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Tuesday Mar 15, 2016

APMs: A Primer on the New Payment Model

Each of you is now familiar, or is hopefully growing more familiar, with the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA).  

MACRA was enacted April 16, 2015, and repealed the Medicare sustainable growth rate. It also set in motion the creation and implementation of two payment pathways for physicians participating in the Medicare program. Last month I shared information and insights on the Merit-Based Incentive Payment System (MIPS). In this post, I am providing an overview of the MACRA Alternative Payment Model (APM).  

The AAFP views the APM as the best opportunity for family physicians, primarily due to the fact that it promotes new delivery and payment models that migrate away from fee-for-service. Our primary goal for several years has been the establishment of payment policies that promote and finance comprehensive, continuous, and coordinated primary care. We believe that MACRA creates an environment whereby these models can be implemented, and we believe the APM pathway gives these models a place to grow and mature.

Starting in 2019, family physicians participating in a qualified alternative payment model who successfully meet the quality and performance criteria and exceed the established Medicare beneficiary thresholds will be eligible for a 5 percent bonus payment on their total allowed Medicare charges. Furthermore, qualifying physicians participating in a qualifying and eligible APM will be exempt from the MIPS program. APM qualifying physicians also will receive a higher Medicare physician fee schedule update (of 0.75 percent) starting in 2026.

There are three sets of criteria that must be met in order to secure the bonus payment in the APM pathway. Those three criteria are:

Qualifying Alternative Payment Model -- MACRA explicitly outlines which delivery and/or payment models will ultimately qualify as an APM. The law states that qualifying APMs must be established through one of four ways:

  • Medicare Shared Savings Program;
  • Centers for Medicare and Medicaid Innovation (CMMI) programs expanded by the HHS Secretary;
  • Medicare Quality or Acute Care Episode Demonstration projects; and
  • demonstrations required by federal law

Eligible Alternative Payment Model -- Any APM that meets one of the four qualifying criteria listed above must also meet the performance and quality thresholds established by the law. There are three performance thresholds:

  • APMs must report quality and performance measures comparable to those contained in the MIPS program.
  • APMs must use a certified EHR technology.
  • APMs  must incur nominal financial risk for monetary losses or be a medical home model expanded under CMMI authority.

Qualifying Alternative Payment Model Physician -- The final criterion in determining if an individual physician or a group of physicians qualified for the 5 percent bonus payment is that  a qualified physician must demonstrate that the required percentage of his or her payments is received through a qualified and eligible APM.  

For 2019 and 2020, qualifying physicians must demonstrate that, at minimum, 25 percent of their total Medicare payments are aligned with a qualifying and eligible APM.  Starting in 2021, the minimum threshold increases to 50 percent, but the law allows physicians to use a combination of Medicare and non-Medicare payments, such as those from Medicaid and commercial insurers, to meet that threshold.

A few observations on APMs:

  • APMs represent the better of the two pathways, in AAFP’s opinion, for family physicians to move away from the challenges of episodic fee-for-service practice models towards more comprehensive delivery and payment models that allow for and compensate you for comprehensive and coordinated patient care.
  • The AAFP is aggressively advocating for the inclusion of an advanced primary care delivery model as a qualifying APM. We view the Comprehensive Primary Care (CPC) initiative as a model that can and should be expanded on a national scale.
  • APMs are more inclusive than accountable care organizations (ACO) and do not “require” family physicians to sell their practice to a hospital or health system to qualify for the APM bonus payment.
  • The medical home plays an important role in the APM pathway, since medial home APMs are exempt from the “nominal risk” eligibility criteria.
  • Pursuit of the APM pathway is valuable even if you fall short of the eligibility and qualification criteria since APM participation is recognized as a Clinical Practice Improvement Activity (CPIA) under the MIPS pathway. This means that those that attempted to participate in an APM will receive favorable scoring for the CPIA performance category in the MIPS program.
  • The MIPS program is designed to prepare physicians for participation in an APM. For this reason, making an effort to transition towards an APM sooner rather than later is encouraged.

The AAFP is committed to ensuring that you and your practice are ready to take advantage of new payment opportunities presented by MACRA. In the coming weeks we will be launching a comprehensive member education and communications effort designed to simplify the transition and provide the guidance you need to realize the benefits of value-based payment. Please watch for additional information at this blog or on aafp.org.  

Wonk Hard
On March 8, CMS announced a proposed rule(www.cms.gov) to test new models to improve how Medicare Part B pays for prescription drugs and the administration of those drugs by physicians. Although most prescription drugs are paid through Medicare Part D, there is a substantial number of drugs paid for under the Part B program. Primarily, Medicare Part B covers prescription drugs that are administered in a physician’s office or hospital outpatient department, such as cancer medications, injectables like antibiotics, or eye care treatments.

The proposal issued by CMS puts in place a value-based payment model for prescription drugs, but also alters the payment for the administration of such products in a manner that is favorable for family physicians. The proposed rule seeks to test six alternative approaches for Part B drugs. The AAFP issued a statement on the proposal and will be providing CMS with substantive comments on the proposal in the coming weeks. The full proposal is available on the Federal Register(www.federalregister.gov).

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Stephanie Quinn, AAFP Senior Vice President of Advocacy, Practice Advancement and Policy.

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The opinions and views expressed here are those of the authors and do not necessarily represent or reflect the opinions and views of the American Academy of Family Physicians. This blog is not intended to provide medical, financial, or legal advice. All comments are moderated and will be removed if they violate our Terms of Use.