An Advanced Alternative Payment Model (APM) is one of two pathways physicians can choose under the Quality Payment Program (QPP). Alternative Payment Models or APMs are part of a broader push to reform the healthcare system to embrace innovative approaches to improve the quality and value of the care delivered with a focus on better care, smarter spending, and healthier people. APMs work toward these goals through payment arrangements that go beyond fee-for-service billing and give incentive payments to provide high quality, cost-efficient care. Examples of APMs can include accountable care organizations, patient-centered medical homes, bundled payment models, and episode and condition-based models. Advanced APMs are a subset of APMs, and let practices earn more for taking on some risk related to their patients' outcomes and cost of care. Physicians that meet specified criteria to be an Advanced APM and achieve threshold levels of payments or patients through Advanced APMs can qualify as a Qualifying APM Participant (QP), which exempt them from reporting requirements and payment adjustments under MIPS, and make them eligible for a 5 percent lump sum incentive payment between 2019 through 2024, and a higher annual baseline payment increase (0.75 percent) compared to MIPS participants (0.25 percent) starting in 2026.
Good resources for additional overview information on Advanced APMS:
CMS uses the following criteria to determine which existing APMs qualify for the Advanced APM pathway. To be an Advanced APM under the QPP, an APM must:
CMS publishes a list of models that it determines are Advanced APMs online. In 2018, the following models are Advanced APMs:
CMS continues to add other models as Advanced APMs.
For more information on APMs, visit the CMS Quality Payment Program website at https://qpp.cms.gov/apms/overview or see CMS’s Alternative Payment Models in the Quality Payment Program which includes a table that displays APMs that CMS operates and identifies which of the APMs CMS has determined to be Advanced APMs, available at www.cms.gov/Medicare/Quality-Payment-Program/Resource-Library/Comprehensive-List-of-APMs.pdf.
To qualify for the 5 percent APM incentive payment and the higher annual baseline payment increase for participating in an Advanced APM, an eligible clinician must be a Qualifying APM Participant (QP). An eligible clinician is a QP for a year if the eligible clinician is in an APM Entity group that collectively receives a certain percentage of payments for covered professional services or sees a certain percentage of patients through the Advanced APM during the performance year. Eligible clinicians in Advanced APMs that do not meet the Qualifying APM Participant (QP) patient or payment thresholds, but meet a lower threshold, are considered Partial Qualifying APM Participants (PQ).
The Advanced APM Entity group must meet either the Medicare payment count or the Medicare patient count. The Advanced APM entity does not need to meet both to receive a QP or PQ determination.
Note: These thresholds will change beginning in the 2019 performance year for the 2021 payment incentive year.
During the Qualifying APM Participant Performance Period (January 1–August 31 two years prior to the payment year), CMS will take three “snapshots” (March 31, June 30, August 31) to determine which eligible clinicians are participating in an Advanced APM and whether they meet the Threshold Scores to become Qualifying APM Participants. For those Advanced APM participants, CMS will make three Qualifying APM Participant determinations based on claims data for services furnished from January 1 through each of the three snapshot dates. Reaching the Threshold Score at any of the “snapshots” will result in Qualifying APM participant status for the eligible clinicians in the Advanced APM entity.
If an eligible clinician does not meet the Threshold Scores to become a QP based only on participation in Advanced APMs with Medicare, starting in the 2019 performance year, they can also count their participation in Other Payer Advanced APMs to potentially become a QP for the year and earn the bonus payment. A payment arrangement with a payor other than Medicare is considered an Other Payer Advanced APM if CMS determines that the arrangement meets the criteria for an Other Payer Advanced APM, which are similar, but not identical, to the criteria for Advanced APMs under Medicare. For instance, the nominal amount standard is different for Other Payer Advanced APMs.
Beginning with the 2019 performance period, payors can submit the following types of payment arrangements to meet the criteria as an Other Payer Advanced APM:
CMS will consider commercial and other private payors for the Other Payer Advanced APM option in future years. Under this all-payer combination option, eligible clinicians must first be in a Medicare Advanced APM before a payment arrangement with non-Medicare payors will be considered. Eligible clinicians must meet an alternative threshold that will include non-Medicare payments and patients to qualify for the 5 percent bonus. For more information on Other Payer Advanced APMs, see Quality Payment Program Year 2 Final Rule All-Payer Combination Option & Other Payer Advanced APMs, available on the CMS website at www.cms.gov/Medicare/Quality-Payment-Program/Resource-Library/All-Payer-Combination-Option-and-Other-Payer-Advanced-APMs.pdf.