NAACOS, AMA Ask Congress to Extend Advanced APM Incentive Payments

October 03, 2022 - More than 800 accountable care organizations (ACOs) and healthcare associations, including the National Association of ACOs (NAACOs) and American Medical Association (AMA), have asked Congress to support value-based care and extend the Advanced Alternative Payment Model (APM) incentive payments.

The organizations penned a letter to congressional leaders detailing the importance of the incentive payments.

The Medicare Access and CHIP Reauthorization Act (MACRA) created a 5 percent incentive payment to encourage participation in Advanced APMs. APMs help further value-based care as they link reimbursement to care quality and patient outcomes instead of volume.

Without action from Congress, the incentive payments will expire at the end of 2022.

“This development would reduce reimbursements and serve as a disincentive to nearly 300,000 clinicians working to improve the quality and cost-effectiveness of care for millions of Medicare beneficiaries,” the letter stated.

The healthcare organizations urged lawmakers to extend the incentives and allow additional time for more providers to transition to APMs.

In addition to encouraging providers to enter APMs, the incentive payments provide resources that can be used to expand value-based services. ACOs, the primary type of Advanced APM, have used the incentives to fund wellness programs, reduce cost-sharing for beneficiaries, hire care coordinators, and pay for transportation and meal programs.

These services are typically not reimbursed by Medicare but have improved patient health outcomes and wellbeing. Thus, letting the incentive payments expire would hurt patient care, the organizations said. ACOs care for nearly 20 percent of all Medicare beneficiaries and almost a third of traditional Medicare patients.

The incentive payments also support providers as they invest in digital health tools, workflow improvements, quality measurement systems, transitional care services, and data analytics. The incentives can help diminish the cost of these tools, which total between $1 to $2 million per year for some ACOs.

Promoting Advanced APM participation can also help the Medicare program save money, the organizations pointed out in the letter. For example, ACOs have saved Medicare nearly $17 billion in gross savings and $6.3 billion in net savings since 2012. In 2020 alone, ACOs generated $4.8 billion in gross savings and $2.1 billion in net savings after CMS paid $613 million in incentive payments.

Additionally, ACOs participating as Advanced APMs typically produce higher net per beneficiary savings than those in non-advanced tracks, the letter noted.

To help continue advancing value-based care, the organizations urged congressional leaders to include Section 4 of the Value in Health Care Act (HR 4587) in an end-of-year legislative package. This legislation would extend the 5 percent Advanced APM incentive payments for an additional six years. It would also allow CMS to adjust the thresholds to qualify for the payments, which are set to increase under the current law.

“These two crucial policy changes will better recognize physicians and other healthcare providers for their Advanced APM arrangements across all payers, including Medicare Advantage plans, and types of models while gradually increasing the qualifications,” the organizations wrote.

“We ask you to advance this important legislation, which will give our organizations the flexibility and financial security needed to innovate care, improve the health of our populations, and lower healthcare costs.”

Earlier this year, NAACOS, AMA, and six other healthcare organizations sent a similar letter to the Senate Committee on Finance Subcommittee on Fiscal Responsibility and Economic Growth. The organizations said providers need greater incentives from Congress to participate in APMs and urged the lawmakers to extend the MACRA payment incentives.