The Centers for Medicare & Medicaid Services (CMS) acknowledges that the design of episode-based payment models is highly complex, and is working toward addressing the challenges associated with developing an episode-based payment model as part of the Oncology Care Model (OCM), according to a study published in the Journal of Oncology Practice.1

The CMS initiated the OCM to promote higher quality and better coordinated oncology care at a lower cost. Participating physician group practices must agree to provide a set of enhanced services to OCM beneficiaries receiving chemotherapy during a 6-month episode of care.

Designing an episode-based payment requires multiple complex steps, as the success of the model is dependent on aligning the payment relative to the cost. An episode, however, often has numerous variables that must be considered during the design stage.

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The first challenge is to define the episode, which includes the initiation and duration of the episode and the services included in the episode.

CMS identified multiple complexities that are encompassed by these additional challenges, including:

  • Attribution of patients
  • Patient shifting, multiple practice locations, and complex business models
  • Practice expenditure variation, risk adjustment, and benchmark episode prices

“CMS has considered and attempted to address these numerous challenges in designing OCM,” wrote the authors.

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CMS is working to determine if this episode-based payment model will work in oncology by using information from the 190 practices and 16 commercial payers who are currently participating in OCM.


  1. Kline RM, Muldoon LD, Schumacher HK, et al. Design challenges of an episode-based payment model in oncology: The Centers for Medicare & Medicaid Services Oncology Care Model. J Oncol Pract. 2017 May 23. doi: 10.1200/JOP.2016.015834 [Epub ahead of print]