How is an Alternative Payment Model (APM) defined under MACRA?

• A. APMs are payment approaches that provide added incentives to improve quality and cost efficiency, often involving risk-sharing and care coordination.
• B. APMs are payment approaches that require no risk and no coordination.
• C. APMs are only about penalties.
• D. APMs are only inpatient.

Answer: (A)

Under MACRA, an Alternative Payment Model is a payment approach that provides added incentives to deliver higher quality and more cost-efficient care, and it requires providers to take on some financial risk and to coordinate care. The incentives are tied to performance on quality and cost metrics, encouraging teams to manage the full cycle of care for patients, use resources wisely, and prevent unnecessary utilization. Because providers must share in financial risk if outcomes or costs don’t meet targets, MACRA’s APMs push toward value over volume and emphasize collaboration across settings.

This is why the best description includes both the added incentives for quality and cost efficiency and the elements of risk-sharing and care coordination. The other statements don’t fit MACRA’s APM concept since they imply no risk, focus only on penalties, or restrict the model to inpatient settings, which isn’t how APMs are defined.