APM Measurement Cover

Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicare Advantage, and State Medicaid Programs

Report: Released October 25, 2016

The LAN, launched in March 2015 by the U.S. Department of Health and Human Services (HHS), brings together public, private, and non-profit sectors to transition to successful alternative payment models (APMs) that improve health care quality. Through the LAN’s collaborative structure, more than 7,100 participants are taking action towards APM adoption and implementation, a critical step in building a health care system that results in better accessibility, quality, affordability, empowerment, and innovation. The LAN is working to increase adoption of alternative payment models with the goal of tying 50% of U.S. health care payments to APMs by 2018.

After the release of the Framework, the LAN’s Payer Collaborative, comprised of a diverse mix or public and private health plans, convened to further shape and inform the LAN’s approach for measuring progress in adopting APMs. In mid-February, the Payer Collaborative launched a five-week pilot to determine the feasibility of obtaining internal data from plans and also to understand the investment of time and resources needed to complete the data collection. This pilot was an essential step in ensuring that the APM Framework – and the measurement aligned with it – was “road tested.” It allowed the LAN to refine the methodology and to develop precise definitions for measurement before launching the national measurement effort. This first LAN APM Measurement Effort requested health plans to provide data through two different methodologies:

  • The 2015 look-back metrics, which is a retrospective view, asked health plans to report actual dollars paid to providers during 2015 or the most recent 12 months.
  • The 2016 point-in-time metrics, which was somewhat of a prospective view, asked health plans to report dollars paid to providers based on contracts in place on January 1, 2016. Health plan dollars could be reported as the number of members attributed to APMs multiplied by an average cost per member per year. Alternatively, health plans could report the most recent spend data that was available.

When the LAN combined this data with that of the Blue Cross Blue Shield Association (BCBSA), and America’s Health Insurance Plans (AHIP), the results demonstrated the following:

  • 62% of health care dollars in Category 1
  • 15% of health care dollars in Category 2
  • 23% of health care dollars in a composite of Categories 3 and 4

A total of 70 health plans and two Medicaid FFS states participated in this initial LAN effort, representing approximately 199 million of the nation’s covered lives, and 67% of the national market (excluding FFS Medicare). More information on the LAN’s first APM Measurement Effort can be found in this  APM Measurement Effort report.

Publication Info

Publication date: October 25, 2016
17 pages
Suggested Citation: Health Care Payment Learning & Action Network. Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage, and Fee-for-Service Medicare Programs. October 25, 2016.

In keeping with the goals of the U.S. Department of Health and Human Services (HHS), the LAN aims to shift 50% of U.S. health care payments into alternative payment models (APMs) by 2018. The LAN’s Guiding Committee convened the Alternative Payment Models Framework and Progress Tracking (APM FPT) Work Group to develop standardized definitions and categories of APMs and a methodology for quantifying the adoption of APMs across the public and private sectors. The Work Group, which was composed of public and private stakeholders, released a white paper describing the APM Framework and how it was developed.

After the release of the Framework, the LAN’s Payer Collaborative, comprised of a diverse mix or public and private health plans, convened to further shape and inform the LAN’s approach for measuring progress in adopting APMs. In mid-February, the Payer Collaborative launched a five-week pilot to determine the feasibility of obtaining internal data from plans and also to understand the investment of time and resources needed to complete the data collection. This pilot was an essential step in ensuring that the APM Framework – and the measurement aligned with it – was “road tested.” It allowed the LAN to refine the methodology and to develop precise definitions for measurement before launching the national measurement effort.

The survey sought to quantify the amount of health plan in- and out-of-network spending that flows through APMs – including key areas of pharmacy and behavioral health spending (if data were available). Each of the questions in the survey tracked to the categories and subcategories of the APM Framework. The LAN collected data through two different methodologies:

    • The 2015 look-back metrics, which is a retrospective view, asked health plans to report actual dollars paid to providers during 2015 or the most recent 12 months.
    • The 2016 point-in-time metrics, which was somewhat of a prospective view, asked health plans to report dollars paid to providers based on contracts in place on January 1, 2016. Health plan dollars could be reported as the number of members attributed to APMs multiplied by an average cost per member per year. Alternatively, health plans could report the most recent spend data that was available.

For more information on the distinctions between the two methods, please read the final report, Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicare Advantage, and State Medicaid Programs. For FAQs or to take a look at the metrics, click the links below:

National Data Collection Metrics

FAQs

The LAN APM Framework establishes standardized definitions and categories of APMs and a methodology for quantifying the adoption of APMs across the public and private sectors. The original LAN APM Framework was developed by the Alternative Payment Models Framework and Progress Tracking (APM FPT) Work Group, which was composed of public and private stakeholders and convened by the LAN Guiding Committee. In mid-2017, a refreshed Framework was released to reflect changes in market dynamics and legislation. For timing and trend reasons, this year’s APM measurement effort used the original Framework. apm-framework_page_3

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