National APM Metric Overview

National APM Metric Overview and Methodology

APM Metric Overview
This information request involves collecting information from commercial, Medicaid, and
Medicare Advantage health plans to track the adoption of alternative payment models (APMs).
This information will help the current and future LAN audience understand general market trends
and the pace of progress toward alternative payment model adoption across public and private
health plans. The LAN adapted the CMS payment taxonomy and expanded it by introducing
refinements that describe health care payment through the stages of transition from pure fee-forservice toward APMs that tie payment to cost and quality. The original APM Framework,
published in January 2016, classifies payment models into four categories:
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Category 1—fee-for-service with no link of payment to quality
Category 2—fee-for-service with a link of payment to quality
Category 3—alternative payment models built on fee-for-service architecture
Category 4—population-based payment

The LAN’s goal is to bring together private health plans, providers, employers, state partners,
consumer groups, individual consumers, and other stakeholders to accelerate the transition to
alternative payment models. Spending through APMs will be calculated in the following manner:
Denominator: Participating health plans will report the total estimated in- and out-of-network
health care spend (e.g. annual payment amount) made to providers in calendar year (CY) 2016 or
most recent 12 months.
Numerator: The numerators will generally track to the subcategories and models listed in the
original APM Framework. Health plans will report the total estimated payment amounts of
categories 1 through 4 payments made to providers in CY 2016 or most recent 12 months.

Targeted Respondents
In order for this effort to yield a meaningful representation of the private insurance market, we are
targeting major health plans that represent greater than 67% of covered lives across the
commercial, Medicare Advantage and Medicaid markets. The LAN is recruiting health plans to
participate directly as well as partnering with trade associations, some of which will share their
members’ aggregate results with the LAN.
The LAN strives to broaden its reach by increasing the number of health plans participating in the
LAN who are committed to: 1) implementing APMs and 2) submitting data that, when aggregated
with others’, will categorize how health plans are paying providers on a national scale. Given
health plan involvement in the LAN events to date (estimated at over 250 organizations), and the
strong participation in the LAN’s 2016 APM Measurement Effort which represented 67% of
covered lives in three market segments, we believe that a sufficient number of health plans will
participate in the 2017 APM Measurement Effort so that the resulting data will give a strong
indication of the national direction.

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National APM Metric Overview and Methodology

Neither a census nor a nationally representative sample is necessary for the purposes of this data
collection effort. Rather, we have identified a minimum proportion of the market share (i.e., 60
percent of covered lives) and include as many health plans as are necessary to reach that threshold.
In effect, this will require recruiting health plans across a variety of regions and states, yielding a
cohort of health plans that covers much of the U.S. market. For instance, in addition to the very
large national insurance companies (Anthem, United Healthcare, Aetna, Cigna and Humana), we
are targeting state-based insurers like the Blue Cross Blue Shield plans in many states. In addition,
we are working in conjunction with major health plan associations including America’s Health
Insurance Plans (AHIP), the Blue Cross and Blue Shield Association (BCBSA), Association for
Community Affiliated Plans (ACAP) and National Association of Medicaid Directors (NAMD).

APM Data Collection & Reporting
For data collection, we will provide participating health plans with Excel workbooks for each of
the commercial, Medicaid, and/or Medicare Advantage lines of business in which they are
involved. Health plans will respond to one or more workbooks, depending on their lines of
business. The workbooks will contain specific instructions for each metric, including the number
of beneficiaries involved in APM programs, total spending in these APM programs, and the
payer’s overall health care spending in- and out-of-network (i.e., the “denominator”) for each line
of business. Health plans are instructed to also provide their in-network only health care spending.
This will be used as an alternative denominator for comparison purposes. After the health plans
submit these data, a cross checking of responses will help to identify whether any data appear to
be outliers and require correction. We will aggregate all data submitted which, together with
aggregated data from the trade associations, will quantify the dollars flowing through the
categories and subcategories specified in the Framework.
At the end of each data collection and after aggregation and analysis, the LAN plans to report that
X # of health plans participated in the data collection, X # of health plans represent Y
beneficiaries, which is Z% of the total covered life population within a given calendar year.
Among this proportion, A% of payment is in category 1, B% in category 2, and C% in a
combination of category 3 and category 4.

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