What is the Alternative Payment Model (APM)?
An APM shifts the focus to value-based care from traditional fee-for-service models, applying to specific clinical conditions, populations, or care episodes. APMs use bundled payments and other methods that encourage better care coordination and cost-efficiency based on quality and cost metrics.
Examples of APMs include:
- Pay-for-performance
- Bundled payment models (also known as episode-based payment models)
- Medicare Shared Savings Programs (consists of several tracks/options)
- Accountable Care Organizations (ACO)
- Patient-centered medical homes
- Models tested by the Center for Medicare and Medicaid Innovation (CMMI)
Types of Alternative Payment Models
- Advanced APMs
Advanced APMs are a key component of the Quality Payment Program under the Medicare Access and CHIP Reauthorization Act (MACRA). These models incentivize healthcare providers to deliver high-quality, cost-efficient care by offering financial rewards for meeting specific performance metrics. Advanced APMs often involve taking on some level of financial risk and reward for patient outcomes, encouraging providers to focus on value over volume.
- MIPS APMs
MIPS APMs combine elements of the Merit-based Incentive Payment System (MIPS) and APMs. They allow clinicians to participate in a value-based payment structure, rewarding high-quality, cost-efficient care.
What is the difference between APM and advanced APM?
APMs and Advanced APMs are both designed to shift healthcare reimbursement from volume-based to value-based care, but they differ in their level of complexity and requirements. APMs are broader models that include various payment structures encouraging quality and efficiency improvements, but they may not meet stringent criteria for financial risk and reward. Advanced APMs, on the other hand, are a subset of APMs that meet specific criteria set by CMS, including assuming substantial financial risk and providing a pathway for higher potential rewards.
Examples of Alternative Payment Models
Example 1: Bundled Payments for Care Improvement (BPCI) Initiative.
This model provides a single, bundled payment for all services related to a specific episode of care, such as hip replacement surgery. Providers are responsible for the quality and cost of care across the episode, including pre-operative, operative, and post-operative services.
Example 2: The Comprehensive Primary Care Plus (CPC+) model.
PCMH models focus on providing comprehensive and patient-centered primary care. CPC+ involves a monthly care management fee and performance-based incentives to support primary care practices and deliver coordinated and effective care.