Specialty model will focus on upstream management of lower back pain and congestive heart failure in traditional Medicare
This week, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2026 Medicare Physician Fee Schedule (MPFS) proposed rule, which introduces a new mandatory Ambulatory Specialty Model (ASM), and announced updates on the Cell and Gene Therapy Access Model. These developments reflect CMS’s continued focus on value-based care, chronic condition management, and new payment strategies.
Specialists will be financially accountable for the upstream management of low back pain and congestive heart failure in traditional Medicare. The model is designed to reduce costs and improve healthcare quality through performance-based payment adjustments and enhanced care coordination. The proposal is open for public comment, and CMS may revise model parameters before finalizing the rule later this year.
In this article, Health Management Associates (HMA) experts break down the ASM model’s goals and design features and explains developments in CMS’s Cell and Gene Therapy Access Model. HMA experts are reviewing the CY 2026 MPFS and the CY 2026 Hospital Outpatient Prospective Payment System proposed rules and will highlight key policy provisions in a forthcoming article.
ASM Focus on Chronic Care
CMS estimates that more than two-thirds of traditional Medicare beneficiaries have at least one chronic condition. CMS states that spending on heart failure comes to $10‒$13 billion annually, while annual costs associated with low back pain are $6‒$8 billion. A lack of coordinated care can impede patients’ ability to manage their health and result in low-value care like unnecessary procedures and avoidable hospitalizations that run up costs without improving healthcare outcomes. The ASM will test how incentives such as payment adjustments to providers can encourage preventive care, earlier diagnosis, and better disease management.
Program Goals
The ASM is designed to encourage collaboration and communication between patients’ primary care providers and specialists who treat low back pain and heart failure. According to CMS, improved coordination will lead to the following:
- Better patient outcomes and reduced disease progression
- Decreased spending on low-value care experiences, such as unnecessary hospitalizations and procedures
- Ensure providers are evaluated based on performance measures that are linked to the care they offer their patients
- Optimize data transparency to allow providers to compare their performance with their peers when being measured on patient-centered outcomes
Performance will be assessed based on the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) across four factors:
- Improving outcomes, such enhancing patients’ functional status or controlling their blood pressure
- Lowering costs, especially through reduced provision of unnecessary services
- Increasing patient engagement through clinical care processes
- Expanding interoperability and data communication through certified electronic health record technology
Though based on the MIPS MVPs, the ASM will enhance the focus of performance measures, thereby simplifying reporting and allowing for comparisons across different providers and regions.
Table 1. ASM Model Payments, Participants, and Timeline
| Category | Details |
| Model Type | Two-sided risk payment model |
| Payment Adjustment Range | -9% to +9% based on performance relative to peers |
| Performance Tiers | – Positive adjustment for high performance – Neutral for average performance – Negative adjustment for low performance |
| Geographic Scope | Rolled out in ~25% of core-based statistical areas (CBSAs) and metropolitan divisions nationwide |
| Specialties Included | – Low back episodes: Anesthesiologists, pain management, interventional pain management, neurosurgeons, orthopedic surgeons, physical medicine or rehabilitation specialists– Heart failure episodes: General cardiologists |
| First Performance Year | January 1, 2027 |
| Duration | 5 years |
| Relation to Other Models | – ASM is the second mandatory model proposed by CMS, following TEAM (Transforming Episode Accountability Model). While TEAM focuses on hospital-based episodes, ASM shifts accountability to specialists.– Both models align with CMS’s broader strategy to reduce low-value care, a theme also reflected in the recently announced the Wasteful and Inappropriate Service Reduction (WISeR) model. |
| Policy Context | Part of CMS Innovation Center’s strategy to promote evidence-based prevention, high-value care, and reduce unnecessary utilization |
Cell and Gene Therapy Model
On July 15, 2025, CMS announced the participants in the Cell and Gene Therapy (CGT) Access Model. A total of 33 states, plus the District of Columbia and Puerto Rico, will participate in this model, which has the federal government negotiating outcomes-based agreements with CGT manufacturers of sickle cell disease treatments. Participating states represent approximately 84 percent of Medicaid beneficiaries with the condition. Under the model, participating states receive guaranteed discounts and rebates from participating CGT manufacturers if the therapies fail to deliver their promised therapeutic benefits. States also have the option of receiving federal support of up to $9.55 million each to assist with implementation, outreach, and data tracking. States may choose when to begin their participation between January 2025 and January 2026. CMS indicated it may modify the model in the future to cover other diseases with high-cost, high-impact therapies.
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The ASM introduces opportunity and financial risk for specialists, hospitals, and health systems. Providers should consider strategies and tactics that will strengthen their collaboration with primary care teams to manage the chronic conditions addressed in the ASM model, which may require workflow redesign and new communication protocols. Providers also should consider whether they will need to make investments in data infrastructure and reporting to meet their performance quality goals.
HMA’s Medicare team—including actuaries, data analysts, and policy experts—helps organizations model, understand, and navigate the impact of proposed frameworks and policy changes, quantify risk, and more, so organizations can improve both financial performance and patient outcomes.
For details about these model announcements or the new proposed rules, contact the HMA Medicare team tracking these policies.
