The Ambulatory Specialty Model Explained

How the Ambulatory Specialty Model scores cardiologists and spine and pain specialists, what it pays, and what practices in the 235 mandatory areas should have in place when the first performance year opens on January 1, 2027.

The CY2026 Physician Fee Schedule final rule established the Ambulatory Specialty Model (ASM), a mandatory five-year test of specialist accountability in traditional Medicare. Performance years run from January 1, 2027, through December 31, 2031, and each year's payment adjustment lands two years later, in 2029 through 2033.

It is CMS's first large-scale attempt to hold ambulatory specialists financially accountable for managing chronic conditions upstream, starting with heart failure and low back pain, which together account for roughly 6% of Medicare Parts A and B spending. Unlike MIPS, participation is mandatory in selected areas, every score is benchmarked against other participants treating the same condition, and the adjustment reaches ±12% of Part B payments by the final year.

Why CMS Built ASM

ACO and bundled-payment models have concentrated on hospitals and primary care, while specialists, who manage much of chronic disease spending, have mostly stayed outside accountability structures. ASM, part of the Innovation Center's 2025 strategy, puts two-sided risk on them and replaces MIPS measure selection with a fixed, condition-specific set, so peers are directly comparable. Participation is mandatory because volunteers self-select: assigning it by randomly selected geography gives CMS a cleaner test of whether specialist accountability changes spending.

The model draws on the MIPS Value Pathways and on the episode-based cost measures MIPS has used for years, and it runs alongside LEAD (Long-term Enhanced ACO Design), the ACO REACH successor that introduces episode-based arrangements between ACOs and specialists. If ASM hits its savings targets, diabetes, COPD, chronic kidney disease, and oncology are plausible next conditions, and the data and primary care relationships built for ASM would carry into them.

Who Must Participate

Geographic Selection

CMS randomly selected about a quarter of the 935 Core-Based Statistical Areas (CBSAs) and Metropolitan Divisions, 235 areas, stratifying by Medicare spending, episode volume, and metropolitan status so low-cost markets are represented alongside expensive ones. Texas has the most (16), followed by California (12), Florida (12), and New York (11).

The February 2026 preliminary participant list used 2024 claims; the final 2027 list, posted in September 2026, used 2025 claims. If you practice in a selected area and meet the criteria, participation is not optional.

Check if your area is mandatory →

Specialty and Condition Focus

Heart Failure Cohort:

Low Back Pain Cohort:

Your specialty is the code on the plurality of your Medicare Part B claims.

Volume Thresholds and the MIPS Waiver

Eligibility requires at least 20 attributed episodes under the MIPS episode-based cost measure methodology, counted in the calendar year two years before the performance year: 2025 claims for 2027, 2026 claims for 2028. CMS rechecks every year. MIPS is waived for each performance year in which you meet the criteria; if a later lookback puts you under 20 episodes, ASM doesn't apply that year and you report to MIPS, if MIPS-eligible. A clinician can be in ASM in 2027, out in 2028, and back in 2029.

Eligibility doesn't guarantee a score. A participant who reports but can't be scored on quality or cost in the performance year (cost needs 20 episodes; each quality measure needs 20 cases) gets no final score and a neutral adjustment. For lower-volume specialists, a handful of expensive episodes can swing the result.

Notable Exceptions

• RHCs and FQHCs: not eligible if billed exclusively under RHC/FQHC methods
• Critical Access Hospitals: Method I CAH clinicians are included if they meet the criteria
• Multiple TINs: each qualifying TIN/NPI combination is a separate participant

How Scoring Works

The Composite Score

Each participant receives a final score from 0 to 100, which sets the payment adjustment two years later. Four categories feed it:

MIPS history suggests most clinicians do well on Improvement Activities and Promoting Interoperability, so giving them positive weight would bunch scores together. CMS made them deduction-only and put all the positive weight on quality and cost, where performance varies. Bonus points for complex patients and small practices come afterward (see payment adjustments).

Quality Scoring (50%)

Each measure earns 1 to 10 points by decile against your cohort: top 10% earns 10, bottom 10% earns 1. A measure below 75% data completeness scores zero; one that is complete but has fewer than 20 cases drops out. A participant with no quality measure meeting the 75% requirement gets a final score of zero and the maximum negative adjustment.

Benchmarks come from ASM participants, not historical MIPS data. Cost and the claims-based quality measure are always benchmarked on the same performance year; other quality measures use performance-year data where feasible, otherwise a prior ASM year.

Because most benchmarks don't exist until submission closes (March 31, 2028, for the 2027 year), there is no way to calculate your result in advance.

Cost Scoring (50%)

CMS calculates cost from claims. Where MIPS may apply several cost measures, including Total Per Capita Cost (TPCC) and Medicare Spending Per Beneficiary (MSPB), ASM scores each cohort on one Episode-Based Cost Measure (EBCM):

That keeps a cardiologist from being charged for a patient's unrelated orthopedic surgery, but the measure is still broad: hospitalizations, ER visits, imaging, procedures, and Part D drugs inside the episode window all count. Scoring is anchored to the median episode cost among participants; a 6 is the median, and higher scores mean lower cost.

Cost Scoring Benchmark Methodology:

Scores within each range are interpolated linearly. Costs are risk-adjusted for patient health status (HCC risk scores) and the participant's specialty role in the episode.

Quality Measures in Detail

ASM uses fixed measure sets. Unlike MVPs, there is no selection: every measure in your cohort is required.

Heart Failure Quality Measures

Q377 asks whether functional status was assessed, not whether it improved, and is eCQM-only; CMS is still weighing an outcome version. VBCA has developed CMS-approved QCDR measures relevant to heart failure management that complement this set.

Low Back Pain Quality Measures

Changes proposed for 2027: the CY2026 rule held a slot for an imaging measure that was still in development. The CY2027 proposed rule (CMS-1848-P, July 2026) would fill it with a claims-based MRI Lumbar Spine for Low Back Pain measure and replace Q220 with Functional Outcome Assessment (Q182), because Q220's steward stopped maintaining it. Comments closed September 14; the final rule is expected around November 1, 2026.

For spine surgeons and interventional pain specialists, a set built on medication safety, depression screening, and BMI can feel tangential to procedural practice. CMS chose it to test whether specialists manage the whole patient.

The Operational Requirements Most Practices Aren't Ready For

Improvement Activities: Up to −20 Points

Completing both required activities avoids any deduction; missing one costs 10 points and missing both costs 20. Attestation is at the TIN level and covers every participant in the TIN. This is where most specialists face the steepest learning curve.

Activity 1: Connecting to Primary Care and Social Needs

You need processes, workflows, or technology to:

• Confirm each ASM beneficiary has access to primary care, and help them find a clinician if not
• Send relevant clinical information to the PCP after each visit (EHR integration, HIE, or fax workflow)
• Check whether the beneficiary had an annual health-related social needs (HRSN) screening in primary care (food, housing, transportation, utilities, interpersonal safety), and if not, prompt the PCP or screen the patient yourself

Activity 2: Collaborative Care Arrangements with Primary Care

You need at least one written, signed, and dated arrangement with a primary care practice that shares ASM beneficiaries. PCP participation must be voluntary, and the arrangement must cover at least 3 of these 5 elements:

MSSP ACOs don't require arrangements like this, and most specialists' ties to referring physicians are informal.

Promoting Interoperability: Up to −10 Points

The measures mirror MIPS and are reported at the TIN level. Participants submit a CEHRT ID, complete the Security Risk Analysis and SAFER Guides self-assessment, make the ONC attestations, exchange data by one of three routes (referral loops, HIE bi-directional exchange, or TEFCA), and give patients electronic access.

Key measures and point allocations:

A practice that meets MIPS Promoting Interoperability requirements should meet these without much extra work.

Payment Adjustments and Safeguards

The Risk Schedule

Adjustments apply to all Medicare Part B covered professional services in the payment year, not only heart failure or low back pain care. ASM starts at the MIPS maximum penalty, ±9%, and climbs. Because of the two-year lag, the first adjustment arrives in 2029, the third performance year.

The Redistribution Percentage

From Score to Payment

MIPS converts scores to adjustments linearly. ASM uses a logistic exchange function fit to each cohort, an S-curve that is steepest in the middle, so modest differences near the cohort median move payment while outliers are limited. There is no fixed performance threshold: if every participant improves, you still have to outscore your peers to earn a positive adjustment.

Scoring Adjustments

CMS adds points to the final score (capped at 100) for participants who meet the data submission requirement:

Rural update, September 2026: the CY2026 final rule declined a rural adjustment, expecting rural participants to qualify as small practices. Reviewing the preliminary list, CMS found they are typically in larger practices, and the CY2027 proposed rule would add 5 points for rural participants on top of other adjustments. It is not final.

Reporting Relief, Appeals, and CMS Support

Practices with 15 or fewer clinicians may report quality at the TIN level. CMS applies neutral adjustments for extreme and uncontrollable circumstances such as declared disasters, and clinicians have 30 days from their performance report to appeal. CMS will share aggregate cost, utilization, and quality data (patient-level claims on request), waives telehealth geographic and originating-site limits, and extends an anti-kickback safe harbor to qualifying payments under collaborative care arrangements.

Strategic Implications

For Cardiology Practices

• The measures are familiar from MIPS; being ranked against other cardiologists is not
• An avoidable hospitalization costs points twice, in Q492 and in episode cost
• Echocardiogram use isn't measured directly but shows up in episode cost

For Pain Management and Spine Specialists

• Depression and BMI screening usually need intake workflow changes
• Anesthesiologists in pain management may find some measures a poor fit for their encounters
• Your episode costs are compared with those of orthopedic surgeons and neurosurgeons

For Health Systems and ACOs

• ASM participants can stay in MSSP ACOs, and CMS encourages "layering" the two sets of incentives
• ASM and MSSP attribute patients differently
• The ACO is often best placed to broker the collaborative care arrangements ASM requires
• LEAD, launching in 2027, gives ACOs formal episode arrangements with specialists; ASM participants are the obvious candidates

The Preparation Window

CMS judged a 2027 start feasible because ASM reuses MIPS reporting mechanics. That holds for submission. Collaborative care arrangements, functional status workflows, and episode cost visibility all take longer, and our ASM preparation guide lays out what to finish before January 1 and in the first 90 days of 2027.

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