CMS Launches Ambulatory Specialty Model for Chronic Condition Specialists in 2027

The Centers for Medicare & Medicaid Services (CMS) has introduced the Ambulatory Specialty Model (ASM) in its 2026 Medicare Physician Fee Schedule Final Rule.

This mandatory alternative payment model targets medical specialists who treat patients with low back pain and heart failure, aiming to assess whether payment adjustments based on quality, cost, care coordination, and meaningful use of certified electronic health record technology (CEHRT) can improve care quality and reduce costs. The ASM, built on the Merit-Based Incentive Payment System (MIPS) framework, will operate from January 1, 2027, through December 31, 2033.

ASM applies to individual clinicians who meet specific eligibility criteria, identified annually using historical data, and exempts participants from MIPS reporting during their ASM participation years. Performance evaluation will cover four categories akin to MIPS but focused specifically on low back pain and heart failure, with quality and cost each accounting for 50% of the clinician’s final performance score.

Payment adjustments in ASM are linked directly to clinicians' performance scores through a payment multiplier affecting Medicare Part B reimbursements for covered professional services. This multiplier can either increase or decrease payments depending on performance, subject to maximum risk parameters. By incorporating meaningful use of CEHRT and care coordination measures, ASM intends to foster more effective chronic condition management.

This model reflects CMS's broader strategy to enhance value-based care via alternative payment models, aiming to shift from volume-based reimbursement to quality and cost-effectiveness. The ASM’s focus on common chronic conditions like low back pain and heart failure aligns with efforts to improve patient outcomes in high-cost areas. Insurers, providers, and policymakers should monitor ASM implementation for its potential impact on payment methodologies and care delivery frameworks.

Clinicians involved in managing these chronic conditions will need to prepare for new reporting and performance measurement requirements while adjusting practice strategies to meet ASM’s quality and cost benchmarks. CMS's approach could influence future expansions of alternative payment models targeting other clinical areas with significant cost and quality improvement opportunities.