What is an APM (Alternative Payment Model) and Does Our Health Care Organization Qualify?

By nThrive | Posted: 04/14/2017

What is an APM?

An APM (Alternative Payment Model) is a system for medical reimbursement that provides additional compensation as an incentive for the delivery of higher quality and more cost-efficient health care by providers. These payment models can apply to health care populations, episodes of care, or specific clinical conditions.

Health organizations who participate in these models must carry a specific amount of financial risk by accepting both risk and reward for providing coordinated, high-quality and efficient care for the lowest price.

As defined by MACRA, APM’s include:

  • CMS Innovation Center model (under section 1115A, other than a Health Care Innovation Award)
  • MSSP (Medicare Shared Savings Program)
  • Demonstration under the Health Care Quality Demonstration Program
  • Demonstration required by federal law

APMs include bundled payments models, Accountable Care Organizations (ACOs), and Patient-Centered Medical Homes (PCMHs), and others. APMs that do not qualify as Advanced APMs are required to participate in the Merit-based Incentive Payment System (MIPS) and will retain APM-specific rewards.

What is an Advanced APM (AAPM)?

An Advanced Alternative Payment Model is one of the two new provider payment pathways under MACRA’s new Quality Payment Program (QPP) and is held to an even higher standard than current APMs (i.e.: ACOs, bundled payments, MSSP track 1, etc.). Essentially, an AAPM serves more people, with better technology, and with greater accountability.

To be deemed an Advanced APM, an APM participant must also:

  • Utilize certified EHR technology to document and communicate care (with at least 50 percent of APM clinician utilization).
  • Base payment measures on MIPS comparable quality performance category measures.
  • Have a higher minimum threshold for patient-facing cases, or more in-person visits.
  • Take on “not nominal risk” of at least 4 percent.

Learn more about MACRA and value-based care:

Download our MACRA Readiness Checklist to see if your health care organization is prepared.

View our MACRA Management Solutions page.

Contact us to schedule a free MACRA Readiness Assessment.

Click here to visit CMS.gov and learn more about advanced alternative payment models.