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APMs offer an opportunity for providers to begin sharing the risk and reward for providing high quality patient care and managing patient populations. Because APMs are new, there a host of questions about how they’ll work in practice. The following background is meant to assist ASPS members as they determine if APM participation is the best path to success under the Quality Payment Program.

In early 2015, the Department of Health and Human Services (HHS) took steps to improve quality and lower healthcare costs, announcing its plan to move aggressively on its goal to transition 30 percent of traditional fee-for-service Medicare payments to alternative payment models (APMs) by the end of 2016.

APMs create fundamental changes in how healthcare is paid for. Payers are moving away from fee-for-service (FFS), volume-driven health care payments to value-based payment models. These new payment methods involve the payer and provider sharing in some of the risk and rewards associated with managing and caring for patient populations and aligning incentives for high-quality, patient-centered care. The goal is to engage patients and improve healthcare outcomes.

There are different types of APMs (i.e., shared savings, bundled payments, pay for performance, global payments, risk adjusted rates, episode based payment, etc.,) and each may utilize unique payment methodologies that, if followed closely, can incentivize providers on quality, outcomes, and cost containment.

The Medicare Access and CHIP Reauthorization Act (MACRA) provides a 5% annual lump sum payment to qualified physicians who participate in APMs meeting certain specifications, and it exempts those providers from reporting to the new Merit-Based Incentive Payment System or MIPS.

To be a qualified, or "Advanced APM," three requirements must be met: 1) use of certified EHR technology; 2) payment based on quality measures comparable to those used in the quality performance category of MIPS, and 3) be either a Medical Home Model, or an entity that bears more than a nominal amount of risk for monetary losses.

Clinicians in other types of APMs would be given partial credit for some, but not all of the MIPS program, and be expected to successfully submit other measures to receive a positive payment adjustment.

CMS proposes that it would notify the public of which APMs will be Advanced APMs prior to each Performance Period, starting no later than January 1, 2017.

There are a number of benefits for participating in an APM:

  • A 5% annual participation bonus for providers participating in an Advanced APM from 2019-2024
  • Better designed incentives to reward providers for value and quality, not volume
  • Lighter reporting burden to CMS
  • Ability to share in the savings for high quality, coordinated, efficient care. When you perform well, you get paid for it
  • For providers who qualify for an APM, but do not yet meet the criteria to be an Advanced APM, they can still receive MIPS adjustments and APM specific awards (This is a great safety net for organizations still trying to figure out how to make an Advanced APM work well for their system)

But there are also risks:

  • You must meet eligibility requirements to select the Quality Payment Program Alternative APM path
  • Providers are financially responsible for managing the health of the patient population and utilization of resources
  • Providers assume some risk tied to reimbursement
  • If the Advanced APM's actual expenditures exceed expected expenditures during a specific performance period, CMS can:
    • Withhold payment for services to the APM Entity and/or the APM Entity's eligible clinicians
    • Reduce payment rates to the APM Entity and/or the APM Entity's eligible clinicians

MACRA requires that an incentive payment be made to qualifying APM participants for participating in certain "Advanced APMs" (A-APM). Whether an APM is eligible as an A-APM depends solely upon how the APM is designed. By statute, A-APMs must:

  • Be a CMS Innovation Center model (other than a Health Care Innovation Award), part of the Medicare Shared Savings Program, or other another demonstration required by federal law that meets certain criteria
  • Require 50% of participants to use certified EHR technology
  • Base payment on quality measures comparable to those in the MIPS quality performance category
  • Either: (1) require APM Entities to bear more than nominal financial risk (at least 3% of expected expenditures) for monetary losses; OR (2) is a Medical Home Model expanded under CMMI authority

Currently available Advanced APMs for 2017 include:

  • Comprehensive ESRD Care Model (CEC) – Two-Sided Risk
  • Comprehensive Primary Care Plus (CPC+);
  • Next Generation ACO Model;
  • Shared Savings Program – Track 2;
  • Shared Savings Program – Track 3;
  • Oncology Care Model (Two-Sided Risk)
  • Comprehensive Care for Joint replacement (CJR) Payment Model (Track 1 – CEHRT)

For new APMs, the Agency will post determinations on the website on an ad hoc basis, but no less frequently than annually.

The complete list of Advanced APMs can be found here: APMs Overview

Advanced Alternative Payment Model (A-APM) Qualifying Participants (QPs) are exempt from MIPS. If an A-APM Entity meets or exceeds yearly thresholds, the providers within that entity will be excluded from any MIPS payment adjustments. The Entity will receive a 5% bonus, based on aggregate payment amounts for Medicare Part B covered services.

Not all A-APM participants qualify for the 5% incentive payment given, though. Only Qualifying Participants (QPs) will receive the full bonus. Other, "Partial" QPs are given the option of participating or not participating in MIPS.

A QP is a practitioner in an A-APM entity (at the group level) whose clinicians collectively receive 25% or more of their total payments from Medicare Part B payments, or who see a volume of Medicare beneficiaries in excess of 20% of their total patient volume. Once the A-APM entity exceeds one of these thresholds, all clinicians in the entity will be deemed QPs.

A Partial QP is a practitioner in an A-APM entity whose clinicians collectively receive 20% or more of their total payments from Medicare Part B payments, or who see a volume of Medicare beneficiaries in excess of 10% of their total patient volume. Once the A-APM entity exceeds one or both of these thresholds without exceeding the higher QP threshold in either domain, all clinicians in the entity will be deemed Partial QPs.

These thresholds will increase over time.

QP Payment Amount Thresholds
Payment Year
2019
2020
2021
2022
2023
2024 & Later
QP Payment Amount Threshold
25%
25%
50%
50%
75%
75%
Partial QP Payment Amount Threshold
20%
20%
40%
40%
50%
50%
QP Patient Count Thresholds
Payment Year
2019
2020
2021
2022
2023
2024 & Later
QP Payment Amount Threshold
20%
20%
35%
35%
50%
50%
Partial QP Payment Amount Threshold
10%
10%
25%
25%
35%
35%

CMS will attempt to provide information and preliminary assessments based on historical data to help Advanced APM participants understand what their threshold scores would likely be in order to mitigate uncertainties and facilitate MIPS participation if necessary. However, the Agency will not calculate actual threshold scores until the end of a performance period.

By 2021, CMS will introduce an "All-Payer" option, allowing Advanced APM Entities who do not meet either the QP payment or patient count threshold to potentially participate via the All-payer option, which will have lower Medicare thresholds.

Of note, any QP determination is made at the group level. This policy is based on the premise that positive change occurs when entire organizations commit to participating. If the group's collective threshold score meets the relevant QP threshold, all eligible clinicians in that group would receive the same QP determination.