This clinical trial studies decitabine and cytarabine in treating older patients with newly diagnosed acute myeloid leukemia, myelodysplastic syndrome that is likely to come back or spread to other places in the body, or myeloproliferative neoplasm. Drugs used in chemotherapy, such as decitabine and cytarabine, work in different ways to stop the growth of cancer cells, either by killing the cells or by stopping them from dividing. Giving decitabine and cytarabine may work better than standard therapies in treating cancers of the bone marrow and blood cells, such as acute myeloid leukemia, myelodysplastic syndrome, or myeloproliferative neoplasm.

PRIMARY OBJECTIVES:

I. Examine whether a combination of decitabine given for 10 days (days 1-10), rather than the usual 5 days, plus "standard dose cytarabine (ara-C) (100 mg/m^2 daily days 1-7) might improve 6-month survival probability from the historical 65% to 80% in patients age >= 60 with newly diagnosed acute myeloid leukemia (AML).

II. Test whether this combination might maintain complete response (CR) rate at our historic 45% in these patients.

III. Study factors that lead physicians to escalate or maintain ara-C doses in those patients who have had an "intermediate response" short of CR to the first 2 cycles of the combination.

IV. While maintaining awareness of confounding covariates, examine the effect of such dose escalation on CR rate.

OUTLINE:

Patients receive decitabine intravenously (IV) daily on days 1-10 and cytarabine IV once daily (QD) on days 1-7. Treatment repeats every 28-35 days for 2 courses in the absence of disease progression or unacceptable toxicity. After course 3, patients achieving remission will receive 1-2 more courses of therapy at the same dose. Patients in remission with significant side effects will receive decitabine and cytarabine at decreased doses. Patients not achieving remission will not receive any more treatment.

After completion of study treatment, patients are followed up for 6 months and then periodically.

Inclusion Criteria:

• Newly-diagnosed AML by World Health Organization (WHO) criteria (>= 20% myeloid blasts by morphology in either blood or marrow)
• High-risk myelodysplastic syndrome (MDS) or myeloproliferative neoplasm (MPN) including chronic myelomonocytic leukemia 2 (CMML2) as defined by 10-19% myeloid blasts in either blood or marrow
• Patients may have received azacitidine, decitabine, or lenalidomide but no "cytotoxic therapy" such as ara-C or anthracyclines; data suggest that failure to respond to azacitidine reduces probability of response to 3+7; hence in the interest of having a relatively homogeneous population, while patients who have received and failed azacitidine or decitabine will be eligible for this study, they will be analyzed separately from patients who have not received these drugs
• Treatment related mortality (TRM) score < 22.9; patients with TRM scores > 13.1, in whom the risk of death within 28 days of beginning induction therapy has averaged 41%, will preferentially be placed on protocol 2642
• Provision of written informed consent
• Note, unlike pharmaceutical company sponsored protocols eligibility is not conditioned on bilirubin, creatinine, or absence of other malignancy within the past 2-3 years; the TRM score incorporates creatinine and thus a high creatinine can in principle be offset by favorable values for the other covariates in the TRM score; bilirubin was not a covariate in the TRM; furthermore, in the doses we are using, dose adjustment of decitabine or ara-C is not indicated in the presence of renal or hepatic abnormalities; our broad eligibility criteria may increase the likelihood that our results will be generalizable; the inability to reproduce results of early phase AML studies has been a problem in the past