Prior to APM participation, practices should be able to understand the financial risk involved including differences between upside and downside risk. The Financial Risk category outlines key considerations for taking on financial risk to help practices understand the financial impact of APM participation. Review the following questions and responses to help your practice potentially mitigate business and performance risk within APMs for financial success.

Cost of Entry

Does your practice know the financial investments needed for success in an APM?

If yes Your practice has identified the associated costs and prioritized those investments based on a return on investment analysis.
If no The infrastructure required to be successful in an APM can be costly and should be identified and incorporated into your practice’s budgeting process. Consider options prior to APM participation.
If unsure Determine the associated costs based on a cost/benefit analysis prior to APM participation.

Is the cost to participate in provider alignment arrangements that provide access to APMs sustainable for your practice?

If yes The cost to partner is not a limiting factor to your practice’s APM participation.
If no This relationship may not be the best arrangement for your practice’s success within an APM. Consider options prior to APM participation.
If unsure Understand if there are contractual and/or funds flow implications, and if there are required infrastructure investments to which your practice is subject to prior to APM participation.

Can your practice maintain or grow net revenue despite a potential decline in volume under this APM?

If yes This APM offers a potential financially rewarding opportunity for your practice.
If no This APM may not be financially sustainable for your practice. Consider options prior to APM participation.
If unsure Analyze the financial impact of patients moving from fee-for-service contracts to the value-based payments within an APM prior to participation.

Value-Based Contracts

Has your practice participated in a payer contract under which financial performance was partially dependent on quality and/or cost metrics?

If yes Prior experience in submitting quality data and other metrics for payer contracts can serve as an indicator of success for meeting performance thresholds in an APM.
If no Your practice should pursue upside-only value-based arrangements before taking on a downside risk contract. Most providers are not currently in downside risk contracts, but the number of participants is expected to grow in the future.
If unsure Become familiar with your practice’s overall strategy toward value-based arrangements prior to APM participation.

Can your practice get sufficient patients/payments through this APM to qualify for the Advanced APM track under the Quality Payment Program (QPP)?

If yes If your practice participates in a qualifying downside risk arrangement that has quality and Certified EHR Technology (CEHRT) requirements, you could receive a 5% Advanced APM bonus payment (during CY 2019-2024).
If no It may be difficult for your practice to achieve the patient and/or payment thresholds to receive the 5% Advanced APM participation bonus scheduled to expire after 2024. Consider potential solutions prior to APM participation.
If unsure Examine the ratio of patients treated within the APM compared to the total number of patients seen annually. Specialists may see a subset of patients that are not included within the Advanced APM, whereas primary care providers are likely to increase attribution in certain population-based models, such as Accountable Care Organizations. Consider options available to increase likelihood of participation within an Advanced APM.

View more information on Advanced APMs at ACC's QPP Hub.

Taxpayer Identification Number (TIN) Strategy

Can you identify how many TINs are within your practice, and are you aware of why they are structured that way?

If yes Your practice's TIN strategy is optimal for APM participation.
If no Determine a TIN strategy that would be effective for APM participation, if feasible.
If unsure Evaluate the pros and cons of keeping your current TIN structure vs. modifying to accommodate for APM participation.

Cost Data

Does your practice have access to Medicare Quality Resource Use Reports (QRUR) or equivalent reports from your commercial payers to assist in understanding performance on quality and cost measures?

If yes QRUR reports and equivalent commercial payer reports can show performance on quality and cost measures relative to national benchmarks. The data contained in the reports will be useful for assessing potential performance of your practice within an APM setting.
If no Medicare QRUR reports can be accessed on with an Enterprise Identity Management System account. Contact your payers for equivalent commercial reports. Consider solutions prior to APM participation.
If unsure Ask your practice administrator or designated individual if your practice’s QRURs have been downloaded and analyzed and if equivalent data is available from commercial payers prior to APM participation.

Upside and Downside Risk

Is your practice aware of this APM’s risk characteristics, and are you prepared for downside risk implications?

If yes Financial modeling can help predict likely scenarios, increasing the chance of APM success.
If no Your practice may not be ready for APM participation or may only be able to participate in upside risk models. Consider practice viability for accepting downside risk.
If unsure Upside-only arrangements can function as onramps toward risk-based models. Downside risk should only be attempted if your practice is prepared for the costs to bear risk prior to APM participation.

Review APM risk characteristics through the Health Care Transformation Task Force white paper Accountable Care Financial Arrangements: Options and Considerations.

Is your practice aware of the cost characteristics associated with office-based vs. facility-based for procedural and advanced medical imaging?

If yes Your practice is aware that office-based imaging is a lower cost setting than facility-based which may impact the portion of cost for which your practice is responsible.
If no Be aware that your practice may be responsible for those costs, and the care setting can play a factor into reimbursement calculations. Consider solutions prior to APM participation.
If unsure Conduct financial modeling to determine financial considerations different care settings present based on your practice’s revenue stream prior to APM participation.