Healthcare’s Alternative Universe…The APM

by Cancergeek

APM’s are better known in healthcare as Alternative Payment Models.

Simply stated, an alternative payment model is a payment approach that gives added incentive payments to provide high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population.

Advanced APMs are a subset, and let practices earn more for taking on some risk related to their patients’ outcomes. You may earn a 5% incentive payment by going further in improving patient care and taking on risk through an Advanced APM.

The APM’s are enabled through the Quality Payment Program via the Department of Health and Human Services.

Now that you know what APMs are, I want to dispel a myth I often hear:

APMs are difficult, risky, and really hard to develop let alone implement and be successful.

The reality is that if you understand your market, listen to your stakeholders, and have a strategy for data collection, then it is not any more complex than any other reimbursement you get today.

As a matter of fact, in 2008 it was even more difficult to design and create an alternative payment model since there were no programs or support from the Department of HHS.

Yet, that is exactly what I did.

I designed a model of care to screen for cancer and caring for oncology patients.

Our focus was to go from “Do I have cancer to here are my treatment options in 72 hours or less.”

The key to all of this was radiology and pathology. (as well as support from surgeons and oncologists)

In order to allow the radiologists and pathologists to practice in this model we had to change their compensation models.

We deliberately threw out the RVU models and generated a new physician payment model based on their ability to generate a definitive diagnosis by cancer type. A model that rewarded communication to all stakeholders.

We mapped all of the downstream work that was ordered by surgeons, medical and radiation oncologists, primary care, and other physicians after a diagnosis was made.

We also mapped out the additional lab and imaging work that historically was ordered by these physicians.

We ran our operations for 6 months.

During that time we collected data on the downstream orders, coding and billing, and appointments.

We were then able to show that we saved time and dollars.

We saved time in missed appointments, repeat imaging exams, duplicate exams, and unnecessary orders.

We saved time for patients, physicians, and technical staff.

We also demonstrated that we made better use of surgeons, medical oncologists and radiation oncologists time.

At the end of 6 months we were able to prove that we saved over $4.5M.

We also proved that our outcomes and overall “patient experience” were better than anyone else in our market.

I leveraged the data, the proof, and the revenue with our payers to develop a risk share model. We split the savings 70–30, in which we kept 70% and the insurance kept 30%.

We used that money to continue to improve our physician compensation model for radiology and pathology. This allowed our physicians to focus on ensuring they had all of the information needed to generate a definitive diagnosis. It also allowed them time to educate referring and ordering physicians, spend time with patients, and to communicate with surgeons, medical and radiation oncologists to help them in their treatment decision making process.

It allowed us to earn a preferred status within our market and with our insurance groups.

In a time when advance payment models weren’t invented or widely being used, we took destiny into our own hands.

Everyone else waited.

We acted.

We created an alternate universe.

A universe that allowed us to get back to “why” we do the work we do.

A universe that allowed us to deliver care at the N of 1.

As always you can feel free to email me at or follow me on Twitter @cancergeek