Objectives: In preparation for payment reform, we evaluated Medicare payments for the initial treatment of patients with advanced ovarian cancer and assessed factors responsible for variation. Methods: Using the linked SEER-Medicare database, we identified a cohort of 9,491 women aged 65 years or older with stage III/IV epithelial ovarian cancer diagnosed between 1995 and 2007. Diagnostic and procedural codes specific to the care of ovarian cancer were used to estimate total medical costs for the treatment of ovarian cancer. Costs were adjusted for geography and for inflation to the 2009 US dollar. NCCN Guideline–consistent care was defined as surgery and 6 cycles of chemotherapy. A generalized linear regression was performed to assess factors associated with variability in cost. Results: The mean total payment per patient in the initial treatment period was $65,908 (range of means, $30,745–$96,360). Increasing medical comorbidity, use of PET/CT, surgical complications, and readmissions were associated with increased costs. Treatment with NCCN Guideline–consistent surgery and chemotherapy had a mean annual cost of $85,987 compared with $89,149 for non–NCCN Guideline–consistent treatment with surgery and chemotherapy. The cost of surgery and chemotherapy that was not consistent with NCCN Guidelines was approximately $7,000 more than the cost of therapy that was consistent (P<.001) Conclusions: The financial burden of caring for patients with ovarian cancer is substantial. Treatment that is consistent with NCCN recommendations for treating advanced ovarian cancer, which is shown to have improved outcomes, is not associated with higher cost.