When the Oncology Care Model (OCM) was coming to an end, there was much excitement around its replacement model, the Enhancing Oncology Model (EOM). Unfortunately, with downside risk being mandatory from the outset, The Center for Medicare and Medicaid Innovation (CMMI) misunderstood what oncology groups needed to participate. Although CMMI recently made one essential change to generate more interest for a second enrollment EOM period, it still needs another to make it a success.
For reasons described herein, CMMI should waive recoupment penalty payments for every group that enrolled in performance period 1-3.
Change 1: Make financial success more attainable
CMMI already made the first necessary change, as it modified the “at-risk” dollars for the second EOM enrollment period. Rather than force practices to reduce spend to avoid paying a penalty, as long as practices do not increase spend, there is no penalty. This was accomplished by placing what is known as the “neutral zone” between the benchmark and the target price, rather than at 98% of the benchmark. See: https://deepriskmanagement.com/update-to-the-enhancing-oncology-model-eom-effective-july-1-2025/ for more.
Change 2: Offer a third, risk-free arrangement (RA0):
CMS made it clear that EOM would require practices to take immediate downside risk. This was a departure from OCM, which allowed practices to elect “upside only” for a time. This time allowed practices to learn more about the program, but more specifically how they financially perform relative to the benchmarks/ target prices set. Without understanding performance relative to benchmarks, practices are forced to take a heavy gamble.
An upside only period is critical because it takes roughly a year to “run out” all claims and for the government to reconcile and share performance results. An upside only period is also unlikely in EOM.
The reason it is unlikely relates to CMS providing upfront investment dollars for participating practices known as per member per month (PMPM, or in OCM and EOM: monthly enhanced oncology services “MEOS”) payments. In some cases, these MEOS payments backfired in OCM, as practices did not spend them on the necessary resources to achieve success and did not reduce overall expenditure. Without downside risk, CMS picked up the tab for both the MEOS and the increase expenditures (losses). Indeed, CMS cited the MEOS payments as a primary reason OCM did not reduce overall spend.
To avoid repeating its mistake in EOM, CMMI both reduced the MEOS payments and mandated downside risk. Doing both is misguided though, as MEOS payments count towards the overall expenses. In other words, if participating groups cannot produce the necessary savings, the MEOS payments must be returned. MEOS dollars are at risk. Likely recognizing this reality, CMS increased the MEOS payments beginning at the next EOM enrollment period – from $70 to $100 (for non-duals). Adding MEOS is helpful, but likely ineffective. Either an upside only risk arrangement is needed, or at least one that only places the MEOS at risk.
Change 3: Provide sufficient data – in advance of signing up for EOM
Given the above, the overall success of EOM seems simple: provide practices with enough data to make an informed decision on whether to participate. While this may seem obvious, this was not the case for enrollment period one, and might not be the case for enrollment period two.
Imagine you are asked to put up a significant amount of money to join a basketball free throw contest. If you make a certain number of free throws, you win. If not, you lose. The first question you would likely ask is: “how many free throws must I make to win?” If the answer is, “we will tell you after the game is over.” Would you still put money on the line? This is EOM.
All CMMI must do to fix this problem is to show practices how they have performed historically, relative to the (estimated) target prices that would have been set. Variation (due to trend and other adjustments) is expected, but at least there is solid guidance. Just state roughly how many free throws must be made.
This is easier said than done. Compiling and analyzing a massive amount of data and structuring it for each practice in a usable format by the time a decision needs to be made is a heavy lift.
But without more and better data, most practices will not take risk. So, provide the data, or make downside risk optional until you can. Two out of three ain’t bad.
Brian Kern, Esq. is the CEO of Deep Risk Management, a company that specializes in pricing and transferring oncology risk.