Money Up front: ACOs and The Advance Payment Model

Anticipating relatively high start-up costs, the Innovation Center of CMS developed the Advance Payment Model (APM) to complement the Shared Savings Program.  The APM is a limited model available to smaller ACOs that generally serve rural-based areas; however, the ACO may participate in either Shared Savings Program track.

In order to qualify as an APM the Accountable Care Organization must, among other things:

1-       Not have any inpatient facilities and have less than $50 million in total annual revenue.

OR

2-      Be an ACO in which the only inpatient facilities are critical care access hospitals or low-volume rural hospitals and have less than $80 million in total annual revenue.

Once the APM is adopted, the ACO can expect three different payments:

1-      Upfront fixed payment of $250,000 in the first month of the Shared Savings Program.

2-      Upfront variable payment of $36 per preliminary, prospective assigned beneficiary in the first month.

3-      Monthly variable payment of $8 per preliminary, prospective assigned beneficiary.

Currently, there are approximately 20 ACOs participating in the Advance Payment Model.  For more information about the Advanced Payment Model, such as the process for recoupment of the advanced payments and the rubric for selecting APM ACOs, please visit this CMS page.