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The MACRA All-Payer Advanced APM Pathway: System-Wide Implications

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May 3rd, 2017

Background

The Quality Payment Program (QPP) under MACRA is now more than three months underway into the first payment year. However, there are still many nuances of the program, specifically under the multi-payer Advanced APM option, that payers —including commercial, Medicare Advantage, and Medicaid — and clinicians need to understand before they can begin collaborating, and time is of the essence.

Becoming an Advanced APM
In the first two years of the QPP providers who want to participate in the Advanced APM track not only have to find an appropriate model that they can participate in, but they also must have sufficient Medicare payments or patient counts to meet established thresholds. The game changes in performance year 2019 (payment year 2021) where providers can use other payers who have contracted APMs that meet guidelines in order to meet the threshold criteria. While the provider must still meet a minimum Medicare threshold, they can draw on other payers to meet the increasingly higher thresholds as they incrementally increase until 2021, thus altering the game for not only providers, but payers.

Provider Benefits and Implications

Although most providers will default under the MIPS track, there are benefits that can be realized through participating in the Advanced APM pathway, including:

  • Exclusion from MIPS reporting
  • Payment adjustments subject only to the Advanced APM model and not MIPS
  • Lump sum bonus payment of 5 percent based on Part B payments from the previous calendar year (through 2024)
  • Qualify for awards or shared savings within the APM model as the criteria for success are met
  • Early-adopter knowledge and experience to move ahead of the curve in the value-based payment movement

The transition to accepting risk may be a slower process depending on the provider’s past experience, preparation, and current readiness. Because the 5 percent bonus is only awarded in the first six years of the QPP, it is necessary to transition to the Advanced APM pathway as early as possibly to gain the maximum reward. Additionally, the early years of the program will have the lowest threshold for providers to qualify. Since the threshold grows over time, joining an APM later requires that initial efforts meet a higher bar.

Providers will also need to clear the hurdles of coordinating and negotiating with “other” payers in their Advanced APM models that meet the requirements set forth from CMS and ensure they are submitting sufficient information to CMS to prove they are participating in models that qualify under the multi-payer umbrella.  Because this process hasn’t been fully set forth yet, there are still unknowns to navigate.

Payer Implications

“Other” payers who wish to participate in this initiative must meet similar requirements to the three requirements Medicare Advanced APMs must meet (bolded text indicates differences in the requirements).

  1. Requires participants to use certified EHR technology
  2. Provides payment for covered professional services based on quality measures comparable to those used in the MIPS quality performance category
  3. Either: (1) is a Medicaid Medical Home Model that meets criteria that is comparable to a Medical Home Model expanded under CMS Innovation Center authority, OR (2) requires participants to bear a more than nominal amount of financial risk.

Payers who wish to capitalize on the option to engage willing providers in the value-based care movement have the opportunity to develop new and innovative models that meet their needs as well as help providers meet the thresholds established by CMS.

Next Steps

Both providers and payers who want to take advantage of the multi-payer Advanced APM model under the MACRA Quality Payment Program need to begin developing models and establishing relationships now. As lessons learned are applied moving forward, the ability to tie not only Medicare lives but lives under all other payers have the potential to exponentially impact the entire health care system with value-based care taking the center seat to driving change, increasing quality, and decreasing costs.

Leavitt Partners understands that the Quality Payment Program and associated payment reform is an important component for advancing the health care. If you would like to learn more about our MACRA research, please refer to our March MACRA white paper.

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