Alternative Payment Methodology – A Cheat Sheet

Alternative Payment Methodology – A Cheat Sheet

What is it?

Alternative Payment Methodology (APM) is an effort to move healthcare away from encounter-based reimbursement, what has been called fee-for-service. With fee-for-service, payments are unbundled and services are paid separately. Additionally, clinicians are only  reimbursed for services delivered within the walls of their office. That is, if a clinician talks to the patient on the phone about an illness, this is a service, but it’s not reimbursed. However, there are many ways to improve the health of patients that occur outside of the office visit. APM gives providers and clinics the freedom to provide care in different formats.

How does it work?

APM allows clinics to be reimbursed with a monthly payment (a set amount per patient per month). This is what is known as a capitated payment model or a per-member-per-month payment approach. This is a payment agreement where clinicians or groups of clinicians receive a set amount for each enrolled person assigned to them for a period of time, whether or not the person seeks care.

In this APM pilot project the participating sites see a varied patient population, so each site was able to receive its own customized per-member-per-month payment rate . This approach has replaced fee for service models, in which providers receive a payment for each service (visit, test, procedure) they provide. Under APM clinics and providers are rewarded for meeting quality measures  instead of being rewarded for churning out visits.

Who is involved?

This pilot is focused in Oregon. The key players are  listed below:

Why should I read this blog?

This blog is a platform for those on the ground experiencing this transition to APM to share insights and lessons learned. It provides a venue for the research team to report in real time on relevant findings. This blog also encourages discussion between those with experience implementing such transformations and those who are eager to start the journey.

Have an unanswered question?

If you’d like some more introductory information this article is a great read, we couldn’t have said it better ourselves! Still have a question you’d like answered? An idea for a blog post? Contact us here.