Alternative Payment Models (APMs)

Quality & Practice

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What is an Alternative Payment Model (APM)?

An APM is a general term used to describe payment arrangements that are not purely fee-for-service. These tend to be value-based payment approaches that apply financial incentives intended to foster the provision of high-quality and cost-efficient care. APMs can apply, for example, to a specific clinical condition, a care episode, or a patient population.

Most Medicare clinicians will initially participate in the Quality Payment Program (QPP) through MIPS to earn a performance-based payment adjustment. Clinicians who take a further step towards care transformation may participate in Advanced APMs to earn a Medicare incentive payment for participating in an innovative payment model.

To qualify as an Advanced APM, APMs must meet specified criteria related to the use of certified electronic health record technology, payment based on quality measures comparable to those used in MIPS (see separate definition), and financial risk. As an alternative to the financial risk requirement, some APMs may qualify as Advanced APMs if they are medical home models that meet certain criteria specified by CMS. Significant participation in Advanced APMs can allow participants of Advanced APMs to qualify for a 5% incentive payment from 2019 through 2024, or higher annual payment updates than they would otherwise receive starting in 2026. Learn more about Medicaid and the QPP.

New Resources: Stroke Rehabilitation and Spine Care Toolkits

The Innovative Payment and Practice Models (IPPM) Committee have created the Stroke Rehabilitation and Spine Care Toolkits, which are intended to serve as guides for Academy members who are seeking to implement PM&R-led stroke rehabilitation and spine care APMs in their practice or payment system. The toolkits provide information on value-based care models, appropriate outcomes, economic and payment considerations, and current medical research to support the premise of the APM. The goal of these toolkits is to support opportunities for members to approach healthcare systems and payors to encourage stroke rehabilitation and spine care APM adoption and innovate the systems of care to provide enhanced and progressive rehabilitation throughout the continuum.

APM Glossary

AAPM&R recognizes that APMs can include complex terminology regarding health system transformation and delivery system reform. The Academy has created a glossary to reflect AAPM&R’s current understanding of these terms.

Principles of APMS

The Academy understands its important role in defending physiatry in APM discussions and recognizes how critical it is for models to promote health equity, collaborative care, cost-effective clinical approaches, and long-term function of health to be successful. AAPM&R has released a set of 10 principles that outline the key elements necessary to achieving such goal. The principles will be used to help guide essential advocacy and knowledge building for our members and as a tool when demonstrating how PM&R can successfully contribute to value-based care initiatives.

AAPM&R 2022 APM Benchmark Survey Report

The Academy conducts a member survey every two years to assess the use of APMs across its membership. The survey data is used to generate ideas within innovative payment and practice models, set the Academy's advocacy agenda, and potentially develop new resources for members. Take a glance at the 2022 APM Benchmark Survey Report below. 

CMS APMs and Advanced APMs


Please note: APMs are not limited to CMS. There are many available through commercial insurers. 

Where can I learn more?


Please note: due to the risk involved, it is important to understand your options thoroughly.