What is ASM? CMS's New Ambulatory Specialty Model Explained

The Ambulatory Specialty Model (ASM) is a mandatory payment model proposed by CMS that will change how specialists get paid for treating Medicare patients with heart failure and low back pain. Starting January 1, 2027, this five-year program creates direct competition between specialists, with payment adjustments based on relative performance rather than meeting predetermined thresholds. 

Why CMS Created ASM: Learning from Past Programs

Healthcare fragmentation has worsened as Medicare beneficiaries see more specialists with limited coordination. ASM borrows some familiar elements from other programs you might recognize:

From TEAM: Quality & Cost scoring, peer comparison, care coordination emphasis, and CMS keeping 15% of bonuses as savings.

From MIPS/MVP: Four performance categories with most of the same requirements.

New approaches: Only Quality & Cost are scored (IA/PI can only cost you points), a new scoring method which will create much larger payment swings than traditional MIPS.

Who Gets Selected

ASM isn't voluntary. CMS will select specialists based on:

• Heart failure cohort: Cardiologists with most of their Medicare billing in cardiology
• Low back pain cohort: Specialists with most of their Medicare billing in pain management, orthopedics, neurosurgery, and related specialties
• Episode volume: Minimum 20 episodes annually using Episode-Based Cost Measures
• Geographic selection: Random selection of 25% of Core Based Statistical Areas nationwide

CMS will notify participants by the end of 2025, but the final list will drop by July 2026.

The Performance Categories

Quality (50% weight)

Required measures for all participants covering excess utilization, evidence-based care, and patient outcomes. Heart failure specialists report on beta-blocker therapy and ACE inhibitors. Low back pain specialists track depression screening and MRI utilization.

New! Even though ASM participants are required to submit all required measures if they don’t submit at least one eCQM/CQM with 75% data completeness they will face an automatic -9% penalty.

Cost (50% weight)

Uses Episode-Based Cost Measures comparing total Medicare spending per episode. Scoring based on standard deviations from cohort median, with 10 achievement points possible.

Improvement Activities (Penalty only)

Two required Improvement Activities focused on primary care coordination:

1. IA-1: Help patients find PCPs, communicate after visits, and ensure health-related social needs screening has been completed
2. IA-2: Execute a collaborative care arrangement with primary care practice

Missing improvement activities costs you 10-20 points from final score.

Promoting Interoperability (Penalty only)

You have standard PI requirements, but you don’t need to attest to the Information Blocking attestation statement. Unlike IA, poor performance in PI is a scaling negative score between -1 and -10 points. Also, keep in mind that for every category, including PI, you must report data at the individual level.

How Payments Work: The Competitive System

ASM creates a pool of money from participants with poor performance then redistributes money to the good performers based on relative performance. Unlike MIPS, CMS will keep 15% of that money before redistributing it.

1. Bonus pool calculation: Total Medicare payments × 9% risk level × 85% redistribution = available bonus money
2. Score transformation: Final scores converted using logistic function emphasizing median performance differences
3. Payment formula: (Risk Level × Transformed Score × Scaling Factor) - Risk Level
4. Result: Winners get bonuses funded by penalties on poor performers

Key Differences from MIPS

Special Features and Protections

Bonuses available:

• Small practices (≤15 clinicians): +10 points
• Solo practitioners: +15 points
• Complex patients: Up to +10 points based on HCC scores and dual-eligible percentages

New flexibilities:

• Complete MIPS waiver during participation
• Expanded telehealth to any location, including patient homes
• Patient incentives up to $1,000 annually (blood pressure monitors, gym memberships)
• Legal safe harbor for collaborative care arrangements with primary care physicians

Data Sharing and Support

CMS provides unprecedented data access in ASM:

• Aggregate reports: Regular performance feedback during the year
• Optional: Patient-level data: Detailed Medicare claims for participants' ASM patients upon request

This represents a significant opportunity for specialists who typically have limited visibility into broader patient utilization patterns.

Timeline and Implementation

• Performance Years: 2027-2031
• Payment Years: 2029-2033
• Notification: Preliminary lists by end of 2025, final lists by July 2026
• Risk progression: 9% initially, increasing in later years

Financial Impact

The stakes are substantial. A specialist with $500,000 in annual Medicare billings faces up to $45,000 in potential gains or losses (9% adjustment). As risk levels increase over time, these amounts will grow significantly.

Model Overlap Considerations

ASM can run alongside other CMS programs like ACOs, creating overlapping incentives. However, CMS did not clarify in their proposed rule whether MSSP ACOs still have to report for any of their specialists selected for participation in ASM.

Preparing for ASM

Smart preparation focuses on:

• Understanding your group’s construct and if you have either of these types of specialists evaluating their current episode volumes and costs
• Building primary care relationships for collaborative arrangements
• Investing in care coordination capabilities
• Reviewing current quality measure performance

Looking Ahead

ASM represents CMS's vision for specialty payment reform. If successful, expect expansion to other chronic conditions and specialties. The program sends a clear message: the future belongs to specialists who embrace collaboration, accountability, and systematic quality improvement.

For selected specialists, ASM offers both significant opportunity and substantial risk. Poor performers face financial penalties. High performers could see meaningful income increases while being rewarded for coordination efforts.