CMS Proposes Key Updates to the Ambulatory Specialty Model in the CY 2027 Physician Fee Schedule

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Published on APM Connect | August 2026

On July 16, CMS released its proposed rule for the Calendar Year 2027 Medicare Physician Fee Schedule (PFS), which includes several updates to the Ambulatory Specialty Model (ASM).

Now that we’ve had time to read and digest the proposals, here’s a breakdown of what ASM participants need to know.

Some Cardiologists May Be Excepted from ASM Participation

One of the notable structural proposals is an exception pathway for certain cardiologists currently required to participate in the ASM heart failure track. Under the proposal, cardiologists who have been selected for ASM but officially redesignate their specialty type — for example, from general cardiology to interventional cardiology, cardiac electrophysiology, or cardiac surgery — via proof of board certification in that specialty would be exempt from ASM participation.

CMS stated that procedural cardiologists whose practice is primarily invasive or surgical in nature should not be held accountable under a model designed around the longitudinal management of heart failure patients. The proposal acknowledges that specialty designation in claims data does not always reflect how physicians actually practice, and that mandatory ASM inclusion may be misaligned for specialists whose scope of work centers on procedures rather than chronic disease management.

For health systems and multispecialty cardiology practices with a mix of interventional and general cardiologists, this is a noteworthy carve out. Practices should audit their ASM-enrolled cardiologists against their board certification status to determine who may qualify for this exception. If applicable, the physician must officially redesignate their specialty through PECOS or CMS-855 form within 30 days of the effective date of the approved redesignation, demonstrating proof of board certification.

Collaborative Care Arrangements Streamlined for Same-TIN Practices

In the 2026 Final Rule, ASM required each participating physician to execute their own Collaborative Care Arrangement (CCA) with a primary care practice, creating significant administrative overhead for larger groups managing many participants. In the 2027 Proposed Rule, CMS stated they would allow all ASM participants within the same Tax Identification Number (TIN) to share a single CCA with one primary care practice, rather than requiring individualized agreements for each physician. However, all ASM physicians must sign the shared document.

The proposed change recognizes that when all specialists reassign their billing rights to the same TIN, the rationale for maintaining dozens of discrete contractual agreements disappears. CMS responded to the administrative burden that has been a consistent pain point for ASM participants, particularly those in large specialty groups or integrated health system networks.

In practical terms, this change could reduce the number of executed CCAs from potentially dozens to just one or two documents — a meaningful reduction in legal and contracting resources required to maintain model compliance.

Low Back Pain Quality Measure Update: Changed Functional Outcome Measure

For ASM participants in the low back pain track, CMS is proposing to replace the existing quality measure "Functional Status Change for Patients with Low Back Impairments" (MIPS Q220) with "Functional Outcome Assessment" (MIPS Q182).

The measure steward for MIPS Q220 no longer supports it, which effectively compelled CMS to identify a replacement. Rather than simply withdrawing the measure without a substitute, CMS proposes Q182 as a transitional measure — explicitly noting it will serve until a more robust patient-reported outcome performance measure (PRO-PM) can be identified and validated for the low back pain population.

There is an important clinical and operational distinction between the two measures. While the outgoing measure focused on capturing functional status change over a treatment episode, the incoming Functional Outcome Assessment requires clinicians to document a care plan specifically when functional outcome deficiencies are identified. This shifts some administrative responsibility to the treating clinician and may require updates to documentation workflows and EHR templates. Practices in the low back pain track should prepare their teams for this documentation expectation ahead of the January 2027 effective date, but keep in mind that this measure won’t stay around forever.

Quality ID #182: Functional Outcome Assessment : Percentage of visits for patients aged 18 years and older with documentation of a current functional outcome assessment using a standardized functional outcome assessment tool on the date of the encounter AND documentation of a care plan based on identified functional outcome performance deficits within two days of the date of the identified deficits.

New Claims-Based Utilization Measure: MRI Lumbar Spine for Low Back Pain

In addition to the PRO-PM quality measure swap, CMS is proposing to introduce "MRI Lumbar Spine for Low Back Pain (modified for ASM)" as a new claims-based utilization measure for the low back pain track.

This proposal has been anticipated for some time. CMS had previously included a placeholder in the ASM measure set signaling its intent to add an imaging utilization measure targeting low-value lumbar MRI ordering. Because the measure is claims-based, it does not impose any additional eCQM reporting burden on participating practices; CMS will derive performance directly from administrative claims data. There are no measure specifications yet, but CMS will provide more details before January 2027.

The intent is to disincentivize inappropriate imaging utilization by flagging excess or low-value MRI ordering patterns. This aligns with clinical evidence that most patients with acute low back pain do not benefit from early lumbar MRI and that high imaging rates are associated with increased costs without commensurate improvements in outcomes. ASM participants in the low back pain track should review their current lumbar MRI ordering patterns and ensure they are aligned with evidence-based ordering criteria.

Bonus Points for Voluntary Patient-Reported Outcome Data Submission

Rounding out the ASM quality proposals, CMS is proposing a 5-point quality scoring incentive for ASM participants who voluntarily submit patient-reported outcome (PRO) data to support the development of future PRO-based performance measures.

CMS does not yet have mature PRO-PMs ready for ASM, but recognizes the need to build the data infrastructure and evidence base for such measures. Voluntary PRO data collection would allow CMS to evaluate candidate measures using real-world data from participating practices before mandating formal reporting.

For ASM participants, this represents an opportunity to influence how future measures are designed and a potential boost to quality performance scores. Practices with existing PRO collection workflows, particularly those already using validated instruments like the PROMIS measures, are well positioned to earn the bonus with relatively modest incremental burden.

What's Next

These proposed changes reflect CMS's ongoing effort to refine ASM based on operational experience and participant feedback. The administrative simplifications, particularly the CCA consolidation and the specialty exception pathway, signal responsiveness to concerns raised by participants since the model's introduction.

Participants in both tracks should use the comment period to engage with CMS on any provisions that would be operationally burdensome or clinically misaligned.

The comment deadline is September 14, 2026. ASM participants are encouraged to submit comments directly through the Federal Register or through their respective specialty societies.

For the full proposed rule, see: Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule

This post is intended for informational purposes. Readers should consult the full proposed rule text and legal counsel before making compliance or operational decisions based on proposed — not yet finalized — provisions.