Alternative Payment Models: Tracks, QP Status & Incentive

Alternative Payment Models (APMs) are CMS-administered value-based payment frameworks under the Quality Payment Program (QPP). The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established APMs. 

APMs move clinicians from fee-for-service Medicare reimbursement toward arrangements with shared financial risk and reward. CMS recognizes two APM tracks, Advanced APMs and MIPS APMs, and assigns QP and Partial QP status by participation thresholds. This guide covers the tracks, QP status, and the APM incentive for the 2026 performance year.

What is an Alternative Payment Model?

An Alternative Payment Model (APM) is a CMS-administered payment framework that moves clinicians from fee-for-service Medicare Part B reimbursement toward value-based arrangements. APMs tie payment to quality and cost outcomes through shared financial risk and reward.

CMS introduced APMs under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as one of two tracks within the Quality Payment Program (QPP). The other track is the Merit-Based Incentive Payment System (MIPS). MACRA replaced the sustainable growth rate formula with this value-based structure.

CMS distinguishes Advanced APMs from MIPS APMs. Advanced APMs carry full financial risk, exempt qualifying clinicians from MIPS, and connect to the APM incentive. MIPS APMs carry reduced risk and report MIPS through the APM Performance Pathway. The Tracks section below covers both APM types in detail.

APMs fall into three broad categories by payment design:

• Episode-based (bundled-payment) APMs: the Transforming Episode Accountability Model (TEAM), mandatory for selected hospitals starting January 1, 2026, and legacy BPCI Advanced participants.
• Total-cost-of-care APMs: the Medicare Shared Savings Program (MSSP) and ACO REACH.
• Primary-care APMs: Primary Care First and Making Care Primary.

The CMS Innovation Center (CMMI) tests new APMs. Established models migrate to standard CMS operations once CMMI completes testing. This page defines APMs at the hub level and routes to the child pages that own per-topic depth. The three subsections below answer how APMs differ from Traditional MIPS, where APMs sit within the QPP, and how many models CMS recognizes for 2026.

How Does An Alternative Payment Model Differ From Traditional MIPS Reporting?

An Alternative Payment Model differs from Traditional MIPS reporting in three structural ways: payment basis, risk-sharing, and reporting mechanism.

Payment basis marks the first difference. Traditional MIPS adjusts Medicare Part B fee-for-service reimbursement from -9 percent to +9 percent based on the clinician’s MIPS Final Score. APMs replace or supplement fee-for-service with shared-savings, capitation, or bundled-payment arrangements that tie payment to quality and cost outcomes.

Risk-sharing marks the second difference. Advanced APMs require clinicians to bear nominal financial risk, meaning downside exposure if quality or cost targets are missed. Traditional MIPS carries no downside risk beyond the -9 percent maximum negative adjustment.

The reporting mechanism marks the third difference:

• Advanced APM QPs are excluded from MIPS reporting entirely.
• MIPS APM participants report through the APM Performance Pathway (APP), a reduced-burden alternative to Traditional MIPS.
• Traditional MIPS clinicians report under the full MIPS framework across four performance categories.

Where Do Alternative Payment Models Fit Within The Quality Payment Program?

Alternative Payment Models are one of two tracks within the CMS Quality Payment Program (QPP), the other being the Merit-Based Incentive Payment System (MIPS).

The Quality Payment Program is the CMS framework created by MACRA in 2015 to move Medicare physician payment from fee-for-service toward value-based reimbursement. The Quality Payment Program operates two tracks: APMs, the central entity of this page, and MIPS.

A clinician’s QPP participation for a performance year is mutually exclusive per clinician-year by track. QP status under an Advanced APM excludes the clinician from MIPS. Otherwise, the clinician reports MIPS, either through Traditional MIPS or through the APM Performance Pathway if the clinician participates in a MIPS APM.

For the broader QPP framework, including the MIPS track and the cross-program eligibility criteria, see the Quality Payment Program hub.

How Many Alternative Payment Models Does CMS Recognize For 2026?

CMS recognizes approximately 20 to 30 active Alternative Payment Models each performance year. CMS publishes the exact list annually in the Physician Fee Schedule Final Rule and the CMS Innovation Center model inventory.

The 2026 active APM landscape spans three category groups:

• Total-cost-of-care models: MSSP, ACO REACH, and other accountable care arrangements.
• Episode-based models: the TEAM model (newly mandatory in 2026), BPCI Advanced legacy participants, and the Radiation Oncology Model.
• Primary-care models: Primary Care First and Making Care Primary.

Within the active list, CMS designates each model as either Advanced, qualifying participants for the APM incentive, or MIPS APM, qualifying participants for APP reporting. The designation changes year over year as model risk parameters evolve.

CMS publishes the full 2026 model inventory by track through the Quality Payment Program Resource Library. Two Wave 3 list pages will hold the complete Advanced APM and MIPS APM inventories once launched.

What are the Alternative Payment Model tracks?

CMS divides Alternative Payment Models into two tracks based on the financial risk and reporting requirements clinicians take on: the Advanced APM Track and the MIPS APM Track.

The Advanced APM Track is the higher-risk, higher-reward path. Clinicians whose practice participates in an Advanced APM and meets QP status thresholds are excluded from MIPS reporting and connect to the APM incentive. The MIPS APM Track is the lower-risk path. Clinicians whose practice participates in a MIPS APM still report MIPS through the simplified APM Performance Pathway (APP) instead of Traditional MIPS.

CMS designed the two-track structure to support value-based care adoption at different risk-tolerance levels. Practices with mature value-based care infrastructure pursue the Advanced APM Track. Practices building toward full risk pursue the MIPS APM Track as an intermediate step. 

What is the Advanced APM Track?

The Advanced APM Track is the higher-risk Alternative Payment Model path under the Quality Payment Program (QPP). Clinicians whose practice participates in an Advanced APM bear nominal financial risk per the Nominal Amount Standard, use Certified Electronic Health Record Technology (CEHRT), and report quality measures comparable to MIPS Quality measures.

CMS designates an APM as Advanced when the model meets three requirements:

1. Nominal financial risk: participants bear downside exposure per the Nominal Amount Standard, or the model qualifies as an expanded Medical Home Model.
2. CEHRT use: participants document and report care using Certified Electronic Health Record Technology.
3. Quality-measure-based payment: the model bases payment on quality measures comparable to MIPS Quality measures.

Clinicians whose Advanced APM participation meets the QP threshold achieve QP status. For the 2026 performance year, the QP threshold is 75 percent of Medicare Part B payment amount or 50 percent of Medicare patients through the Advanced APM during the QP Performance Period. QP status excludes the clinician from MIPS reporting and connects the clinician to the APM incentive covered in the Incentive section below.

Historically Advanced APMs include the MSSP higher-risk ACO tracks, BPCI Advanced, Primary Care First, and Comprehensive Primary Care Plus (CPC+) legacy participants. CMS publishes the annual list of Advanced APMs for each performance year.

For the full Advanced APM risk requirements, CEHRT specifications, and the current model list, see the Advanced APM page.

What is the MIPS APM Track?

The MIPS APM Track is the lower-risk Alternative Payment Model path. Clinicians whose practice participates in a MIPS APM continue to report MIPS, through the simplified APM Performance Pathway (APP) instead of Traditional MIPS.

CMS designates an APM as a MIPS APM when the model does not meet all three Advanced APM criteria of risk, CEHRT, and quality-measure-based payment, but does include MIPS-eligible clinicians under a defined APM arrangement. MIPS APM participants remain in the MIPS scoring framework with reduced reporting burden through the APP.

The APM Performance Pathway (APP) is a MIPS reporting framework that aligns the clinician’s MIPS Quality category measures with the APM Entity’s quality measure set. Promoting Interoperability and Improvement Activities categories report under standard MIPS rules. Cost is CMS-calculated as in Traditional MIPS.

MIPS APM participants are not eligible for the APM incentive reserved for Advanced APM QPs. MIPS APM participants instead receive standard MIPS payment adjustments based on their MIPS Final Score.

Historically, MIPS APMs include the MSSP lower-risk ACO tracks that lack sufficient downside risk for Advanced classification, and several CMS Innovation Center models with limited risk-sharing.

For the full MIPS APM reporting mechanics and the APM Performance Pathway measure set, see the MIPS APM page.

What is QP and Partial QP Status?

QP status (Qualifying APM Participant) and Partial QP status are CMS designations that determine whether an Advanced APM participant is excluded from MIPS reporting and whether the clinician connects to the APM incentive.

CMS evaluates an Advanced APM participant against payment-amount and patient-count thresholds during the QP Performance Period. Clinicians who meet the QP threshold receive QP status, which brings exclusion from MIPS reporting and the APM incentive. Clinicians who meet the lower Partial QP threshold receive Partial QP status, which allows a MIPS election but does not carry the incentive.

CMS makes QP and Partial QP determinations after the QP Performance Period closes. CMS uses a multi-snapshot evaluation that captures clinician participation at three points during the year. Beginning with the 2026 QP performance period, CMS runs both an entity-level and an individual-level calculation, and a clinician qualifies under either level. 

What is QP Status (Qualifying APM Participant)?

QP Status, Qualifying APM Participant status, is the CMS designation awarded to clinicians whose Advanced APM participation meets the higher of two CMS thresholds during the QP Performance Period.

For the 2026 performance year, the QP threshold is 75 percent of the Medicare Part B payment amount or 50 percent of Medicare Part B patients through one or more Advanced APMs during the QP Performance Period. Clinicians meeting either component qualify.

QP status carries two effects:

• MIPS exclusion: QPs receive no MIPS Final Score and no MIPS payment adjustment.
• APM incentive: QPs connect to the Qualifying APM Conversion Factor and, for the payment years it applied, the lump-sum APM Incentive Payment covered in the Incentive section below.

CMS confirmed QP status for 528,827 clinicians based on 2024 participation, the group receiving the 2026 payment-year benefits. For the full QP threshold mechanics, snapshot evaluation, and the determination process, see the QP status page.

What is Partial QP status?

Partial QP status is the CMS designation awarded to clinicians whose Advanced APM participation meets the lower of two CMS thresholds during the QP Performance Period, falling short of QP status but exceeding the partial threshold.

For the 2026 performance year, the Partial QP threshold is 50 percent of the Medicare Part B payment amount or 40 percent of the Medicare Part B patients through one or more Advanced APMs during the QP Performance Period.

Partial QPs make a binding election for the performance year:

• MIPS exemption election: the clinician declines MIPS, matching QP treatment but without the incentive.
• MIPS participation election: the clinician reports MIPS voluntarily, through the APM Performance Pathway, and pursues a positive adjustment.

Partial QPs are not eligible for the APM incentive. The incentive is reserved for QPs at the higher threshold.

What QP and Partial QP Thresholds Apply in 2026?

For the 2026 performance year (PY2026), CMS applies two thresholds for QP and Partial QP determinations, one based on Medicare Part B payment amount and one based on Medicare Part B patient count. The following table states both thresholds by status.

Status	Payment Amount Threshold	Patient Count Threshold
Qualifying APM Participant (QP)	75%	50%
Partial QP	50%	40%

A clinician needs to meet either the payment-amount component or the patient-count component to reach the corresponding status. CMS uses the method producing the more favorable result for the clinician’s participation pattern. These values follow the threshold schedule at 42 CFR 414.1430 for the 2026 performance year (2028 payment year).

How is the APM Incentive Payment Calculated?

The APM incentive for a Qualifying APM Participant (QP) has two distinct components for the 2026 performance year: the Qualifying APM Conversion Factor and the historical lump-sum APM Incentive Payment. QPs earn the incentive by participating in an Advanced APM and meeting the QP threshold during the QP Performance Period.

The Qualifying APM Conversion Factor is the current, permanent benefit. Beginning in CY 2026, CMS applies a higher Medicare Physician Fee Schedule update to QPs, 0.75 percent versus 0.25 percent for non-QPs, under MACRA. The lump-sum APM Incentive Payment is the legacy benefit. CMS paid it as a percentage of the QP’s estimated aggregate payment amount, and the lump sum expires after the 2026 payment year under current law.

The calculation has three discrete elements: eligibility, incentive amount, and payment timing. The three subsections below cover each element, and the final subsection answers whether the lump-sum payment still applies in 2026.

Eligibility (QP Status Achieved)

Eligibility for the APM incentive requires the clinician to achieve QP Status during the QP Performance Period, the 75 percent payment or 50 percent patient threshold covered in the QP Status section above.

CMS conducts the QP determination during a defined Performance Period, the calendar year preceding the payment year. CMS uses three snapshot dates to evaluate participation, and the snapshot producing the highest threshold result governs the determination.

A clinician may participate in more than one Advanced APM during the Performance Period. CMS aggregates participation across all qualifying Advanced APMs when calculating threshold compliance.

Partial QPs do not qualify for the APM incentive. Clinicians who meet the lower 50 percent payment or 40 percent patient threshold, but not the QP threshold, receive no incentive regardless of whether they elect MIPS reporting.

Incentive Amount (Percentage of Estimated Aggregate Payment Amount)

The incentive amount has two parts for the 2026 performance year. The Qualifying APM Conversion Factor raises the QP’s Medicare Physician Fee Schedule update to 0.75 percent, versus 0.25 percent for non-QPs, applied to every covered service the QP bills. The lump-sum APM Incentive Payment equals a fixed percentage of the QP’s estimated aggregate payment amount for Medicare Part B covered professional services during the QP Performance Period.

The lump-sum percentage stepped down across the program under statute:

Payment Year	Performance Year	Lump-Sum Percentage
2019-2024	2017-2022	5%
2025	2023	3.5%
2026	2024	1.88%
2027 onwards	2025 onward	None under current law

CMS derives the lump-sum base from the QP’s historical Medicare Part B claims submitted under the QP’s NPI and TIN. Non-Medicare and non-Part-B claims are excluded. A worked example shows the calculation. A QP with $400,000 in estimated aggregate payment amount earned $20,000 at the 5 percent rate that applied through the 2024 payment year. 

The same base yields $7,520 at the 1.88 percent rate for the 2026 payment year. The 3.5 percent and 1.88 percent step-downs came from the Consolidated Appropriations Act, 2023 (Public Law 117-328) and subsequent statute.

Payment Year and Lump-Sum Disbursement

The lump-sum APM Incentive Payment lands two years after the QP Performance Period, paid by CMS as a single lump-sum disbursement rather than a percentage adjustment to ongoing Medicare Part B claim payments.

CMS uses the two-year lag to allow time for QP determination, Medicare claims maturity, and aggregate payment amount calculation. The 2026 payment-year lump sum, based on the 2024 performance period, reaches QPs during CY 2026 at the 1.88 percent rate.

The disbursement differs from the conversion factor by mechanism:

• Lump-sum APM Incentive Payment: a single payment to the QP’s designated recipient, typically the APM Entity or the QP’s billing TIN.
• Qualifying APM Conversion Factor: a higher per-claim rate applied to every covered service during the payment year.
• MIPS payment adjustment: a per-claim adjustment applied to non-QP clinicians, which QPs do not receive.

Does the APM Incentive Payment Still Apply in 2026?

The lump-sum APM Incentive Payment does not apply to the 2026 performance year. Under 42 CFR 414.1450, CMS makes lump-sum payments only for payment years 2019 through 2026. The 2026 payment year, based on the 2024 performance period, is the final lump-sum year at the 1.88 percent rate.

A clinician who achieves QP status in the 2026 performance year receives the Qualifying APM Conversion Factor of 0.75 percent, MIPS exclusion, and any model-specific rewards. That clinician receives no lump-sum payment unless Congress reauthorizes the incentive. The original MACRA-authorized 5 percent lump sum covered performance years 2017 through 2022, stepped down to 3.5 percent for the 2023 performance year and 1.88 percent for the 2024 performance year, then expired. 

The American Medical Association is petitioning Congress to extend the lump-sum incentive. Confirm current statutory status with the CMS Quality Payment Program Resource Library before relying on the lump-sum payment in financial projections.

How Does Macralytics Advise on APM Participation?

Macralytics provides Alternative Payment Model advisory services through a four-step engagement that helps practices evaluate APM participation, model QP status pursuit, and manage the APM incentive lifecycle.

The engagement follows four steps:

1. APM landscape assessment: the team reviews the practice’s current Medicare Part B mix, specialty, geography, and existing ACO or MSSP participation to identify Advanced APM and MIPS APM opportunities for the upcoming performance year.
2. QP status modeling: the team models the practice’s likely QP or Partial QP threshold achievement under candidate APMs, based on patient mix and Medicare Part B payment volume.
3. Participation transition support: the team coordinates participation paperwork, CEHRT compliance verification for Advanced APMs, and APP measure-set alignment for MIPS APMs when a practice joins a model.
4. Incentive lifecycle management: the team monitors the QP determination after the QP Performance Period, confirms conversion factor and lump-sum eligibility, and tracks disbursement.

Practices weighing the tracks, the sunsetting lump sum, and the new individual-level QP calculation face a revenue decision, not only a compliance one. Macralytics delivers this work through its APM advisory service.

Should A Small Practice Consider Joining An Alternative Payment Model?

Depends. Small practices, defined as TINs with 15 or fewer eligible clinicians, face structural barriers to Advanced APM participation. The small-practice MIPS accommodations often produce a more favorable Medicare payment outcome than APM participation for low-volume practices.

The volume problem drives the analysis. Most Advanced APMs require a minimum patient panel or aggregate payment thresholds to reach the QP threshold of 75 percent of Medicare Part B payment or 50 percent of patients through the Advanced APM. A small practice with limited Medicare Part B volume may not reach the QP threshold even with full participation. That practice remains a Partial QP, with no incentive, or a non-QP, with no APM benefit.

The MIPS small-practice accommodations offer an alternative:

• +10 Improvement Activities bonus applied to the small-practice MIPS score.
• Promoting Interoperability reweighting to zero for qualifying small practices.
• 3-point Quality measure floor on submitted measures.

These accommodations can produce a positive MIPS payment adjustment that compares favorably to the financial risk an Advanced APM imposes.

APM participation still fits some small practices. Small practices in specialty areas with active episode-based APMs, such as orthopedic surgery under the TEAM model or radiation oncology, can be candidates. Small practices participating in larger ACOs that aggregate volume across TINs can also reach the threshold. Most other small practices benefit from the patient-volume scale they lack, and stay in MIPS with the small-practice accommodations.