Oncology Care Model Sees Net Losses Despite Spending Reductions

The CMS cancer-focused payment model showed savings over time, but overall losses exceeded $600 million.

Apr. 3, 2026 at 7:40pm

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An extreme close-up X-ray photograph revealing the intricate internal structure of a chemotherapy infusion bag, conceptually illustrating the challenges of achieving cost savings and quality improvements in cancer care.An X-ray view of a chemotherapy infusion bag highlights the complex internal structure of cancer care, where savings and quality improvements can be elusive.Lebanon Today

While the Oncology Care Model (OCM) implemented by the Centers for Medicare & Medicaid Services (CMS) led to notable savings in cancer care spending, the program ultimately resulted in a net loss of over $600 million. The study found that spending reductions grew over time for participating practices, but the program's overall costs, including monthly payments and performance incentives, exceeded the savings.

Why it matters

The OCM was the first cancer-focused alternative payment model developed by CMS, aimed at improving patient care and lowering costs for chemotherapy. Understanding the successes and challenges of the OCM can provide valuable lessons for future value-based oncology care initiatives.

The details

The OCM, implemented from 2016 to 2022, provided participating oncology practices with monthly payments and performance-based incentives to coordinate care and follow clinical guidelines. The study evaluated data on 739,735 Medicare beneficiaries treated at 202 OCM practices, compared to 830,165 beneficiaries at 534 non-OCM practices. While spending was $616 less per episode in the OCM group, the program resulted in a net loss of $639 million to Medicare after accounting for the payments to practices. No significant changes in quality outcomes were observed.

  • The OCM was implemented between 2016 and 2022.
  • The study evaluated data from January 2014 to June 2022.

The players

Gabriel A. Brooks, MD

First author of the study, from the Department of Medicine at Geisel School of Medicine and Dartmouth Cancer Center in Lebanon, New Hampshire.

Ravi B. Parikh, MD

Commentator on the findings, from the Emory University School of Medicine in Atlanta, Georgia.

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What they’re saying

“Value-based care delivery transformation takes time to implement, but over time, real savings can start to accrue, especially for common cancer types where it is easier to define the approach for high-quality, high-value care.”

— Gabriel A. Brooks, MD, First author

“Once models can be designed in collaboration with high-penetration commercial payers to create an all-payer model, as opposed to one that only targets Medicare patients, then you're going to start to see these models have more holistic success.”

— Ravi B. Parikh, MD, Commentator

What’s next

The CMS has launched a follow-up program called the Enhancing Oncology Model (EOM), which focuses on a narrower range of common, high-cost cancer types. However, enrollment in the EOM has been underwhelming, with only 28 practices reportedly enrolled as of March 2026.

The takeaway

While the Oncology Care Model resulted in net losses for Medicare, it also demonstrated that practices can find ways to reduce low-value care and cut spending while maintaining quality of care, especially for common cancer types. These successes should inform the design of future value-based oncology care initiatives, which may benefit from an all-payer approach rather than one focused solely on Medicare patients.