The Ambulatory Specialty Model Explained
- David Pittman
- Nov 28
- 2 min read
What CMS's New Mandatory Test Means for Specialists
The 2026 Physician Fee Schedule Final Rule established the Ambulatory Specialty Model (ASM)—a mandatory, five-year test of specialist accountability within traditional Medicare. The model launches January 1, 2027, and runs through December 31, 2031, followed by two payment reconciliation years (2032–2033).
ASM represents the first large-scale effort by the Centers for Medicare and Medicaid Services (CMS) to hold specialists in ambulatory settings financially accountable for upstream management of chronic conditions that drive high spending and avoidable hospitalizations. It focuses initially on heart failure and low back pain, two conditions that together account for roughly 6% of Medicare Parts A and B spending and are predominantly managed by specialists.
The model builds on the MIPS Value Pathway framework but differs in key areas, including measure reporting, scoring, and payment adjustments. Notably, as much as 12% of all Medicare Part B payments will be at risk, and the model will force more small practices to participate.
From score to payment adjustment
Each clinician’s final composite score (0–100) is transformed into a payment adjustment factor using a logistic exchange function. This function compresses extreme scores to prevent outsized gains or losses and ensures that moderate performance differences yield proportionate payment effects.
■ A score near 50 points yields a roughly neutral adjustment (0 %).
■ Higher scores generate positive adjustments up to the maximum risk level.
■ Lower scores produce proportionate penalties.
The relative distribution of scores within each cohort directly affects the size of individual payment changes. So, when many participants perform well, each receives a smaller positive percentage, and vice versa. ASM retains this “tournament-style” approach to payment adjustments.
Unlike MIPS, ASM does not establish a fixed performance threshold. Participants are scored entirely relative to peers, which means final payment adjustments depend on the overall distribution of scores in the cohort that year.
Read the full brief by David Pittman, Pittman Policy Strategies.
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