While 2026 is barely underway, focus is already shifting to January 1, 2027, when the new Ambulatory Specialty Model (ASM) will take effect. The new model is designed to assess the care of those with heart failure and lower back pain. The ASM will be effective until December 31, 2031. This will affect payment years 2029-2033 for participating providers.
Heart failure accounts for approximately $10-$13 billion in annual Traditional Medicare costs, compared with roughly $6-$8 billion spent each year on lower back pain. The focus of the Ambulatory Specialty Model is to improve prevention and management of chronic disease while helping to reduce avoidable hospitalizations and unnecessary procedures, in turn lowering costs to Traditional Medicare.
Who will be affected? Traditional Medicare has mandated certain providers who treat patients with these conditions to be a part of this model. These providers were selected based on their specialty, historically treating at least 20 episodes of care per year in the outpatient setting, and residing in a certain geographical area. General cardiologists are assigned as specialist groups for heart failure, while anesthesiology, pain management, interventional pain management, neurosurgery, orthopedic surgery, and physical medicine and rehabilitation specialists are assigned to lower back pain. Eligibility for participating providers will be reviewed annually by Medicare. Medicare has announced the list of ASM providers for 2027 on their website.
Aside from improving prevention and management of chronic diseases and reducing avoidable hospitalizations and unnecessary procedures, the ASM also aims to:
- Increase collaboration between specialists and primary care providers
- Prevent development of additional disease through better risk assessment
- Offer greater transparency in performance among participants and peers
- Measure outcomes that center on the patient’s priorities
- Empower participating specialists by aligning measures with factors they are better able to control
The payment structure for the ASM will focus on four categories:
- Quality
- Cost
- Improvement Activities
- Improving Interoperability
Quality and cost will each account for 50% of the score for the provider with bonus points coming from improvement activities and improving interoperability. Quality will be based on required measures for participation covering excess use, evidence-based care, and patient outcomes. Measures are specific to the disease.
The following are the measures for heart failure:
- Risk-Standardized Acute Unplanned Cardiovascular-Related Admission Rates for Patients with Heart Failure (MIPS Q492 with modified specifications)
- Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (MIPS Q008)
- Controlling High Blood Pressure (MIPS Q236)
- Functional Status Assessment for Heart Failure (MIPS Q377)
The following are the measures for lower back pain:
- Use of High- Risk Medications in Older Adults (MIPS Q238)
- Preventative Care and Screening: Screening for Depression and Follow-Up Plan (MIPS Q134)
- Preventative Care and Screening: BMI Screening and Follow-Up Plan (MIPS Q128)
- Functional Status Changes for Patients with Low Back Impairments (MIPS Q220)
- Excess Utilization Measure – To Be Determined in CY 27 Rulemaking
The data for these measures are captured through claims, eCQM, and MIPS CQMs. These measures will use the same specifications as MIPS except for Risk-Standardized Acute Unplanned Cardiovascular-Related Admission Rates for Patients with Heart Failure which will have modified specifications.
Cost is assessed by using episode-based cost measures and comparing them to the total Medicare spending per episode. CMS uses claims data to calculate costs; no additional information will have to be reported by the provider.
Improvement activities focus on clinical care processes and patient engagement. There are two categories of improvement activities. The first category involves connecting specialty care with primary care and ensuring completion of health-related social needs screenings. Helping patients find a primary care provider and getting screenings completed is imperative to ensure that all the patient’s health needs can be assessed and addressed. The second category is establishing communication and collaboration expectations with primary care using collaborative care arrangements. Collaborative care arrangements are a formal agreement between at least two providers who will work together to provide care for a patient. These agreements help to improve care outcomes and efficiency of services provided to patients.
Interoperability improvement requirements are similar to those used in MIPS. Interoperability focuses on implementing technology to aid specialists in communication and data sharing electronically between specialists, the patient, and the primary care provider.
The ASM is a two-sided risk arrangement model that subjects providers to financial gains and losses depending on their performance relative to their peers. Clinicians are rewarded for preventing worsening of chronic conditions, improving chronic disease management, detecting risks and signs of chronic conditions early, enhancing patient experience, and reducing avoidable hospitalizations.
The payment methodology will work by taking each ASM participant’s final score and calculating it into a payment adjustment. The adjustment will be used to calculate the Part B covered services payment for the corresponding ASM payment year. The score earned in the 2027 performance year will set that payment adjustment for 2029. The payment adjustments can range from -9 percent to +9 percent in the first two payment years of 2028 and 2029. This is set to increase in later payment years.
If a provider is part of the ASM, they are considered exempt from MIPS reporting requirements while they are participating in this model. This model is different from MIPS in many ways. In the ASM, you will report as an individual provider and not as a group. Reporting requirements will be based on a set of measures and activities specific to the conditions being evaluated and managed. There will not be flexibility to select which measures and activities you wish to report. The model will only compare performance of those providers treating the same conditions rather than being scored against the entire pool of MIPS providers.
While we look ahead, now is the time to start preparing for these upcoming changes. If you are a provider included in the 2027 ASM, start by reviewing your patient population and costs associated with these diagnoses. Review the criteria for each measure you will have to report on, and how the data is reported to CMS. Ensure processes are in place to avoid obstacles next year. Check to see if you have existing relationships with primary care providers. If those relationships are not well defined, work to get collaborative care agreements in place now. Preparation is key to a smooth transition.
If this model is successful at meeting the goals CMS has outlined, the expansion of this care model to include other chronic diseases could be in our future.
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