Understanding APM financial settlements

While alternative payment models (APMs) have increased in popularity over recent years, they can be difficult to implement because of their operational dependence on payment systems designed for fee-for-service (FFS) reimbursement. In addition, moving away from a FFS reimbursement construct can cause underreporting of detailed services. As a result, many APMs undergo financial settlements, meaning payments flow as normal during model performance periods and are retrospectively reconciled to a target price or benchmark after the fact.

APM financial settlement data offer providers opportunities to validate financial calculations, understand methodology, and enhance patient management. Providers can also gain perspective on other revenue drivers such as patient retention.

In this paper, Milliman consultants explore APM reimbursement methodologies through the lens of the Centers for Medicare and Medicaid Services (CMS) Oncology Care Model as an illustrative case study.

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