- Regulatory burden discussions with CMS Administrator
- CMS proposes new alternative payment model
- Prompt and Fair Pay Act would establish prompt pay standards for Medicare Advantage plans
- Hospital Inpatient Services Modernization Act reintroduced in Congress
- AMA supports bipartisan Community TEAMS Act
- More articles in this issue
Regulatory burden discussions with CMS Administrator
This week, AMA CEO and Executive Vice President John Whyte, MD, MPH, met with CMS Administrator Mehmet Oz, MD, MBA. There was considerable discussion around the administration’s efforts to address prior authorization.
The AMA also highlighted the roadmap (PDF) the AMA developed for CMS to significantly improve the Merit-based Incentive Payment System (MIPS) and MIPS Value Pathways (MVPs). These recommendations are an outgrowth of two AMA-convened specialty workgroups. Dr. Whyte acknowledged that the 2026 Medicare Physician Fee Schedule (MPFS) proposed rule contained several positive steps on MIPS but urged that CMS needs to do more. The discussion was constructive, and the AMA looks forward to an ongoing dialogue to resolve these issues.
CMS proposes new alternative payment model
In the 2026 Medicare physician payment proposed rule, the CMS Innovation Center (CMMI) proposes a new alternative payment model, the Ambulatory Specialty Model (ASM), for implementation in 2027. Physicians in seven specialties (anesthesiology, cardiology, interventional pain management, pain management, neurosurgery, orthopedic surgery, and physical medicine and rehabilitation) who treat patients with heart failure or low back pain in 240 geographic areas would be required to participate in ASM for up to five years. Payment adjustments for all their services, not just those for heart failure or low back pain patients, would be applied two years after the performance year, with payments reduced or increased as much as 9% in 2029 and 2030, growing to 12% by 2033.
Positive aspects of ASM
The AMA has been urging CMMI to create alternative payment models for specialists for more than a decade, and ASM has several elements that are responsive to these recommendations. ASM is intended to focus on care of patients with specific conditions that are managed by specialists who provide mainly ambulatory rather than inpatient care. It uses quality and cost measures applicable to the same health condition. To help support physicians in independent private practices transitioning to value-based care models, ASM allows physicians to participate without having to be part of an accountable care organization, hospital, or large physician group. In addition, unlike other models that require participants to repay CMS if the total cost of care for a patient population is more than a benchmark set by the agency, it does not place physicians at direct financial risk for increases in total Medicare spending on their patients.
Significant concerns
ASM also contains several problematic features that forthcoming AMA comments on the proposal will urge CMMI to modify. ASM’s financial model guarantees that most participating physicians will have their payments cut regardless of how well they perform on the measures. These pay cuts are how ASM would provide savings for Medicare, instead of by helping physicians reduce avoidable Medicare spending on hospitalizations and other services.
ASM would mandate participation, and the AMA will recommend it be redesigned as a voluntary model. ASM also uses a “tournament” approach with no performance standard set in advance, but rather a physician’s payment adjustment depends on whether their performance exceeds the majority of other ASM participants each year. Finally, physicians treating as few as 20 patients with heart failure or low back pain a year would be required to participate and have their payments reduced or increased based on the ASM required measures, even if ASM patients are a small subset of all their patients.
One of CMMI’s current aims is designing models to “level the playing field for providers practicing independently and outside of health system or health plan ownership to increase competition in markets.” While the AMA and CMMI are aligned in this goal, we are concerned that, unless ASM is modified, it could accelerate consolidation instead of providing better support for independent practices. Data from the AMA’s 2024 Physician Practice Benchmark Survey identified “ease participation in risk-based payment models” as a key reason that physicians left private practice (PDF).
Prompt and Fair Pay Act would establish prompt pay standards for Medicare Advantage plans
On Aug. 26, the AMA sent a letter (PDF) of support to Reps. Lloyd Doggett (D-TX) and Greg Murphy, MD (R-NC) for H.R. 4559, the “Prompt and Fair Pay Act.” The legislation would establish prompt pay standards requiring Medicare Advantage (MA) plans to reimburse clean claims in a timely and transparent manner, while also setting a payment floor that prevents MA contracts from paying less than traditional Medicare fee-for-service rates.
The legislation’s prompt pay provisions create clear expectations for timely reimbursement and establish consequences for late payments, reducing administrative friction and providing practices with greater financial stability. Importantly, beginning in 2027, the bill also establishes payment parity between MA and traditional Medicare. Physicians will still be able to negotiate higher rates, but this safeguard prevents plans from offering contracts that undercut Medicare fee-for-service and will help ensure physician practices remain financially viable as MA enrollment continues to grow.
H.R. 4559 also strengthens fairness and accountability in the MA program by prohibiting retaliatory plan behavior, providing physicians with meaningful payment options and empowering strong enforcement authority. Together, these reforms will help stabilize physician practices, improve transparency and protect patient access to care.
The AMA looks forward to working with Reps. Doggett and Murphy, and other congressional leaders to advance this critical legislation.
Hospital Inpatient Services Modernization Act reintroduced in Congress
On Aug. 20, the AMA sent a letter (PDF) of endorsement for the Hospital Inpatient Services Modernization Act (S.2237/H.R. 4313) introduced by Senators Tim Scott (R-SC) and Raphael Warnock (D-GA), and Reps. Vern Buchanan (R-FL), Dwight Evans (D-PA), and Lloyd Smucker (R-PA). This important legislation would extend the Acute Hospital Care at Home (AHCaH) waiver authority through 2030 and commission a data-driven study to assess the quality, safety and equity implications of this innovative model of care. This proven program allows patients to receive hospital-level care from physicians and other members of the health care team in the comfort of their home. The AHCaH program is not a new program but the continuation of a bipartisan policy from 2020. There is no new money involved, and its success shows that innovations that deliver hospital-level care that meets patients where they are, has proven to be tremendously successful, cost-effective, leading to fewer patient readmissions, infections, and complications, especially for patients with chronic conditions who prefer care delivered in the home-based setting. This policy also frees up hospitals to treat patients whose conditions or ailments can only be treated in the inpatient setting. The AMA strongly urges lawmakers to include this five-year extension in any legislation that Congress must pass to fund the federal government before the start of the 2026 Fiscal Year on October 1st. We will work with the bill sponsors to see this important legislation advance this session.
AMA supports bipartisan Community TEAMS Act
This week, the AMA sent a letter (PDF) renewing its support for H.R. 3885, the Community Training, Education, and Access for Medical Students (Community TEAMS) Act. The bill, introduced by Reps. Carol Miller (R-WV) and Marc Veasey (D-TX), amends the Public Health Service Act to provide grants for training opportunities for medical students in rural health clinics, federally qualified health centers, and health care facilities located in medically underserved communities.
Currently, over 260 million individuals live in Health Professional Shortage Areas (HPSAs). With a projected shortage of up to 86,00 physicians by 2036, that number is likely to increase in the coming years. It is important to ensure that medical students are provided with training opportunities that will help to fulfill these shortages while giving patients within HPSAs the care they need. H.R. 3885 would do just that.
The AMA will continue to advocate for initiatives to support access to health care for patients in rural and underserved areas similar to the Community TEAMS Act.
