A mandatory CMS model that ties specialists’ Medicare Part B pay to how they manage chronic conditions starts Jan. 1, 2027. With about two months until launch, a coalition of provider groups is asking CMS to delay it or soften it.
CMS finalized the Ambulatory Specialty Model in the CY 2026 physician fee schedule final rule, issued Oct. 31, 2025, according to Epstein Becker Green.
What to know:
- It targets two conditions. The heart failure track covers cardiology. The low back pain track covers anesthesiology, pain management and interventional pain management, neurosurgery, orthopedic surgery and physical medicine and rehabilitation, according to Benesch.
- It’s mandatory by geography. CMS chose core-based statistical areas and metropolitan divisions based on chronic condition spending, episode volume and other factors, according to Benesch. The model covers 235 areas and leaves out most large metros, according to an Oct. 27 report from the Center for Healthcare Quality and Payment Reform (via Becker’s Hospital Review). Clinicians in those areas are included if they have at least 20 attributed episodes in a 12-month period. There is no opt-out or hardship exemption.
- The final list is smaller than the preliminary one. CMS released the final participant list Sept. 15, according to the American College of Cardiology. It includes 3,319 clinicians in the low back pain cohort, down from about 4,027 on the February preliminary list, according to Becker’s. The heart failure cohort has 2,215 clinicians, 395 fewer than the preliminary list, according to the ACC. The model covers more than 5,500 specialists in total, including about 760 orthopedic surgeons, 626 pain management physicians and 246 neurosurgeons, according to the Center for Healthcare Quality and Payment Reform.
- It carries two-sided risk on all Part B pay. Payments can rise, stay flat or fall based on performance compared with peers. The adjustment applies to all of a clinician’s Part B payments, not just low back pain or heart failure services. The maximum adjustment is 9% in 2029 and 2030, 10% in 2031, 11% in 2032 and 12% in 2033, according to CMS. Positive adjustments are capped at 85% of total reductions, so most specialists are expected to face cuts, according to the Center for Healthcare Quality and Payment Reform.
- The timeline runs five years. Performance years run from 2027 through 2031, with payment adjustments from 2029 through 2033.
- Specialists must link to primary care. To earn credit for the model’s collaborative care improvement activity, participants need at least one written, signed collaborative care arrangement with a primary care practice that shares an ASM beneficiary, according to CMS. Improvement activities must be in place for at least 90 continuous days in the performance year.
- Surgery counts toward cost. Under the low back pain cost measure, clinically related spinal surgeries and procedures, injections and neurostimulators are part of episode spending. A spine surgery within 90 days before or 60 days after the triggering visit keeps an episode from starting, according to the CMS measure specification.
- More changes are pending. CMS’ CY 2027 proposed rule would add five points to the final score of eligible rural participants, add a measure on potentially unnecessary lumbar MRIs and confirm that participants cannot voluntarily withdraw, according to Applied Policy. It would also create an exception for cardiologists who redesignate to certain subspecialties. It proposes no equivalent exception for the low back pain track. Comments closed Sept. 14. CMS had not issued the final rule as of Oct. 28.
Calls for delay grow
On Oct. 28, the American Hospital Association, American Medical Association, AMGA, Health Care Transformation Task Force, Medical Group Management Association, National Association of ACOs and Premier asked CMS’ Innovation Center to delay the model, according to Healthcare Innovation. They cited delayed participant lists and problems getting into the model’s portal. If CMS keeps the Jan. 1 start, the groups want no downside risk in the first performance period, advance notice of cost and quality thresholds, and quality reporting at the practice level.
The Center for Healthcare Quality and Payment Reform’s report found that about one-third of the selected areas are fully rural. It warned that losing a single specialist could force patients in those areas to travel an hour or more for care.
What operators read into it
ASM is a condition-management model, not a surgical bundle. Dan Tasset, founder, CEO and executive chairman of Leawood, Kan.-based NueHealth, said it still shows where CMS is headed.
“That model is really showing directionally where CMS is going to go, which is getting the providers to stand behind their product,” he told Becker’s. “It’s not just managing the episodic bundle, but in this case, it’s managing the medical condition, lower back pain. And CMS is not going to stop with lower back pain.”
Beyond the model, Scott Sporer, MD, an orthopedic surgeon and chair of the board at Oswego, Ill.-based Kendall Pointe Surgery Center, expects federal payment policy to keep pushing surgery toward ASCs. He said he thinks site-neutral payment principles “[are] going to start being applied a little bit more universally to surgical procedures.”
Pushback from specialty societies
The American Academy of Orthopaedic Surgeons said the model, “as designed for orthopaedic surgeons treating low back pain, is deeply flawed.” In a Sept. 14 comment letter, it urged CMS to delay the model by at least one year.
The American Society of Anesthesiologists also asked CMS Sept. 14 for a delay of at least one year, and for performance benchmarks to be set before the first performance period. In March, before the final list came out, the group said “over 1,000 anesthesiologists and pain medicine physicians” would be required to participate. It asked CMS to reduce early penalties and add measures relevant to anesthesiologists.
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