Advanced Alternative Payment Model (AAPM) - Frequently Asked Questions

MACRA defines any of the following as a qualifying Alternative Payment Model (APM):

• An innovative payment model expanded under the Center for Medicare & Medicaid Innovation (CMMI), with the exception of Health Care Innovation Award recipients;
• A Medicare Shared Savings Program (MSSP) accountable care organization (ACO);
• Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program; or
• Another demonstration program required by federal law.

Advanced APMs (AAPMs) are a subset of APMs that meet additional criteria: Use of quality measures comparable to measures under MIPS;

• Use of a certified electronic health record (EHR) technology; and
• Assumes more than a “nominal financial risk” OR is a Medical Home Model expanded under the CMMI.

. Qualifying participants in AAPMs are exempt from the MIPS reporting requirements.

Only AAPMs are eligible for the 5% bonus. The following APMs apply to primary care and are (AAPMs) for the performance period beginning in 2020:

• 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

For payment year 2025, ECs that are considered QPs are eligible for a lump sum 3.5% bonus based on the previous year’s Medicare Part B payments.

Beginning in payment year 2026, QPs will receive a 0.75% increase to their Medicare physician fee schedule.

To be considered a QP, an EC must  receive a certain percentage of payments or see a certain percentage of patients through the AAPM. For the 2023 performance year, the payment threshold is 50% and the patient count threshold is 35%.

QP determinations will be made at the group level. Participants who do not meet the QP thresholds may be considered a partial QP if they receive 40% of their payments or see 25% of their patients through an AAPM. Partial QPs can elect to participate in MIPS and may report using the APM Performance Pathway. Partial QPs will be excluded from MIPS unless the EC makes an explicit election to participate.

CMS will make QP determinations three times during the performance period.

QPs will be identified on the following schedule:

• March 31 of the performance period; 
• June 30 of the performance period; 
• and August 31 of the performance period.

To be included in the QP calculations, an EC must be on the AAPM’s participation list during at least one of these determination snapshots. Once determined to be a QP, an EC will retain QP status for the performance period even if they are not included in the AAPM’s participation list during all determination snapshots.

For example, an EC included on the participation list and determined to be a QP during the March 31 snapshot, but not included on the participation list during the June 30 snapshot will be considered a QP for the performance period. ECs can check their QP status using the QPP Participation Status lookup tool.

The All-Payer Combination Option allows ECs to become QPs or Partial QPs by meeting QP thresholds through a pair of calculations that assess a combination of both Medicare Part B covered professional services furnished through Advanced APMs and services furnished through Other Payer AAPMs.

To be considered a QP, an entity or EC must receive at least 50% of its payments through an AAPM or see 35% of its patients through an AAPM. At least 25% of payments received or 20% of patients seen must be through the Medicare AAPM. To be considered a partial QP, an entity or EC must have at least 40% of payments received or 25% of patient seen through an AAPM. A minimum of 20% of payments received or 10% of patients seen must be through the Medicare AAPM.

Other Payer APMs are non-Medicare fee-for-service payment arrangements that meet the AAPM criteria:

• Required use of CEHRT 
• Payment based on quality measures comparable to those in MIPS
• Assumption of nominal risk.  

Other Payer AAPM include arrangements authorized under Title XIX (Medicaid), Medicare Health Plan payment arrangements, and payers with payment arrangements aligned with a CMS Multi-Payer model, and arrangements with commercial and other private payers. 

Payers or eligible clinicians can request that CMS determine whether an arrangement qualifies as an Other Payer AAPM. Additional information on Other Payer AAPMs can be found on the CMS QPP website.

Most physicians will move through MIPS until more AAPMs become available. However, family physicians interested in an AAPM model need to be prepared to start on the MIPS track. ECs can verify their QP status using the QPP Participation Status lookup tool. A list of AAPMs and MIPS APMs is available on the CMS QPP website.