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Alternative Payment Model (APM)

What is an Alternative Payment Model (APM)?

An Alternative Payment Model (APM) is a payment approach that offers incentive payments to facilities for providing cost-efficient and high-quality care. This payment model is applicable for any type of care episode, clinical condition, or population.

In addition to the standard APM, there are other, more specific, types:

  • MIPS APMs: where MIPS-eligible clinicians participate in the payment model with their CMS-approved participation list.
  • Advanced APMs: a track of the Quality Payment Program (QPP) where those enrolled receive a 5% incentive for achieving threshold levels of patients or payments.

Advanced APMs are often also considered MIPS APMs. However, MIPS-eligible clinicians participating in Advanced APMs are also included in MIPS if they do not meet the set patient or payment threshold needed to become a Qualifying APM Participant.

Another alternative to becoming a Qualifying APM Participant is the All-Payer option, which requires the clinician to participate in a combination of Advanced APMs with Medicare and Other-Payer Advanced APMs.

How do APMs improve healthcare?

Since healthcare providers are held accountable for meeting specific quality performance goals to receive their incentive payments, patients see an improvement in the quality and efficiency of care. Additionally, the purpose of the APM is to increase the quality of care without increasing spending. This ensures that prices for patients and facilities do not increase.