On Jan. 1, 2027, selected specialists will begin participating in a mandatory CMS payment model with two-sided financial risk. Yet many organizations still don't know whether the model applies to them.
During our recent webinar on the CY2027 Medicare Physician Fee Schedule Proposed Rule, we asked more than 200 attendees where their organizations stood on the Ambulatory Specialty Model.
In total, 41% said they were unsure whether ASM applied to them.
Only 16% said they were in scope and preparing.
The poll was informal, conducted live during the session, and it shouldn't be treated as survey research. But the people responding were practice administrators, quality directors, physician leaders, and ACO executives. They're the people who will have to operationalize the model.
That uncertainty doesn't reflect a lack of diligence. ASM was finalized through the CMS Innovation Center rather than through the Quality Payment Program materials that quality teams monitor for MIPS and MVP changes. An organization could have followed every MIPS and MVP update and still missed that a separate, mandatory CMS Innovation Center model would replace traditional MIPS participation for some clinicians.
One point of clarity before going further — ASM itself is final. It was established in the CY2026 Physician Fee Schedule Final Rule. The cohorts, the eligibility criteria, the mandatory participation, the 5-year term, and the two-sided risk are settled. The CY2027 Proposed Rule refines the model, and those refinements are the only part still open to comment.
Congestive heart failure and low back pain.
CMS selected these conditions because they carry substantial Original Medicare spending with meaningful opportunity to reduce avoidable hospitalizations and unnecessary procedures. Annual Medicare spending runs approximately $10-$13 billion for heart failure and $6-$8 billion for low back pain.
The heart failure cohort includes clinicians whose Medicare Part B claims are predominantly associated with cardiology.
The low back pain cohort includes clinicians in:
Specialty alone doesn't determine participation. Clinicians must also practice in a selected Core Based Statistical Area and meet a minimum volume of attributed episodes, measured through the MIPS episode-based cost measures. That threshold is at least 20 attributed episodes annually.
Five performance years: Jan. 1, 2027 through Dec. 31, 2031.
Payment adjustments run from 2029 through 2033. Care delivered in 2027 affects Medicare Part B payments beginning in 2029.
No.
Participation is mandatory for clinicians meeting the eligibility criteria. There's also no routine exit. Once CMS determines a clinician is eligible, that clinician remains a participant for the duration of ASM, even if the clinician later stops meeting the original criteria.
That provision is easy to overlook and changes the level of preparation required. ASM eligibility is not a 1-year reporting question.
Adjustments apply to future Medicare Part B payments at up to plus or minus 9% in the first performance year, rising to plus or minus 12% by the final performance year.
For a practice with $4 million in annual Medicare Part B revenue, that is roughly $360,000 in either direction in 2027, and approximately $480,000 by 2031.
Quality and cost together account for half the final score. Improvement Activities and Promoting Interoperability contribute additional points.
Participants are scored relative to other clinicians in the same condition cohort rather than against the national MIPS population.
For participating clinicians, ASM replaces the traditional MIPS payment adjustment methodology for the duration of the model.
It doesn't switch off every other CMS obligation. If those clinicians also participate in an MSSP ACO, the ACO's quality reporting through the APP continues. ASM changes how the individual clinician is evaluated and paid under MIPS. It doesn't consolidate everything else.
That distinction is the most important and least appreciated feature of ASM.
For affected clinicians, the biggest change isn't a new measure set. It's that the reporting strategy their organization has refined over years of MIPS participation no longer applies unchanged.
Reporting shifts to the individual clinician. ASM participants report and are evaluated as individuals. There is no group reporting option comparable to traditional MIPS or MVP group reporting. Organizations that submit MIPS data at the group level will need to identify which clinicians are moving into ASM and build a separate workflow for them.
Measure selection becomes prescribed. MIPS and MVP participants have some ability to select measures reflecting their clinical services and strongest performance opportunities. ASM participants report a defined set of measures and activities tied to the condition being managed. The strategic flexibility that drives a meaningful share of MIPS score improvement isn't available.
Benchmarking changes fundamentally. Under traditional MIPS, clinicians are compared against a broad national reporting population with benchmarks published in advance. Under ASM, a cardiologist managing heart failure is compared with other clinicians in the heart failure cohort, and the effective threshold isn't known until the performance year closes.
That comparison is more clinically specific. It also creates significant financial uncertainty, which is the subject of the next section.
|
Feature |
Traditional MIPS |
Ambulatory Specialty Model |
|
Participation |
Required unless an exclusion applies |
Mandatory for clinicians meeting ASM criteria, with no opt-out |
|
Reporting level |
Individual, group, subgroup, or virtual group |
Individual clinician only |
|
Measure selection |
Some flexibility within program requirements |
Prescribed measures and activities |
|
Benchmarking |
National benchmarks, published in advance |
Relative to the peer cohort; effective threshold known only after the performance year closes |
|
Adjustment range |
Set annually by CMS against a published threshold |
Up to plus or minus 9% in 2027, rising to 12% by 2031 |
|
Duration |
Annual participation and reporting cycle |
Five-year model commitment with no routine exit |
|
Relationship to MIPS |
Traditional physician payment adjustment program |
Replaces the traditional MIPS payment adjustment. Other program obligations, including MSSP APP, continue |
Participants are evaluated relative to others in the same clinical cohort, and their payment adjustment depends in part on how the rest of that cohort performs.
Peer-relative scoring is defensible in principle. Comparing heart failure management with other clinicians managing heart failure is more clinically meaningful than comparing it with the entire MIPS population.
The problem is the combination of peer-relative scoring, mandatory participation, and two-sided financial risk.
This is where ASM differs from MIPS in a way that is easy to miss. MIPS also carries positive and negative adjustments, but it publishes a performance threshold in advance. A practice knows what score avoids a penalty and can manage toward it. Under ASM, the effective threshold is a function of cohort performance and can't be known until after the performance period closes.
Clinicians are therefore being asked to accept financial risk they can't fully measure or manage prospectively. At up to 9% of Part B payments in the first performance year and 12% by the last, that is a material amount of revenue riding on a target that doesn't exist when the year begins.
CMS could reduce that uncertainty without abandoning peer comparison. Two approaches would work:
1. Publishing interim cohort performance information during the performance year
2. Establishing a minimum performance floor below which no penalty applies during the first performance year
This is the issue we believe deserves the most attention during the comment period.
Most current ASM discussion focuses on quality measures, cost measures, and submission requirements. The harder work is operational.
ASM requires participating specialists to support several forms of care coordination:
These aren't reporting requirements. They require new workflows, referral processes, data-sharing capability, and in many cases formal agreements with primary care organizations.
A specialty practice that has never maintained a structured relationship with primary care will need to create one. Depending on the organization, that involves clinical leadership, legal review, contracting, information technology, compliance, and workflow redesign. It isn't a project to begin in the final quarter of the performance year.
Organizations are paying considerably more attention to the ASM measure set than to the collaborative care requirements. The balance should be reversed. Measure builds fit inside defined reporting cycles. New operational and contractual relationships don't.
CMS published the CY2027 Medicare Physician Fee Schedule Proposed Rule on July 14, 2026. Comments are due by 11:59 p.m. ET on Sept. 14, 2026.
Four proposed changes matter most.
1. New participant exceptions. CMS proposes provisions addressing changes in Taxpayer Identification Number and specialty redesignation, which matter for clinicians who move between practices, experience organizational restructuring, or have their specialty identification change.
2. Added submission flexibility for small practices. Because ASM doesn't offer the group reporting pathways available under MIPS, individual reporting creates a disproportionate burden for smaller organizations. CMS proposes additional flexibility to address it.
3. A new administrative claims measure for lumbar imaging overuse. This is aimed at the low-back pain cohort and consistent with the model's goal of reducing care that does not clearly improve outcomes.
4. A quality measure substitution. CMS proposes replacing Quality Measure 220 with Quality Measure 182. This doesn't change who participates, but it directly affects the reporting specifications and measure build required for the 2027 performance year.
Five months is enough time to prepare, but only starting from the right question.
Don't rely on intuition. Don't assume CMS, a payer, or an existing reporting vendor will alert you.
Eligibility is driven by geography, specialty, and attributed episode volume. This is a data question with a definite answer.
Every cardiology, anesthesiology, pain management, interventional pain management, neurosurgery, orthopaedic surgery, and physical medicine and rehabilitation organization should confirm whether its clinicians practice in an included geographic area and meet the episode-volume criteria.
For any clinician who may be included, establish which ones are in scope, whether they currently report MIPS individually or as part of a group, who submits their data today, and whether that arrangement extends to ASM.
Then look at historical episode-based cost performance. Cost carries real weight under ASM, and many organizations have never reviewed clinician-level performance on the relevant episode-based cost measures. Historical performance isn't a forecast, but it is the best available starting point for understanding exposure.
Assess whether participating specialists have formal, operational relationships with the primary care practices involved in their patients' care. Where those arrangements don't exist, start them now.
The goal isn't documenting that coordination occurs. It's establishing repeatable processes for preventive screening, lifestyle support, health-related social needs, referrals, follow-up, and health information exchange.
The Proposed Rule is not final. Comments are due Sept. 14, 2026 under file code CMS-1848-P at regulations.gov.
Organizations submitting a single substantive comment should consider focusing on the uncertainty created by peer-relative scoring. Mandatory participation and two-sided risk are demanding enough. Asking clinicians to accept that risk without an advance performance threshold makes it harder for them to understand their exposure or improve against it.
There is no version of this model in which an organization discovers in February 2027 that ASM applied to its clinicians and recovers the year.
Performance measurement begins Jan. 1. There is no reporting-only year, no broad transition period, and no exemption for organizations that didn't realize they were included.
Clinicians will be evaluated on care delivered beginning the first week of 2027, compared against a cohort they can't yet see, for an adjustment that reaches their Medicare Part B payments in 2029.
Five months is enough time to prepare. It't not enough time to discover you should have started 5 months earlier.
Send us your organization's TIN and NPI roster. Within 2 business days, we'll determine whether your clinicians fall within an ASM cohort, identify those meeting the episode-volume threshold, and summarize the results. There's no cost and no obligation.
Contact us at contact@healthmonix.com.
Healthmonix is a CMS-approved Qualified Registry and Qualified Clinical Data Registry. We help specialty organizations and health systems determine ASM eligibility, evaluate historical cost and quality performance, model potential financial exposure, and prepare for reporting across ASM, MIPS, MVPs, and the Medicare Shared Savings Program.