Quantifying episode-based costs of care under the oncology care model: Analysis of Medicare beneficiaries in the UAB cancer community network.

19 Background: The Oncology Care Model (OCM) is a specialty care model developed by the Centers for Medicare & Medicaid (CMS) Innovation Center aimed at providing higher quality, more highly coordinated cancer care and reducing costs for patients undergoing chemotherapy. The OCM calculates costs of care in a novel way by anchoring costs within episodes of care, defined as six-month intervals triggered by initial anti-cancer treatment, as opposed to diagnosis date. The purpose of this study is to assess costs within the OCM episodes of care. Methods: This was a secondary analysis of Medicare administrative claims data for beneficiaries 65 and older with cancer who received anti-cancer drug treatment (chemotherapy, hormone therapy) between 2012-2015 at an institution in the UAB Cancer Community Network (CCN). Total and service-specific costs (Medicare reimbursement to providers) per patient-episode were summed from inpatient, outpatient, chemotherapy, radiation therapy, testing/pathology, evaluation and management (E/M), home health, skilled nursing facility (SNF), and hospice claims. Prescription drug costs were not included. Mean costs for the first three OCM episodes were calculated and compared to (1) diagnosis-based costs (six-month intervals starting at cancer diagnosis) and (2) service type. Results: Average total cost in the first three OCM episodes of care was $24,922 (n=13,902), $18,534 (n=6,618), and $16,548 (n=4,672). Compared to episode-based cost, average total diagnosis-based cost was higher in the first episode of care ($33,244, n=9,615), and lower in the second and third episodes ($17,143, n=9,110; $12,897, n=8,002). Episode-based outpatient, inpatient, and chemotherapy costs were the highest service-specific costs in all three episodes of care (1st: $8,374, $5,493, $2,445; 2nd: $6,188, $3,913, $3,158; 3rd: $5,909, $3,251, $3,399). Conclusions: Costly chemotherapy and inpatient and outpatient visits indicate an opportunity for targeted improvement resulting in higher value care. Knowledge of current costs of care will aid oncology practices in transition to the OCM and in usage of value-based services for better quality cancer care.