An Advanced Alternative Payment Model (APM) is a new concept, introduced through the Quality Payment Program (QPP), that requires eligible clinicians to take on a higher level of financial risk for patient outcomes when compared to participation through the Merit-Based Incentive Payment System (MIPS) track. Advanced APM participants receive a 5 percent payment bonus in 2019 through 2024 and higher annual reimbursement starting in 2026. Participants are also exempt from MIPS reporting requirements.

Criteria

To be considered an Advanced APM, the following criteria must be met:

• CEHRT requirement: Use certified electronic health record technology
• Quality measure requirement: Base payments on quality measures comparable to those used in MIPS (Quality performance category)
• Financial risk requirement: Must either be a Medical Home Model expanded under the Center for Medicare and Medicaid Innovation OR requires participants to bear a more than nominal amount of financial risk in terms of total Medicare expenditures or participating organizations’ Medicare revenue (*note: revenue may be significantly lower for small practices)

Approved Models

The following models are considered Advanced APMs for 2018:

• Comprehensive ESRD Care Model (Large Dialysis Organization arrangement)
• Comprehensive ERSD Care Model (Non-LDO Arrangement)
• Comprehensive Primary Care Plus (CPC+)
• Medicare Shared Savings Program – Track 1+
• Medicare Shared Savings Program – Track 2
• Medicare Shared Savings Program – Track 3
• Next Generation ACO Model
• Oncology Care Model Two-Sided Risk Arrangement
• Vermont All-Payer ACO Model

Benefits of Advanced APM Participation

• A 5 percent lump sum incentive bonus based on Medicare Part B payment (starting in 2019)
• A significantly higher Medicare Physician Fee Schedule update than would be received through participating in MIPS (starting in 2026)
• Participants are exempt from MIPS reporting requirements and payment adjustments.

It is important to understand that participation in the program is insufficient to qualify for earning the benefits. Eligible clinicians must see a sufficient number of Medicare patients or receive sufficient revenue through an Advanced APM to qualify for benefits.

Qualifying

Qualifying Participant (QP) status is determined at the Advanced APM entity level rather than the level of the individual eligible clinician. An Advanced APM entity (the hospital or group of clinicians operating and participating in the Advanced APM) must participate in an Advanced APM for a minimum of 60 days for the Centers for Medicare and Medicaid Services (CMS) to make a QP determination. Clinicians under the Advanced APM entity can be designated either a full "QP" or "Partial QP." Three times a year, the Advanced APM entity can apply for QP or Partial QP status. Once determined, status does not change for that performance year. The Advanced APM entity must reapply for QP or Partial QP status each year.

Qualifying Participant

If the APM entity (such as an ACO or physician group practice) meets the specified thresholds for "Qualifying APM Participant" or "QP" status, then all eligible clinicians belonging to the Advanced APM entity become "Qualifying APM Participants" or "QPs." QPs are excluded from MIPS reporting requirements and payment adjustments. Each QP will receive:

• A 5 percent lump sum incentive bonus based on Medicare Part B payment (starting in 2019)
• A 0.75 percent Medicare Physician Fee Schedule update (starting in 2026) 

Partial QP

If an Advanced APM entity (such as an ACO or physician group practice) does not meet the specified thresholds for full QP status, it may qualify for partial QP status. If the Advanced APM entity qualifies for partial QP status, all eligible clinicians belonging to the Advanced APM entity will be considered partial QPs. Partial QPs will not earn the 5 percent lump bonus. Unlike QPs, which are automatically excluded from MIPS, partial QPs may participate in MIPS. The Advanced APM entity will make the decision to participate in MIPS.

Additional Resources

• MACRA Hub
• MACRA FAQs
• CMS QPP Website
• HIMSS Fact Sheet: What Clinicians Need to Know About APMs