What Should I Consider Before Joining an APM?

As physician practices consider joining an alternative payment model (APM), Medical Economics published an interesting list of items that should be considered before making the jump into an APM. This is increasingly important as MACRA incentivizes APMs and private payers are also considering APMs more now than ever.

Considerations

The Medical Economics article starts by asking a fundamental question: why do you want to participate? This is important because, as David J. Zetter (founder of Zetter Healthcare Management Consultants) noted,  “Ultimately, you should participate in MIPS or an APM because it is also going to help your practice and care for patients improve … a practice needs to understand what they are getting into and what is in it for them.”

Next, practices should consider what changes will be necessary for participation and if additional resources are necessary. There may be specific reporting requirements and it is important to see if the APMs’ goals fall in line with those of the practice itself. Third, practices should ensure the APM is feasible for the practice and others. Medical Economics cites Kim Sweet, a healthcare resource administrator for ScrogginsGrear, writing that “practices need to determine the ease or difficulty when building the system, processes and infrastructure that make the APM operational.”

One example Sweet cites is the possibility of having to add staff such as diabetes educators or nutritionists. There could also be the cost and time to add new technology for the administrative side of the practice. This does not generate immediate revenue and could be a large initial expense. Practices should also inquire what support the APM will provide to help the practice through the process of implementation.

Continuing, the next question to ask is whether APM participation will affect profits. It is important to know how revenue changes will affect each owner’s stake in profits. Practices can determine costs and potential revenues by building a business plan and understanding the specific risk requirements of the APM.

Fifth, the scale of the APM is another important question. Practices should understand the size and scope of the APM in terms of the services it provides to participants and how many other partners are in the model. “The difference on a practice could be success or failure if you are not set up to work with the right environment or not in line with the costs that may be incurred due to the APM’s requirements,” Sweet says.

The final question posed is whether there is payer support outside of Medicare participating in the model. This helps to create a strong and supportive relationship for practices. The answer could depend on specialty or location. But ultimately, payer support is critical when gauging the potential for success.

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