Ambulatory Specialty Model (ASM): Executive Briefing

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1. Executive Summary and Strategic Context

What Is This Model and What Problem Does It Solve?

The Ambulatory Specialty Model (ASM) is a mandatory CMMI alternative payment model targeting specialist physicians who treat Original Medicare patients with heart failure or low back pain. The model runs for five performance years from January 1, 2027, through December 31, 2031, with payment adjustments applied from January 1, 2029, through December 31, 2033. It is authorized under Section 1115A of the Social Security Act.

The model is designed to address a specific structural failure in Medicare's fee-for-service delivery system: when patients with chronic conditions see multiple specialists, care becomes fragmented, coordination breaks down, and utilization escalates. Patients with heart failure or low back pain are particularly vulnerable to this failure mode. They frequently encounter multiple unconnected clinicians across ambulatory, acute, and post-acute settings, generating treatment delays, duplicative workups, avoidable hospitalizations, and unnecessary procedures — all without corresponding improvements in health outcomes.

The scale of this problem is substantial. Annual Medicare spending on heart failure runs $10–$13 billion. Annual Medicare spending on low back pain runs $6–$8 billion. These two conditions together represent a concentrated pool of high-cost, high-volume spending where targeted specialist accountability may yield meaningful savings without sacrificing clinical quality.

ASM tests whether performance-based payment adjustments on Medicare Part B claims — structured as two-sided financial risk — can incentivize specialists to improve upstream chronic disease management, coordinate more actively with primary care, reduce avoidable utilization, and generate better patient outcomes. Critically, the model does not attempt to restructure how specialists are paid for individual services. Instead, it applies a percentage-based adjustment factor — positive or negative — on top of existing Part B payments, making this an overlay accountability mechanism rather than a global payment redesign.

Strategic Significance for the VBC Market

ASM represents a meaningful structural departure from how CMMI has historically engaged specialists in value-based care. Most prior CMMI innovation has been concentrated in primary care (e.g., Primary Care First, Comprehensive Primary Care Plus) or in episode-based models primarily oriented around facility-level care (e.g., Bundled Payments for Care Improvement Advanced). ASM pulls specialist physicians — specifically cardiologists and a defined set of pain and musculoskeletal subspecialists — directly into two-sided financial accountability for the full scope of care delivered around their patients' chronic conditions.

The implications for the value-based care market are layered. First, mandatory participation is a critical design element. Unlike voluntary models where selection bias systematically enrolls higher-performing, more-prepared organizations, mandatory models capture the full distribution of practice patterns — including the highest-utilizing, lowest-coordinating outliers whose behavior most needs to change. This makes ASM's results more generalizable as evidence of what specialist accountability can accomplish across the broader market.

Second, the model's MVP (MIPS Value Pathways) framework as the measurement architecture is strategically significant. ASM uses the QPP portal for data submission and builds its performance categories on existing MIPS infrastructure — quality measure reporting, promoting interoperability requirements, improvement activity attestations. This lowers the infrastructure lift for participants who already operate within the QPP ecosystem, and it signals that CMS intends to use ASM as a scalability test case for how specialty-specific accountability can be layered onto existing administrative infrastructure without building entirely new reporting systems.

Third, the Collaborative Care Arrangement (CCA) requirement creates a novel structural demand across the specialist-primary care interface. Requiring specialists to execute written, signed arrangements with primary care practices — covering data sharing, co-management, care transitions, and closed-loop communication — forces organizational relationships that have historically been informal, episodic, and non-binding. For health systems that own both specialty and primary care practices, this is an operational nudge. For independent specialists who refer to non-affiliated PCPs, it is a more significant operational undertaking that may accelerate network consolidation or partnership agreements.

Fourth, ASM's telehealth waiver — which removes geographic and originating site restrictions for ASM beneficiaries — has practical significance for rural and hybrid-market cardiologists and pain subspecialists whose patient panels are geographically distributed.

Political Context and Administrative Alignment

ASM was finalized under the CY 2026 Physician Fee Schedule Final Rule, with the model architecture developed across the transition from the Biden to the Trump administration. The model's launch under the current Trump administration — led at CMS by Administrator Dr. Mehmet Oz and at CMMI by Director Abe Sutton — situates it explicitly within the Make America Healthy Again (MAHA) policy agenda championed by HHS Secretary Robert F. Kennedy Jr. CMS's own model description frames ASM as advancing "President Trump's directive to Make America Healthy Again by promoting preventive care through screenings, increasing transparency by making medical provider performance data more widely available, and protecting American taxpayers by holding select specialists accountable."

This framing is more than rhetorical. The MAHA alignment gives ASM political durability within the current administration's priorities. The model's emphasis on preventive screenings (HRSN, depression, BMI, functional status), upstream disease management, and practitioner-level transparency in performance data all map coherently onto the current administration's stated public health priorities. Mandatory model structures have historically faced political headwinds — the Obama-era mandatory cardiac bundled payment model was rescinded before implementation — but ASM's alignment with MAHA and its narrower scope relative to earlier mandatory bundled payment proposals provides some insulation.

Market Transformation Implications

For hospital systems and multi-specialty physician groups, ASM creates both an operational burden and a strategic opportunity. The burden is real: cardiologists and the specified pain/musculoskeletal subspecialists in selected CBSAs face mandatory two-sided risk starting in 2027, with payment adjustments ranging from -9% to +9% in performance years 1 and 2, escalating to -12% to +12% by performance year 5. For a cardiologist generating $250,000 in annual Medicare Part B billings, a maximum negative adjustment in year 5 represents a $30,000 annual revenue reduction — material enough to drive behavioral change, particularly for independent practitioners without the financial cushion of a large system.

The strategic opportunity lies in differentiation. High-performing practices that invest in care coordination infrastructure, CCA execution, and quality measure performance will receive positive adjustments compounding over multiple payment years. The model's peer-relative scoring design — where payment adjustments are determined by performance relative to cohort peers rather than absolute benchmarks — means that practices that move faster on care transformation will capture upside at the direct expense of slower-moving competitors within the same geography.

For Medicare Advantage plans, ASM operates exclusively in Original Medicare (fee-for-service). MA plan strategists should monitor ASM's utilization and quality data closely, as the model will generate condition-specific, specialist-level performance transparency at a scale not previously available. CMMI's stated intent to make ASM participant performance data more widely available means that cardiologist and pain specialist quality metrics will become publicly accessible in ways that could inform MA network construction and value-based contracting terms.

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2. Model Architecture and Payment Structure

Participation Structure and Eligibility Criteria

ASM participation is mandatory for physicians meeting all four eligibility criteria. Participants are identified at the individual physician level using a TIN/NPI combination, not at the practice or organizational level. A physician may be selected as an ASM participant under multiple TINs simultaneously.

Eligibility is evaluated using claims data from the calendar year two years prior to each performance year. For the 2027 performance year, eligibility was determined using CY 2025 data. The preliminary participant list was released in February 2026 using CY 2024 data; the final 2027 participant list was released in September 2026 using the corrected CY 2025 dataset.

Eligibility Criteria:

Criterion	Specification
Billing basis	Bills under Medicare Physician Fee Schedule
Specialty type — Heart Failure Cohort	Cardiology
Specialty type — Low Back Pain Cohort	Anesthesiology, Interventional Pain Management, Neurosurgery, Orthopedic Surgery, Pain Management, Physical Medicine and Rehabilitation
Episode volume threshold	≥20 attributed Episode-Based Cost Measure (EBCM) episodes for the relevant condition per year
Geographic requirement	Practices in one of the selected mandatory CBSAs or metropolitan divisions (approximately one-quarter of all CBSAs and metropolitan divisions)

CMS assigns specialty type based on the most common specialty code on a physician's Medicare Part B claims. Episode attribution uses condition-specific triggering and confirming claims from the EBCM methodology — the same methodology that determines EBCM episode attribution in the Cost performance category. Service location is assigned to the most common CBSA or metropolitan division across a participant's attributed episodes.

ASM participants may concurrently participate in Medicare Shared Savings Program ACOs, other CMMI models including Advanced APMs, and may receive financial incentives from those programs without conflict. ASM participants are exempted from MIPS reporting for any performance year in which they meet ASM eligibility criteria.

Performance Categories and Measurement Architecture

ASM evaluates participants across four performance categories. Quality and Cost each carry a 50% weight in the final score calculation. Improvement Activities and Promoting Interoperability generate point adjustments rather than weighted contributions.

Quality (50% weight — Final Score)

Heart Failure Cohort Quality Measures:

Measure	MIPS ID	Collection Type
Risk-Standardized Acute Unplanned Cardiovascular-Related Admission Rates for Patients with HF (modified for ASM)	Q492	Administrative claims
HF: Beta-Blocker Therapy for LVSD	Q008	eCQM or MIPS CQM
HF: ACE Inhibitor or ARB or ARNI Therapy for LVSD	Q005	eCQM or MIPS CQM
Controlling High Blood Pressure	Q236	eCQM or MIPS CQM
Functional Status Assessments for Heart Failure	Q377	eCQM

Low Back Pain Cohort Quality Measures:

Measure	MIPS ID	Collection Type
Use of High-Risk Medications in Older Adults	Q238	eCQM or MIPS CQM
Preventive Care and Screening: Screening for Depression and Follow-Up Plan	Q134	eCQM or MIPS CQM
Preventive Care and Screening: BMI Screening and Follow-Up Plan	Q128	eCQM or MIPS CQM
Functional Status Change for Patients with Low Back Impairment	Q220	MIPS CQM
Excess Utilization Measure (to be proposed in CY 2027 rulemaking)	TBD	Administrative claims

Data completeness threshold is 75% of eligible cases per measure. Measures meeting data completeness but with fewer than 20 cases are excluded from scoring (not penalized). Unreported or incomplete measures receive zero points. Individual measures are scored on a 1–10 point scale using performance year or historical cohort benchmarks. Non-administrative claims measures must be submitted via the QPP portal; administrative claims measures are calculated directly by CMS. Small practices (15 or fewer NPIs) may report at the TIN level; non-small practices report at the TIN/NPI (individual) level.

Cost (50% weight — Final Score)

Cohort	Cost Measure	Measure ID	Collection
Heart Failure	Heart Failure EBCM	COST_HF_1	Administrative claims
Low Back Pain	Low Back Pain EBCM	COST_LBP_1	Administrative claims

CMS calculates cost measures directly from Medicare administrative claims data. No participant submission is required. EBCMs cover 365 days of services related to the chronic condition episode. Participants with fewer than 20 EBCM episodes do not receive an EBCM score and receive no cost performance category score. Benchmarks are calculated annually based on cohort performance.

Improvement Activities (Point Adjustments to Final Score)

Both improvement activities must be attested at the TIN (group) level and must be active for a 90-day continuous period within the performance year. Documentation must be retained for at least six years per 42 CFR § 512.135, though only an attestation — not supporting documentation — is submitted to CMS.

IA	Name	Core Requirements
IA-1	Connecting to Primary Care and Ensuring Completion of HRSN Screening	Workflows confirming PCP access for all ASM beneficiaries; post-visit communication back to PCP; determination of annual HRSN screening status and facilitation if not completed
IA-2	Establishing Communication and Collaboration Expectations with Primary Care Using CCAs	At least one written, signed CCA with a PCP practice sharing ≥1 ASM beneficiary; CCA must include ≥3 of 5 collaborative elements: data sharing, co-management, transitions in care planning, closed-loop communication, care coordination integration

IA scoring adjustments:

• Both IAs completed: no adjustment
• One IA completed: -10 points
• Neither IA completed: -20 points

CCA remuneration is optional. Where financial incentives are exchanged between ASM participants and PCP practices under a CCA, the CMS-sponsored model safe harbor at 42 CFR § 1001.952(ii) is available, provided payments do not exceed the participant's Medicare Part B reimbursement multiplied by their performance-based payment adjustment, and are traceable by check or electronic funds transfer.

Promoting Interoperability (0 to -10 Point Adjustment)

Reported at the TIN (group) level; reported data may include non-ASM participant clinicians within the TIN. Requires CEHRT ID submission, four interoperability measures (e-Prescribing, HIE, Provider to Patient Exchange, Public Health and Clinical Data Exchange), and four attestations (ONC direct review, actions to limit interoperability, Security Risk Assessment, SAFER Self-Assessment). Reporting period is 180 days. CMS scores this category using MIPS methodology; a score of zero is assigned for incomplete attestations or measures. Unlike MIPS, ASM offers no automatic PI reweighting and no PI-specific hardship application.

Final Score Calculation and Adjustments

The final score calculation follows a sequential logic:

1. If the participant fails the Minimum Data Submission Requirement (does not report at least one non-administrative claims quality measure meeting 75% data completeness), they receive a final score of zero and the maximum negative payment adjustment.
2. If the participant cannot be scored in both Quality and Cost (does not meet case/episode minimums), they receive no final score and a neutral payment adjustment.
3. Otherwise, CMS calculates the weighted final score and applies adjustments.

Bonus adjustments available:

• Complex Patient Bonus: Up to 10 points based on HCC risk scores and dual-eligible patient proportion.
• Small Practice Bonus: 10 points for practices of 2–15 clinicians; 15 points for solo practitioners.
• Final score cannot fall below zero or exceed 100 points.

Payment Methodology and Timeline

Payment adjustments apply to all Medicare Part B covered service payments during the applicable payment year. Adjustments are determined by comparing a participant's transformed final score against their cohort's score distribution using a logistic exchange function. A scaling factor ensures that aggregate positive adjustments within each cohort do not exceed aggregate negative adjustments — this is a budget-neutral design within each cohort.

Performance-Payment Timeline and Risk Levels:

Performance Year	Performance Period	Data Reporting Deadline	Payment Year	Payment Period	Two-Sided Risk Level
Year 1	Jan 1 – Dec 31, 2027	March 31, 2028	Year 1	Jan 1 – Dec 31, 2029	±9%
Year 2	Jan 1 – Dec 31, 2028	March 31, 2029	Year 2	Jan 1 – Dec 31, 2030	±9%
Year 3	Jan 1 – Dec 31, 2029	March 31, 2030	Year 3	Jan 1 – Dec 31, 2031	±10%
Year 4	Jan 1 – Dec 31, 2030	March 31, 2031	Year 4	Jan 1 – Dec 31, 2032	±11%
Year 5	Jan 1 – Dec 31, 2031	March 31, 2032	Year 5	Jan 1 – Dec 31, 2033	±12%

Note the two-year lag between performance and payment. Participants must plan capital and operational investments with the understanding that performance-year results do not generate payment impacts until two years later.

Beneficiary Incentives and Waivers

ASM includes a MIPS waiver — participants are exempt from MIPS reporting for any performance year they meet ASM eligibility — and a telehealth waiver removing geographic and originating site restrictions for ASM beneficiaries.

ASM participants may offer in-kind engagement incentives directly to established ASM beneficiaries, subject to the following constraints: incentives must connect to care for a targeted chronic condition, support prevention or patient engagement, and not be tied to use of outside providers. Total incentive value must not exceed $1,000 per patient. Technology items valued over $75 must remain property of the ASM participant and be retrieved when the care relationship ends. No incentive costs may be shifted to any federal health care program.

Participant Portal and Administrative Infrastructure

The ASM Participant Portal (Version 1.0, released September 2026) is the primary administrative hub for participant onboarding, profile management, organizational change requests, and program document uploads. Access is through the CMS Enterprise Portal (portal.cms.gov) using ID.me, Login.gov, or IDM credentials. Role types include Primary Contact (administrative privileges), Secondary Contact (read-only), and Data Custodian (responsible for QPP/HDR data submission and eDFR data retrieval). The portal sessions automatically time out after 30 minutes of inactivity. Annual performance reports will detail individual measure-level scores, performance category scores, applicable bonus adjustments, final scores, payment adjustment factors, and payment multipliers.