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Proposed Changes for APM Participants in 2023


CMS Quality Promoting Interoperability 2023 APM

With the release of the 2023 Proposed MIPS and QPP Rule, we are highlighting potential changes that could impact practices if finalized. This week, we are focusing on Advanced Alternative Payment Model (APM) participants and what changes are being proposed for them. In this blog, we will review the major potential changes for APM participants in the 2023 proposed rule as well as provide a reminder for those who achieved Qualifying Participant (QP) status to ensure that they are able to receive payment. 

2023 Proposed Changes

Promoting Interoperability Reporting

CMS is proposing to allow APM Entities the option to report Promoting Interoperability (PI) at the entity level, if they choose. Up until now, reporting has been completed for each individual participant TIN for the PI category. However, both Quality and Improvement Activity data is aggregated at the entity level for reporting currently, so this proposed change is not revolutionary and instead could potentially provide more consistency for reporting standards and expectations for APMs.

If finalized, for the 2023 reporting period, the following considerations should be made: 

  • Providers should confirm with their APM as to how they are planning to report the PI category. 
  • This proposed change is optional, not mandatory, so individual TIN reporting might continue for some APMs. 

Distribution of APM Incentive Payments to Providers

When CMS is unable to complete APM Incentive payments, they are required to post a notice in the Federal Register to provide an opportunity for providers to clarify or update their payment information. Under current policy, the cut-off date for providers to update their information is November 1 of each payment year or 60 days from the date on which CMS makes the initial round of APM Incentive Payments for such year, whichever is later.

CMS is proposing to change the deadline to September 1 of the payment year or 60 days from the date on which CMS makes the initial round of payments, whichever is later. This proposed change is due to CMS' need for additional time to process payments and is a reflection of their ability to provide earlier notification to providers regarding their inability to complete payment.  

Nominal Amount Standard

This proposal only directly impacts the APM Entity, not the participating clinicians. When the QPP was established, CMS put in place an 8% nominal amount standard, but said that it would need to be reevaluated after 2020. The "nominal amount standard" defines the the minimum total amount of the average estimated total Medicare Parts A and B revenues of all providers and suppliers participating in the APM Entity that the entity must put at risk. CMS is proposing to maintain the nominal amount standard at 8% for all future years. 

Requests for Information for Potential Future Changes

QP Determinations at the Individual Eligible Clinician Level

CMS is requesting information on sunsetting the use of APM Entity-level QP determinations and instead making QP determinations at the individual eligible clinician level only.

  • Currently, QP determinations are made at the entity level, which has led to some capping of specialist participation in APMs. Due to the difference in patient attribution for specialist services in comparison to services provided by primary care, specialist participation in APMs could prevent the APM from reaching their threshold score.
    • Our analysis: Removing specialists from APMs is a concern and it is something we have seen happen, however, this is not an appropriate solution to that problem. Specialists, particularly procedural and surgical specialists, will be disincentivized to join or remain in APMs as they are unlikely to meet QP status under individual-level QP determinations.
  • CMS also states that it is concerned that clinicians who do not meet the QP threshold at the individual level will receive "windfall" financial reimbursements.
    • Our analysis: APMs were designed with the goal of creating patient-centered care integrated across the care continuum. Specialists are an important part of the spectrum of care and should be equally incentivized to participate in APMs.

Transition from APM Incentive to QP Physician Fee Schedule (PFS) Conversion Factor

As the 5% lump sum bonus ends in the 2022 performance year, CMS is requesting information regarding the gap in statutory financial incentives and the difference in potential incentives between QPs and MIPS eligible clinicians in future years. 

2025 Payment Year Gap in Incentives

  • There will be no incentives for APM participation in the 2023 performance year/2025 payment year due to the statutory expiration of the APM Incentive lump sum bonus.
  • The QP PFS conversion factor, which becomes effective in the 2026 payment year, will replace the APM Incentive lump sum bonus with an increased fee schedule update of 0.75% compounded annually for each year as a QP. The MIPS update will be 0.25%. 
  • CMS is looking for creative solutions to incentivize APM participation that does not require additional funding or an altered reimbursement structure. 

QP PFS Conversion Factor Inadequacy compared to MIPS Positive Payment Adjustment

  • Looking at the years after the QP PFS conversion factor becomes effective, CMS is concerned that APM incentives will not surpass MIPS incentives until 2038. This concern is based on their expectation that MIPS positive payment adjustment will be at or above 6.9% in the 2025 payment year.
    • Our analysis: The highest maximum MIPS bonus in the history of the program was 1.87%. It is unlikely that potential future MIPS bonuses will cause clinicians to leave APMs.

2022 QP Notice for APM Incentive Payment

While we have the attention of APM participants, we wanted to call to attention that CMS is attempting to contact providers for whom they are currently unable to complete 2020 performance year/2022 payment year APM Incentive compensation transactions. To ensure that you receive proper payment, please complete the following steps. 

  • Download the 2022 QP notice for APM Incentive Payment .zip file
    • Once you have downloaded the .zip file, you will need to open it for it to "unzip" and provide you with the enclosed notice and directory of providers they have been unable to contact (the directory is an Excel document).
    • Open the Excel document that provides the names and NPIs of providers for which CMS has been unable to complete payment. 
  • If you locate your name or NPI on the directory, please refer to the notice document (the .pdf in the .zip file you opened earlier) to find the "2022 Incentive Payment Billing Information Collection Form" file. 
    • The form will allow to specify billing reassignment for your payment. 
    • Further guidance and clarification on special cases for billing reassignment is provided on page 2 of the notice document.
    • Your completed form must be submitted to the QPP help desk by November 1, 2022. Payments will be processed after all forms have been received. 

Next Steps

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    • Contact your Client Success Manager if you have any questions or if you plan on adding a new facility.
  • If you are not a MarsdenAdvisors client:
    • Contact us to learn more about our services and to reap the rewards of our combined decades of experience.

If you have any questions on this, let us know! 


Juliette Walle

Written by Juliette Walle

Juliette Walle is a Health Policy Analyst at the consulting firm MarsdenAdvisors.

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