Payment & Delivery Models

7 ways to speed development of Medicare APMs

Physician-developed Alternative Payment Models (APMs) can provide opportunities to improve quality of care and patient outcomes while slowing growth in Centers for Medicare and Medicaid Services (CMS) spending. But barriers, such as inadequate payment for high-value services, stifle innovation and act as disincentives to physician participation.

“Most of the savings from improved care delivery will come from reducing avoidable utilization of hospitals, tests, medications, and post-acute care,” AMA Executive Vice President and CEO James L. Madara, MD, wrote in a letter to CMS Administrator Seema Verma. “Yet, under current Medicare payment systems, if physicians keep patients healthy or successfully prevent disease progression and complications, their fee-for-service revenues will be lower, which may leave them with insufficient resources to continue providing high quality care and cover their practice costs.”

Dr. Madara’s Nov. 20 letter came in response to a CMS request for feedback on a new direction for the Center for Medicare and Medicaid Innovation (CMMI). Specifically, the CMS request said the agency aims to “promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs and improve outcomes.”


The AMA commended CMS for recognizing the need for a new direction and requesting stakeholder input. The Association also recommended several strategies that align with the CMMI stated guiding principles—such as promoting market choice and competition—and focus areas, such as physician specialty payment models, behavioral health APMs and local innovations including Medicaid-focused models.

The AMA’s recommended strategies include the following.

Support physician-driven approaches to patient-centered care. Shift from a top-down to a bottom-up approach to designing APMs, and commit to testing every APM that earns a positive recommendation from the Physician-Focused Payment Model Technical Advisory Committee (PTAC).

Limit physician accountability to aspects of quality and cost that are within physician control. Many of the APMs that CMMI developed inappropriately transfer insurance risk to physicians, the letter states. Physicians are willing to be held accountable for the appropriateness of tests they order and procedures they perform, but CMMI should not expect them to take risk for the prices of drugs or the severity mix of their patients.

“Increasing physicians’ financial risk for Medicare spending on hospitals and drugs will be a major barrier to increasing their participation in APMs,” the letter notes.

Eliminate unnecessary administrative burdens. CMS should use its waiver authority to remove problematic burdens that hinder addressing basic patient needs. These include certification requirements that endocrinologists face in order to obtain proper shoes for patients with diabetes and prior authorization or step-therapy barriers allergists face in prescribing proper medications for their asthma patients.

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Refine and improve promising APMs over time. CMMI has implemented most APMs by deciding how the APM should be structured, implementing it and then terminating it when statistically significant savings have not been demonstrated, according to the letter. “CMMI should assume every APM will need refinement,” and focus on rapid-cycle improvement beginning with limited-scale testing.

Seek proposals to test APMs that extensively use digital medicine services, telehealth and remote monitoring. The need to leverage new technologies to support targeted management of chronic conditions and rapidly manage acute events is essential as clinician shortages persist and the size of the Medicare population grows, states the letter.

Initiate models based on improving access to preventive services. The CMMI-tested Diabetes Prevention Program has been expanded nationwide. The letter urges CMMI to “proceed expeditiously” with implementing a virtual model. It also encourages CMMI to purse a self-measured blood pressure program.

Regarding the focus areas CMS highlighted, the AMA urged CMMI to test the Patient-Centered Opioid Addiction Treatment (P-COAT) model, which is a physician-focused behavioral health APM the American Society of Addiction Medicine has developed with the AMA. The P-COAT APM includes medication-assisted treatment and addresses medical, psychological and social components. It calls for payments to support evaluation, diagnosis and treatment planning followed by maintenance.

Test PTAC-recommended models. “CMMI’s highest priority should be expanding the availability of APMs in which specialists can successfully participate, including additional and expanded APMs for primary care specialists,” the letter states.

Two Physician-Focused Payment Models that received a positive PTAC recommendation are the ACS-Brandeis Advanced APM submitted by the American College of Surgeons and Project Sonar, submitted by the Illinois Gastroenterology Group and SonarMD.

APM resources can be found on the AMA’s Medicare Alternative Payment Models webpage. The AMA has also developed “A Guide to Physician-Focused Alternative Payment Models,”which offers a menu of physician-focused APM types and advice on how to choose the appropriate one.

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