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Alternative Payment Models (APMs)

APMs vary in design, but all aim to restructure payments in a way that financially incentivize low-cost, high-value care. Common types of APMs include medical homes, episodic or bundled payment models, accountable care, and capitated payments. In 2019, 41% of Medicare payments, 30% of commercial payments, 53% of MA payments, and 23% of Medicaid payments were tied to APMs (source: Health Care Payment Learning & Action Network).

Advanced Alternative Payment Models

The Medicare Access and CHIP Reauthorization Act of 2016 (MACRA) established the Medicare Quality Payment Program (QPP), which rewards clinicians for significantly participating in a class of APMs that meet rigorous criteria for technology, quality, and financial risk, known as Advanced APMs. In addition to any model specific payments, clinicians who substantially participate in Advanced APMs- called Qualified APM Participants (QPs)- are excluded from MIPS and can earn a 5% Medicare bonus (through the 2022 performance year). Clinicians can qualify based on their participation in Medicare, Medicare Advantage (MA), Medicaid, and private sector models.

Read about ACP’s APM and QPP related advocacy efforts

Fast Links


Medicare Advanced APMs at a Glance

* For application related deadlines for all of the models visit ACP’s Physician & Practice Timeline

Primary Care First (PCF)

Primary Care First (PCF)  is a voluntary, multi-payer, five-year model operating in 26 regions of the country that offers enhanced payments to support advanced primary care services. Practices have the opportunity to receive performance-based payments in addition to a combination of a flat primary care visit fee and a population-based payment (PBP) that is calculated using the complexity of the patient population. PCF’s seriously ill populations (SIPs) component is currently under review and will not begin on the previously announced April 1, 2021 start date. Primary Care First includes two cohorts of participating practices: Cohort 1 began in January 2021 and Cohort 2 will start in January 2022. There are currently 827 practices participating in Cohort 1 of Primary Care First (List) and 14 payer partners as of 4/6/2021. Additional resources can be found below.

The Direct Contracting (DC) Model

The Direct Contracting (DC) Model is a voluntary, five-year ACO model that is scheduled to start April 1, 2021. In early 2021, the Innovation Center expects to solicit a second round of applicants for a 2022 start.  The DC Model offers partially or fully capitated payments for relevant Medicare Part A and Part B services and features two distinct tracks; 1) the Professional Option, which is 50% shared savings/losses and primary care capitation; and 2) the Global Option, which is 100% shared savings/losses and primary care or total care capitation. Check out ACP's Direct Contracting Model Fact Sheet for more information.

The Geographic (“Geo”) Direct Contracting Model

The Geographic (“Geo”) Direct Contracting Model differs from the other DC models in that it requires financial risk for a portion of all Medicare FFS beneficiaries residing in a geographic area, similar to a Medicare Advantage managed care network.  “Direct Contracting Entities” propose a percent discount to Medicare and receive a prospective, capitated monthly payment based on predicted spending. They individually contract with "preferred providers” and are responsible for all downstream payments. These payment arrangements may (but do not have to) include full or partial capitation, quality bonuses, or shared savings payments. Geo will be tested over two consecutive three-year agreement periods starting in 2022 in four to ten regions, which are yet to be selected by CMS.

The Kidney Care Choices (KCC) Model

The Kidney Care Choices (KCC) Model builds on the existing ESRD Care Model structure, in which dialysis facilities, nephrologists, and other clinicians form ESRD-focused ACOs to manage care for beneficiaries with ESRD. This model adds fixed payments for clinicians who manage care for Medicare beneficiaries with late-stage chronic kidney disease and ESRD. The goal is to delay the onset of dialysis and incentivize kidney transplantation. The model will have four distinct payment Options: the CMS Kidney Care First Option and the Comprehensive Kidney Care Contracting Graduated, Professional, and Global Options. Financial accountability under the model is set to start on April 1, 2020. A second solicitation cycle for applicants interested in a 2022 start date will occur in 2021.

The Medicare Community Health Access and Rural Transformation (CHART) Model

The Medicare Community Health Access and Rural Transformation (CHART) Model offers up front funding for innovation in rural communities. It features two tracks, an “ACO Transformation Track” for existing two-sided risk MSSP ACOs and a “Community Transformation Track” for new networks of community partners led by a Lead Organization, who receive up front funding and regular capitated payments to implement a specified transition plan. CMS will select up to 15 communities and 20 ACOs. The model starts in 2022. Applications are due in Spring 2021.

Comprehensive Primary Care Plus (CPC+)

Comprehensive Primary Care Plus (CPC+), a five-year, multi-payer program, began in January 2017 with the aims of improving quality, access, and efficiency of primary care. The program comprises 2,625 primary care practices in 18 regions with two primary care practice tracks. Practices are supported by 52 aligned payers, from whom they receive additional payment outside of the fee-for-service system for providing comprehensive primary care. This program will be coming to a close on December 31, 2021, and participating practices are invited to participate in another CMMI model, if they are able to do so. Other model options include Primary Care First, the Direct Contracting Model, and/or the Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs). Additional CPC+ resources can be found below.

More on Advanced APMs

1. What models currently qualify as Advanced APMs?

Click here for a full list of qualifying 2020 Advanced APMs, including Medicare Advantage and private payer models.

2. How do I become a Qualifying Advanced APM Participant (QP)?

To be considered a QP for a given performance year, an eligible clinician must have a certain portion of their patients or payments flow through Advanced APMs. The 2021-2022 thresholds are listed below. Clinicians may qualify based on their participation in Medicare AAPMs alone or based on their combined participation in Medicare, Medicare Advantage, Medicaid, private payer, and multi-payer APMs. Clinicians will have three opportunities to qualify each year based on three overlapping “snapshots” of claims data from January-March, January-June, and January-August. To find out whether you are considered an eligible professional and satisfy the QP thresholds for a given year, visit CMS’ QPP Participation Status Lookup Tool.

2020 Medicare Threshold Option

  Payments Patients
QP 50% 35%
Partial QP 40% 25%

2020 All-Payer Combination Threshold Option 

  Payments Patients
QP 50% (25%) 35% (20%)
Partial QP 40% (20%) 25% (10%)

*Note: QP thresholds are set to increase to 75% in 2021 unless Congress intervenes.

3. What is a Partial QP?

Clinicians who participate in Advanced APMs but fall short of the QP threshold may reach a separate, smaller threshold and qualify as a Partial QP. Partial QPs have the option to opt out of MIPS. APM- participating clinicians who do choose to participate in MIPS will be scored under the MIPS APM Performance Pathway. Partial QP determinations are made at the APM Entity level. If a clinician opts out of MIPS, it will apply to all of their TIN/NPI combinations. The 2020 partial QP thresholds are listed in parenthesis in the tables under Question 2.

4. What rewards do clinicians who participate in AAPMs receive?

MIPS eligible clinicians who achieve QP status in Advanced APMs will: 

  • Receive supplemental or performance-based payments according to the rules established under their APM (e.g., care coordination or infrastructure payments, shared savings, bundled payments, etc.);
  • Be exempted from participating in MIPS;
  • Receive a 5% lump sum bonus payment on their fee-for-service reimbursements through the 2024 payment years (based on 2022 performance).
  • Receive a 0.5% higher Physician Fee Schedule update starting in 2026 (0.75% instead of 0.25%).

CMS Resources:

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