CMS Unveils New Advanced Alternative Payment Models for 2018

Ken Terry

October 26, 2016

The Centers for Medicare & Medicaid Services (CMS) on Tuesday announced some new payment arrangements that will qualify as advanced alternative payment models (APMs) in the agency's Quality Payment Program (QPP), starting in the 2018 performance year. Physicians and other eligible clinicians who receive a certain percentage of revenue from advanced APMs are exempt from the requirements and penalties of the Merit-Based Incentive Payment System (MIPS) and are eligible to receive 5% annual bonuses for 5 years, beginning in 2019.

The new models that will qualify as advanced APMs are Accountable Care Organization (ACO) track 1+, a new voluntary bundled payment model that CMS has not yet described; the Comprehensive Care for Joint Replacement (CCJR) Model; and the Advancing Care Coordination through Episode Payment Models.

In addition, CMS expects to reopen applications for new practices and payers in its Comprehensive Primary Care Plus (CPC+) program and new participants in the Next Generation ACO model for the 2018 performance year.

All of this is part of CMS's effort to bring as many physicians as possible into groups and networks that are capable of delivering value-based care, defined as higher quality at lower cost. Advanced APMs are designed to provide value-based care, and CMS expects that about 125,000 physicians will participate in these models in 2018.

ACO track 1+ will be part of the Medicare Shared Savings Program (MSSP). Currently, the MSSP includes three other tracks. Most ACOs in the program participate in track 1, which has no downside risk. But only tracks 2 and 3, which require ACOs to take downside risk, qualify as advanced APMs. Track 1+ will also entail taking financial responsibility, but the amount of Medicare practice revenue at risk for the first 2 years will be capped at 8%.

At a recent press conference where CMS announced the final rule for the Medicare Access and CHIP Reauthorization Act (MACRA), CMS Acting Administrator Andy Slavitt said that track 1+ is designed to make it "more reasonable and tenable for small practices" to participate in ACOs that take risk from CMS. Besides the cap on losses, he pointed to the upside opportunity plus the 5% annual bonus guaranteed to physicians who join advanced APMs.

The CCJR program, which launched January 1 of this year, involves bundled payments for joint replacement cases. It is mandatory for about 800 hospitals in 67 geographic areas across the country. While it is not clear how many physicians are affected, one would expect that most orthopedists practicing in those hospitals are, along with the physicians who care for patients for 90 days after discharge.

The Advancing Care through Episode Payment Models, which CMS proposed in July, include bundled payments for episodes of care for acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment, excluding lower-extremity joint replacement. Again, 90 days of postdischarge care are included in the bundles. CMS proposes to test these bundled payments for 5 performance years, beginning July 1, 2017, and ending December 31, 2021. Only clinician participants who use certified electronic health records technology and take financial risk qualify for the advanced APM track of QPP. The same is true for CCJR participants.

CPC+ is an advanced medical home model that aims to strengthen primary care through regionally based multipayer payment reform and care delivery transformation. The 5-year demonstration project, which builds on the CPC program that began in 2012 and ends this year, will be launched on January 1. The 2017 application period for the program has ended, but CMS now says it will reopen applications for 2018.

The Next Generation ACO model is similar to the Pioneer ACO program in that participants must take significant financial risk. CMS has introduced several innovations to make it easier for these ACOs to bear risk.

For a physician to qualify for the advanced APM track in 2017, he or she must derive 25% of Medicare payments from that APM or must have 20% of their Medicare patients in that APM. The percentages rise to 50%/35% in 2019 and to 75%/50% in 2021.

The advanced APMs available in 2017 include the following:

  • Comprehensive End-Stage Renal Disease (ESRD) Care Model (large dialysis organization [LDO] arrangement);

  • Comprehensive ESRD Care Model (non-LDO arrangement);

  • Comprehensive Primary Care Plus (CPC+);

  • Medicare Shared Savings Program ACOs – track 2;

  • Medicare Shared Savings Program ACOs – track 3;

  • Next Generation ACO Model; and

  • Oncology Care Model (two-sided risk arrangement).

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