Alternative Payment Models

CMS determines APM eligibility. Participants in APMs are called “Qualifying APM Participants” or QPs. Pathologists and practice staff can look up their participation status at any time using CMS’ QPP Lookup Tool and their NPI. Qualifying APM Participants do not have to report MIPS. Consider checking with billing or compliance staff at your organization for additional information on participation.

APMs and MIPS have some similarities because both focus on cost efficiency and quality of care. MIPS evaluates participants on performance in four categories: Quality, Cost, Improvement Activities, and Promoting Interoperability. APMs can include various arrangements such as bundled payment models and shared savings models, and can be focused on a specific condition, population, or care location. In contrast, the MIPS program includes measures and activities for clinicians in most specialties and care locations. While MIPS participants can choose any quality measures they want to report, APMs are more limited and aligned in measures and activities. Unlike MIPS, APMs are not statutorily mandated to be budget neutral.

The Centers for Medicare and Medicaid Innovation Center (CMMI; the Innovation Center) creates APMs and sets participation requirements. APMs can be voluntary or mandatory. Voluntary models have an application period when practices can request to participate in the APM. Once the application period closes, participants are no longer accepted.
Mandatory models require participation; there is no application period. Participants are notified that they are included in the model.

The list of APMs, including those that are accepting applications and those that are not, is available at the CMMI Innovation Models website.

APMs and ACOs are not the same although there are similarities. An APM is a payment arrangement created by CMS. An Accountable Care Organization, or ACO, is a group of doctors or practices who agree to work together to provide high-quality, coordinated care and who agree to take responsibility for the care of a defined set of patients. An ACO can participate in an APM, such as Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) but APM participants do not have to join an ACO and it is possible for practice to participate in APMs without joining an ACO.

The payment structure of APMs varies depending on the model. Participants in most models still bill Medicare and are paid on the Physician Fee Schedule (PFS) as usual. The changes to payments can come in the form of a performance-based payment or performance-based recoupment. However, some models do use a different billing structure. Additionally, distribution of payments or shared savings are determined by each institution.

Participants considering applying for an APM or who have been assigned to a mandatory APM should investigate the payment structure carefully to understand risks and benefits. Each model has information regarding payment on the model page, all of which can be found via CMMI’s Innovation Models website.

Payments in APMs vary by model, but it is possible for practices who provide high-quality, cost-efficient care to earn more by participating in an APM than they would otherwise, in the form of performance-based payments or shared savings.

Starting in 2026, qualifying participants in Advanced APMs (AAPMs), a subset of APMs that require use of certified EHR technology, will also receive a higher conversion factor than non-AAPM clinicians. This provides additional incentive for practices to move into APMs.
APMs incentivize best practices in health care, including increasing care coordination, improving care transitions, supporting patients’ understanding of their diagnosis, and more. APMs can also be lower burden than participating in MIPS because many APMs use quality measures that do not require data submission and usually do not require practices to select from a long list of measures and activities.

CMS continues to aim for all Medicare beneficiaries to be in accountable care relationships such as an APM or ACO by 2030. However, it is not clear that this is attainable nor is it clear that there is any statutory basis to require this. While we appreciate CMS’ goals regarding value-based care, we continue to advocate for a careful transition to avoid compromising access or quality for patients.

Independent practices can participate in APMs, although there can be challenges depending on the features of the APM. Some APMs require high levels of practice infrastructure or IT support. However, some APMs also provide monetary incentives for practice transformation. CMMI has also stated that increasing participation of independent practices, including small and rural practices, in APMs is a priority. The CAP continues to advocate for the importance of clinicians practicing in the setting that allows them to provide the best care for their patients and not forcing practice consolidation.

CMMI has created all APMs for the QPP. When the QPP was established, there was a mechanism for outside stakeholders to submit APMs for consideration but so far CMMI has not implemented models submitted by stakeholders. As of 2025, there is not a pathway for stakeholders to create APMs.

Historically, CMMI has focused on broad models such as hospital-based and/or primary care models, and has only recently begun focusing on specialty care. The CAP monitors all new APMs to ensure any inclusion of pathology is fair and meaningful. There is not an APM focusing on pathology as of 2025 although some other APMs, notably the Enhancing Oncology Model, require reporting of specific pathology data elements.

The CAP continues to advocate for meaningful participation options for pathologists in APMs, while also ensuring fair payment and value for pathology services. Some previously suggested APMs have used pathology as a mechanism to cut costs without appreciating the critical importance of pathology to the health care system. The CAP has participated in meetings with CMMI to ensure that the priorities of pathology and other specialties are considered as CMMI develops new models.