Alternative Payment Models and the Quality Payment Program

The Centers for Medicare & Medicaid Services’ Innovation Center develops and evaluates alternative payment models (APMs), which test new healthcare payment and service delivery approaches and reward model participants for effectively delivering value-based care. Many of these models are also part of the Quality Payment Program or QPP, which rewards Medicare clinicians who provide high-value, high-quality care with payment increases – while at the same time reducing payments to those clinicians who aren’t meeting performance standards.

Clinicians have two tracks to choose from in the Quality Payment Program based on their practice size, specialty, location, or patient population:

1. Merit-based Incentive Payment System (MIPS)
2. Advanced Alternative Payment Models

The CMS Innovation Center is responsible for overseeing aspects of the Quality Payment Program related to APMs.

What is an Advanced APM?

An APM is an Advanced APM if it:

1. Requires participants to use certified electronic health record (EHR) technology;
2. Provides payment for covered professional services based on quality measures comparable to those used in the MIPS quality performance category; and
3. Either: (1) is a Medical Home Model expanded under CMS Innovation Center authority OR (2) requires participants to bear a significant financial risk.

What is a MIPS APM?

All Advanced APMs are also MIPS APMs. That is, these APMs have MIPS eligible clinicians on their CMS-approved participation list. However, not all MIPS APMs are Advanced APMs.

Qualifying APM Participant

Eligible clinicians in the Quality Payment Program who meet certain threshold levels of payments or patients through Advanced APMs can become Qualifying APM Participants (QPs). QPs may earn an APM Incentive Payment and are exempt from reporting to MIPS.

Clinicians can also become a Partial QP if they meet lower thresholds than QP status for payment amount and patient count. Partial QPs will not receive the APM Incentive Payment, but may choose not to participate in MIPS.

Eligible Clinicians who don’t earn QP or Partial QP status may be required to participate in MIPS.

To learn more, visit the Quality Payment Program website.