The proposed 2026 Medicare physician payment schedule includes several elements in the ambulatory specialty model that the AMA has for years suggested be implemented to create better alternative payment models for specialists.
But in comments to the Centers for Medicare & Medicaid Services (CMS), the AMA tells the agency that there are various areas in the ambulatory specialty model that need to be redesigned when the rule is finalized to help physicians, particularly those in private practice, remain financially stable to continue caring for older-adult patients with heart failure or low back pain.
“One of the CMS Innovation Center’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.’ The AMA and CMS are aligned in this goal, but we are concerned that the current model design will not provide better support for independent practices and may lead them to look to help from larger organizations to maintain their financial sustainability,” AMA CEO and Executive Vice President John J. Whyte, MD, MPH, wrote to CMS Administrator Mehmet C. Oz, MD.
Dr. Whyte noted that 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).
The comprehensive comment letter (PDF) comes in response to the nearly 2,000-page proposed 2026 Medicare physician payment rule that CMS unveiled earlier this year in which the ambulatory specialty model was one of the major proposals.
The positive changes
The ambulatory specialty model is a positive change because it builds upon the alternative framework for Medicare’s Merit-based Incentive Payment System (MIPS) value pathways program that AMA and specialty societies recommended.
Consistent with this framework, instead of being designed to apply to all services across a broadly defined specialty, the ambulatory specialty model is intended to focus on patient care for specific conditions that are managed by specialists who provide predominantly ambulatory care rather than inpatient care. The model includes two conditions: heart failure and low-back pain.
The AMA comments lay out these positive changes the ambulatory specialty model provides for physicians and the patients they care for:
- The model uses quality and cost measures applicable to the same health condition.
- Physicians can participate in the ambulatory specialty model without having to be part of an accountable care organization, hospital or large physician group.
- The model does not put physicians at direct financial risk for increases in total Medicare spending on their patients. That is unlike other models, which require participants to repay Medicare if the total cost of care for a patient population is more than the benchmark that CMS sets.
What needs improvement
While there are these positive features in the proposed payment model, the AMA tells CMS that there are several areas that the agency should modify before the rule becomes final. The recommendations include those outlined here.
Restructure the ambulatory specialty model’s financial model. As proposed, the model guarantees that most participating physicians will see their payments cut no matter how well they perform on the measures. Instead of achieving Medicare savings by reducing physician payment rates, the AMA urges CMS to help physicians in reducing avoidable Medicare spending on hospitalizations and other services.
Redesign the ambulatory specialty model as a voluntary model. As proposed, physicians in seven specialties who treat patients in selected geographic areas would be mandated to participate. The AMA also is concerned that physicians treating as few as 20 patients with heart failure or low back pain annually would be required to participate and have their payments reduced or increased based on the ambulatory specialty model requirements.
Set a performance standard in advance, instead of using a “tournament approach.” Without a change, a physician’s payment adjustment will depend on whether their performance exceeds the majority of other ambulatory specialty model participants each year.
Well-designed alternative payment models to improve care delivery for health conditions managed by specialists are an important part of the AMA’s Medicare payment-reform strategy. Before Medicare’s ambulatory specialty model is implemented in 2027, the AMA urges that it be modified.
