- What Is the Ambulatory Specialty Model?
- Who Is Required to Participate?
- How Does ASM Compare to MIPS?
- What Are the Performance Categories?
- Performance Categories
- How Payment Adjustments Work
- What Specialists Should Do Now
- The Bottom Line
If you treat Medicare patients for heart failure or low back pain in an outpatient setting, there’s a good chance you’ve already heard the term Ambulatory Specialty Model circulating in billing conversations. What you might not know yet is how directly it could affect your practice’s reimbursement starting in 2027.
This new specialty care initiative is officially moving forward. Following its finalization by CMS in October 2025 through the CY 2026 Physician Fee Schedule final rule, the model now stands as a major landmark shift in specialty care reimbursement.
Key Takeaways
- The Ambulatory Specialty Model (ASM) is a mandatory CMS alternative payment model that begins January 1, 2027, and runs for five performance years through 2031.
- Participation is mandatory for eligible cardiologists and select pain/orthopedic specialists in certain geographic regions, with no opt-out option.
- ASM uses the MIPS Value Pathways framework as its foundation but differs from MIPS in scoring methods, payment risk levels, and financial accountability.
- Payment adjustments under ASM can reach up to 12% of Medicare Part B payments by the final performance year, with both upside and downside risk.
- Specialists who qualify for ASM will be exempt from MIPS during active ASM performance years, but only if they meet all submission requirements.
What Is the Ambulatory Specialty Model?
Developed by the CMS Innovation Center, the Ambulatory Specialty Model (ASM) is a mandatory five-year alternative payment model (APM).
The CMS Innovation Center launched the mandatory five-year Ambulatory Specialty Model (ASM) to hold specialists accountable for heart failure and low back pain outcomes. These conditions account for approximately 6% of annual Medicare spending, making upstream management essential for cost reduction.
Participation is required for eligible physicians in 25% of randomly selected core-based statistical areas (CBSAs). As CMS evaluates clinicians individually using Medicare Part B claims rather than at the group level, verifying eligibility is vital.
Related: Impacts of 2025 Rule Changes: What to Expect
Who Is Required to Participate?
ASM eligibility depends on specialty and volume. The heart failure cohort targets cardiologists, while the low back pain cohort includes anesthesiology, pain management, neurosurgery, orthopedics, and physical medicine specialists.
Clinicians must manage 20+ annual episodes to qualify. CMS evaluates 2025 claims to set 2027 eligibility, with a final list due by July 2026. Eligibility is tracked by TIN/NPI. Multi-region specialists are assigned to the CBSA where most episodes occur, requiring careful primary site tracking.
How Does ASM Compare to MIPS?
If you’re currently navigating MIPS Reporting, you’ll find ASM both familiar and meaningfully different. Both programs share four performance domains including quality, cost, improvement activities, and promoting interoperability, and utilize the MIPS Value Pathways framework to determine financial outcomes.
However, unlike budget-neutral MIPS, CMS retains a portion of ASM funds as Medicare Trust Fund savings, including 15% of the 2027 risk pool. ASM also carries higher financial stakes, with downside risk beginning at 9% in 2027 and reaching 12% by 2031, applying to all Medicare Part B payments.
Participants meeting ASM submission requirements gain an exemption from MIPS reporting. This relief is conditional; failing to meet data requirements results in losing both the exemption and any payment adjustments.
Practices navigating MIPS today who may soon transition to ASM can get a head start by exploring how Patient360’s MIPS reporting services can help you build the performance tracking habits and data infrastructure that ASM will require.
Related: MIPS Essentials: What Healthcare Professionals Must Know
What Are the Performance Categories?
ASM performance is measured across the same four categories familiar to MIPS participants. Quality measures are condition-specific. For heart failure, that includes metrics like blood pressure control and medication management. For low back pain, functional status improvement and appropriate imaging use are part of the picture.
Measures are tied to MIPS Value Pathways designed specifically for each cohort, which means reporting is more targeted than the broader MIPS menu.
Performance Categories
ASM utilizes four performance domains similar to MIPS, but with cohort-specific quality measures for heart failure and low back pain linked to targeted MIPS Value Pathways.
Cost performance is based on total care costs during an episode window, including services from outside providers.
Improvement activities prioritize care coordination through mandatory Collaborative Care Arrangements with primary care providers. Promoting Interoperability tracks certified EHR use, while new telehealth flexibilities allow specialists to perform virtual follow-ups without typical geographic restrictions.
How Payment Adjustments Work
ASM payment adjustments take effect two years post-performance; for example, 2027 results impact 2029 Part B payments. This delay allows CMS to process scores and applies to all Part B claims, not just specific episodes.
Financial stakes are significant, with downside risk increasing from 9% to 12% over five years. Unlike MIPS, the bonus pool is smaller as CMS retains some funds, resulting in compressed upside for high performers.
Specialists who want to understand their current performance baseline before 2027 can take the first step by reviewing their readiness at Patient360’s MIPS get-started portal, which walks you through the measures and reporting pathways most relevant to your specialty.
What Specialists Should Do Now
Groundwork for the 2027 start begins now. While CMS already used 2024-2025 data to identify participants, you can still control your readiness for when the model goes live. Confirm your eligibility by checking CMS criteria against your claims history. Your historical MIPS Value Pathways performance serves as a reliable benchmark for where you stand.
Prioritize care coordination with primary care providers and ensure your EHR supports Promoting Interoperability data-sharing. Familiarize yourself with episode-based cost methodology to better understand how encounters influence your score.
The Bottom Line
ASM represents a major shift in Medicare accountability for outpatient specialists, featuring mandatory participation and high financial stakes. Preparing before 2027 is essential to managing performance under this new outcomes-focused model.
Patient360 provides the compliance expertise needed to navigate these changes. We help practices assess readiness and implement the systems necessary for success under ASM. Contact us today to secure your practice’s future.
