across all practices.
Although the report found that practices that participated in two-sided risk drove OCM payment reductions, none of the other four groups of practices they analyzed achieved significant reductions in total episode payments.
The report does note that while practices that adopted two-sided risk succeeded in reducing payments for Part A, Part B, and Part D payments, they did not reduce the probability of costly inpatient admissions or emergency department visits, nor did they improve access to timely hospice care at the end of life.
After accounting for model payments, practices that adopted two-sided risk by the end of the model achieved net savings for Medicare in 10 of 11 performance periods, totaling $299.6 million. All other practices achieved net Medicare losses in all performance periods, with losses largest for practices remaining in one-sided risk.
Practices with two-sided risk also earned the highest performance-based payments and were most likely to achieve the quality thresholds necessary to keep all performance-based payments, demonstrating that these practices not only achieved the highest financial impacts but also the highest quality, on average, the report said.
Relative to other practices, practices with two-sided risk were more likely to be independent of a hospital or health system, on average, although the report authors stress that these results do not imply this was a necessary condition for success. These practices also stood out in the extent to which they expanded or implemented changes in care processes in response to the model.
A small number of practices terminated their participation after the first year of the model, with four practices leaving. in the latter half of 2018 and a total of 27 practices leaving OCM by the middle of 2019. Model exit accelerated at the beginning of 2020 with the introduction of mandatory two-sided risk for practices that had not achieved performance-based payments in the first two model years: overall, 37 additional practices exited the model in the second half of 2019. Exit interviews and surveys suggested that practices that exited by mid-2019 primarily terminated due to difficulty meeting model requirements, while most terminations occurring after mid-2019 were primarily due to concerns related to two-sided risk.
The authors also stress that the results cannot distinguish whether adoption of two-sided risk in the last two to three model years enhanced performance or was merely correlated with improved performance. Practices that ultimately elected to participate in two-sided risk contracts showed evidence of greater OCM impacts than comparison practices starting in the first performance period, suggesting that these higher-performing practices had more confidence they would succeed in two-sided risk arrangements. However, although impacts increased after the adoption of two-sided risk, the the authors said they cannot rule out the possibility that the additional incentives of two-sided risk spurred practices to achieve greater impacts than they would have remaining under one-sided risk.
Whether or not adoption of two-sided risk led to better performance, the authors suggest that payment impacts generated by practices that did adopt two-sided risk demonstrate that episode-based oncology models have the potential to yield net savings for Medicare.
The follow-on program to OCM is the Enhancing Oncology Model. EOM is a voluntary payment model intended to transform care for cancer patients. EOM aims to improve care coordination, quality, and health outcomes for patients while also holding oncology practices accountable for total costs of care to make cancer care more affordable, equitable, and accessible for patients and Medicare. There are 41 practices and three payers participating in the first cohort.
On May 30, CMS announced the opening of a second round of applications to join the EOM in July 2025.
