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Mapping the pathway

In previous posts, we introduced the new Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program (QPP) and reviewed the Merit-based Incentive Payment System (MIPS) pathway. In this post, we look at the Advanced Alternative Payment Model (APM) pathway.

APMs represent an important step in moving the healthcare system from volume-based to value-based care. These payment approaches were developed in partnership with the clinician community to provide added incentives for clinicians to deliver high-quality and cost-efficient care.

Advanced APMs, which must meet the base definition of APMs, plus additional independent criteria, provide a pathway for eligible clinicians to become Qualifying APM Participants (QPs), and therefore, can earn incentive payments for their participation.  Eligible clinicians who adhere to Advanced APM practices can earn more for taking on some risk related to patients’ outcomes.

The first performance period began January 1, 2017 and the APM participation option is to join Advanced APMs in order to become QPs.  Under this option, if a clinician receives 25 percent of Medicare covered professional services or sees 20 percent of Medicare patients through the Advanced APM in 2017, they could earn a five percent incentive payment in 2019. The Centers for Medicare and Medicaid Services (CMS) estimates there will be 70,000 to 120,000 QPs in 2017 and 125,000 to 250,000 in 2018.

Defining the path

Advanced APMs are risk-bearing APMs that provide services to Medicare Part B Beneficiaries.  MIPS eligible clinicians can participate in Advanced APMs and may receive a five percent incentive payment by taking on financial risk for potential losses under an APM, being accountable for performance based on meaningful quality measures, and using certified electronic health record technology (CEHRT).

Specifically, Advanced APMs must meet all three of the following criteria: 

  1. The APM must require participants to use (CEHRT).
  2. The APM must provide for payment for covered professional services based on quality measures comparable to those in the quality performance category under MIPS.
  3. The APM must either require that participating APM entities bear risk for monetary losses of a more than nominal amount under the APM, or be a Medical Home Model expanded under section 1115A(c) of the Act.

Eligible Clinicians who participate in an Advanced APM and meet or exceed the relevant QP payment amount or QP patient count threshold for a year are determined to be QPs.  The amount of the APM Incentive Payment is equal to five percent of the estimated aggregate payments for covered professional services furnished during the calendar year immediately preceding the payment year.

There are two Advanced APM options: the Medicare Option begins in payment year 2019, and the Other Payer Advanced APM option will begin in payment year 2021. Other Payer Advanced APMs are risk-bearing APMs with payment arrangements under any payer other than traditional Medicare.  The criteria for Other Payer Advanced APMs generally mirrors the Advanced APM criteria, but participation thresholds will be higher.  Other Payer Advanced APMs will include Medicare Advantage, full capitation arrangements, and commercial payer APMs.

Will you qualify?

CMS maintains a list of Advanced APMs on their QPP website. Models included among the 2017 list of Advanced APMs are the Comprehensive Primary Care Plus (CPC+), Next Generation ACO Model, and the Medicare Shared Savings Program Tracks 2 and 3. In the 2018 performance year, CMS is strengthening the movement toward Advanced APMs and anticipates increasing the list of models that qualify, which include the addition of a Medicare ACO Track 1 +, a new voluntary bundled payment model, the Comprehensive Care for Joint Replacement Payment Model (CEHRT track), the Advancing Care Coordination through Episode Payment Models Track 1 (CEHRT track), and the Vermont All-Payer ACO Model.

Health information technology beyond the CEHRT will be required to manage populations for Advanced APMs. The Infrastructure to support administration and cost management in addition to care management takes time, money, and expertise to design and build. It starts with choosing the right partners to manage the post-acute care delivery.

To succeed under MACRA, a health system must simultaneously focus on achieving the best performance possible under MIPS while defining and executing a roadmap to achieve Advanced APM qualification.

Through MACRA, CMS has created an accelerated pathway to value-based reimbursement from MIPS to Advanced APMs.  Because of the budget neutrality of MIPS, there will be winners and losers with maximum adjustments of up to plus or minus nine percent by 2022 to be applied based on comparative performance to other providers. Though Advanced APMs by their nature require financial risk, systems are measured only against themselves and thus have more control over their performance and related risk, and, as a bonus, are able to earn extra incentives from CMS for their participation.  As MACRA goes into effect in 2017, it is in a health system’s best interest to set a path to Advanced APMs.

A solid strategy and roadmap will be to prepare for MIPS in 2017, then figure out what your strategy is for 2018 and beyond.