The Centers for Medicare & Medicaid Services (CMS) finalized the Ambulatory Specialty Model (ASM)—a new alternative payment model set to begin on January 1, 2027, which will continue for 5 years.1
The ASM, which was finalized in October 2025, will be mandatory for all clinicians within a given geographic area,* who have historically treated at least 20 heart failure or low back pain episodes per year as defined by the relevant episode-based cost measure (i.e., heart failure or low back pain), and be a CMS-designated specialty that commonly treats people with Original Medicare for low back pain or heart failure in an outpatient setting.** While the ASM initially focuses on heart failure and low back pain, it is critical that all surgeons remain informed of the model’s requirements. Because the majority of surgical care is delivered in the outpatient setting, models targeting this setting are likely to expand.
The ASM heart failure cohort will include select clinicians who have been assigned a specialty code of cardiology on the plurality of their Medicare Part B claims. Physicians who treat low back pain, with the specialty type of anesthesiology, pain management, interventional pain management, neurosurgery, orthopaedic surgery, or physical medicine and rehabilitation are included in the low back pain cohort.
Once a provider is considered eligible, they remain an ASM participant for the duration of the model, even if they no longer satisfy the criteria. Providers in the ASM are exempt from Merit-Based Incentive Payment System (MIPS) reporting requirements for the duration of their participation in the model.
The ASM builds off the existing MIPS Value Pathway (MVP) framework. Model participants will be assessed on four ASM performance categories: quality, cost, improvement activities, and promoting interoperability. ASM participants will receive a final score based on their performance in each category; quality and cost categories are 50% of the final score, and improvement activities and promoting interoperability contribute to bonus points. While similar to MIPS, the model differs in multiple ways:
- ASM participants will be required to report as individual clinicians (and will not have the option of reporting through a group as they do under MIPS and MVPs).
- ASM participants will be required to report on a set of measures and activities meant to represent performance for the condition being evaluated and managed (and will not have the flexibility to select measures or activities as is the case with MVPs reported under MIPS).
- The ASM will compare performance of only those clinicians treating the same condition (whereas under MVPs, clinicians are scored against the entire pool of MIPS clinicians).
Most importantly, the ASM will use a different methodology than MVPs in calculating a final score and payment adjustment, placing more value on quality and cost performance. Under the ASM, quality and cost performance will make up 50% of the final score, with improvement activities and promoting interoperability contributing bonus points. Based on this final score relative to other providers within their cohort, participants will receive a positive, neutral, or negative payment adjustment 2 years later to their Medicare Part B claims. The negative payment adjustment under the ASM exceeds that of the MIPS program, with participants subject to a downside risk of up to -12% by the final year of the program, which is significantly greater than the -9% potential risk under MIPS.
While the ACS is supportive of the ASM’s aim to look across episodes of care, the College strongly opposes the implementation of this model for several reasons, most importantly the misaligned incentive structure that focuses primarily on cutting costs rather than creating incentives that reward care teams for improvements in team-based, patient-centered care. A fundamental flaw of the ASM is that rather than rewarding high performers with the greatest possible incentive payments, CMS intends to withhold a portion of funds available for redistribution as savings to the Medicare program.
In addition, payment reductions under the ASM will be applied to all Part B services, not just those related to the episodes measured under the model. Thus, even if model participants see a relatively low volume of patients with the ASM-targeted conditions, all their Part B payments will ultimately be at risk. Finally, the maximum downside risk exceeds even the maximum negative adjustment under the MIPS program.
The ACS also strongly opposed the use of the CMS MIPS quality measurement framework as well as the Acumen cost measure methodology as the basis for this model. The MIPS framework uses a one-size-fits-all approach to measurement and perpetuates care silos by focusing on adverse events and measuring quality at the individual clinician level, while the Acumen cost measure methodology used in the ASM is very narrowly defined. The spotty cost coverage of a few common procedures does little to promote a surgeon’s or team’s attentiveness to cost and is not consistent with a patient-centered framework for measuring and improving the value of care. Instead, the ACS advocates for quality measurement frameworks that look at the full care journey and the embedded care pathways to focus on shared accountability across the entire care team.
In its September 12, 2025, comment letter,2 the ACS laid out these concerns and advocated that a total overhaul of the ASM in both quality and cost metrics is necessary, but despite these efforts, CMS finalized the model as proposed. The ACS continues to align its advocacy around the ASM and other clinician-focused models, urging CMS to look beyond the failed MIPS and MVP framework. Instead, the ACS recommended that the CMS institute a new value-based care framework that truly incentivizes surgical care improvement and cost reduction by incorporating patient goals of care, risk-adjusting cost at the episode level, tracking major adverse event avoidance, and verifying care for the condition. Despite these efforts, CMS finalized the model as proposed.
*Each Medicare provider will be assigned to a core-based statistical area (CBSA) based on the ZIP code of the clinician’s most common episode-level service location. CMS will randomly select approximately 25% of CBSAs to include in the model.
**CMS will determine specialties based on the specialty code indicated on the plurality of a clinician’s Medicare Part B claims from the calendar year occurring 2 years prior to the performance year.
Kate Murphy is a Regulatory and Quality Assistant, Haley Jeffcoat is a Senior Quality Affairs Associate, and Jill Sage is Senior Manager of Quality Affairs in the ACS Division of Advocacy and Health Policy in Washington, DC.
References
- Centers for Medicare & Medicaid Services. ASM (Ambulatory Specialty Model). Available at: https://www.cms.gov/priorities/innovation/innovation-models/asm. Accessed November 18, 2025.
- American College of Surgeons. Response to the CY 2026 MPFS Proposed Rule. 2025. Available at: https://www.facs.org/media/coeb2ce2/2026-mpfs-comments.pdf. Accessed November 6, 2025.
