Cut through the noise, find the signal: Intelligence for serious healthcare leaders
Analysis updated November 9, 2026
The Ambulatory Specialty Model (ASM) is a mandatory, five-year CMS Innovation Center model running from January 1, 2027 through December 31, 2031, authorized under Section 1115A of the Social Security Act. It tests whether performance-based payment adjustments applied directly to specialist physicians can improve chronic disease management, reduce avoidable hospitalizations, and curtail unnecessary procedures for Original Medicare (fee-for-service) beneficiaries with heart failure or low back pain.
The model targets two of Medicare's most expensive chronic condition categories. Heart failure carries annual Medicare spending of $10–$13 billion; low back pain carries $6–$8 billion annually. More than two-thirds of Original Medicare beneficiaries live with at least one chronic condition, and their care accounts for the majority of Original Medicare spending. The core pathology ASM addresses is fragmentation: patients with these conditions frequently see multiple, unconnected clinicians, producing delayed diagnoses, duplicative testing, unnecessary procedures, avoidable hospitalizations, and elevated costs without commensurate health improvements.
ASM's design logic is straightforward but structurally significant: rather than holding health systems, ACOs, or hospitals accountable for total cost of care, it places direct financial accountability on the individual specialist physician — specifically the cardiologist, orthopedic surgeon, pain management physician, and their peers — for the efficiency and quality of care delivered within their condition-specific episodes. This represents a meaningful departure from bundled payment and ACO models that have historically placed accountability upstream (at the payer or system level) or downstream (at the hospital level).
ASM is architecturally distinct from prior CMMI models in several ways that elevate its strategic significance:
First, it is mandatory. Eligible specialists practicing in selected geographies have no opt-out. This eliminates the self-selection bias that has plagued voluntary models and ensures the evidence generated reflects actual market conditions rather than the behavior of motivated early adopters. For hospital executives and physician group administrators, this means that ASM participation is a compliance matter, not a strategic choice — the strategic decisions are about how to perform, not whether to participate.
Second, it uses a two-sided risk arrangement from day one. Beginning with the 2027 performance year, participants face payment adjustments ranging from -9% to +9% on all Medicare Part B claims for covered professional services. This downside risk escalates to -12% to +12% by the 2031 performance year. The model's budget neutrality mechanism — total positive adjustments cannot exceed total negative adjustments within a cohort — means that performance is evaluated relative to peers, not against an absolute threshold. High performers gain at the direct financial expense of low performers.
Third, it targets specialists who historically have not been the primary target of VBC reform. Cardiology, interventional pain management, neurosurgery, orthopedic surgery, anesthesiology, and physical medicine and rehabilitation have largely sat outside the direct accountability structures of ACO and MSSP models. ASM brings these specialties into a mandatory performance framework with real financial consequences, creating both an urgent compliance imperative and a first-mover advantage for practices that build performance infrastructure early.
Fourth, it replaces MIPS reporting for eligible participants. ASM participants are exempt from MIPS reporting for any performance year in which they meet ASM eligibility criteria. This has practical administrative implications — practices that have invested in MIPS reporting infrastructure will need to redirect those workflows toward ASM's specific measure set and attestation requirements.
The model is explicitly framed within the Trump administration's "Make America Healthy Again" (MAHA) initiative, led by HHS Secretary Robert F. Kennedy Jr. The CMS model page states directly that ASM "will help to achieve 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 for the cost and quality of care they deliver."
This alignment is not cosmetic. The model's emphasis on preventive care, upstream disease management, health-related social needs (HRSN) screening, and lifestyle-based interventions maps directly onto the administration's public health framing. The model was established through the CY 2026 PFS Final Rule and refined in the CY 2027 PFS Final Rule, representing two successive rulemaking cycles of active development under the current administration. The final participant list for the 2027 performance year has been released, and the model infrastructure — including the ASM Participant Portal (opened September 15, 2026) and Data Sharing Agreements — is actively operational. The model is not a proposed concept; it is in pre-launch onboarding with a January 1, 2027 start date.
The involvement of CMMI Director Abe Sutton and CMMI Deputy Director for Policy Amy Turner situates ASM within the current administration's broader CMMI reform agenda, which has emphasized accountability, transparency, and fiscal discipline in innovation model design. The mandatory structure and two-sided risk arrangement are consistent with that orientation.
ASM will force structural changes in how specialty practices operate, how health systems manage specialist alignment, and how Medicare Advantage plans think about network performance:
For physician groups and independent specialists: The model creates an immediate financial incentive to invest in care coordination infrastructure — EHR interoperability, care transition protocols, primary care relationships formalized through Collaborative Care Arrangements (CCAs) — that most specialty practices have historically underinvested in. Practices that begin building these capabilities before January 1, 2027 will have a material competitive advantage in the peer-relative scoring environment.
For health systems: ASM creates a new accountability vector running directly through employed and affiliated specialists. Health system CFOs and CMOs must now evaluate whether their cardiology and orthopedic service lines have the operational infrastructure to perform competitively in a mandatory payment adjustment model. Underperforming specialists will generate negative Part B adjustments that follow them to their organization.
For Medicare Advantage plans: While ASM applies only to Original Medicare (fee-for-service) beneficiaries and Part B payments, the performance transparency built into the model — including public performance data reporting — will generate comparative intelligence on specialist quality and efficiency that will be relevant to MA network contracting decisions.
For ACOs and MSSP participants: ASM participants can concurrently participate in ACOs and other CMMI models, including Advanced Alternative Payment Models (AAPMs), and receive financial incentives from both. This creates a potential performance dividend for specialists already embedded in high-performing ACO structures, whose existing care coordination infrastructure may directly support ASM performance.
ASM participation is mandatory for individual specialist physicians who meet all four eligibility criteria, identified at the TIN/NPI combination level:
| Eligibility Criterion | Specification |
|---|---|
| Billing | Must bill under the Medicare Physician Fee Schedule |
| Specialty Type | Heart Failure Cohort: Cardiology only; Low Back Pain Cohort: Anesthesiology, Interventional Pain Management, Neurosurgery, Orthopedic Surgery, Pain Management, Physical Medicine and Rehabilitation |
| Episode Volume | ≥20 attributed Episode-Based Cost Measure (EBCM) episodes per year for the relevant condition |
| Geography | Must practice in a selected mandatory geographic area (approximately one-quarter of all CBSAs and metropolitan divisions) |
Eligibility is assessed using 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 final participant list for 2027 was released on September 15, 2026.
Physicians may be selected as ASM participants under multiple TINs if they meet eligibility criteria under each. CMS reassesses eligibility annually, meaning new participants can be added in future performance years. The specialty type designation is based on the most common specialty code on Medicare Part B claims.
Notable exception pathways exist (finalized in the CY 2027 PFS Final Rule):
An excepted participant: loses subject status for performance assessment, data submission, and payment adjustments; loses access to model waivers; loses CMS-sponsored safe harbor protection for remuneration from CCAs; but continues to receive payment adjustments from prior non-excepted performance years.
Participants may concurrently participate in ACOs (including MSSP), other CMMI models, and AAPMs, receiving financial incentives from each. ASM participation substitutes for — and waives — MIPS reporting obligations during eligible performance years.
ASM uses four performance categories:
| Category | Weight in Final Score | Data Source | Reporting Level |
|---|---|---|---|
| Quality | 50% | eCQM/CQM submission + administrative claims | Individual (TIN/NPI); small practices (≤15 NPIs) may report at TIN level |
| Cost | 50% | Administrative claims (no participant submission) | Individual (TIN/NPI) |
| Improvement Activities | Additive adjustment | Attestation | Group (TIN) or Individual (TIN/NPI) |
| Promoting Interoperability | Subtractive adjustment (0 to -10 points) | CEHRT ID, measures, attestations | Group (TIN) |
Quality measures by cohort:
Heart Failure Cohort:
| Measure | ID | Collection Type |
|---|---|---|
| Risk-Standardized Acute Unplanned Cardiovascular-Related Admission Rates for Patients with HF (modified for ASM) | MIPS Q492 | Administrative Claims |
| HF: Beta-Blocker Therapy for LVSD | MIPS Q008 | eCQM or MIPS CQM |
| HF: ACE Inhibitor or ARB or ARNI Therapy for LVSD | MIPS Q005 | eCQM or MIPS CQM |
| Controlling High Blood Pressure | MIPS Q236 | eCQM or MIPS CQM |
| Functional Status Assessments for Heart Failure | MIPS Q377 | eCQM |
Low Back Pain Cohort (as finalized in CY 2027 PFS Final Rule):
| Measure | ID | Collection Type |
|---|---|---|
| Use of High-Risk Medications in Older Adults | MIPS Q238 | eCQM or MIPS CQM |
| Preventive Care and Screening: Screening for Depression and Follow-Up Plan | MIPS Q134 | eCQM or MIPS CQM |
| Preventive Care and Screening: BMI Screening and Follow-Up Plan | MIPS Q128 | eCQM or MIPS CQM |
| Functional Outcome Assessment (replaces MIPS 220) | MIPS Q182 | MIPS CQM |
| MRI Lumbar Spine for Low Back Pain (modified for ASM; added in 2027 Final Rule) | TBD | Administrative Claims |
Quality measure scoring requires ≥75% data completeness (reporting on at least 75% of eligible denominator cases) and a minimum of 20 eligible cases for a measure to be scored. Measures meeting data completeness but not the case minimum are excluded from scoring; unreported or incomplete measures receive zero points. All administrative claims-based measures are scored at the individual (TIN/NPI) level, including for small practices that otherwise report at the TIN level.
Improvement Activities scoring:
| IA Completion Status | Final Score Impact |
|---|---|
| Both IAs completed | No adjustment |
| One IA completed | -10 points |
| Neither IA completed | -20 points |
Each IA must be active for a 90-day continuous period within the performance year.
CCAs may optionally include remuneration, protected under the CMS-sponsored model arrangements safe harbor (42 CFR § 1001.952(ii)). The remuneration cap is calculated separately for each ASM participant using that participant's Part B payments during the performance year (not the payment year) multiplied by their payment adjustment factor.
Promoting Interoperability:
For 2027 only, a transition policy applies: participants receive a 100% PI category score by submitting their CEHRT ID and the dates of a continuous 180-day performance period. All PI measures are voluntary and unscored in 2027. Beginning in 2028, full PI reporting requirements apply, including HIE reporting and both the Electronic Prior Authorization and Electronic Prior Authorization for Prescription Drugs measures.
ASM uses a two-sided risk arrangement applied as a payment adjustment factor to all Medicare Part B claims for covered professional services during the payment year. Payment years lag performance years by two calendar years.
| Performance Year | Data Reporting Deadline | Payment Year | Maximum Upside | Maximum Downside |
|---|---|---|---|---|
| 2027 (Jan 1 – Dec 31, 2027) | March 31, 2028 | 2029 (Jan 1 – Dec 31, 2029) | +9% | -9% |
| 2028 (Jan 1 – Dec 31, 2028) | March 31, 2029 | 2030 (Jan 1 – Dec 31, 2030) | +9% | -9% |
| 2029 (Jan 1 – Dec 31, 2029) | March 31, 2030 | 2031 (Jan 1 – Dec 31, 2031) | +10% | -10% |
| 2030 (Jan 1 – Dec 31, 2030) | March 31, 2031 | 2032 (Jan 1 – Dec 31, 2032) | +11% | -11% |
| 2031 (Jan 1 – Dec 31, 2031) | March 31, 2032 | 2033 (Jan 1 – Dec 31, 2033) | +12% | -12% |
Payment adjustments are peer-relative: CMS compares each participant's final score against the median and distribution of their cohort (heart failure or low back pain separately). The model is budget neutral within each cohort — total positive adjustments are scaled to equal total negative adjustments, using a scaling factor applied to each participant's transformed final score (calculated via logistic exchange function). A participant reassigning billing rights to a new TIN after a performance year ends but before the corresponding payment year ends carries their payment adjustment to the new organization.
Final Score Construction and Adjustments:
| Scoring Adjustment | Amount | Eligibility |
|---|---|---|
| Complex Patient Adjustment | Up to +10 points | Based on HCC risk scores and dual-eligible patient proportion |
| Small Practice Adjustment (2–15 clinicians) | +10 points | Practices with 2–15 NPIs |
| Solo Practitioner Adjustment | +15 points | Solo practice (1 NPI) |
| Rural Scoring Adjustment (new in 2027 Final Rule) | +5 points | Participants in MIPS-defined rural areas who otherwise score above zero |
A participant who fails to meet the Minimum Data Submission Requirement (reporting at least one non-administrative claims-based quality measure at ≥75% data completeness) receives a final score of zero and the maximum negative payment adjustment, regardless of eligibility for any scoring adjustment. A participant who cannot be scored in both quality and cost (failing case/episode minimums) receives no final score and a neutral payment adjustment.
Illustrative financial impact: A participant with +6% payment adjustment applied to $250,000 in annual Part B payments generates a +$15,000 net adjustment per the model's vignette example.
CMS will provide ASM participants with enhanced performance data including episode-based cost, utilization, and quality data at both aggregate/de-identified and beneficiary-identifiable claims levels. Beneficiary-identifiable data access requires execution of a Data Sharing Agreement (DSA) and Data Request and Attestation (DRA) form through the ASM Participant Portal. Data submitted by ASM participants flows through the Quality Payment Program (QPP) portal using processes parallel to MIPS. Reporting tasks and data retrieval are managed by the Data Custodian role within the Participant Portal, accessed through the Health Data Reporting (HDR) and Expanded Data Feedback Reporting (eDFR) systems.
ASM participants may offer in-kind engagement incentives to established ASM patients — capped at $1,000 per patient in total — provided incentives connect directly to chronic condition management, patient engagement, or care coordination goals. Technology items valued above $75 must remain the property of the ASM participant and be retrieved upon end of the care relationship. No costs may be shifted to any federal health care program.
Two model waivers apply: