In the beginning years of the program, most physicians will participate in the QPP using the Merit-based Incentive Payment System (MIPS) pathway. However, over time, it is expected that more physicians will transition to the Advanced Alternative Payment Model (APM) pathway as they become more familiar with the Advanced APM options and as CMS makes more Advanced APMs available.
To qualify for the 5 percent APM incentive payment and the higher annual baseline payment increase for participating in an Advanced APM, an eligible clinician must be a Qualifying APM Participant (QP). An eligible clinician is a QP for a year if the eligible clinician is in an APM Entity group that collectively receives a certain percentage of payments for covered professional services or sees a certain percentage of patients through the Advanced APM during the performance year. As such, eligible clinicians will want to ensure they are meeting these threshold levels of payments or patients through Advanced APMs to qualify as a Qualifying APM Participant (QP). Eligible clinicians will also want to ensure they are maximizing incentive payments by providing high quality, cost-efficient care.
A good resource on Advanced APM participation is Building Blocks for Success: Key Considerations for Advanced Alternative Payment Model (APM) Participation
Identify Growth Strategies to be a Qualifying APM Participant (QP)
Grow Advanced APM PCP Network
Many Advanced APMs can grow their payment or patient count by targeting PCPs that can be included in the network. But it is important to note that not all PCP’s are created equal; expansion should target high-performing PCPs.
Practices need to ensure patients do not “leak” to providers outside the Advanced APM network. Referring physicians can be provided with information that allows them to make a decision on which specialist in the network can provide high quality, cost-efficient care.
Practices need to develop a payer strategy – commercial, Medicare Advantage, and Medicaid – that identifies payers that provide the opportunity to move from the traditional fee-for-service contracts to value-based (Advanced APM) contracts. The result will be increase payment and patient counts that will help meet the QP threshold in coming years.
Payers are selective in entering into APM agreements because they are ultimately accountable for managing the clinical and financial risk. From that perspective, many times payers will offer resources and analytic insights to support their practice partners in successfully managing the population. Each payer will have their own financial contract model and quality measures; but most are following the lead of the CMS APM models.
Employers - the largest purchasers of commercial insurance – are starting to develop direct provider relationships using APM models. Many large employers are creating bundled payment relationships around specific conditions to lower the cost of care. In addition, there are some employers looking to contract directly with ACOs to manage the population.
Create an Advanced APM Opportunity Analysis
As practices move into the Advanced APM payment track, it will be important to identify areas of opportunity to lower costs, improve quality, and increase patient satisfaction. The opportunity analysis should outline targeted areas of improvement and identify the potential improvement in cost or quality.
Key areas for improvement include:
- Network Optimization
- Leakage and Referral Management
- Condition Management
- High-Risk Patient Management
- Evidence-Based Care Management
- Inpatient and ER Utilization Management
- Post-Acute Care Network Management
As these opportunities are identified, they should be incorporated into the financial model to support sensitivity analyses and scenario modeling.
In addition, a Clinical Improvement Plan can be created to address areas to improve clinical outcomes.
Develop an Advanced APM Financial Model and Plan
The financial fundamentals shift as practices move from a FFS Model to an Advanced APM. The revenue sources, profit drivers, and profit centers shift will drive fundamental change in the operating economics of providers; and practices entering into Advanced APM agreements need to refine how they approach financial modeling and planning. Profitability and market share will hinge on number of lives effectively managed, rather than total volume / breadth of service.
||Advanced Payment Model
||Utilization-based (volume) fee-for-service reimbursement
||Total cost of care-based fee-for-value reimbursement (gainsharing, risk share, capitation)
High volume, full capacity
|Cost-effective management of attributable lives
||Acute facilities dominate the market and drive the most value
Primary care, post-acute care settings become more prominent
Population health managers assume market control
The model and plan should answer the following:
- Model payment and patient counts across different payer scenarios to meet QP requirements in coming years
- Define inpatient and outpatient optimization opportunities based on operational benchmarks
- Model market share and population impacts on utilization and capacity
- Define risk-model (i.e. risk-share, bundled payments) strategies and scenarios
- Define total cost of care provided to different populations
- Define population-based financial forecast including resource requirements, capital, and costs.
- Ability to incorporate specific assumptions driving performance projections including market dynamics, network size, and cost reduction opportunities
- Model a range of scenarios and high level outcomes
- Perform sensitivity analysis for the preferred alternative to understand key pressure points
Develop a Capabilities and Gap Analysis
A capabilities and gap analysis is key to the success of an APM and Advanced APM. The practice should examine its current capabilities, strengths and weaknesses. The analysis should focus on the following required characteristics provider organizations need to be successful as an Advanced APM: strong leadership, clinical integration, successful medical management programs and experience with managing risk, measurement, reporting and incentives. The analysis should evaluate the partners’ readiness to succeed in an Advanced APM agreement based on the CMS quality and cost requirements.
Step 1: Define End-State Capabilities
The first step is to ensure an understanding of the end-state capabilities needed for success in an Advanced APM. Using the information outlined in the Identify Capabilities section, define a capabilities vision and prioritize the capabilities needed to achieve the vision.
Step 2: Assess Current Capabilities
The second step, the current state analysis, is initiated by evaluating each organization’s capabilities based on a construct of the end state. This is accomplished through interviews with key stakeholders, tours of facilities, and surveys. It will be important that each organization designates clinical and operational leadership to coordinate and guide the process.
The Capabilities Assessment offers practices a self-evaluation of their current capabilities. The assessment is structured based on 8 key competencies and outlines strengths and weaknesses.
Step 3: Develop Capabilities Gap Analysis
Based on the information obtained in Step One and Two, the practice can create a gap analysis to define the opportunities and overlap, to help ensure effective and efficient use of resources. Often referred to as a 'needs analysis,' the gap expresses needs in the areas of processes, resources, systems, practices, and performance measures. The gap analysis is an overarching strategic analysis of the capability requirements for the transformation to an Advanced APM.