CMS Proposes New Mandatory Specialty Care Model: What You Need to Know About ASM

Jul 22

CMS’s CY 2026 Medicare Physician Fee Schedule (PFS) Proposed Rule introduces the Ambulatory Specialty Model (ASM), a mandatory payment model focused on outpatient care for heart failure and low back pain.

What is ASM?

ASM is a five-year, mandatory model that will hold outpatient specialists accountable for their performance on relevant quality, cost, care coordination, and electronic health record use metrics. The model specifically targets heart failure and low back pain. The model maintains fee-for-service payment, but retrospectively evaluates performance on cost and quality metrics, with payment adjustments based on performance outcomes.

ASM would reward clinicians who:

Prevent worsening or recurrence of chronic conditions by encouraging lifestyle changes
Improve chronic disease management by encouraging collaboration between specialists and primary care providers
Detect risks and signs of chronic conditions early
Enhance patient experience by prioritizing patient-reported outcomes on function
Reduce avoidable hospitalizations and care lacking clear evidence of benefit

By aligning financial incentives with early intervention, evidence-based care, and care coordination, ASM aims to improve quality and reduce costs by moving specialist behavior toward longitudinal, high-value management of chronic conditions.

Model Goals

The Ambulatory Specialty Care Model aims to strengthen how specialists deliver and coordinate care for people with heart disease or low back pain. CMS outlines six core goals:

Improve collaboration between specialists and primary care to support better outcomes

Use risk assessment to manage chronic disease and prevent additional disease

Reduce avoidable hospitalizations and unnecessary procedures

Increase transparency by comparing performance among participants and their peers

Focus outcome measures on what matters most to patients

Align performance metrics with factors specialists influence

Who Will Be Required to Participate?

Participation in ASM will be mandatory for eligible physician specialists practicing in randomly selected geographic regions who frequently manage heart failure or low back pain in outpatient settings.

CMS will use historical Medicare claims data to identify both the geographic areas for participation (approximately 25% of core-based statistical areas nationwide) and the individual clinicians who meet eligibility criteria. The selected clinicians will be required to participate beginning in January 2027.

Eligible participants include:

Cardiologists

Orthopedic surgeons

Neurosurgeons

Anesthesiologists (including those practicing interventional pain)

Pain management specialists

Physical Medicine & Rehabilitation (PM&R) physicians

These specialties were selected based on their billing patterns and clinical role in managing the targeted conditions. For the low back pain cohort, CMS proposes a broader set of specialties that commonly manage this condition across the continuum of care, including both surgical and non-surgical approaches.

Nonphysician practitioners (NPPs) such as nurse practitioners and physician assistants are not included in ASM. While NPPs may continue to support patient care under the billing TIN of a participating practice, they will not be individually attributed for model performance, nor will they directly report or receive performance-based payment adjustments under ASM.

How Performance Drives Payment Adjustments in ASM

CMS evaluates participating specialists across four categories to determine future Medicare Part B payment adjustments:

Quality: Clinicians report condition-specific measures tailored to heart failure or low back pain, including patient-reported outcomes and use of evidence-based care.

Cost: Medicare spending is assessed using episode-based cost measures (EBCMs) for the applicable condition. Clinicians are scored based on how their per-episode costs compare to the cohort median, adjusted for case mix.

Improvement Activities (IA): Clinicians attest to activities like shared decision-making or enhanced care coordination.

Promoting Interoperability (PI): This category tracks the use of Certified EHR Technology (CEHRT), including e-prescribing and patient access.

Performance is measured on a 0–100 scale, with Quality and Cost weighted most heavily (50% each). Clinicians who fail to meet requirements in the PI or IA categories may receive deductions of up to 15 points each, lowering their overall score.

Once final scores are calculated, CMS uses a peer-to-peer comparison within each cohort (e.g., all cardiologists managing heart failure). Instead of meeting an external threshold, a clinician’s score is ranked relative to peers, and an exchange function determines their payment adjustment ranging from +9% to –9%.

Clinicians continue to receive standard Medicare payments during the performance year and adjustments are applied two years later. For example, performance in 2027 will impact Medicare Part B payments in 2029. CMS calculates adjustments during the year between, providing feedback to participants in advance.

This delayed adjustment model mirrors the MIPS timeline, giving clinicians time to understand their performance and prepare for future years. The adjustment itself is applied to every Medicare Part B claim during the payment year, but beneficiary cost-sharing remains unchanged, and patients still pay coinsurance based on the original fee schedule amount.

Overlap with Other CMS Models

CMS acknowledges that some clinicians required to participate in ASM may also be involved in other Innovation Center models or ACOs. To address this, the agency proposes a clear overlap policy that allows maximum flexibility for participation in ASM and other models.

Key points on model overlap:

ASM does not exclude clinicians from participating in other CMS Innovation Center models. CMS proposes that participation in ASM can coexist with other models, including:

ACO initiatives (e.g., MSSP, ACO REACH),

Episode-based models, and

Advanced primary care models.

No double payment for shared savings: If multiple models apply to the same care episode, CMS will attribute costs and savings to only one model. This typically follows CMS’s established model hierarchy rules, which prioritize total cost of care models (e.g., ACOs) over condition-specific episode models like ASM.

Performance scoring applies separately: Clinicians participating in both ASM and another model will still receive distinct performance assessments under each model’s framework.

No “opt-out” due to participation in another model: Specialists required to participate in ASM cannot decline participation based on involvement in another CMS model.

This approach reflects CMS’s broader move toward model alignment, where multiple models operate in parallel with guardrails to avoid conflicting incentives or duplicate payment adjustments.

Timeline and Milestones

Specialists will have a transition period to prepare for ASM. CMS plans to issue a preliminary list of participants by the end of 2025 and finalize participation in 2026, allowing time for practices to gear up for the model’s launch in 2027. Here’s what to know about the anticipated timeline:

Mid–Late 2025: CMS will finalize the proposed rule and begin model preparation.

2026: CMS will use Medicare claims data from 2024 and 2025 to:

Identify eligible clinicians based on specialty and service volume.

Select approximately 25% of geographic regions (core-based statistical areas) for mandatory participation.

Notify clinicians of their selection and responsibilities under the model.

January 1, 2027: ASM performance begins. Participating clinicians will be required to:

Report performance data (where applicable),

Undergo evaluation based on the four performance categories,

And receive feedback on their scores.

2029 and beyond: The first payment adjustments based on 2027 performance are expected to take effect. This lag allows time for data submission, scoring, and application of updates.

2027–2031: The model will run for five performance years.

2032–2033: CMS will finalize payment adjustments and complete an evaluation of ASM’s impact. If successful, CMS could expand the model further.

What Comes Next—and How to Prepare

ASM signals a significant shift in how CMS reimburses outpatient specialty care by measuring performance of individual clinicians on treatment for heart failure and low back pain. Although the model begins in 2027, CMS will use 2024–2025 claims data to identify participants and regions, making early preparation essential.

CMS is accepting public comments on the proposed rule through September 12, 2025, at 5 p.m. ET. Clinicians, health systems, and professional societies are encouraged to submit feedback on attribution, eligibility, scoring, and model overlap.

To prepare, physicians should assess their likelihood of selection, review current performance on relevant MIPS cost measures, and identify areas to strengthen care coordination, patient engagement, and use of health IT. Notably, ASM is launching alongside other Innovation Center efforts to redesign specialty care, such as the newly announced WISeR Model (Working to Increase Specialty Engagement and Redesign), which offers a voluntary pathway focused on strengthening coordination between specialists and accountable entities. Together, ASM and WISeR signal a broader CMS strategy to embed specialists more fully in value-based care.

Coral Health Advisors can support your organization in evaluating participation risk, crafting public comments, and aligning operations to succeed under ASM. Contact us to learn how we can help you prepare.