What are Advanced Alternative Payment Models (AAPMs)?

MACRA Basics

Advanced Alternative Payment Models (AAPMs)

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) permanently repealed the flawed sustainable growth rate (SGR) and set up a new two-track Medicare physician payment system that emphasizes value-based payment models. The Advanced Alternative Payment Model (AAPM) offers physicians incentives to provide high-quality, cost-effective care and move away from the fee-for-service (FFS) model.

AAPM Overview

The AAPM is one of the two new payment tracks created under MACRA; the other track is the Merit-based Incentive Payment System (MIPS).

AAPMs available for primary care include:

  • Medicare Shared Savings Program (MSSP) Track 2
  • MSSP Track 3
  • Comprehensive Primary Care Plus (CPC+) initiative
  • Next Generation Accountable Care Organization (NGACO)
  • Vermont Medicare ACO initiative (as part of the Vermont All-Payer Accountable Care Organization [ACO] Model)

For the 2017 performance period, an AAPM entity must do one of the following for all of its eligible clinicians to be qualifying participants (QPs):

  • Receive at least 25% of its Medicare Part B payments through the AAPM, or
  • See at least 20% of its Medicare patients through the AAPM

QPs will receive an annual 5% lump-sum bonus. The bonus applies in payment years 2019-2024.

QPs will be excluded from the MIPS reporting requirements.

QPs will receive a 0.75% increase to their Medicare physician fee schedule (PFS) beginning in 2026.

AAPM entities that do not meet either the payment threshold or the patient threshold can opt to participate in MIPS and will be scored using the APM Scoring Standard.