• MACRA Basics

    Advanced Alternative Payment Models (AAPMs)

    The Medicare Access and CHIP Reauthorization Act (MACRA) permanently repealed the flawed sustainable growth rate (SGR) and set up the two-track Quality Payment Program (QPP) that emphasizes value-based payment models. This is your guide to the Advanced Alternative Payment Model (AAPM) track.

    AAPM: One of Two Payment Tracks Under the Quality Payment Program (QPP)

    Advanced Alternative Payment Models (AAPMs) offer physicians incentives to provide high-quality, cost-effective care and move away from the fee-for-service (FFS) model. The other QPP participation option is the Merit-based Incentive Payment System (MIPS) track.

    AAPMs for Primary Care

    To be considered an AAPM, the model must meet three statutory criteria:

    • Use quality measures comparable to MIPS
    • Require participants to use certified electronic health record technology
    • Participants must bear more than nominal financial risk

    An APM that does not meet the criteria to be an AAPM may be considered a MIPS APM.

    AAPMs available for primary care include:

    • ACO Realizing Equity Access and Community Health (REACH)
    • Maryland Total Cost of Care Model - Maryland Primary Care Program Track 3
    • Medicare Shared Savings Program (MSSP) BASIC Level E, and the ENHANCED track
    • Primary Care First
    • Vermont Medicare ACO Initiative (as part of the Vermont All-Payer ACO Model)
    • Additional models will be announced by CMS as they are approved

    AAPMs: Criteria for Qualifying Participants

    For the 2023 performance period, an AAPM entity must do one of the following for all its eligible clinicians to be qualifying participants (QPs):

    • Receive at least 50% of its Medicare Part B payments through the AAPM, or
    • See at least 35% of its Medicare patients through the AAPM

    Eligible clinicians that are not considered QPs can be considered partial QPs if the AAPM entity meets at least one of the following thresholds:

    • Receive at least 40% of its Medicare Part B payments through the AAPM, or
    • See at least 25% of its Medicare Part B patients through the AAPM.

    QPs will be excluded from the MIPS reporting requirements. Partial QPs can opt to participate in MIPS. Partial QPs who elect to participate in MIPS must report through Traditional MIPS or the APM Performance Pathway (APP).

    ECs can also achieve QP status through the All-Payer Combination Option. This option allows ECs who do not meet the QP patient or payment threshold under their Medicare AAPM to count their participation in an Other Payer APM toward their QP status. The payment and patient thresholds remain the same under the All-Payer AAPM option, 50% and 35% respectively. However, an EC can reach these thresholds through a combination of payments or patients seen through the Medicare AAPM and the Other Payer AAPM. To become a QP through the All-Payer Combination Option, an EC must still meet minimum thresholds under the Medicare arrangement. ECs must:

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

    An EC can be considered a partial QP through the All-Payer Combination Option if they meet the payment or patient threshold, 40% and 25% respectively. Partial QPs must meet the following minimum Medicare thresholds:

    • Receive at least 20% of Medicare Part B payments through the Medicare AAPM, or
    • See at least 10% of Medicare patients through the Medicare AAPM.

    APM entities or eligible clinicians can request that CMS use the All-Payer Combination Option to determine their QP status. Entities and ECs must submit payment and patient data from their Other Payer APM for CMS to make this determination.

    Additional resources, including the full list of Medicare and Other Payer AAPMs, are available in the resource library of the Quality Payment Program website.

    CMS makes QP determinations three times a year (March 31, June 30, and August 31) using an AAPM Entity’s participation list. Advanced Alternative Payment Model participants can check their QP status using the QPP Participation Status Tool.

    For payment year 2025, QPs will receive a 3.5% lump-sum bonus based on the previous year’s Medicare Part B payments.

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