CMS’ newest specialty payment model is putting a new question in front of independent spine practices: How much infrastructure will it take to remain competitive under value-based Medicare?
Beginning Jan. 1, 2027, the Ambulatory Specialty Model will require qualifying physicians in selected markets to participate in a five-year payment model focused on low back pain and heart failure. For low back pain, the model includes anesthesiology, pain management, interventional pain management, neurosurgery, orthopedic surgery and physical medicine, and rehabilitation. Participation is mandatory for clinicians who meet CMS’ criteria, with no opt-out or hardship exemption.
CMS estimates about 8,600 physicians will participate across selected geographic markets. Unlike many Medicare value-based arrangements that placed financial risk primarily on hospitals or accountable care organizations, ASM scores physicians individually and ties future Medicare Part B payment adjustments to their performance.
For small practices, that shift arrives with a longstanding concern about value-based care: the resources required to compete.
The risk moves to the surgeon
Under ASM, participants are scored across quality, cost, care improvement activities and interoperability. Performance in 2027 will determine Medicare Part B payment adjustments beginning in 2029. The risk corridor starts at -9% to 9% and expands in later years, eventually reaching -12% to 12%.
The adjustment also is not limited to a physician’s low back pain services. It applies to the participant’s Medicare Part B covered professional-service payments during the corresponding payment year.
Awareness of that exposure has itself become an issue.
Mike Verdon, MD, a neurosurgeon in Dayton, Ohio, looked through CMS’ preliminary participant list and found colleagues who were included.
“I know a lot of people that are and they don’t know,” he said. That makes preparation more than a reimbursement exercise. Practices need to know which physicians are exposed and how they perform on the measures CMS will use to determine future payment.
Data becomes part of the practice model
ASM’s design increases the importance of data and outcomes infrastructure. The model assesses low back pain specialists on measures tied to quality and costs, while also requiring performance around care improvement and interoperability.
That fits a broader shift already underway in spine. As bundled payments, outcomes-based contracting and other value-based arrangements expand, data infrastructure is becoming increasingly important to spine programs. Practices increasingly need the ability to connect clinical outcomes with utilization, costs and the broader patient episode.
Ramis Gheith, MD, chief medical officer of Chicago-based DxTx Pain & Spine, put the priority simply.
“Value-based care is all based on data,” he said. “Collect your data now. Start now if you haven’t started already.”
The challenge can be particularly significant for independent groups. Spine leaders have previously said smaller organizations may lack the infrastructure and support systems available to larger groups and hospitals, making outcomes collection and other value-based capabilities more difficult to build.
ASM also requires participants to complete improvement activities involving primary care. Every participant must connect patients with primary care and establish collaborative care arrangements, adding coordination requirements beyond the surgeon’s immediate practice.
Accountability extends outside the practice
That coordination matters because a low back pain episode can involve care from multiple organizations.
A spine physician may be evaluated on an episode that includes imaging, physical therapy, pain management and hospital services provided by organizations the surgeon does not own. That separation between accountability and control has already emerged as a concern in spine care.
The issue puts a premium on coordination across organizational boundaries. An independent practice does not necessarily need to own every component of the episode, but ASM’s structure gives participating physicians a financial interest in understanding how patients move through the broader care pathway.
CMS gives smaller practices a cushion
CMS has built specific scoring protections into ASM for smaller groups.
Under the agency’s scoring methodology, physicians in practices with two to 15 clinicians can receive a 10-point bonus, while solo practitioners can receive 15 points. Participants may also earn up to 10 additional points based on patient complexity, including hierarchical condition category risk scores and the proportion of dual-eligible patients they treat.
Those adjustments explicitly recognize differences in practice size and patient mix. They do not remove ASM’s requirements around quality, cost, improvement activities and interoperability.
Another pressure on independence
ASM is also arriving as independent spine and orthopedic groups contend with broader financial pressure.
CMS’ proposed 2027 Physician Fee Schedule estimates that orthopedic surgery payments would decline 7% under proposed changes to work, practice expense and malpractice RVUs, separate from the proposed conversion-factor reduction. The estimated effect varies by site of service and does not apply uniformly to every practice.
Independent groups are already balancing declining or constrained reimbursement against rising costs. Derek Cantrell, CEO of Carmel, Ind.-based Goodman Campbell, described the pressure facing independent practice as “declining revenues over the last 20 years versus rising costs.”
Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group, described the same financial environment more succinctly:
“We’re just having to fight more every day for the same dollar,” he said.
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