Advanced Alternative Payment Models (AAPMs): Frequently Asked Questions

MACRA defines any of the following as a qualifying Alternative Payment Model (APM):

• An innovative payment model expanded under the Center for Medicare & Medicaid Innovation (CMMI), with the exception of Health Care Innovation Award recipients;
• A Medicare Shared Savings Program (MSSP) accountable care organization (ACO);
• Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program; or
• Another demonstration program required by federal law.

Advanced APMs (AAPMs) are a subset of APMs that meet additional criteria:

• Use of quality measures comparable to measures under MIPS;
• Use of a certified electronic health record (EHR) technology; and
• Assumes more than a “nominal financial risk” OR is a Medical Home Model expanded under the CMMI.

Qualifying participants in AAPMs are exempt from the MIPS reporting requirements.

An APM that does not meet the criteria to be an AAPM may be considered a MIPS APM.

For the 2023 performance period, an AAPM entity must do one of the following for all its eligible clinicians to be qualifying participants (QPs):

• Receive at least 50% of its Medicare Part B payments through the AAPM, or
  
• See at least 35% of its Medicare patients through the AAPM

Eligible clinicians that are not considered QPs can be considered partial QPs if the AAPM entity meets at least one of the following thresholds:

• Receive at least 40% of its Medicare Part B payments through the AAPM, or
  
• See at least 25% of its Medicare Part B patients through the AAPM.

QPs will be excluded from the MIPS reporting requirements. Partial QPs can opt to participate in MIPS. Partial QPs who elect to participate in MIPS must report through Traditional MIPS or the APM Performance Pathway (APP).

ECs can also achieve QP status through the All-Payer Combination Option. This option allows ECs who do not meet the QP patient or payment threshold under their Medicare AAPM to count their participation in an Other Payer APM toward their QP status. The payment and patient thresholds remain the same under the All-Payer AAPM option, 50% and 35% respectively. However, an EC can reach these thresholds through a combination of payments or patients seen through the Medicare AAPM and the Other Payer AAPM. To become a QP through the All-Payer Combination Option, an EC must still meet minimum thresholds under the Medicare arrangement. ECs must:

• Receive at least 25% of Medicare Part B payments through the Medicare AAPM, or
  
• See at least 20% of Medicare patients through the Medicare AAPM.

An EC can be considered a partial QP through the All-Payer Combination Option if they meet the payment or patient threshold, 40% and 25% respectively. Partial QPs must meet the following minimum Medicare thresholds:

• Receive at least 20% of Medicare Part B payments through the Medicare AAPM, or
  
• See at least 10% of Medicare patients through the Medicare AAPM.

APM entities or eligible clinicians can request that CMS use the All-Payer Combination Option to determine their QP status. Entities and ECs must submit payment and patient data from their Other Payer APM for CMS to make this determination.

Additional resources, including the full list of Medicare and Other Payer AAPMs, are available in the resource library of the Quality Payment Program website.

CMS makes QP determinations three times a year (March 31, June 30, and August 31) using an AAPM Entity’s participation list. Advanced Alternative Payment Model participants can check their QP status using the QPP Participation Status Tool.

For payment year 2025, QPs will receive a 3.5% lump-sum bonus based on the previous year’s Medicare Part B payments.

Qualifying participants (QPs) will receive a 0.75% increase to their Medicare physician fee schedule (PFS) beginning in 2026.

Only AAPMs are eligible for the 5% bonus. The following APMs apply to primary care and are (AAPMs) for the performance period beginning in 2020:

• ACO Realizing Equity Access and Community Health (REACH)
• Maryland Total Cost of Care Model - Maryland Primary Care Program Track 3
• Medicare Shared Savings Program (MSSP) BASIC Level E, and the ENHANCED track
• Primary Care First
• Vermont Medicare ACO Initiative (as part of the Vermont All-Payer ACO Model)
• Additional models will be announced by CMS as they are approved

For payment year 2025, ECs that are considered QPs are eligible for a lump sum 3.5% bonus based on the previous year’s Medicare Part B payments.

Beginning in payment year 2026, QPs will receive a 0.75% increase to their Medicare physician fee schedule.

To be considered a QP, an EC must  receive a certain percentage of payments or see a certain percentage of patients through the AAPM. For the 2023 performance year, the payment threshold is 50% and the patient count threshold is 35%.

QP determinations will be made at the group level. Participants who do not meet the QP thresholds may be considered a partial QP if they receive 40% of their payments or see 25% of their patients through an AAPM. Partial QPs can elect to participate in MIPS and may report using the APM Performance Pathway. Partial QPs will be excluded from MIPS unless the EC makes an explicit election to participate.

CMS will make QP determinations three times during the performance period.

QPs will be identified on the following schedule:

• March 31 of the performance period; 
• June 30 of the performance period; 
• and August 31 of the performance period.

To be included in the QP calculations, an EC must be on the AAPM’s participation list during at least one of these determination snapshots. Once determined to be a QP, an EC will retain QP status for the performance period even if they are not included in the AAPM’s participation list during all determination snapshots.

For example, an EC included on the participation list and determined to be a QP during the March 31 snapshot, but not included on the participation list during the June 30 snapshot will be considered a QP for the performance period. ECs can check their QP status using the QPP Participation Status lookup tool.

The All-Payer Combination Option allows ECs to become QPs or Partial QPs by meeting QP thresholds through a pair of calculations that assess a combination of both Medicare Part B covered professional services furnished through Advanced APMs and services furnished through Other Payer AAPMs.

To be considered a QP, an entity or EC must receive at least 50% of its payments through an AAPM or see 35% of its patients through an AAPM. At least 25% of payments received or 20% of patients seen must be through the Medicare AAPM. To be considered a partial QP, an entity or EC must have at least 40% of payments received or 25% of patient seen through an AAPM. A minimum of 20% of payments received or 10% of patients seen must be through the Medicare AAPM.

Other Payer APMs are non-Medicare fee-for-service payment arrangements that meet the AAPM criteria:

• Required use of CEHRT 
• Payment based on quality measures comparable to those in MIPS
• Assumption of nominal risk.  

Other Payer AAPM include arrangements authorized under Title XIX (Medicaid), Medicare Health Plan payment arrangements, and payers with payment arrangements aligned with a CMS Multi-Payer model, and arrangements with commercial and other private payers. 

Payers or eligible clinicians can request that CMS determine whether an arrangement qualifies as an Other Payer AAPM. Additional information on Other Payer AAPMs can be found on the CMS QPP website.

Most physicians will move through MIPS until more AAPMs become available. However, family physicians interested in an AAPM model need to be prepared to start on the MIPS track. ECs can verify their QP status using the QPP Participation Status lookup tool. A list of AAPMs and MIPS APMs is available on the CMS QPP website.