An Alternative Payment Model (APM) is a payment approach that gives added incentive payments to provide high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population.
Types of APMs
Meet the statutory definition of an APM. MIPS eligible clinicians participating in an APM are also subject to MIPS.
MIPS APMs have MIPS eligible clinicians participating in the APM on their CMS-approved participation list.
An Advanced APM is a track of the Quality Payment Program that offers a 5 percent incentive for achieving threshold levels of payments or patients through Advanced APMs. If you achieve these thresholds, you are excluded from the MIPS reporting requirements and payment adjustment.
Advanced & MIPS APMs
Most Advanced APMs are also MIPS APMs. MIPS Eligible clinicians participating in Advanced APMs are included in MIPS if they do not meet the threshold for payments or patients sufficient to become a Qualifying APM Participant (QP). The MIPS eligible clinician will be scored under MIPS according to the APM scoring standard.
Starting in the Performance Year 2019, eligible clinicians will be able to become Qualifying Alternative Payment Model Participants (QPs) through the All-Payer Option. To attain this Option, eligible clinicians must participate in a combination of Advanced APMs with Medicare and Other-Payer Advanced APMs. Other-Payer Advanced APMs are non-Medicare payment arrangements that meet criteria that are similar to Advanced APMs under Medicare.
MACRA defines any of the following as a qualifying Alternative Payment Model (APM):
- An innovative payment model expanded under the Center for Medicare & Medicaid Innovation (CMMI), with the exception of Health Care Innovation Award recipients;
- A Medicare Shared Savings Program (MSSP) accountable care organization (ACO);
- Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program; or
- Another demonstration program required by federal law.
To receive the 5% AAPM bonus, the eligible clinician (EC) must be considered a qualifying participant (QP). ECS is considered QPs if they receive a certain percentage of payments or see a certain percentage of patients through the AAPM. For the 2019 performance year, the payment threshold is 50% and the patient count threshold is 35%. QP determinations will be made at the group level. Participants who do not meet the QP thresholds may be considered a partial QP if they receive 40% of their payments or see 25% of their patients through an AAPM. Partial QPs can elect to participate in MIPS and will be scored under the APM scoring standard. Partial QPs will be excluded from MIPS unless the EC makes an explicit selection to participate.
Knowing QP Status
To be a QP in an AAPM, a MIPS eligible clinician must have a significant portion of their patients or payments flow through AAPMs. Clinicians may qualify based on their participation in Medicare AAPMs alone under the Medicare Threshold Option. Starting in 2019, clinicians can also qualify based on their combined participation in both Medicare and other payer models under the All-Payer Combination Threshold Option. Starting in 2019, participation in Medicare Advantage, Medicaid, and CMS multi-payer AAPMs will count. Starting in 2020, private payer AAPMs will also count. The 2019-2020 QP thresholds are listed below.
Medicare Threshold Option
All-Payer Combination Threshold Option
In the performance year 2019, ECs who do not meet the patient or payment threshold under the Medicare Option, but do meet a Medicare minimum threshold (in parentheses), may ask for a QP determination under the All-Payer Combination Option.
CMS will make QP determinations three times during the performance period. QPs will be identified on the following schedule: March 31 of the performance period; June 30 of the performance period; and August 31 of the performance period. To be included in the QP calculations, an EC must be on the AAPM’s participation list during at least one of these determination snapshots. Once determined to be a QP, an EC will retain QP status for the performance period even if he or she is not included in the AAPM’s participation list during all determination snapshots. For example, an EC included on the participation list and determined to be a QP during the March 31 snapshot, but not included on the participation list during the June 30 snapshot will be considered a QP for the performance period.
MIPS eligible clinicians who achieve QP status in AAPMs will:
- Receive supplemental or performance-based payments according to the rules established under their APM (e.g., care coordination or infrastructure payments, shared savings, bundled payments, etc.);
- Be exempted from participating in MIPS;
- Receive a 5% lump-sum bonus payment on their fee-for-service reimbursements for payment years 2019-2024 (based on performance in 2017-2022).
- Receive a 0.5% higher Physician Fee Schedule update starting in 2026 (0.75% instead of 0.25%).