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CMS Proposes 2026 Updates for Physicians, New Ambulatory Model

What the Medicare Physician Fee Schedule proposals mean for surgery centers

BY ALEX TAIRA | JULY 23, 2025

The Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (CMMI) have proposed a new Ambulatory Specialty Model (ASM) in CMS’ proposed 2026 Medicare Physician Fee Schedule (MPFS). The ASM, an initiative designed by CMMI, is aimed at patients undergoing treatment for heart failure or low back pain in outpatient settings.

CMS has proposed the ASM as a mandatory model beginning on January 1, 2027, with a test period of five performance years. The model is built on the foundation of the current Merit-based Incentive Payment System (MIPS), which is the MPFS value-based payment system that originated in 2017. MIPS uses four “performance categories” against which physicians are scored and their payments adjusted depending on good or bad performance relative to national benchmarks. The ASM will use the exact same performance categories as MIPS: quality, cost, improvement activities and promoting interoperability (PI). Notably, ASC-based clinicians—those who furnish 75 percent or more of their Medicare services in an ASC—are exempt from the PI performance category in traditional MIPS due to lack of availability of electronic health record (EHR) technology. However, CMS has explicitly stated that no such exemption will apply in the ASM.

Clinicians will be automatically selected for participation in the ASM if they reach a certain volume threshold, are located in a model geographic region and are billing a plurality of Medicare Part B claims with a designated ASM specialty. The specialties listed for participation include many that are performed in surgery centers, such as cardiology, anesthesiology, orthopedic surgery, pain management and more. Depending on scoring in the aforementioned performance categories, ASM participants could have their payments adjusted by up to 9 percent.

In the MPFS, CMS also has proposed to use two separate conversion factors (CF) to update payments for physicians beginning in 2026. One CF will apply to physicians who are considered qualifying participants in an alternative payment model (APM) and another CF will apply to all other clinicians. Most physicians who operate in surgery centers will likely have their payments updated by the non-APM participant CF, which is proposed at $33.4209. This represents a roughly 3.3 percent increase in the average reimbursement rate over the 2025 CF, mostly buoyed by a one-year, 2.5 percent increase passed as part of the One Big Beautiful Bill Act on July 4, 2025. Notably, the MPFS does not include an annual inflationary update and physicians have had to seek congressional intervention each of the past five years to stave off cuts. Congress was unable to come to an agreement on physician relief for 2025, leading to a 2.8 percent CF reduction this year relative to 2024.

CMS released the 2026 MPFS proposed rule on July 14. Although policies in the MPFS rarely directly affect surgery centers, they do have a significant impact on the reimbursement and practice patterns of clinicians who work in ASCs.

ASCA plans to comment on the ASM and other MPFS policies relevant to ASC-based clinicians before the September 12 deadline.

Write Alex Taira at ataira@ascassociation.org with any questions.