MGMA urges MedPAC to reiterate concerns on APM bonus expiration (March 21, 2025)

March 21, 2025 

Michael E. Chernew, Ph.D.
Chair
Medicare Payment Advisory Commission
425 I Street, NW, Suite 701
Washington, DC 20001

Dear Dr. Chernew:

On behalf of the undersigned organizations whose physician, hospital, and accountable care organization (ACO) members are on the frontlines of value-based patient care, we are writing regarding the Medicare Payment Advisory Commission’s (MedPAC) deliberations during its March 2025 meeting on stabilizing and improving Medicare physician payment.

We urge MedPAC to reiterate its concerns cited below (and as outlined in Chapter 1 of MedPAC’s June 2024 Report to Congress) about the expiration of incentives for physicians and other clinicians participating in advanced alternative payment models (APMs):

The Commission is also concerned about the upcoming sunsetting of participation bonuses for clinicians in A–APMs after 2026. To date, the A–APM participation bonus (currently set at 5 percent of a clinician’s Medicare payments for fee schedule services) has always been larger than the highest adjustment available through the Merit-based Incentive Payment System (MIPS) (which has reached up to 2.34 percent)—helping to incentivize clinicians’ participation in A–APMs. After 2026, A–APM participation bonuses will be eliminated in favor of the differential payment updates for clinicians depending on whether or not they are in an A–APM, described above. But in the initial years of differential updates, the higher updates for qualifying clinicians in A–APMs will produce a relatively weak incentive to participate in A–APMs. In 2027, for example, A–APM clinicians’ payment rates will be only 1 percentage point higher than those of other clinicians. MIPS may therefore become the more attractive option for top-performing clinicians in coming years, depending on CMS’s implementation decisions. (MIPS adjustments can reach up to 9 percent under current law.) Waning interest in A–APMs could result in missed opportunities to achieve better-quality care more efficiently.

We could not agree more with Commissioner Poulsen that some remarks in this report on the consequences of sunsetting the advanced APM incentives could be misconstrued as support for their expiration or as a change in the Commission’s position since the June 2024 Report was released. As Congress has yet to extend the advanced APM incentive for the 2025 performance period, physicians, other health care professionals, and ACOs are facing significant uncertainty about whether they will be able to continue to support expanded care teams and maintain investments in population health infrastructure. This jeopardizes the necessary foundation for delivering high-quality, well-coordinated, cost-effective care to Medicare beneficiaries in APMs.

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