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Bundled Oncology Payments in Medicare

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July 20, 2016


The Centers for Medicare & Medicaid Services has chosen nearly 200 physician group practices and 17 commercial health insurance companies to participate in a new oncology demonstration project that pays providers a bundled payment for all chemotherapy and related services a patient needs over a six-month period.


Called the Oncology Care Model (OCM), the project aligns the financial incentives offered by Medicare and private payers to encourage greater coordination, appropriateness, and patient access in the delivery of cancer care. The five-year project began July 1, 2016 and covers most cancer types. The Medicare arm will include more than 3,200 oncologists and about 155,000 Medicare beneficiaries.


The payments under the OCM model have two elements:


  • Coordinated Care: Practices receive a $160 per month/per patient payment for offering enhanced services to oncology patients. These include coordinating care with other providers, helping the patient navigate among providers and treatments, providing 24/7 access to care when needed, and coordinating diagnostic scans and follow-up with other members of the patient’s medical team.

  • Oncology Care: Practices also receive a performance-based amount that will cover all chemotherapy and related care the patient receives from hospitals, physicians, post acute providers, and others. Although services will be paid on a fee-for-service basis as care is provided, CMS will later set a benchmark amount that it deems appropriate for the episode of care. Providers will be allowed to share in the savings if the actual amount they spent was below that benchmark. They will receive an even greater share of the savings if they also agree to share in financial losses. The performance-based payments will be made only for higher-volume cancer types.


Click to access CMS list of practices, payers, and related information

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