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A 2015 law passed by Congress sought to put Medicare on a financially sustainable path by incentivizing participation in alternative payment models (APMs), which are designed to make doctors and hospitals financially accountable for lowering patients’ medical spending and improving quality. That law, the Medicare Access and CHIP Reauthorization Act (MACRA), provides bonuses for participating in risk-bearing Advanced APMs, which include accountable care organizations (ACOs).
To earn the bonus, clinicians must meet Qualifying APM Participant (QP) thresholds, which are based on the proportion of payments made under, or patients in, the APM. While the bonuses have been a meaningful incentive, the law increases these thresholds to an unreasonable level starting in 2021, and many doctors, hospitals and ACOs that would qualify under this year’s standard will be ineligible. It’s important to note that ACOs currently comprise the vast majority of those earning Advance APM bonuses.