MedPAC Offers Opinions on Alternative Payment Models

The HCPLAN isn’t the only group working to develop APMs. The Medicare Payment Advisory Committee (MedPAC) dedicated a portion of its January meeting to discussing alternative payment models (APM) that will serve as alternatives to traditional fee-for-service Medicare. As mentioned in our previous enews, MACRA fosters the development of new APMs but delegates the leg-work to the Centers for Medicare and Medicaid Services (CMS). Proposed rules that are forthcoming this year will provide greater insight into what criteria new APMs will have to meet. In the meantime, stakeholders are doing their best to speculate and plan ahead.

MedPAC, the independent Congressional agency established to advise the U.S. Congress on issues affecting the Medicare program, makes formal recommendations to Congress in the form of two reports on Medicare policy topics. They also submit comments to agencies on regulatory matters. The Commission’s recommendations are not law in any way. MedPAC is required to comment on various stages of CMS’ APM rulemaking and therefore dedicated a session at its January meeting to the new payment models.


At its meeting, the Commission focused on the 5% bonus payment updates that providers in APMs will be eligible for from 2019-2024. For 2019, providers must receive at least 25 percent of their Medicare payments from an approved, or “qualified” APM in 2018. Providers meeting this APM threshold would also be exempt from participating in MIPS.

The APM approval criteria will be part of an upcoming rulemaking, but the Commissioners were eager to comment on the need for these 5 percent bonus payments to providers be tied to taking on a significant amount of financial risk and to be able to prove that they are effectively controlling costs. The threshold for what a “significant” amount of financial risk has yet to be defined.

MedPAC also laid out some draft principles they hope that APM entities are built on. These principles include the incentive payments (i.e. ACO shared savings) being tied to cost control and quality, similar to ACOs. The commission also wants APM entities take on a sufficient number of beneficiaries and assume risk for total Medicare Part A and Part B spending for their beneficiaries. Though only the entity would assume risk, they would also be allowed to share savings with beneficiaries i.e. rewarding them for following treatment plans. They also discussed some nuances to how APMs should function, such the need for accurate risk adjusting of individual and aggregate beneficiaries.

Lastly, and perhaps most importantly, MedPAC agreed that their goal over the coming months should be to advocate for the APM development and participation process to be as simple as possible. The Commission closed its APM discussion by expressing its intent to include this as a recurring topic for future meetings.

As always, ADVOCATE will keep you up to date on this and all issues impacting radiology as they become available.

Best regards,
Kirk Reinitz, CPA