Value-Based Care Is Finally Coming for Specialists

For over a decade, Medicare’s transition toward value-based reimbursement has primarily revolved around primary care physicians, care coordination infrastructure, and population health strategy. Models like the Medicare Shared Savings Program (MSSP) and ACO REACH have restructured incentives across thousands of organizations, but have left many high-volume specialists on the periphery. The proposed Ambulatory Specialty Model (ASM), introduced in the 2026 Physician Fee Schedule Proposed Rule, may mark the most serious federal attempt yet to close that structural gap.

By tethering reimbursement to discrete outpatient episodes, chemotherapy regimens, orthopedic procedures, interventional cardiology workflows, ASM represents a pivot from attribution-based population health to performance-centered specialty care. But while the model signals long-overdue inclusion, its implementation raises critical questions about infrastructure readiness, attribution fairness, and operational feasibility for both health systems and independent specialists.

A Model That Finally Mirrors Specialist Care Patterns

The central design principle of ASM is its alignment with how specialists actually deliver care: through finite, high-cost, clinically defined episodes. Unlike ACOs, which rely on retrospective population attribution and shared savings, ASM deploys prospective episode logic, tying performance incentives directly to procedures and related outcomes. Specialists can now be held accountable for readmissions, duplicative diagnostics, and post-acute utilization within their domain of influence.

This is not an abstract reform. According to Kaiser Family Foundation (KFF), specialty care represents over 60% of Medicare spending growth in outpatient services. CMS’s move to reframe these services within a value-based construct reflects both fiscal pressure and a recognition that volume-driven reimbursement is no longer defensible.

ASM also incorporates tailored reporting mechanisms through MIPS Value Pathways (MVPs), offering specialty-specific quality metrics and a narrower administrative scope. For vascular surgeons, oncologists, gastroenterologists, and other procedural subspecialists, this level of alignment with clinical reality has been notably absent from previous programs.

Accountability, Innovation, and the Risk of Overshoot

The strategic rationale behind ASM is clear: specialists must be incentivized to eliminate waste, improve coordination, and deliver more predictable outcomes. Yet its success will hinge on whether CMS can implement risk adjustment, attribution logic, and episode triggers in ways that reflect real-world clinical complexity.

One persistent concern is data readiness. While large integrated systems may already have the infrastructure to track episode-level quality and cost, smaller practices often operate without access to advanced analytics platforms or sophisticated revenue cycle tools. A 2023 GAO report warned that federal models relying on performance-based risk can unintentionally penalize providers who lack technical capacity, not clinical competence.

Additionally, CMS will need to carefully delineate ASM’s overlap with existing programs such as BPCI Advanced and the recently sunset Oncology Care Model (OCM). Without guardrails, there is risk of administrative duplication, inconsistent benchmarks, and strategic gaming among participants seeking the most favorable pathway.

And while the voluntary nature of ASM protects against premature disruption, it introduces the classic value-based pitfall of selection bias. If participation is dominated by low-risk, well-capitalized practices, results may be skewed, and long-term scalability compromised.

Implications for Health Systems and Tech Infrastructure

For health systems managing mixed specialty portfolios, ASM is both a challenge and an opportunity. Leaders must now assess which service lines can realistically engage with episode-based payment models, what types of care pathways require redesign, and how to operationalize performance accountability within existing digital infrastructure.

Vendor partnerships will play a defining role. From claims analytics to MVP-aligned quality capture, digital health firms are already positioning to support ASM implementation. But the bar is higher now. Tools must not only track performance—they must withstand regulatory scrutiny, enable clinical action, and integrate seamlessly with evolving payment models.

Moreover, organizations must prepare for increased payer scrutiny. As CMS refines benchmarking methodology and tightens episode definitions, the financial viability of ASM participation will depend on precision: in documentation, coding, referral tracking, and post-acute care alignment.

Specialist-Led Value Is No Longer Optional

ASM signals a shift in federal reimbursement ideology: value is no longer the domain of primary care alone. Specialists, long shielded from direct performance risk, are now being asked to lead.

This transformation is overdue. The majority of Medicare beneficiaries interface with specialists more often than with their primary care providers. Yet until now, federal payment structures have failed to hold specialty care accountable for inefficiency, redundancy, or unwarranted variation. ASM offers a corrective, but only if its design reflects the realities of clinical practice and avoids the pitfalls of over-complex implementation.

As CMS prepares to finalize ASM later this year, the policy window is open. Stakeholders, from specialty societies and technology vendors to integrated delivery networks, have a unique opportunity to influence how episodes are defined, how performance is measured, and how burden is distributed.

If implemented thoughtfully, ASM could catalyze a new era of specialist-led innovation: one in which remote monitoring, procedural standardization, and post-acute care orchestration are no longer aspirational, but reimbursable. But success will require more than interest. It will require deliberate design, equitable infrastructure, and a federal commitment to implementation fidelity.