Editorial Note on Part 414
Editorial Note: Nomenclature changes to part 414 appear at 60 FR 50442, Sept. 29, 1995, and 60 FR 53877, Oct. 18, 1995.

§ 414.1415 Advanced APM criteria. ( a ) *Use of certified electronic health record technology (CEHRT)* — ( 1 ) *Required use of CEHRT.* To be an Advanced APM, an APM must: ( i ) For QP Performance Periods ending with 2018, require at least 50 percent, or for QP Performance Periods beginning with 2019 and ending with 2024, 75 percent, of eligible clinicians in each participating APM Entity group, or for APMs in which hospitals are the APM Entities, each hospital, to use CEHRT to document and communicate clinical care to their patients or health care providers;
( ii ) For QP Performance Periods prior to 2019, for the Shared Savings Program, apply a penalty or reward to an APM Entity based on the degree of the use of CEHRT of the eligible clinicians in the APM Entity; and
( iii ) For QP Performance Periods beginning with 2025, require use of CEHRT as defined at paragraph (3) under CEHRT at § 414.1305.
( 2 ) [Reserved].
( b ) *Payment based on quality measures.* ( 1 ) To be an Advanced APM, an APM must include quality measure performance as a factor when determining payment to participants for covered professional services under the terms of the APM.
( 2 ) At least one of the quality measures used in the payment arrangement as specified in paragraph (b)(1) of this section must: ( i ) For QP Performance Periods before January 1, 2020, have an evidence-based focus, be reliable and valid, and meet at least one of the following criteria: ( A ) Used in the MIPS quality performance category, as described in § 414.1330;
( B ) Endorsed by a consensus-based entity;
( C ) Developed under section 1848(s) of the Act;
( D ) Submitted in response to the MIPS Call for Quality Measures under section 1848(q)(2)(D)(ii) of the Act; or
( E ) Any other quality measures that CMS determines to have an evidence-based focus and to be reliable and valid; and
( ii ) For QP Performance Periods beginning on or after January1, 2020, be: ( A ) Finalized on the MIPS final list of measures, as described in § 414.1330;
( B ) Endorsed by a consensus-based entity; or
( C ) Determined by CMS to be evidenced-based, reliable, and valid.
( 3 ) The quality measures upon which an Advanced APM bases the payment in paragraph (b)(1) of this section must include at least one measure that is an outcome measure unless CMS determines that there are no available or applicable outcome measures included in the MIPS final quality measures list for the Advanced APM's first QP Performance Period. Beginning January 1, 2020, the included outcome measure must satisfy the criteria in paragraph (b)(2) of this section.
( 4 ) A single quality measure that meets the criteria under both paragraphs (b)(2) and (3) of this section may be used to satisfy the requirements of paragraph (b)(1) of this section.
( c ) *Financial risk.* To be an Advanced APM, except as described in paragraph (c)(6) of this section, an APM must either meet the financial risk standard under paragraph (c)(1) or (2) of this section and the nominal amount standard under paragraph (c)(3) or (4) of this section or be an expanded Medical Home Model under section 1115A(c) of the Act. ( 1 ) *Generally applicable financial risk standard.* Except for paragraph (c)(2) of this section, to be an Advanced APM, an APM must, based on whether an APM Entity's actual expenditures for which the APM Entity is responsible under the APM exceed expected expenditures during a specified QP Performance Period, do one or more of the following: ( i ) Withhold payment for services to the APM Entity or the APM Entity's eligible clinicians;
( ii ) Reduce payment rates to the APM Entity or the APM Entity's eligible clinicians; or
( iii ) Require the APM Entity to owe payment(s) to CMS.
( 2 ) *Medical Home Model financial risk standard.* The APM Entity participates in a Medical Home Model that, based on the APM Entity's failure to meet or exceed one or more specified performance standards, which may include expected expenditures, does one or more of the following: ( i ) Withholds payment for services to the APM Entity or the APM Entity's eligible clinicians;
( ii ) Reduces payment rates to the APM Entity or the APM Entity's eligible clinicians;
( iii ) Requires the APM Entity to owe payment(s) to CMS; or
( iv ) Causes the APM Entity to lose the right to all or part of an otherwise guaranteed payment or payments.
( 3 ) *Generally applicable nominal amount standard.* ( i ) Except as provided in paragraph (c)(4) of this section, the total amount an APM Entity potentially owes CMS or foregoes under an APM must be at least equal to either: ( A ) For QP Performance Periods beginning in 2023, 8 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities; or
( B ) 3 percent of the expected expenditures for which an APM Entity is responsible under the APM.
( ii ) [Reserved]
( 4 ) *Medical Home Model nominal amount standard.* ( i ) For a Medical Home Model to meet the Medical Home Model nominal amount standard, the total annual amount that an APM Entity potentially owes CMS or foregoes must be at least the following amounts: ( A ) For QP Performance Period 2017, 2.5 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities.
( B ) For QP Performance Period 2018, 2.5 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities.
( C ) For QP Performance Period 2019, 3 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities.
( D ) For QP Performance Period 2020, 4 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities.
( E ) For QP Performance Periods 2021 and later, 5 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities.
( ii ) [Reserved]
( 5 ) For the purposes of this section, expected expenditures means the beneficiary expenditures for which an APM Entity is responsible under an APM. For episode payment models, expected expenditures means the episode target price. For purposes of assessing financial risk for Advanced APM determinations, the expected expenditures under the terms of the APM should not exceed the Medicare Part A and Part B expenditures for a participant in the absence of the APM. If the expected expenditures under the APM exceed the Medicare Part A and Part B expenditures that an APM Entity would be expected to incur in the absence of the APM, such excess expenditures are not considered when CMS assesses financial risk under the APM for purposes of Advanced APM determinations.
( 6 ) *Capitation.* A full capitation arrangement meets this Advanced APM criterion. For purposes of this part, a full capitation arrangement means a payment arrangement in which a per capita or otherwise predetermined payment is made under the APM for all items and services furnished to a population of beneficiaries during a fixed period of time, and no settlement is performed to reconcile or share losses incurred or savings earned by the APM Entity. Arrangements between CMS and Medicare Advantage Organizations under the Medicare Advantage program (part 422 of this title) are not considered capitation arrangements for purposes of this paragraph (c)(6).
( 7 ) *Medical Home Model 50 eligible clinician limit.* Beginning in the 2023 QP Performance Period, notwithstanding paragraphs (c)(2) and (4) of this section, if an APM Entity participating in a Medical Home Model is comprised of more than 50 eligible clinicians, as determined by that APM Entity's Participation List on any of the three QP determination dates (March 31, June 30, and August 31 of the QP Performance Period), the requirements of paragraphs (c)(1) and (3) of this section apply.
[81 FR 77537, Nov. 4, 2016, as amended at 82 FR 53960, Nov. 16, 2017; 83 FR 60090, Nov. 23, 2018; 84 FR 540, Jan. 31, 2019; 84 FR 63200, Nov. 15, 2019; 87 FR 70229, Nov. 18, 2022; 88 FR 79538, Nov. 16, 2023]