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What Are Medicare Alternative Payment Models (APMs)?

In 2016, the Centers for Medicare and Medicaid Services (CMS) introduced the new Quality Payment Program (QPP). The QPP recognizes the role of Alternative Payment Models (APMs) in furthering CMS’ goal to better align reimbursements for services with the cost and quality of care. QPP incentivizes practices to move toward APMs and away from strict fee-for-service.

What is an Alternative Payment Model?

An APM is a payment model that deviates from traditional fee-for-service. The traditional process for reimbursing physicians for their services under Medicare Part B is to pay for services according to the Physician Fee Schedule (PFS). Under this approach, practices are paid a set fee for each service delivered. Under MIPS, payments can be adjusted either up or down depending on scores in each program.

If an organization adopts one of CMS’ APMs, they agree to be paid according to the rules of that payment model, which is some variation of the PFS or a new model altogether.

APMs require healthcare organizations (often a hospital and affiliated physician practices) to align themselves with the goal of taking better care of a population of patients, often defined by a geographic region.

A common example of an APM is a Medicare Shared Savings Plan (MSSP) also known as an Accountable Care Organization (ACO).

Under an MSSP, if the organization can realize savings by providing high-quality and low-cost care to a defined group of Medicare beneficiaries seen by the providers participating in the MSSP, Medicare will share the savings with the ACO.

This payment structure incentivizes physicians to work together to improve the care of patients.

What is an Advanced APM?

An Advanced APM is similar to an APM, with some additional criteria.

  • The APM requires participants to use certified EHR technology.
  • The APM bases payment on quality measures comparable to those in the MIPS quality performance category.
  • The APM either: (1) requires APM entities to bear more than nominal financial risk for monetary losses OR (2) is a Medical Home Model expanded under Center for Medicare & Medicaid Innovation authority (CMMI).

Advanced APMs entering into a risk payment-model have potentially higher incentives in exchange for participating in downside risk. The risks are higher but so is the potential payout.

Another example of an Advanced APM is the Comprehensive Primary Care Plus (CPC+) model based on the concept of Patient-Centered Medical Home. In 2019, CMS announced Primary Care First, a new payment model that expands upon the CPC+ APM.

From the CPC+ FAQs published by CMS:

“Payment redesign by payers, both public and private, will offer the ability for greater cash flow and flexibility for primary care practices to deliver high quality, whole-person, patient-centered care and lower the use of unnecessary services that drive total costs of care.”

In CPC+, participants receive a share in the savings and receive a payment per month per beneficiary to provide services that are not reimbursed under the PFS.

Participating in an APM

Participating in an Advanced APM as a “Qualifying APM Participant” will mean you are exempt from MIPS. CMS calculates a provider’s Qualifying Participant status via the APM Determination Period, a lookback of two segments of time for a preliminary and final status. Learn more on the CMS website. For 2020, here is the list of APMs:

  • Bundled Payments for Care Improvement Advanced Model​
  • Comprehensive Care for Joint Replacement Payment Model (CEHRT Track)​
  • Comprehensive Primary Care Plus Model​
  • Comprehensive ESRD Care Model (LDO arrangement and Non LDO Two Sided Risk Arrangement)​
  • Maryland Total Cost of Care Model (Care Redesign Program; Maryland Primary Care Program)​
  • Medicare Shared Savings Program (Track 2, Track 3, Basic Track Level E, and the ENHANCED Track)​
  • Medicare Accountable Care Organization (ACO) Track 1+ Model​
  • Next Generation ACO Model​
  • Oncology Care Model (Two-Sided Risk Arrangements);​
  • Vermont All-Payer ACO Model (Vermont Medicare ACO Initiative)

To further encourage providers to move to APMs, CMS established a Physician Focused Payment Model Technical Advisory Committee that will review payment model proposals from providers and submit recommendations to Health and Human Services for consideration.

Here at Mingle, we’re excited to see new innovative payment models that are accessible to small, independent practices. Primary Care First (PCF) is one such new model beginning in 2021. The model increases payments to practices to power the advanced delivery of primary care. Practices receive a population-based payment for attributed patients and have the opportunity to earn up to a 50% bonus if they achieve quality goals. Read our blog post about why we’re excited about Primary Care First.

Has your organization been accepted into Primary Care First? In a recent blog post, Roxanne Thacker, Mingle Health Director of Clinical Services, shares how your practice can prepare. Importantly, PCF practices need a qualified registry partner to meet the PCF requirements. Mingle Health is ready to be your registry and consulting partner to help you succeed in the program.

Who is Likely to Participate and Succeed?

Any organization that is prepared to make changes in how they operate to reach the goal of low-cost, high-quality care is encouraged to participate in an APM. Keep in mind that infrastructure and resources to implement change will be required.

Practices and healthcare organizations have a wide range of reporting requirements and paths to successful participation under the QPP. Get in touch with one of our friendly consultants today and we can work with you to find the best path for your practice and organization.

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