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Is moving to an Alternative Payment Model (APM) right for your practice?

Friday, December 11 2020

Alternative Payment Models (APMs) are value-based approaches to payments for patient care that incentivize high quality and cost-efficient care. One of the major goals of the Quality Payment Program (QPP) is to maximize participation in APMs, which hold clinicians financially and clinically accountable for patient care. There are two types of APMs within the QPP:

APM Type Description
Merit-Based Incentive Payment System (MIPS) APMs MIPS APMs base payment incentives on overall performance, cost/utilization, and performance on quality measures. Participants in MIPS APMs benefit from streamlined APM reporting and scoring advantages under the APM scoring standard, which can maximize annual positive payment adjustments.
Advanced APMs* Advanced APMs require participants to use Certified Electronic Health Record Technology (CEHRT). Advanced APMs also base Medicare payments on performance on quality measures but require participants to bear more than nominal financial risk. Clinicians who meet thresholds for APM participation become qualifying APM participants (QPs) in Advanced APMs, which exempts them from MIPS reporting and earns clinicians within the APM an annual five percent bonus on their Medicare FFS payments.  
*Some MIPS APMs can also be Advanced APMs

Since the inception of the QPP in 2017, many clinicians have opted to participate in APMs to take advantage of the benefits they provide. In addition to the potential to achieve positive payment adjustments and/or shared savings, APMs offer clinicians the opportunity to improve patient care through such features as enhanced team-based care, standardized processes and workflows, and sharing of best practices and resources.

Here are some questions your practice might ask when deciding whether to participate in an APM:

  • Does my practice meet the minimum criteria for APM participation? CMS provides information about APMs, including basic eligibility criteria, on the QPP website.
  • What APM options are available for my practice? Visit the QPP website for a complete list of 2020 MIPS APMs and Advanced APMs, or see the Innovation Models website for more information about specific Advanced APM models.
  • What is the size and scope of the APM I might consider? Consider how many practices or clinicians are included in the APM, the size of the patient base, how long it has been operating, geographic location, and if possible, its performance history.
  • What are the costs to join an APM? Startup costs will vary depending on your practice’s existing resources such as an EHR system. In some cases, the APM organization may handle the cost of technology upgrades, but in other cases, financial responsibility may fall to APM participants.
  • What staffing and time resources would be required? It is important to know your responsibilities within the APM, such as any new processes that your practice would need to put into place, and what your reporting requirements would be. You’ll want to consider what resources are required to participate in an APM, how staff roles and work flows would change, and make a plan for implementing the necessary changes.
  • Am I willing to accept financial risk? Learn about any applicable financial risk for not meeting the quality and cost requirements of the APM you are considering. Additionally, joining an APM means that your payments are tied to the performance of the APM entity as a whole, and Advanced APMs require you to bear downside risk. Ask yourself whether any of these potential risks are feasible for your practice.

CMS is considering making APM participation even easier through a new APM Performance Pathway (APP). This would would reduce the number of measures practices will be required to report. ,. For more information, see the CMS 2021 Quality Payment Program Proposed Rule Overview Fact Sheet.

Ultimately, the choice to move to an APM is unique to the circumstances of your practice. It is important to consider the potential benefits and risks of APM participation. For additional information on considerations for joining an APM, please contact your Technical Assistance (TA) Contractor. You can also review the September 2019 LAN webinar on this topic. 

Need help on determining whether an APM is right for you? Call @QPP_Midwest or 844-QPP-4YOU. 


Author: IMPAQ International with funds from a contract with the Centers for Medicare and Medicaid Services: TORP-RMADA-2017-0004, “Quality Payment Program Small Underserved and Rural Support (QPP SURS) Central Support." 


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