CMS’ mandatory Ambulatory Specialty Model could push smaller specialty practices to consolidate with larger groups or health systems because of its two-sided financial risk, according to an analysis published in the October 2026 issue of The American Journal of Managed Care.
The model will run from January 2027 through December 2031. It requires specialists in selected regions to participate if they treat Medicare patients with heart failure or low back pain in outpatient settings. Those specialists include cardiologists, anesthesiologists, pain management physicians, physical medicine and rehabilitation physicians, orthopedic surgeons and neurosurgeons.
Participants face payment adjustments ranging from -9% to 9% on future Medicare Part B claims, a potential revenue swing of 18 percentage points. The authors wrote that smaller specialty practices may have limited ability to spread that risk across multiple service lines, leaving them especially exposed.
The analysis was written by Ashwanth Kumar, MS, an independent scholar in New York City; Jacob Kannarkat, MD, of Yale School of Medicine in New Haven, Conn.; and Joseph Kannarkat, MD, of Johns Hopkins University School of Medicine in Baltimore.
The authors made three recommendations to CMS:
- Launch the model with upside risk only and add downside risk later.
- Allow participation at the group practice level to reduce the reporting burden on smaller practices.
- Give practices an on-ramp period before applying interoperability penalties.
They cited a July 2025 survey that found 76% of ambulatory surgery centers used an EHR.
The authors also flagged misaligned incentives. One of the model’s quality measures is the use of guideline-directed heart failure medications, but primary care clinicians often manage those drugs rather than cardiologists. Physical therapists, who often provide first-line treatment for low back pain, are excluded from the model.
CMS will score each clinician from 0 to 100 on quality and cost. Clinicians can lose up to 10 points for skipping improvement activities and up to 20 points for not meeting interoperability requirements.
CMS plans to use the model to test whether condition-specific accountability lowers costs and whether the approach could expand to other high-cost chronic conditions.
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