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What Is an “Advanced” APM?

For your convenience:

APMs = Alternative Payment Models

MIPS = Merit-based Incentive Payment System

QPs = Qualifying APM Participants

CEHRT = Certified Electronic Health Record Technology


The MACRA rule has introduced a load of new acronyms (see above), but here is another wrinkle. What exactly is an “Advanced” Alternative Payment Model? Luckily, several attorneys wrote an overview in a recent American Health Lawyers Association article, the bulk of which appears below.


An Advanced APM is an APM that: (1) bears financial risk that is more than “nominal” (or is a medical home); (2) requires practitioners to use certified electronic health record technology (CEHRT); and (3) pays for services based on quality measures comparable to MIPS.


Providers and Accountable Care Organization (ACOs) with a specified percentage of patients or payments directed through Advanced APMs can become Qualifying APM Participants (QPs). This means they will be exempt from MIPS and may qualify for a 5 percent APM incentive payment beginning in 2019.


To have a “more than nominal” risk, an Advanced APM must have provisions to owe CMS or forgo an amount equal to at least: (1) for performance periods 2017 and 2018, 8 percent of the average Medicare Parts A and B revenues of participating APM entities (the “revenue-based standard”); or (2) for all performance periods, 3 percent of the expected expenditures for which an APM Entity is responsible under the APM (the “benchmark-based standard”).


Unlike the proposed rule, the final rule does not require an Advanced APM to carry required marginal risk or minimum loss rate.


In 2019 and 2020, QP determinations will be made based only on Medicare Part B services. Accordingly, CMS expects Advanced APMs to include, primarily, MSSP Tracks 2 and 3, the Next Generation ACO Model, the Comprehensive Joint Replacement Model, the Comprehensive Primary Care Plus Model, and the Comprehensive End-Stage Renal Disease Care Model. A new MSSP Track 1+, carrying less risk than MSSP Track 2 or 3, will be available as an Advanced APM starting in Program Year (PY) 2018. CMS will provide more detail about Track 1+ in a forthcoming rule.


Risk-bearing Medicare Advantage (MA) plans will not qualify as Advanced APMs, but CMS notes they may qualify under the “All-Payor Combination Option.”


In addition to carrying financial risk, at least 50% of clinicians in an Advanced APM must use certified electronic health record technology (CEHRT). However, this provision is not applicable to MSSP ACOs, which may qualify through placing penalties or rewards on participants based on the degree of CEHRT use among eligible clinicians.



iProtean, now part of Veralon thanks the American Health Lawyers Association for permission to use its article, “Assessing the MACRA Final Rule and the Impact on Shared Savings Programs,” AHLA Weekly, October 21, 2016. Article by Mary Beth Johnston, Limo Cherian, Ryan Severson, and Steven Pine, K&L Gates LLP. The Accountable Care Organization Task Force sponsored the article.




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