Medicare Alternative Payment Models (APM)

Delivering quality, cost-efficient care in exchange for taking on risk-related patient outcomes.

What is an Alternative Payment Model?

An Alternative Payment Model (APM) is a payment approach that rewards providers for delivering high-quality and cost-efficient care. APMs require healthcare organizations (often a hospital and affiliated physician practices) to align themselves with the goal of taking better care of a population of patients, often defined by a geographic region. A common example of an APM is a Medicare Shared Savings Plan (MSSP) also known as an Accountable Care Organization (ACO).

What is an Advanced Alternative Payment Model?

Advanced APMs are a subset of APMs that let practices earn more rewards in exchange for taking on risk related to patient outcomes. Advanced APMs are also one of two payment paths under the Quality Payment Program that will be used to determine Medicare Part B payment adjustments. In the Advanced APM track of the Quality Payment Program, you may earn a 5% incentive payment 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 APM criteria:
  • The APM requires participants to use certified EHR technology.
  • The APM bases payment on quality measures comparable to those in the MIPS quality performance category.
  • The APM either requires APM entities to bear more than nominal financial risk for monetary losses OR is a Medical Home Model expanded under Center for Medicare & Medicaid Innovation authority (CMMI).

What is a MIPS Alternative Payment Model?

If you’re in a specific type of APM called a MIPS APM and you are NOT excluded from MIPS (only Advanced APMs are excluded from MIPS), you may be scored using a special APM scoring standard. The APM scoring standard is designed to account for activities already required by the APM. For example, the APM scoring standard eliminates the need for MIPS clinicians to duplicate submission of Quality and Improvement Activity performance category data and allows them to focus instead on the goals of the APM.

Most Advanced APMs are also MIPS APMs so that if an eligible clinician participating in the Advanced APM does not meet the threshold for sufficient payments or patients through an Advanced APM in order to become a Qualifying APM Participant (QP), thereby being excluded from MIPS, the MIPS eligible clinician will be scored under MIPS according to the APM scoring standard. 

What is an All-Payer Advanced Alternative Payment Model?

Starting in the 2019, eligible clinicians are able to become Qualifying Alternative Payment Model Participant (QPs) through the All-Payer Option. This option is attainable through participation in a combination of Advanced APMs with Medicare and Other-Payer Advanced APMs. Other-Payer Advanced APMs are non-Medicare Fee For Service (FFS) payment arrangements with other payers including:
  • Medicaid;
  • Medicare Health Plans (including Medicare Advantage, Medicare-Medicaid Plans, 1876 Cost Plans, and Programs of All Inclusive Care for the Elderly (PACE) plans);
  • Payers with payment arrangements in CMS Multi-Payer 4 Models; and
  • Other commercial and private payer arrangements that meet the criteria to be an Other-Payer Advanced APM.

Qualified Participation in an Advanced APM

Physicians and practitioners who participate in an Advanced APM are referred to as Qualified Participants (QP) or Partial Qualifying Participants (PQ), and may not be subjected to MIPS and may be eligible for a 5% bonus.

Participation in an Advanced APM is determined at the APM Entity level meaning all physicians and other eligible clinicians identified on the APM Entity’s Participant List must collectively meet the QP/PQ thresholds as an APM Entity group for each individual physician to receive credit for participation in an Advanced APM. CMS uses two methods to arrive at a QP or PQ determination: 1) Medicare Payment Count Method – based on the percentage of Medicare payments they receive through an Advanced APM, and 2) Medicare Patient Count Method – based on the percentage of Medicare patients they see through an Advanced APM.

Clinicians can use the QPP Participation Status Tool to check their QP status and see whether they'll receive a 5% APM incentive payment and be excluded from MIPS. The tool also includes participant data for Advanced APMs and MIPS APMs.

Types of Advanced Alternative Payments Models

The following models are Advanced APMs:

How to Join an APM

  1. Locate specific APMs in your area and find one that fits your practice. 
  2. Contact the APM and inquire about the application process and if they accepting new applicants.

A list of 2021 APMs in Houston has been put together for your convenience.

Additional Resources