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Emergency Medicine Alternative Payment Models: Frequently Asked Questions

What is an alternative payment model (APM)?

The Centers for Medicare & Medicaid Services (CMS), the federal agency responsible for running Medicare and Medicaid, defines an alternative payment model (APM) as a payment approach that gives physicians and other providers added incentive payments to provide high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population. Examples of APMs include accountable care organizations (ACOs), medical homes, and bundled payment models.

What is an Advanced APM?

Advanced APMs are a subset of APMs that include additional requirements, such as having a nominal amount of financial risk. Financial risk means that a provider participant in the APM is held financially accountable if the services they provide wind up costing more than a pre-determined target. In other words, the participant must owe back some or all “losses” that he/she is determined to be responsible for. Under Medicare, participation in an Advanced APM could result in a 5 percent payment bonus through 2024 and a higher payment fee schedule update starting in 2026.

What is the Acute Unscheduled Care Model (AUCM)?

The American College of Emergency Physicians (ACEP) created the Acute Unscheduled Care Model (AUCM, pronounced ‘awesome’), a Medicare Advanced APM proposal specifically designed for emergency physicians.

The AUCM would provide a voluntary alternative to the traditional fee-for-service payments for Medicare patients who receive emergency care. It is structured as a bundled payment model, focusing on specific “episodes” of unscheduled acute care. Under a bundled payment approach, if the cost of an episode of care is less than a pre-determined price for that episode, then a participating provider or group can keep that difference. However, if the cost winds up being more than the pre-determined price, participants would be responsible for those losses and owe Medicare the difference.

The AUCM is designed to last five years and be flexible enough to allow the full spectrum of emergency physicians to participate, should they so choose -- from those with dedicated infrastructure and experience accepting financial risk, to smaller groups of physicians who do not have as much experience in this area.  Emergency physicians and groups could participate regardless of employment model (independent group, regional group, national group, employed physicians).

The overall goal of the AUCM is to improve the ability of emergency physicians to reduce inpatient admissions and observation stays when appropriate through enhanced care coordination. Emergency physicians would become key members of the continuum of care as the model focuses on ensuring follow-up care for emergency patients, minimizing redundant post-emergency department (ED) services, and avoiding post-ED discharge safety events that lead to follow-up ED visits or inpatient admissions.

Why did ACEP develop the AUCM?

Currently, individual emergency physicians and emergency medicine groups do not have any opportunities to directly participate in Advanced APMs and therefore potentially receive a five percent Medicare payment bonus. To fill the gap in available Advanced APMs for emergency physicians, ACEP first convened an APM Task Force in 2015 which considered several options for constructing an emergency medicine-focused APM, and ultimately decided to develop the AUCM. The AUCM is designed to include financial risk and therefore qualify as an Advanced APM.

How does CMS decide which Advanced APMs are in Medicare?

CMS’ Center for Medicare & Medicaid Innovation Center (CMMI) is testing the vast majority of the Advanced APMs that are currently operational. While CMS can decide on its own which Advanced APMs to implement, the Medicare Access and CHIP Reauthorization Act (MACRA), the law that created Advanced APMs, created an advisory committee to make recommendations to CMS on which new physician-focused APMs should be in Medicare. Called the Physician-Focused Payment Model Technical Advisory Committee (PTAC), this committee reviews proposals from the public and provides recommendations to the Secretary of the Department of Health and Human Services (HHS). The HHS Secretary is required to respond to every PTAC recommendation, regardless of what the PTAC recommended.

Has the AUCM been implemented? What is the status of the model?

No, the AUCM has not been implemented yet, but work is now underway at CMMI to do so. ACEP submitted its AUCM proposal to the PTAC for consideration in 2017, and the model was ultimately recommended by the PTAC to the HHS Secretary for full implementation in late 2018, including in its official report a designation of “Deserves Priority Consideration”, as the PTAC felt that the model filled an enormous gap in terms of available APMs to emergency physicians and groups.

The HHS Secretary recently formally responded to the PTAC’s recommendation, noting that he believes that core concepts of the AUCM should be incorporated into other APMs that CMMI is developing. Highlights of the response can be found here. CMMI is now just beginning to conduct the work to carry out the HHS Secretary’s request.

What is ACEP doing to promote a role for emergency physicians in APMs?

Since it is unknown how long it will take for CMMI to begin incorporating the AUCM into the Medicare APMs it is developing, we have started our own initiative to promote participation in emergency medicine-focused APMs being offered by other payers like Medicaid and private insurers. To find out more about ACEP’s initiative to promote emergency medicine APMs, please go here.

As Medicaid and private payers move away from fee-for-service contracts with providers towards value-based payment arrangements, a non-Medicare version of the AUCM would be an ideal APM construct for these payers to pursue. However, while we encourage Medicaid and private payers to incorporate core concepts of the AUCM into emergency medicine-focused APMs, we anticipate that some features of the APM will be different from the AUCM depending on the specific patient population being targeted.

What are the pros and cons of participating in an APM?

Unfortunately, there are no opportunities currently for emergency physicians to directly participate in an APM—and that is why ACEP developed the AUCM.  Being in an APM is a financial decision that physicians and groups, when presented with such an opportunity, must make. Participating in Advanced APMs could make you eligible for a five percent bonus payment under Medicare. However, Advanced APMs require you to take on downside financial risk, which may not be a viable option for some of you. Participating in any APM, even one that is not an Advanced APM, also has some benefits, including an opportunity for receiving additional payments for providing high-quality and cost-efficient care. However, participating in an APM requires you to make the necessary infrastructure investments (health information technology, support staff, etc.) to be successful in the model. 

How do I participate in an APM?

Participating in an APM requires a payer, such as Medicare, Medicaid, or a private insurer, to offer a financial agreement that is different from the traditional fee-for-service reimbursement structure. Currently, there are no opportunities for an emergency physician or group to participate in an APM, but several Medicaid offices and private insurers have already expressed interest in potentially offering an arrangement that includes aspects of the AUCM.

Through ACEP’s APM initiative, we plan to develop resources and include tools for emergency medicine groups to approach payers with a proposal to enter into such agreements.

What is CEDR?

Developed by ACEP, the Clinical Emergency Data Registry (CEDR) is the first Emergency Medicine specialty-wide registry to measure acute care quality, outcomes, practice patterns, and trends in emergency care. CEDR is primarily used as a mechanism for helping emergency physicians and other providers meet reporting and attestation requirements in MIPS.

The CEDR registry ensures that you, rather than other parties or payers, are identifying what works best for your clinical practice and patients.

If I participate in an APM, do I still need to meet the Merit-based Incentive Payment System (MIPS) requirements?

It depends.

MACRA created a new physician performance program in Medicare called the Quality Payment Program (QPP). The QPP includes two tracks: MIPS and Advanced APMs.

MIPS includes four performance categories: Quality, Cost, Improvement Activities, and Promoting Interoperability (formerly EHR Meaningful Use). Performance on these four categories (which are weighted) roll up into an overall score that translates to a bonus or that providers receive on their Medicare payments two years after the performance period (for example, performance in 2019 will impact Medicare payments in 2021).

ACEP is doing all that we can to simplify MIPS requirements and make it easier to avoid a penalty and even be eligible for an upward payment adjustment. However, the stated goal of the QPP is to help eventually transition all clinicians to the second track, Advanced APMs.

In order to be in the second track of the QPP and avoid participating in MIPS (and potentially be eligible for a 5 percent Medicare bonus payment), you must meet the definition of a “Qualifying APM Participant” or “Partial Qualifying APM Participant” in an Advanced APM. To qualify, you must have a certain percentage (i.e. threshold) of your payments or patients associated with an Advanced APM(s). Coming right below the threshold makes you a Partial Qualifying APM Participant, allowing you to avoid MIPS, but not be eligible for the bonus payment.

You can meet this threshold in one of two ways:

  1. The Medicare Option, which takes into account your participation solely in Medicare Advanced APMs; and
  2. The All-Payer Combination Option, which takes to account your participation in Advanced APMs both with Medicare and other payers.

To meet this second option, you must be in a Medicare Advanced APM and combine that participation with an Other-Payer Advanced APM. In other words, you cannot avoid MIPS simply by participating in an Other-Payer Advanced APM without also participating in a Medicare Advanced APM.

To find more about Advanced APMs and how to qualify for the five percent payment bonus and avoid MIPS, please read this CMS fact sheet.

How does possible adoption of the AUCM or another emergency medicine APM affect my decision to use CEDR to meet MIPS requirements going forward?

CEDR is a qualified clinical data registry (QCDR) that you can use to help meet (and even exceed) MIPS reporting requirements.

The AUCM is a Medicare Advanced APM still under development at CMS and most emergency physicians have no other real opportunities to directly participate in a Medicare Advanced APM to avoid MIPS. Therefore, at least for the time being, most of you will continue to participate in MIPS—and can continue to use or consider using CEDR for reporting.

The ultimate goal of ACEP’s APM Initiative is to help you participate in an emergency medicine Other Payer Advanced APM. Once CMMI incorporates elements of the AUCM into a Medicare Advanced APM, it will then be easier for you to qualify for the 5 percent payment bonus and avoid reporting in MIPS. As some of you transition to participating in Advanced APMs, CEDR will continue to play an integral role in measuring quality of care and will provide you with the data you need to be successful in this transition and in the new payment model.

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