LAN Releases Final APM White Paper - McDermott+Consulting

LAN Releases Final APM White Paper

On January 12, 2016 the Health Care Payment Learning & Action Network (LAN) released the final Alternative Payment Model (APM) Framework White Paper. The paper defines payment model categories and establishes a common framework and a set of conventions for measuring progress in the adoption of APMs. The work group drafting the paper was charged with establishing a standardized and nationally accepted method to measure progress in the adoption of APMs across the U.S. health care system. It is anticipated that this framework, as well as other efforts of the LAN, will have significant influence in the development of APM models for CMS (MACRA APMs) and private payors.


The paper describes a framework consisting of four categories and eight subcategories:

  • Category 1: Fee-for-service (FFS) with no link to quality and value
  • Category 2:FFS with link to quality and value
    • A: Foundational payments for infrastructure and operations
    • B: Pay for reporting
    • C: Rewards for performance
    • D: Rewards and penalties for performance
  • Category 3:APMs built onFFS architecture
    • A: APMS with upside gainsharing
    • B: APMs with upside gainsharing and downside risk
  • Category 4: Population-based payment
    • A: Condition-specific population-based payment
    • B: Comprehensive population-based payment

The Department of Health and Human Services created LAN, a forum of public and private stakeholders, to help advance the work being done across various public and private sectors to increase the adoption of value-based payments and alternative payment models (APMs). LAN is working to align private payers and the Centers for Medicare and Medicaid Services (CMS) in moving payment from traditional fee-for-service (FFS) methods to FFS-linked to quality and APMs. More information is available on the LAN website.