What’s the news: The AMA has joined dozens of other physician and health care associations and hundreds of accountable care organizations (ACOs), health systems, hospitals and physician practices in calling on Congress to take steps to sustain the nation’s transition to value-based care.
Congress, the AMA and others said, should prioritize extension of Medicare’s advanced alternative payment model (APM) incentive payments and stop drastic increases in qualifying thresholds—actions that are part of the bipartisan, bicameral Preserving Patient Access to Accountable Care Act (H.R. 786; S. 1460).
“Addressing these critical issues as soon as possible will ensure that physicians, hospitals, and other health care providers have the resources and regulatory certainty needed to support beneficiaries’ continued access to high quality, patient-centered care,” says a letter to congressional leaders from the AMA, 23 physician and health care associations and more than 550 ACOs and other health care organizations.
The AMA is leading the charge to reform the Medicare payment system. APMs are a key approach to achieving value-based care by providing incentive payments to deliver high-quality and cost-efficient care for a clinical condition, a care episode or a patient population, says an AMA issue brief (PDF).
Why it’s important: APMs cut health care spending and boost patient outcomes by giving physicians, hospitals and other health care organizations the incentives and tools to proactively manage patient populations, focusing on management of chronic conditions across the care continuum.
“APMs reduce health care spending and improve outcomes by providing physicians, hospitals, and other health care providers with incentives and tools to manage patient populations proactively. APMs focus on management of chronic conditions and reward prevention across the continuum of care,” notes the letter to congressional leaders. “This approach has proven successful with Medicare as ACOs, the largest APM in Medicare, lowered spending by more than $28 billion over the last decade.”
A faster transition to advanced APMs in Medicare was facilitated by financial incentives and regulatory flexibilities, such as exempting advanced APM participants from reporting under the burdensome Merit-based Incentive Payment System (MIPS), that were included in the bipartisan Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
These policies sought to drive greater participation in advanced APMs. While more than 500,000 physicians and other health professionals are participating in APMs, more work needs to be done. Still, it’s important to note that more than half of traditional Medicare beneficiaries are “in an accountable relationship with their clinician,” says the letter to congressional leaders.
These incentive payments are needed to help doctors, hospitals and other health care organizations “cover the upfront and ongoing investments necessary to improve patient outcomes and expand services not covered by traditional Medicare.” They also “help fund wellness programs, patient transportation, meal programs, cost-sharing support for beneficiaries, and expanded access to care coordinators.”
But without additional congressional action, the incentive payments will no longer continue beyond the 2026 payment year, and 2025 is already experiencing a “sharp increase in qualifying thresholds” for them that will create big problems for physician practices, hospitals and others as they plan ahead.
“The financial uncertainty reduces the capacity of practices to manage complex patients, particularly in rural and underserved areas,” says the joint letter. “The sharp increase in advanced APM qualifying thresholds will involuntarily push more clinicians back into the Merit-based Incentive Payment System (MIPS) program, which will mean more physician practices and hospitals will have to incur higher costs and regulatory burdens associated with MIPS reporting.”
As the AMA’s issue brief explains, “Many years after MACRA’s passage, it has become evident that changes are needed to realize the robust pathway to APMs that Congress envisioned.”
Specifically, the AMA says, Congress needs to:
- Reauthorize the ability for physicians to become eligible for crucial incentive payments to increase physician participation in Advanced APMs, which expired at the end of 2024.
- Make participation thresholds for earning the incentive payments more flexible and realistic, reversing abrupt increases that took effect in 2025.
- Update criteria for adopting and expanding Medicare APMs. Criteria for achieving Medicare savings within a short time span have led multiple medical home and other models to be terminated and limited adoption of specialty models. Meaningful pathways are needed for APM proposals developed by stakeholders to be implemented in Medicare.
Learn more: Explore further with this explainer from the AMA on how to advance value-based care with APMs, which is part of the AMA’s Medicare Basics series that provides an in-depth look at important aspects of the Medicare physician payment system.
Also, the Centers for Medicare & Medicaid Services (CMS) has issued 2025 APM incentive payments to physicians who took part in in advanced APMs in 2023. Due to CMS system problems, some payments are being reprocessed and will be sent later in the summer.
As is the case every year, however, there is a subgroup of qualified APM participants for whom CMS does not have up-to-date billing information. Physicians whose organizations have not yet received their APM incentive payment should check the 2025 QP Notice for APM Incentive Payment file (ZIP) and locate their name so that they can complete the 2025 Billing Information Collection Form (also in the file) to ensure they receive their payment.
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