Medicare's Ambulatory Specialty Model: What Pain and Spine Stakeholders Need to Know Before 2027
By Yesh Navalgund, MD, interventional pain consultant and advisor
On January 1, 2027, the Centers for Medicare & Medicaid Services (CMS) will launch the Ambulatory Specialty Model (ASM), a mandatory five-year program that changes how certain specialists who treat low back pain and heart failure are paid. CMS finalized the model in the 2026 Physician Fee Schedule final rule, and it runs through December 31, 2031.
For anyone whose strategy touches low back pain, from practices and health systems to device companies, payers, and investors, ASM is one of the most consequential policy shifts on the horizon.
Why CMS created ASM
According to CMS, more than two-thirds of people with Original Medicare live with at least one chronic condition, and low back pain alone accounts for an estimated $6 to $8 billion in annual Medicare spending. CMS's stated concern is fragmentation: patients see several clinicians who do not coordinate well, which can lead to delays, unnecessary procedures, and avoidable hospitalizations. ASM is designed to reward specialists who manage these conditions upstream and coordinate closely with primary care (CMS ASM overview).
Who is included
The low back pain cohort covers physicians specializing in anesthesiology, pain management, interventional pain management, neurosurgery, orthopedic surgery, and physical medicine and rehabilitation. A clinician is included if they have historically been attributed at least 20 low back pain episodes per year under CMS's episode-based cost measure methodology and practice in one of the selected mandatory geographic areas, which CMS describes as roughly one-quarter of core-based statistical areas and metropolitan divisions. CMS has published the final participant list for the 2027 performance year.
Participation is identified by the combination of Tax ID and NPI, and in the selected areas it is mandatory, with limited exceptions.
How performance is measured
ASM builds on Medicare's MIPS Value Pathways framework with a narrower, condition-specific measure set. Participants are scored annually in four categories:
Quality, such as improvement in patients' functional status.
Cost, using episode-based cost measures focused on avoidable and unnecessary care.
Improvement activities, including screening for health-related social needs and strengthening coordination with primary care.
Promoting interoperability, meaning use of certified EHR technology to share information.
The financial stakes
ASM is two-sided. Based on performance relative to peers, a participant's future Medicare Part B payments are adjusted up, down, or not at all. CMS states the range is minus 9% to plus 9% in the first two performance years, widening to minus 12% to plus 12% by the final year.
What it means by stakeholder
Practices and physician groups: confirm who is on the participant list, then build the infrastructure ASM measures: functional outcome collection, cost visibility at the episode level, social needs screening, and documented coordination with primary care.
Health systems: ASM rewards tighter specialist and primary care integration. Collaborative Care Arrangements, in which specialists and primary care clinicians define roles, data sharing, co-management, and referral processes, are a natural vehicle.
Device and therapy companies: under episode-based cost measurement, therapies will be judged on durable functional benefit and on avoiding repeat or unnecessary procedures. Long-term outcomes data becomes a commercial asset.
Payers: ASM's measure set and performance data may shape how commercial and Medicare Advantage plans think about specialist accountability in back pain.
Investors: in the selected markets, margins for pain and spine platforms will depend partly on ASM performance, which makes data infrastructure and care coordination capabilities worth diligence.
Referring physicians: expect more structured communication from participating specialists on function and outcomes, and clearer plans for transitions back to primary care.
A note for patients reading this
ASM does not change Medicare benefits or your right to choose your doctors. If you want to know how your care team coordinates your back pain treatment, ask when you next visit your doctor.
Working together
I help practices, health systems, device companies, and investors prepare for ASM, including readiness assessments, outcome-measurement strategy, care coordination design, and positioning therapies for an episode-based world. If ASM is on your 2027 planning list, let's talk.
Specialists who want to confirm participation can check the CMS participant dataset on the ASM page or contact the ASM team at AmbulatorySpecialtyModel@cms.hhs.gov.
This article summarizes publicly available CMS information as of November 2026 and is not legal or billing advice. Details may change through future rulemaking.
Sources
CMS Innovation Center, Ambulatory Specialty Model (ASM): https://www.cms.gov/priorities/innovation/innovation-models/asm
CMS, CY 2026 Physician Fee Schedule final rule and ASM fact sheet (linked from the ASM page above)
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