Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program

= ASM risk level x ASM redistribution percentage

x [Sigma3] ASM participant Medicare Part

B payments

The proposed approach to calculating an ASM incentive pool aligns with the current approach that other CMS VBP programs use when calculating the total amount that can be distributed to program participants through payment adjustments. Both the SNF VBP Program (82 FR 36619 through 36621) and the Hospital VBP Program (88 FR 59063 through 59108) employ a similar calculation to determine the total amount that can be redistributed through payment adjustments for their respective program participants. We believe the proposed approach would determine an ASM incentive pool amount that would be appropriate to distribute through scaled payment adjustments, and that the proposed approach would align with the desired level of two-sided risk that we believe would incentivize behavioral change and increased accountability.

We solicited comments on our proposed approach to calculate the ASM incentive pool for each ASM cohort.

We received public comments on the calculation of the ASM incentive pool. The following is a summary of the comments we received and our responses.

Comment: A few commenters supported pooling results from both ASM cohorts together in the proposed calculation formula for calculating the ASM incentive pool to prevent statistical variation due to low volumes and incentivize clinicians to work collaboratively.

Response: We appreciate the commenters for their suggestion to combine the ASM incentive pools for all ASM cohorts for the purpose of calculating ASM payment adjustment factors and multipliers. Based on our performance comparison approach of comparing the final scores of each ASM cohort separately to ensure fair comparisons, we do not believe it would be appropriate to combine each cohort's ASM incentive pool. We do not believe that there would be statistical variation due to low volumes given the individual scoring policies of each ASM performance category discussed in section III.C.2.d. of this final rule. Further, we do not agree that pooling ASM incentives for two clinically different groups of specialists would create an incentive for collaboration nor does ASM require collaboration across ASM participants in different ASM cohorts given the different clinical nature of managing ASM's targeted chronic conditions.

After consideration of public comments, we are finalizing our proposed calculation of ASM incentive pools as proposed at Sec. 512.750(c)(1)(iii). We did not receive any comments on our proposal that ASM participants who do not receive a final score would receive an ASM payment adjustment factor of zero and an ASM payment multiplier of 1 (that is, no payment adjustment); therefore, we are finalizing this proposed policy as proposed at Sec. 512.750(d). We refer readers to comments and our responses, as well as our final provision, on the ASM redistribution percentage proposed at Sec. 512.750(c)(1)(iii) in section III.C.2.f.(4).(b).(ii) of this final rule

(i) ASM Risk Level

As discussed, in the CY 2026 PFS proposed rule (90 FR 32609), we proposed to use the annual ASM risk level to calculate the ASM incentive pool for each ASM cohort. We proposed at Sec. 512.750(c)(1)(i) establishing the ASM risk level that is the magnitude of the maximum downside or upside risk to which an ASM participant would be subject to during an ASM payment year. We proposed at Sec. 512.750(c)(1)(i)(A) through (E) the risk levels for each ASM payment year as summarized in Table B-D9. [GRAPHIC] [TIFF OMITTED] TR05NO25.114

Our proposed ASM risk level of 9 percent for the 2029 ASM payment year (based on 2027 ASM performance year performance) and the 2030 ASM payment year (based on 2028 ASM performance year performance) aligned with the CY 2024 applicable percent of 9 percent under MIPS, which is the maximum and minimum range of potential MIPS payment adjustment factor for a given MIPS payment year defined at Sec. 414.1405(c) (88 FR 79378). Depending on the range of MIPS eligible clinicians' scores within a given MIPS performance period, a scaling factor (ranging from zero to 3) is applied to positive adjustments to retain budget neutrality as defined at Sec. 414.1405(b)(3) (88 FR 79378), meaning that the maximum positive payment adjustment factor may be below or above the applicable percent. A MIPS eligible clinician with a score of zero receives a payment adjustment factor equal to the negative of the applicable percent as defined at defined at Sec. 414.1405, meaning that all MIPS eligible clinicians are potentially subject to a maximum downside risk equivalent to the applicable percent. Based on our ASM performance category and scoring approach that leverages the MVP measurement framework (see section III.C.2.d of this final rule), we believe that starting and keeping the ASM risk level at 9 percent for the first two ASM payment years would be appropriate given its continued use within MIPS. We believe that gradually increasing the ASM risk level over time would provide an incentive for increased accountability that would be central to increasing accountability for longitudinal care management and improving the quality of care for beneficiaries with heart failure and low back pain.

We considered annual ASM risk levels higher and lower than what we proposed for each ASM performance year. Higher ASM risk levels would mean that ASM participants with lower final scores would be subject to potentially higher negative payment adjustments, whereas lower ASM risk levels would mean that ASM participants with lower final scores would be subject to potentially lower negative payment adjustments. Calibrating the right level of risk is critical to ensure that ASM participants will receive meaningful incentives to improve performance. We believe that starting with a level of downside risk already familiar to many ASM participants who previously participated in MIPS would be appropriate given that the application of ASM payment adjustment factors would be applied to Medicare Part B claims for covered professional services (as discussed earlier in this section of this final rule) in a similar fashion as MIPS as defined at Sec. 414.1405(e).

While we proposed at Sec. 512.745(a)(4) a small practice scoring adjustment in an ASM participant's final score, we also considered whether to reduce the ASM risk level for ASM participants in small practices. Given the systematic differences in historical MIPS performance of likely ASM participants in small practices that we observed and discuss in section III.C.2.e.(4) of this final rule, reducing the ASM risk level for ASM participants in small practices would be one way to prevent them from being unfairly penalized in their payment adjustments. We were, however, concerned that decreasing the ASM risk level for ASM participants in small practices to be lower than the equivalent applicable percent in MIPS as defined at Sec. 414.1405(c) would be a disincentive for ASM participants in small practices to submit the required data under ASM and would potentially limit the magnitude of any net positive payment adjustments. We, therefore, believe that the proposed small practice scoring adjustment is a simpler and more transparent adjustment for ASM participants in small practices.

We also considered a similar adjustment in ASM risk level for ASM participants in a rural location as an alternative to the rural practice scoring adjustment that we considered in section III.C.2.e.(4) of this final rule. For the same reasons discussed in section III.C.2.e.(4) of this final rule, we decided not to propose a scoring adjustment for ASM participants in rural areas.

We sought comments on our proposed ASM risk level for each ASM payment year as part of our payment approach. We also sought comment on the alternative risk levels we considered for each ASM payment year. Finally, we sought comment on the alternatives we considered related to a lower ASM risk level for ASM participants in small practices and in rural areas.

We received public comments on the proposed ASM risk level. The following is a summary of the comments we received and our responses.

Comment: Many commenters expressed support for an alternative approach that would implement a glidepath, allowing ASM participants to have little to no risk in the first ASM performance year(s) or allow ASM participants to select their level of risk in the early ASM performance years of the model, as this approach would allow ASM participants time to understand their own comparison to peers in the ASM cohorts, build infrastructure, and make improvements, while also reducing financial burden, especially for small practices. A few commenters recommended that CMS mitigate financial risk and implement a

“hold harmless” approach with no payment incentives for ASM participants during the first ASM performance year, allowing clinicians a pilot year to validate attribution and scoring methods prior to receiving ASM payment adjustments.

Response: We appreciate commenters for the suggestion on the alternative ASM risk levels that we considered, including suggestions on a glidepath to more substantial levels of risk while ASM participants are becoming accustomed to the model's requirements. We believe that we plan to provide ample notification to selected ASM participants ahead of the model start date so that they can learn more about the model requirements and make the necessary adjustments within their practices to meet these requirements. We refer readers to section III.C.2.c.(5) of this final rule for further discussion on the finalized participation selection notification-related policies. We also intend to release resources for ASM participants on model requirements ahead of the model start. We do not believe that a “hold harmless” approach for the first ASM performance year and corresponding ASM payment year would achieve ASM's objectives as it would undermine the savings that we aim to achieve under ASM. Further, as many ASM participants would be accustomed to the 9 percent risk level under MIPS, we believe that starting the ASM risk level at 9 percent and maintaining it at 9 percent for the second ASM payment year is not introducing an undue level of risk. We believe that the gradual increase of the ASM risk level beginning in the third ASM payment year would incentivize continued performance improvement over the model test period. Regarding the suggestion for reducing the ASM risk level for small practices, we believe that the small practice scoring adjustment, as discussed in section III.C.2.e.(4) of this final rule, will support ASM participants in small practices to have a higher final score and increase the likelihood of receiving a positive ASM payment adjustment factor.

Comment: A commenter recommended that CMS implement a 1 to 2-year upside-only participation option in ASM for small and independent practices, noting that this would allow them to build infrastructure and reporting capacity before being held financially liable for potential negative ASM payment adjustments.

Response: We appreciate the recommendation on implementing a 1 to 2-year upside-only option for clinicians in small and independent practices. While we acknowledge that clinicians in small and solo practices face unique challenges in building the infrastructure and capacity to meet reporting requirements, we believe that the adequate notice of mandatory participation would allow ASM participants time to prepare. Further, as many of the measures and requirements are similar to MIPS, we believe that many ASM participants in these types of practices would have capacities to meet ASM's requirements. Finally, the small practice and solo practitioner scoring adjustments would provide another safeguard to increase the likelihood of ASM participants in small or solo practices of achieving a positive payment adjustment.

Comment: A few commenters expressed concerns about the proposed risk levels in the model, which have not been previously tested, noting that payment reduction trajectories are unsustainable and could accelerate practice closures, worsen rural specialist shortages, harm small and integrative practices critical for prevention and functional improvement, destabilize clinicians with limited resources, encourage gaming, and ultimately reduce patient access.

Response: We appreciate commenters for their feedback on the proposed ASM risk levels and their concerns related to the potential impact of these adjustments. As designed, we do not believe that the downside risk level is unsustainable; we proposed to use the same risk level from MIPS for the first two ASM performance years and proposed to gradually increase that risk level by 1 percentage point each year beginning in the third ASM performance year. We believe this gives ASM participants adequate time to get accustomed to the model by the time the two-sided risk levels begin to increase while not exposing ASM participants to levels of risk that they would likely otherwise be subject to under MIPS. As we discussed in section III.C.2.e of this final rule, we have designed the complex patient and small practice scoring adjustments so that we would help offset the challenges commonly faced by these practice types. We believe that this would safeguard against undeserved penalties and from the potential other unintended consequences cited by the commenters. Finally, as part of ASM's evaluation and monitoring efforts, we would monitor for potential unintended consequences of ASM's payment approach. Any resulting adjustments to the payment approach as a result of these monitoring efforts would be done through future notice-and-comment rulemaking.

Comment: Many commenters expressed concern about the current proposed ASM risk level(s) and recommended the reduction of risk levels, for example, aligning with the 2 percent maximum penalty for hospitals in Hospital Value Based Purchasing Program or the 9 percent maximum penalty for MIPS. A commenter shared their belief that the proposal exceeds the budget neutral requirements set forth by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Another commenter recommended a stable downside risk of nine percent throughout the ASM model test period. The commenters also noted concern about burden and financial stability, especially for small and resource- constrained practices, resulting from an excessively ASM high risk level at a time when increases to clinician reimbursement already lag behind inflation.

Response: We appreciate commenters for sharing their concerns on the proposed magnitude of possible negative payment adjustments under ASM. We disagree with the suggestion of aligning with the 2 percent maximum penalty for hospitals in the Hospital Value Based Purchasing Program as the basis for that maximum penalty is based on Part A FFS spending, whereas ASM's payment methodology adjusts Part B FFS spending. As described in the CY 2026 PFS proposed rule (90 FR 32609), we believe that first aligning with the MIPS 9 percent maximum penalty would be appropriate because MIPS payment adjustments are on Part B FFS payments and many ASM participants would already be familiar with this level of risk if they participate in MIPS. We appreciate the commenters for their suggestion of maintaining an ASM risk level of 9 percent throughout the entirety of ASM's test period. While we agree that using the same ASM risk level for all ASM payment years would create consistency, we believe that gradually increasing the ASM risk level beginning in the third ASM payment year would provide a gradual but increasing risk level to incentivize improved performance over time. We appreciate commenters for raising their specific concerns related to financial instability that a high ASM risk level could introduce to ASM participants in small or resource-constrained practices. As we discuss in sections III.C.2.e.(3) and III.C.2.e.(4) of this final rule, we believe that the complex patient and small practice scoring adjustments will ensure that ASM participants in these contexts will be less likely to be unfairly

penalized. We will also continue to monitor the impacts of these scoring adjustments on the payment adjustments for eligible ASM participants throughout the model test period. Finally, as an Innovation Center model under section 1115A(b) of the Act, ASM is not subject to the same budget neutrality requirements set forth in MACRA.

Comment: A commenter recommended specialty-specific risk adjustments for ASM participants.

Response: We appreciate the commenters for their feedback. We do not agree that specialty-specific risk adjustment within ASM's payment approach would be appropriate as it would undermine ASM's approach to conduct more like-to-like comparisons of specialist performance. First, we believe that our ASM participant eligibility criteria identify specialists who we can appropriately evaluate performance related to ASM's targeted chronic conditions. Second, we note that select quality measures and the EBCMs are risk-adjusted for several factors directly related to the target conditions. Collectively, we believe that these measure-level risk adjustments, the complex patient and small practice scoring adjustments, as well as our ASM participant eligibility criteria would ensure that we are making appropriate like-to-like comparisons while accounting for practice-level factors that may lead to systematic differences in ASM participant performance.

After consideration of public comments, we are finalizing the proposed ASM risk levels as proposed at Sec. 512.750(c)(1)(i)(A) through (E). (ii) ASM Redistribution Percentage

As discussed in the CY 2026 PFS proposed rule (90 FR 32610), we proposed to set an ASM redistribution percentage that is the percentage of the Medicare Part B covered professional service payments to ASM participants during an ASM performance year multiplied by the applicable ASM risk level that would be distributed in the form of scaled payment adjustments to ASM participants during an ASM payment year. As discussed earlier in this final rule, we proposed to define the total amount available for distribution as the ASM incentive pool. We proposed at Sec. 512.750(c)(1)(iii) an ASM redistribution percentage of 85 percent beginning with the 2029 ASM payment year. Under this proposed ASM redistribution percentage, 85 percent of Medicare Part B covered professional service payments to ASM participants during an ASM performance year multiplied by the applicable ASM risk level (that is, the value of the ASM incentive pool) would be distributed to ASM participants in the form of scaled payment adjustments. The other 15 percent of the Medicare Part B payments multiplied by the ASM risk level would be retained in the Medicare Trust Fund. To illustrate the scale of the net payment adjustments under these proposed policies, the proposed ASM redistribution percentage of 85 percent and an ASM risk level of 9 percent would lead to an estimated net 7.65 percent (that is, 85 percent multiplied by 9 percent) of the Medicare Part B covered professional service payments distributed in the form of payment adjustments to ASM participants and an estimated 1.35 percent (that is, 15 percent multiplied by 9 percent) retained by Medicare We refer readers to the regulatory impact analysis in section VII of this final rule for further discussion on the estimated impacts of these payment adjustments.

As with the exchange function discussed later in this section of this final rule, we view the important factors when specifying a ASM redistribution percentage to be-- (1) the number of ASM participants that receive a positive payment adjustment; (2) the marginal incentives for all ASM participants to make broad-based care quality improvements and reduce low-value care, and (3) the ability for ASM to demonstrate savings over the ASM test period. We intend for the proposed ASM redistribution percentage to appropriately balance these factors.

We analyzed the distribution of ASM payment adjustment factors using simulated final scores data, focusing on the full range of available ASM payment adjustment factors using a sample of likely ASM participants. We found that an 85 percent ASM redistribution percentage would achieve an appropriate distribution of the number of ASM participants that would receive positive and negative payment adjustments under the different exchange functions that we considered, as discussed later in this section of this final rule. We also found that an 85 percent ASM redistribution percentage under the proposed exchange function would achieve the desired magnitude of positive and negative ASM payment adjustment factors under the ASM risk level proposed for the 2027 ASM performance year.

We considered ASM redistribution percentages as high as 100 percent and as low as 60 percent. An ASM redistribution percentage of 100 percent would mean that the entirety of Medicare Part B covered professional service payments multiplied by the applicable ASM risk level would be distributed through ASM payment adjustment factors to ASM participants. We believe that ensuring a particular level of net savings through an ASM redistribution percentage less than 100 percent would help guarantee a particular level of Medicare Part B savings that would contribute to the net savings in total cost of care from provider behavioral effects that we hypothesize would occur as part of ASM as described in section III.C.1.(b) of this final rule.

We refer readers to the regulatory impact analysis in section VII. of this final rule for further discussion on the scale of ASM and its estimated financial impacts. We considered an ASM redistribution percentage as low as 60 percent because it would increase the potential for higher net savings on Medicare Part B payments and mirrors a similar rate used by SNF VBP Program (82 FR 36619 through 36621). In analyses, however, we found decreasing the ASM redistribution percentages below what we proposed (for example, to 60 percent or 75 percent) would result in an unfavorable distribution of negative and positive ASM payment adjustment factors that would not create the desired set of payment incentives to achieve ASM's goals.

We solicited comments on our proposed ASM redistribution percentage and alternatives considered.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Many commenters recommended eliminating the proposed 85 percent ASM redistribution percentage to calculate payment adjustments for ASM participants. Many commenters noted that the 15 percent withhold from the budget pool leads to Medicare savings through a forced reduction in Medicare Part B payments for all clinicians, even high performers. A commenter shared their belief that the ASM redistribution percentage results in the program being solely punitive. Commenters noted that neither HVBP nor MIPS relies on a redistribution percentage. Several commenters recommended ASM be budget neutral. A few commenters did not support the proposed redistribution percentage and noted a high standard of clarity and transparency is needed to ensure clinician understanding and trust. The commenters shared their belief that the ASM redistribution percentage may be perceived as an arbitrary reduction in payment and suggested that CMS specify how the funds contribute to program solvency, or are reinvested into

beneficiary care in order to gain participant buy-in.

Response: We appreciate commenters for their feedback. We would like to clarify that, as proposed, ASM's payment approach would not lead to a forced reduction in Medicare Part B payments for all ASM participants. The proposed calculation of ASM payment adjustments relies on the ASM incentive pools, which are virtual incentive pools based on ASM participant's historic Part B payments for covered professional services, meaning that there is no prospective withhold of ASM participants' payments, such is done under some other CMS VBP programs. We would calculate ASM payment adjustments so that the expected net result of ASM's payment adjustments when applied during an ASM payment year (that is, the grand sum of Medicare Part B payments for covered professional services to ASM participants multiplied by their respective ASM payment multipliers) would be less than the amount calculated for each ASM cohort's virtual incentive pool. This payment approach means that we expect ASM to achieve net savings to Medicare through the Part B adjustments, as well as through the hypothesized behavioral effects described in the evaluation section, section III.C.2.l, of this final rule. As there would be no respective withhold, ASM participants would continue to receive payment adjustments that range from the negative of the applicable ASM risk level and potentially up to the applicable ASM risk level on the positive end. We also note that MIPS and HVBP are required to be budget-neutral under each of the program's authorizing statutes. As an Innovation Center model under section 1115A(b) of the Act, ASM is not subject to the same budget neutrality requirement in its payment approach, but rather, must ultimately demonstrate statistically significant model savings. Ultimately, we believe that not redistributing the entirety of each cohort's incentive pool allows ASM to achieve the desired payment incentives while ensuring that the model meets its statutory requirement to generate savings.

Comment: A commenter noted that the proposed ASM redistribution percentage could be justified for a voluntary model, where participants elect to take risk with the hopes to perform highly and receive a positive payment adjustment, but not in a mandatory model.

Response: We appreciate the commenter for their feedback but disagree that the ASM redistribution percentage is only justifiable under a voluntary model by virtue of a voluntary model participant's choice to take on downside risk. Other mandatory Innovation Center models introduced downside risk from the beginning of the model, such as the Transforming Episode Accountability Model (TEAM). Under TEAM's payment methodology, we withhold a portion of the benchmark price for TEAM episodes based on a discount factor; we later reconcile actual spending against the episode's target price after the end of a TEAM episode to determine the net payment reconciliation amount owed to or owed by TEAM participants as described at Sec. 512.550.

Comment: A few commenters did not support the proposed ASM redistribution percentage and instead recommended a five percent redistribution percentage. A few commenters shared their belief that a redistribution percentage of no more than 5 percent is comparable to other value based and bundled payment programs and improves financial incentives for ASM participants. A commenter recommended that CMS could supplement savings to the Trust Fund through improved comparison of ASM EBCM savings in ASM with MIPS.

Response: We appreciate the commenters for their suggestion on an alternative ASM redistribution percentage. Based on how we define the ASM redistribution percentage, we interpret their suggestion to mean 95 percent and not 5 percent. As discussed earlier in this section of this final rule, we believe that the use of a redistribution percentage less than 100 percent allows ASM to achieve its desired payment incentives to drive care improvements while achieving net savings to Medicare. Further, as we discussed in the CY 2026 proposed rule (90 FR 32610), in analyses, we found that an 85 percent ASM redistribution percentage would achieve an appropriate distribution of the number of ASM participants who would receive positive and negative payment adjustments under the different exchange functions that we considered, as discussed later in this section of this final rule. We also found that an 85 percent ASM redistribution percentage under the different considered exchange functions would achieve the desired magnitude of positive and negative ASM payment adjustment factors under the ASM risk level proposed for the 2027 ASM performance year. We interpret the commenter's suggestion to compare ASM and MIPS EBCM performance to identify savings for the Medicare Trust Fund to be related to ASM's evaluation approach rather than a modification to ASM's payment methodology. From an evaluation perspective, improvements in EBCM scores over time could identify cost savings. Within our evaluation, we believe that it would be more appropriate to compare EBCM performance over time among ASM participants and against a pool of clinicians with similar characteristics as ASM participants, which would likely include clinicians participating in MIPS.

Comment: A few commenters suggested alternative approaches to generate savings in ASM, through improvements in efficiency, higher quality care and reduction in avoidable utilization without the need for withholding incentive funds.

Response: We appreciate the commenters for their suggestions on alternative approaches to generate savings under ASM. We believe that the collective set of incentives introduced by ASM will drive efficiency improvements, improved quality of care, and reductions in some avoidable or unnecessary services that would collectively drive savings. We refer readers to section III.C.2.l of this final rule for further discussion on how we plan to evaluate ASM against these hypothesized savings.

After consideration of public comments, we are finalizing the proposed ASM redistribution percentage at 85 percent as proposed at Sec. 512.750(c)(1)(iii). (c) Exchange Function

An exchange function translates a participant's final score into a payment adjustment. The type of exchange function used can influence: (1) how many participants receive positive, neutral, or negative payment adjustments; and (2) the size, or magnitude, of the payment adjustment percentage that corresponds to a given performance score. The choice of an exchange function ultimately contributes to creating an optimal set of incentives by setting the distribution and size of payment adjustments.

We proposed at Sec. 512.750(c)(1)(ii) to use a logistic exchange function to translate final scores into ASM payment adjustment factors that would distribute each ASM incentive pool to their respective ASM participants through ASM payment adjustment factors that result in net negative, neutral, or positive payment adjustments.

In our view, important factors when adopting an exchange function include: (1) the percentage of ASM participants that would receive positive payment adjustments compared to those that

would receive negative payment adjustments and (2) the magnitude of the maximum positive and negative net payment adjustment. We believe that ASM would be most effective at encouraging ASM participants to improve the quality of care that they provide to Medicare beneficiaries if ASM participants can earn positive adjustments through high performance across ASM's performance categories but also face some level of downside risk through possible negative payment adjustments. We also believe that the magnitude of negative and positive adjustments must create a strong incentive for improving care related to ASM's targeted chronic conditions. The choice of an exchange function, and the specific parameters of the chosen exchange function, can create different distributions of ASM payment adjustment factors, ASM payment multipliers, and net payment adjustments based on the final scores of ASM participants in each ASM cohort.

In the Quality Payment Program, CMS uses a linear exchange function to translate MIPS eligible clinicians' final scores into MIPS payment adjustment factors relative to an annually determined performance threshold so that the program is budget neutral (89 FR 62199). Under the Hospital VBP Program, CMS uses a linear exchange function to translate a hospital's Total Performance Score into the percentage multiplier to be applied to each Medicare discharge claim submitted by the hospital during the applicable FY (76 FR 26531 through 26534). We refer readers to the Hospital VBP Program Final Rule (76 FR 26531 through 26534) for detailed discussion of the Hospital VBP Program's exchange function, as well as responses to public comments on this issue. Under the SNF VBP Program, CMS uses a logistic function to translate a SNF's performance score into an incentive payment multiplier (82 FR 36616 through 36619). The SNF VBP Program also considered a cube exchange function during its notice-and-comment rulemaking related to the SNF VBP Program exchange function (82 FR 36616 through 36619). We refer readers to the SNF VBP Program final rule (82 FR 36616 through 36619) for detailed discussion on the SNF VBP Program's exchange function and responses to public comments on this issue.

Using the exchange functions that other Medicare VBP programs use or considered using while determining their payment methodology, we considered three exchange functions for use in ASM's payment methodology: (1) linear, (2) logistic, and (3) cube. The equations and graphs of the different exchange functions displayed in the remainder of this section of this final rule are illustrative. We note that the actual exchange functions' forms and slopes would vary depending on the distributions of final scores and wish to emphasize that we present these representations solely for the reader's clarity as we discuss our exchange function policy.

The linear function is a simple, steadily increasing function ranging from zero to one hundred (Figure B-D1). A linear exchange function would provide ASM participants the same marginal incentive to continually improve performance of their final score. The linear exchange function we considered had the following formula, where is an ASM participant's final score: [GRAPHIC] [TIFF OMITTED] TR05NO25.115

The logistic function is an S-shaped curve ranging between zero and one hundred with an inflection point at a specified midpoint (Figure B- D2). The S-shaped curve would mean that participants with scores within the bottom end of the distribution would receive similar payment adjustments and participants at the top end of the distribution would receive similar payment adjustments to one another. There would be more variation in the resulting payment adjustments for those participants with final scores in the middle of the distribution. The logistic exchange function we considered had the following formula, where is an ASM

participant's final score, represents the function's midpoint: [GRAPHIC] [TIFF OMITTED] TR05NO25.116

For the logistic exchange function, we considered values of the function's midpoint (that is, in the earlier formula) set at: (1) 50, which represents the midpoint between the zero to 100 point range that an ASM participant could achieve in their final score; (2) the annual median final score in the ASM performance year for each ASM cohort, and (3) the annual mean final score in the ASM performance year for each ASM cohort. The functional form of the logistic function when centered at 50 points would mean that those ASM participants with final scores within the top 25 percent and the bottom 25 percent of final scores would receive relatively similar ASM payment adjustment factors. However, setting the midpoint at the median or mean final score could help to achieve a more balanced distribution between ASM payment adjustment factors that result in net positive or net negative payment adjustments.

The cube function exponentially increases between zero and one hundred (Figure B-D3). The cube functions means that the incentive to improve performance increases more dramatically at the top end of the score distribution, meaning that a one-point difference in final score at the top end would result in a bigger difference in payment adjustment than the same one-point difference at the lower end of the final score distribution. The cube exchange function we considered had the following formula, where is an ASM participant's final score:

[GRAPHIC] [TIFF OMITTED] TR05NO25.117

We analyzed these three exchange functions using simulated final score data. For the logistic exchange function, we used a midpoint of the median final score within each ASM cohort (see discussion on the logistic function's midpoint earlier in this section of this final rule). We simulated final scores by simulating each of the four ASM performance category scores using informed distributions for measures and the proposed scoring policies for each ASM performance category (see the regulatory impact analysis in section VII of this final rule for further information on our simulation methods). Our modeling ensures that the estimated ASM payment adjustment factors and ASM payment multipliers for each ASM cohort resulted in net payment adjustments that equaled the total ASM incentive pool for the applicable ASM cohort. We evaluated the distribution of ASM payment adjustments factors that resulted from each function (that is, the number and proportion of each ASM cohort that received net negative and positive payment adjustments). We also evaluated descriptive statistics (for example, mean, median, minimum, maximum) of the resulting ASM payment adjustment factors and ASM payment multipliers from each function. We also considered the distribution of ASM payment adjustment factors and ASM payment multipliers by specific ASM participant characteristics, such as small practices.

In our analysis, we found that linear and logistic exchange functions produced relatively similar distributions of ASM participants who would receive net positive payment adjustments, whereas more ASM participants would receive net positive payment adjustments under the cube function. Comparatively, the steadily increasing linear exchange function would mean that there would be a more even distribution of ASM payment adjustment factors across the distribution of final scores. Under the cube function, fewer ASM participants would receive net positive payment adjustments.

We found that setting the logistic function midpoint at the median or mean final score for each ASM cohort produced a maximum ASM payment adjustment factor that exceeded the maximum ASM payment adjustment factor under the linear exchange function (we refer readers to the discussion of the logistic function's midpoint earlier in this section of this final rule). That is, adjusting the logistic function midpoint to a value around the mean or median final score of each ASM cohort would increase the maximum net positive payment adjustment while producing a more even distribution between net positive and negative payment adjustments. The cube function produced the highest maximum ASM payment adjustment factor. All the exchange functions had the same maximum negative ASM payment adjustment factor because the ASM risk level would determine the maximum net negative payment adjustment.

When we compared the median ASM payment adjustment factor produced under each exchange function, we found that the logistic exchange function would produce the highest median net payment adjustment followed by the linear exchange function and then the cube exchange function. The cube exchange function would allow those ASM participants that achieve the highest final scores to achieve high ASM payment adjustment factors but would mean that ASM participants with final scores near the median final score would receive potentially lower ASM payment adjustment factors.

Based on the results of this analysis, we believe that the logistic exchange function would be best suited to achieving the appropriate distribution of ASM payment adjustment factors at the appropriate level of magnitude.

We recognize that using the same exchange function from other CMS programs would help interested parties that use these programs' payment information across care settings better understand ASM's payment methodology. Both the Hospital VBP program and the Quality Payment Program use some form of a linear exchange function in their payment methodologies. Three key program

aspects that facilitate the use of a linear exchange function are a program's number of measures, measure weights, and correlation across program measures. These three aspects mean that there is less chance for a single required measure to skew scores into a non-normal distribution, meaning that it would be appropriate to use a linear exchange function for these programs (82 FR 36618). When first established, the SNF VBP Program relied on a single performance measure to determine performance scores. This approach meant that the distribution of performance scores could have been easily skewed, which could have resulted in an undesired distribution of incentive payments (82 FR 36618). The SNF VBP Program has since added up to 9 measures by which it can assess performance and has retained use of a logistic exchange function (88 FR 53276 through 53304). In our analysis, we found that simulated final scores among likely ASM participants could be skewed due to the potential directional correlation between measures across ASM's performance categories; for example, an ASM participant who performs well on one required quality measure may perform well across other quality measures. The potential for a skewed final score distribution and the use of a linear exchange function could result in an undesired distribution of ASM payment adjustment factors. For these reasons, we believe that the logistic exchange function would be more appropriate for the purposes of ASM's payment methodology.

We solicited comments on our proposal to use a logistic exchange function with midpoint set at the median final score for each ASM cohort to translate final scores into ASM payment adjustment factors. We also sought comments on the alternative exchange functions and specifications of each exchange function we considered.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A commenter supported the proposed methodology of using the logistic exchange function to calculate payment adjustments for ASM participants as it would incentivize ASM participants for higher performance.

Response: We appreciate the commenter for their support of the proposed logistic exchange function.

Comment: A few commenters did not support the proposed use of the logistic exchange function to calculate payment adjustments for ASM participants, noting unfamiliarity with the method and concerns about its impact. Commenters expressed concern that the logistic exchange function may inappropriately amplify ASM payment adjustments, potentially resulting in disproportionate payments relative to the performance of ASM participants. For example, an ASM participant with performance scores slightly below the median may receive negative payment adjustments that are almost as large as ASM participants with much lower scores. A commenter noted that ASM payment adjustments are made relevant to other ASM participants, rather than compared to an objective benchmark, and that differences in ASM payment adjustments would not be directly proportional to differences in ASM final performance scores.

Response: We appreciate the commenters for their feedback. We disagree that unfamiliarity with the logistic exchange function is a reason not to use it as we will provide ASM participants with resources and support so they understand the final payment approach before the first ASM payment year. We also disagree that use of the logistic exchange function would inappropriately create payments adjustments such that participants just below the median final score would receive negative payment adjustments at the same magnitude of participants with much lower scores. In fact, the logistic exchange function works to spread out the distribution of payment adjustments for those participants with final scores near the median final score, allowing for more differentiation in performance. Simultaneously, there is less variation in payment adjustments at the ends of the distribution of final scores as demonstrated by the flattening of the function as it approaches a final score of zero or 100 (see Figure B-D3). For example, there would be less variation in ASM payment adjustment factors between an ASM participant with a final score of 90 compared to one with a final score of 98 using a logistic exchange function. This characteristic of the logistic exchange function means that ASM participants who achieve a certain level of high performance would receive relatively similar adjustments, as would ASM participants whose final scores are at the bottom of the final score distribution. As it can be difficult to differentiate between small differences in performance at the extremes of a distribution, we believe that this feature of the logistic exchange function is advantage as it keeps those adjustments at extremes relatively similar. We refer readers to our discussion of why the logistic exchange function would help us better differentiate performance given the correlation we expect to see across measures in the quality ASM performance category in the CY 2026 PFS proposed rule (90 FR 326140). The commenter is correct that ASM's payment approach determines ASM payment adjustment factors by comparing final scores of ASM participants within each ASM cohort rather than compared to an objective benchmark. We refer readers to our discussion of why we decided not to use a predetermined performance threshold in ASM's payment approach in our response to comments in section III.C.2.f.(2) of this final rule.

Comment: A commenter recommended the alternative to use the median determined by the exchange function from a previous ASM performance year for comparing the performance of ASM participants. The established and published median would allow ASM participants to determine the score at which they would avoid a negative ASM payment adjustment.

Response: We appreciate the commenters for their suggestion on using each ASM cohort's median final score from the previous ASM performance year in the logistic exchange function formula. Use of the median final score in the logistic exchange function does not determine the cutoff in final score that differentiates a positive ASM adjustment factor from a negative ASM payment adjustment factor. In other words, use of the median final score in the logistic exchange function does not force an even 50 percent distribution between ASM participants receiving positive and negative ASM payment adjustment factors. As we described in the CY 2026 PFS proposed rule, use of the median final score in the logistic exchange function would likely mean that more ASM participants would be likely to receive positive ASM adjustment factors compared to using a midpoint value of 50, which would represent the midpoint of possible final scores, or the mean final score (90 FR 32612). For these reasons, we do not believe that using a one-year lag of the median final score would provide additional benefit to ASM participants in calculating payment adjustments. We do intend to provide ASM participants with performance data of their ASM cohort around the time we release the ASM performance reports so that ASM participants would have this data to calibrate their performance during a given ASM performance year.

Comment: A few commenters supported the use of a linear exchange function to calculate payment adjustments for ASM participants, noting its familiarity for clinicians due to alignment with MIPS and the HVBP and the potential to reduce negative impacts to ASM participants.

Response: We appreciate the commenters for their feedback on the alternative linear exchange function that we considered. We understand that the use of a linear exchange function in MIPS would mean that many ASM participants may be familiar with it given that most ASM participants will have previously participated in MIPS. We do not agree that the use of a linear exchange function in HVBP would mean that more ASM participants would be familiar with a linear exchange function as we would not expect most ASM participants to be familiar with the HVBP payment methodology given that program focuses on hospitals and not individual clinicians or clinician groups. As we discussed in the CY 2026 PFS proposed rule (90 FR 32613), we found that the logistic exchange function has two benefits over the linear exchange function under the same ASM risk level and ASM redistribution percentage in our modeling. First, more ASM participants would be likely to receive positive ASM payment adjustments under the proposed logistic exchange function compared to a linear exchange function. Second, the median ASM payment adjustment factor would be higher under the logistic exchange function than under the linear exchange function. We believe that more ASM participants receiving potentially higher ASM payment adjustment factors would be advantageous to ASM participants while creating the desired incentives.

After consideration of public comments, we are finalizing use of the proposed logistic exchange function as proposed at Sec. 512.750(c)(1)(ii). (d) Notification of ASM Payment Adjustment Factors and ASM Payment Adjustment Multipliers to ASM Participants

As discussed in the CY 2026 PFS proposed rule (90 FR 32614), we proposed at Sec. 512.750(e) to notify ASM participants of their ASM payment adjustment factor and ASM payment multiplier through the ASM performance report provided for each ASM performance year. As discussed earlier, we proposed at Sec. 512.750(a) that the amount otherwise paid under Medicare Part B for covered professional services furnished by an ASM participant during an ASM payment year would be multiplied by the ASM payment multiplier determined based on an ASM participant's performance during an ASM performance year.

As discussed earlier in this section of this final rule, our proposed process currently draws from the processes and timelines by which the Quality Payment Program applies MIPS payment adjustments for MIPS eligible clinician as defined at Sec. 414.1405(e). Aligning the timeline and processes with the Quality Payment Program application of MIPS payment adjustments would ensure operational consistency and minimize confusion for ASM participants that have previously participated in MIPS.

Given the time separation between the ASM performance year and the ASM payment year, there may be situations when an ASM participant's TIN affiliation changes between the ASM performance year and the corresponding ASM payment year. Accordingly, we proposed at Sec. 512.750(f) that ASM payment adjustment factors and ASM payment multipliers would continue to apply to Medicare Part B covered professional services payments to ASM participants during an ASM payment year with adjustments made depending on how TIN affiliations change after an ASM performance year and the end of the corresponding ASM payment year. In Table B-D10, we provide several illustrative scenarios and how our proposed policies discussed in this section of this final rule would affect the application of ASM payment multipliers in each scenario.

During an ASM payment year, we proposed at Sec. 512.750(f)(1) that Medicare Part B professional service claims submitted by an NPI who is an ASM participant with a final score for an ASM performance year but under a TIN (1) that did not identify the NPI as an ASM participant for the applicable ASM performance year and (2) to which the NPI began assigning billing rights after the ASM performance year but before the end of the payment year would be adjusted using the ASM payment multiplier calculated for the ASM participant for the corresponding ASM performance year. For example, if an ASM participant identified by TIN- A/NPI bills Medicare under their original practice (TIN A) during an ASM performance year but begins billing Medicare Part B covered professional services claims under a new practice (TIN B) after the ASM performance year but before the end of the corresponding ASM payment year, then we would apply the ASM participant's ASM payment multiplier to Medicare Part B claims submitted by the NPI under the new practice (TIN -B/NPI). If the same ASM participant (TIN-A/NPI) from the above example also billed under TIN A during the same ASM payment year, we would adjust their Medicare Part B payments for covered professional services using the applicable ASM payment multiplier calculated for the ASM participant.

Our proposal means that we would not apply ASM payment multipliers to Medicare Part B claims submitted by TINs, other than the TIN identifying an ASM participant for an applicable ASM performance year and corresponding ASM payment year, to which the ASM participant assigned billing rights to before or during an ASM performance year. For example, if an ASM participant identified by TIN-A/NPI billed to TIN A and TIN B during the ASM performance year, then we would not apply the ASM payment multiplier to Medicare Part B claims submitted by the NPI under TIN-B during the corresponding ASM payment year. Our reasons for applying ASM payment multipliers to Medicare Part B claims to TIN/NPIs combinations created after the end of the ASM performance year and before the end of the corresponding ASM payment year would be to prevent application of multiple payment adjustments on Medicare Part B claims, such as MIPS payment adjustments, during an ASM payment year. Building on the earlier example, in a given ASM performance year, an ASM participant (TIN-A/NPI) could be a MIPS eligible clinician under a different TIN/NPI combination (TIN-B/NPI) and receive a MIPS payment adjustment factor that would apply in the MIPS payment year that aligns with the corresponding ASM payment year. We would not want to interfere with the application of a MIPS payment adjustment factor to Medicare Part B claims billed under the TIN that identified the same NPI as a MIPS eligible clinician.

If we identify an NPI as ASM participants under multiple TINs and that NPI begins billing Medicare Part B claims under a new TIN (that is, neither of the original TINs) after the ASM performance year but before the end of the corresponding ASM payment year, then we proposed at Sec. 512.750(f)(2) to adjust Medicare Part B covered professional service payments submitted by the NPI under the new TIN using the highest of all ASM payment multipliers received for all TIN and NPI combinations that identified the NPI as multiple ASM participants for the corresponding ASM performance year. While we believe that there would be few instances where a single NPI would be identified as multiple ASM participants, we believe this policy

would appropriately track accountability to the NPI under a new TIN while reducing complexity by only applying on ASM payment adjustment multiplier. [GRAPHIC] [TIFF OMITTED] TR05NO25.118

Our proposals closely linked the ASM participants' performance during an ASM performance year to the ASM payment multiplier. These policies would also ensure that ASM participants who qualify for net positive payment adjustments keep them, even if they change TINs by the start of the ASM performance year. For those who have a net negative payment adjustment, this proposal would also ensure ASM participants would remain accountable for their performance. As discussed earlier in this section of this final rule, our proposals would also prevent interference with the application of MIPS payment adjustment factors if the NPI identifying the ASM participant was a MIPS eligible clinician under a different TIN/NPI combination during the same ASM performance year/MIPS performance period.

We based our proposed approach on sub-regulatory guidance issued by the Quality Payment Program on how MIPS payment adjustment factors follow MIPS eligible clinicians if they change their TIN affiliation after a MIPS performance period (81 FR 77330, 85 FR 84917 through 84919, and 86 FR 65536).\294\ Like MIPS, our proposal for ASM tracks accountability to the ASM participant regardless of their specific TIN affiliation at the time we would apply ASM payment multipliers to an ASM participant's Medicare Part B covered professional services payments during an ASM payment year.

\294\ https://qpp.cms.gov/resources/document/21ee9d76-a002-4f5d-b228-3a99b32aa7dc.

We solicited comments on our proposed approach to notify and apply ASM payment multipliers to Medicare Part B covered professional services payments during an ASM payment year. We also sought comment on how ASM payment multipliers would be applied to Medicare Part B covered professional services payments for ASM participants whose TIN affiliations change after an ASM performance year and before the end of a corresponding ASM payment year.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Several commenters recommended that CMS clarify how the payment adjustment is applied, specifically if adjustments are applied to all Medicare Part B payments or those payments specific to episodes.

Response: We appreciate the commenters for their feedback. We clarify that we would apply ASM payment multipliers to all Part B payments for covered professional services to ASM participants during an ASM payment year. This clarification aligns with our policy for the application of payment adjustments as proposed in the CY 2026 PFS proposed rule.

Comment: Several commenters recommended that the ASM payment adjustments be applied only to the services related to the ASM episodes, and not to all Medicare Part B services, representing unrelated services delivered to other types of patients. A commenter expressed concern that applying the payment adjustment to all Medicare Part B services further compounds the financial risks of all ASM participants, including those who see a relatively low volume of patients with ASM targeted chronic conditions representing only a fraction of their practice. A commenter noted that applying payment adjustments to all Medicare Part B services could discourage clinicians from providing care to chronic heart failure and low back pain patients, due to potential negative impacts of low ASM performance scores on their payments for all other conditions.

Response: We appreciate the commenters for their feedback. We disagree with the commenter who believes applying the adjustment to all Part B services would discourage clinicians from providing care to beneficiaries with ASM's targeted chronic conditions. We believe that our participant eligibility criteria appropriately identify specialists that provide care to a higher volume of beneficiaries with ASM's targeted chronic conditions. As the model focuses on specialists, we would expect that most of the Part B payments to ASM participants would be directly related to ASM's targeted conditions, meaning that it would be appropriate to adjust all Part B covered professional services payments. Adjusting all Part B payments for covered professional services provides a stronger financial incentive to improve performance compared to only adjusting payment for selected services. Further, because ASM participants who would otherwise be required to participate in MIPS will be waived from MIPS requirements, only adjusting a portion of Part B payments for covered services related to ASM's targeted chronic conditions would mean that some payments would not be adjusted. In a hypothetical situation where only some Part B covered professional services payments are adjusted under ASM, allowing for simultaneous participation in ASM and MIPS would create undue burden and undermine the model test. Therefore, we believe it is appropriate to adjust all Part B covered professional service payments under ASM to create the right set of financial incentives to achieve ASM's objectives.

Comment: A commenter recommended that CMS increase transparency by using a designated payment code or clear identifier for applying the ASM payment adjustments. The commenter noted that the absence of a distinct code makes it challenging for providers to track and reconcile payments accurately and recommended the use of a designated payment adjustment code or a consistent remittance advice indicator specific to ASM payment adjustments.

Response: We appreciate the commenters for their feedback. We do not believe that it is necessary for ASM participants to use a designated payment code in order for us to adjust payments. As described in our response to comments in this section of this final rule, we would apply ASM payment multipliers to all Part B payments for covered professional services to ASM participants during an ASM payment year, meaning that a separate payment code would be unnecessary and create an unnecessary burden.

Comment: A commenter did not support the use of an ASM performance report for sharing the payment adjustment information with participants and stated their concerns on significant delays in receiving MIPS performance results and payment adjustments. The commenter noted that introducing a high volume of individual reporting could further exacerbate delays at CMS and impact financial planning and performance feedback cycles for ASM participants.

Response: We appreciate the commenters for their feedback on the proposal to provide ASM payment adjustment factors and multipliers to ASM participants through the ASM performance report. We intend to release the ASM performance reports in an appropriate timeframe to mitigate concerns that delays could impact financial planning and performance feedback cycles for ASM participants.

Comment: A commenter suggested CMS clarify how payments adjustments are calculated and applied to ASM participants that change their TIN mid-year.

Response: We appreciate the commenter's request for clarification on policies related to TIN changes in the middle of an ASM performance year or ASM payment year. Based on our finalized policies at Sec. 512.710(c), we note that ASM participants who change TINs during an ASM performance year must notify us of the change; after we approve of the change, the ASM participant will no longer be subject to the model requirements for that ASM performance year. Accordingly, the ASM participant will not receive a final score and will not have their Part B covered professional services payments adjusted in the corresponding ASM payment year. We refer readers to section III.C.2.c.(3).(ii) of this final rule for further discussion of this policy. Should the ASM participant change TINs during an ASM payment year, then the application of the participant's ASM payment multiplier under the new TIN depends on when the participant begins billing under the new TIN. If the ASM participant began assigning billing rights to the new TIN after the applicable ASM performance year but before the end of the corresponding

ASM payment year, then we would continue to adjust payments under the new TIN using the participant's ASM payment multiplier for the remainder of the applicable ASM payment year. We refer readers to Table B-D10 for examples of how this provision would be implemented under different scenarios.

Comment: A commenter recommended CMS implement tools for real-time reporting and payment adjustment monitoring, streamline dispute and correction workflows, and clearly define rules for resolving conflicts when clinicians report through multiple channels or receive inconsistent scoring between group and individual performance.

Response: We appreciate the commenters for their feedback on developing tools to allow ASM participants to report data in real time and monitor payment adjustments. At this time, we do not envision that real-time data reporting would be feasible for ASM. We also believe that the simplicity of the application of ASM payment multipliers to Part B covered professional service payments during an ASM payment would allow an ASM participant to monitor their payment adjustments. We note that we are not allowing ASM participants choice in how they report data (that is, as an individual and as a group) for a given ASM performance year, so there is no need to develop rules for resolving such reporting conflicts. Our finalized policies related to data submission at Sec. 512.720 also describe how we will manage multiple data submissions from an individual ASM participant. We refer readers to section III.C.2.d.(1) of this final rule for further discussion on the data submission procedures and requirements.

After consideration of public comments, we are finalizing our proposed provisions related to notification of ASM participants of their payment adjustment factors and multipliers as proposed at Sec. 512.750(e). We are also finalizing our proposed provision on how TIN changes after an ASM performance year but before the end of the corresponding ASM payment year affects application of ASM payment multipliers as proposed at Sec. 512.750(f). g. Timely Error Notice Process

We believe that it is necessary to have a process by which ASM participants may appeal the ASM performance report. However, the standard CMS claims appeals process submitted through a MAC would not lead to timely resolution of disputes for the purposes of ASM because MACs and other CMS officials would not have timely access to beneficiary attribution data. Therefore, we proposed waving the requirements of section 1869 of the Act specific to claims appeals for purposes of testing ASM. The ASM error notice process is specific to ASM and distinct from the standard CMS appeals procedures set forth under section 1869 of the Act. We note that ASM participants would still be subject to the same limitations on review as stipulated at Sec. 512.170.

We proposed at Sec. 512.755(a) to permit ASM participants to submit a timely error notice regarding the calculations contained within the ASM performance report if the ASM participant believes an error occurred in calculations due to data quality or other issues, or if the ASM participant believes an error occurred in calculations due to misapplication of methodology. We proposed at Sec. 512.755(b) that if an ASM participant believes the ASM performance report contains a calculation error, then the ASM participant would be required to submit a timely error notice documenting the suspected calculation error within 30 calendar days of issuance of the ASM performance report. We also proposed that CMS may specify different requirements for the form, manner, or deadline for submission of the error notice. If the ASM participant does not provide such timely error notice error in accordance with the timelines and processes specified by CMS, then we proposed at Sec. 512.755(b)(1) that the ASM performance report would be deemed final and the ASM participant would be precluded from later contesting those elements of the ASM performance report for that performance year. Additionally, we proposed that only an ASM participant may submit a written timely error notice according to the provisions at proposed Sec. 512.755(b)(2).

The proposed 30-day window to review and appeal CMS calculations aligns with the length of time we have finalized for submitting appeals in other mandatory Innovation Center models, such as TEAM and the Increasing Organ Transplant Access (IOTA) Model.

We acknowledge that the Quality Payment Program allows MIPS eligible clinicians to request a targeted review within 60 days of the closing of the data submission period. As explained in the 2016 Quality Payment Program Final Rule (81 FR 77353), section 1848(q)(13)(A) of the Act describes the required review process for MIPS as “targeted” and “informal,” and does not warrant a second level of review or appeals. Under MIPS, all decisions under the targeted review process are final.

We considered an appeal window that conforms with MIPS, however, a 60-day timeframe would not be appropriate for ASM, as it would not provide sufficient time to generate final ASM payment adjustment factors and ASM payment multipliers before the applicable ASM payment year begins, given the process outlined in Sec. 512.190 of the Standard Provisions--which offers the ASM participant the opportunity to request two additional levels of appeal, including a final review by the CMS Administrator. If an ASM participant elects to go through all levels of appeal available to them, this would be a lengthy process that must conclude by December 1, when CMS must submit final payment adjustment factors to the MACs for the subsequent payment year. Therefore, because of the two additional levels of appeal, CMS is unable to offer ASM participants a lengthier period to review their initial calculations.

We proposed at Sec. 512.755(c) that if CMS receives a timely notice of a calculation error, we will issue an initial determination in writing within 30 calendar days to either confirm that there was an error in the calculation or verify that the calculation is correct. We note that CMS would reserve the right to an extension of the time for providing its initial determination upon written notice to the ASM participant.

If an ASM participant disagrees with CMS' initial determination and wishes to dispute the results of the initial determination, under proposed Sec. 512.755(d), the ASM participant or CMS may request a reconsideration by following the reconsideration review process described in the standard provisions at Sec. 512.190.

We solicited comment on our proposed timely error notice process for ASM appeals at Sec. 512.755 as well as alternatives considered.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A commenter acknowledged the proposed process for ASM participants to receive a timely error notice, allowing them to review their ASM performance report and submit an appeal to dispute any errors or miscalculations. However, the commenter expressed concern that requiring ASM participants to submit a request to review errors within 30 days of receiving the performance report may limit their ability to conduct a thorough review. Alternatively, another commenter suggested that CMS allow ASM participants to submit an error

notice within 60 days of receiving the ASM performance report. The commenter noted that this timeline aligns with the MIPS review process and could help address the limitations of conducting a thorough review under the proposed 30-day window.

Response: We appreciate the commenters for their feedback. We recognize the importance of allowing ASM participants the opportunity to thoroughly review their performance report. As previously discussed, we considered several possible timely error notice timelines during model development (including the MIPS 60-day review window). Due to the multi-step process required for calculating the ASM incentive pool, in conjunction with other internal CMS processes to ensure MACs can process ASM participant claim adjustments for the corresponding payment year, we cannot extend the 30-day deadline for ASM participants to submit timely error notices.

Comment: A commenter recommended that CMS implement a preview period for ASM participants to review their attribution assignments, as well as a formal appeals period to correct errors in specialty designation and attribution. The commenter shared their belief this approach would allow clinicians to exclude non-managing episodes and protect them from ASM payment adjustments.

Response: In reading the commenter's feedback holistically, it appears the commenter is requesting a period to review CMS' identification of a particular clinician as an ASM participant. Specialty designation and beneficiary attribution are two of the elements that CMS uses to identify whether a clinician is eligible to be an ASM participant. Per 42 USC1315a(d)(2), “the selection of organizations, sites, or participants to test those models selected” is precluded from administrative or judicial review. While an ASM participant may submit a request to CMS for unrefined Medicare Parts A, B, and D claims data used to determine ASM participant eligibility for an applicable ASM performance year, this data cannot be used to request review of a clinician's ASM participation status. Moreover, ASM identifies a clinician's specialty types from claims-based specialty codes, which use PECOS information self-reported by clinicians. Thus, if a clinician believes they should update their specialty designation, the clinician will need to follow instructions from PECOS on how to correct their specialty designation.

After consideration of public comments, we are finalizing the timely error notice process as proposed at Sec. 512.755. h. Waivers of Medicare Program Requirements (1) Background

Under section 1115A(d)(1) of the Act, the Secretary may waive such requirements of Titles XI and XVIII and of sections 1902(a)(1), 1902(a)(13), 1903(m)(2)(A)(iii) of the Act, and certain provisions of section 1934 of the Act as may be necessary solely for purposes of carrying out section 1115A of the Act with respect to testing models described in section 1115A(b) of the Act. We proposed to waive ASM participants from MIPS reporting and payment adjustments. We also proposed to waive certain telehealth restrictions to encourage greater flexibility with the use of telehealth services by ASM participants. (2) MIPS Waiver

We believe it may be necessary and appropriate to provide flexibilities to clinicians participating in ASM. We proposed at Sec. 512.775 to use the Innovation Center's statutory authority under section 1115A(d)(1) of the Act to waive all ASM participants from participation in MIPS for any ASM performance year/ASM payment year in which they meet the ASM participant eligibility criteria, unless otherwise specified at proposed Sec. 512.710(a)(2). Our previous and current efforts in testing models where participants are judged against the performance of their peers, such as the SNF VBP Program and the HVBP Program, are likely to incentivize substantial improvements in cost savings and efficiency. We are building off existing mechanisms for payment adjustments of Medicare Part B claims found in MIPS. To maximize the effectiveness of these payment adjustments, we proposed to waive ASM participants from participation in MIPS. This waiver would ease the administrative burden, as ASM participants would be required to only report ASM performance category measures. The waiver would also prevent possible double-payment adjustments by ensuring ASM participants report their performance measures and receive payment adjustments through ASM alone. The MIPS waiver would only be available to ASM participants for the year(s) for which they are measured for performance under the model (that is, the ASM performance year). For example, if a clinician meets eligibility criteria for the model in CY 2027 and is measured for performance under the model for that year, the MIPS waiver applies to CY 2027 and the clinician is not required to participate in MIPS and be measured for performance under MIPS for that year. Yet, for any subsequent year that that clinician does not meet ASM eligibility criteria and is not measured for performance under the model, the MIPS waiver does not apply. The clinician must participate in MIPS and be measured for performance under MIPS if determined to be a MIPS eligible clinician for the applicable MIPS performance period.

We intend to promote as much longitudinal model overlap as possible and ensure maximum flexibility for ASM participants to join existing voluntary models, including Advanced APMs. Specialty care providers have been part of whole-person and primary care models, such as the Shared Savings Program, but the performance measures in those programs are less relevant to specialty care. ASM takes the founding tenets for MVPs and goes further, allowing for like-to-like comparisons for all ASM participants by ensuring they are reporting on the same, clinically relevant measures.

For these reasons, we proposed to seek a MIPS waiver at Sec. 512.775(a) for all ASM participants regardless of whether they have achieved Qualifying APM Participant (QP) status through another Medicare model or program.

We solicited comments on the proposed MIPS waiver for all ASM participants at Sec. 512.775(a).

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A few commenters supported the proposed policy waiving MIPS requirements for all ASM participants for any ASM performance year in which they meet ASM eligibility criteria. The commenters noted that exemption from MIPS would reduce duplicate reporting and administrative burden for clinicians.

Response: We appreciate the commenters for their support of the MIPS exemption for ASM participants for any ASM performance year in which they meet ASM eligibility criteria.

Comment: A few commenters supported the proposed policy waiving MIPS requirements for ASM participants who meet ASM eligibility criteria and offered additional recommendations. A commenter shared their belief that the MIPS waiver relieved reporting burden and recommended that the waiver apply to any ASM participant selected for a

model year and remain in effect for the entire year. A few commenters recommended that CMS to apply the exemption by classifying the model as an advanced APM (AAPM) to enable ASM participants to meet QP thresholds, be exempt from MIPS, and receive the higher PFS conversion factor update.

Response: In response to the commenter who recommended applying the MIPS waiver to any ASM participant selected for a model year and allowing the waiver to remain in effect for the entire year, we believe the proposed policy already does this. We proposed to define “ASM performance year” as a 12-month period beginning on January 1 and ending on December 31 of each year during the first 5 calendar years of ASM test period. Thus, any ASM participant for a given ASM performance year will be exempt from MIPS for the entire corresponding calendar year.

Regarding the comments recommending classification of ASM as an Advanced APM to enable QP status determination for ASM participants, we appreciate the commenters' questions and feedback about whether ASM would qualify as an Advanced APM. We will consider if there are ways for ASM to qualify as an Advanced APM in the future based on the Advanced APM requirements as defined at Sec. 414.1415.

Comment: A commenter did not support the proposed policy waiving MIPS requirements for ASM participants, expressing concern that annual ASM eligibility determinations could require clinicians to participate in MIPS, and recommended CMS allowing ASM participants to opt-in to both MIPS and ASM.

Response: We appreciate the commenter's feedback. An ASM participant who meets ASM eligibility criteria for a given ASM performance year is exempt from MIPS for that entire ASM performance year and must report for ASM performance categories. During model development, we identified the MIPS exemption for mandatory ASM participants as a critical piece of the model test. Specifically, if we allowed ASM participants to opt-in to both MIPS and ASM, then this significantly raises the risk of a double-payment adjustment to the ASM participant's claims during the payment year.

After consideration of public comments, we are finalizing the MIPS waiver at Sec. 512.775(a) as proposed. (3) Telehealth (a) Background

We expect that the proposed ASM design features would lead to greater interest on the part of ASM participants caring for ASM beneficiaries in furnishing services to beneficiaries in their home or place of residence. ASM would create new incentives for comprehensive care management for beneficiaries, including early identification and intervention regarding changes in health status. Under section 1834(m) of the Act, Medicare pays for telehealth services furnished by a physician or practitioner under certain conditions even though the physician or practitioner is not in the same location as the beneficiary. Under the longstanding statutory payment requirements, telehealth services must be furnished to a beneficiary located in one of the originating sites specified in section 1834(m)(4)(C)(ii) of the Act and the site must satisfy at least one of the geographic requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act. Generally, for Medicare payment to be made for telehealth services under the Medicare Physician Fee Schedule several conditions must be met, as set forth under Sec. 410.78(b). Specifically, the service must be on the Medicare list of telehealth services and meet all the following other requirements for payment: (1) the service must be furnished via an interactive telecommunications system, (2) the service must be furnished to an eligible telehealth individual, and (3) the individual receiving the services must be in an eligible originating site. For most telehealth services, this requires the beneficiary to be located at an originating site that is in certain, mostly rural, areas, and in a setting that is a health care facility.

During the PHE for COVID-19, CMS used emergency authority under section 1135(b)(8) of the Act to waive these requirements to allow beneficiaries to be located in an originating site in any geographic area and in any setting, including the home of the beneficiary. Congress has enacted several laws that temporarily extend these flexibilities beyond the PHE. Most recently, the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119-4) amended section 1834(m)(4)(C)(iii) of the Act to extend these originating site flexibilities through September 30, 2025. Absent Congressional action, beginning October 1, 2025, the statutory limitations that were in place for Medicare telehealth services prior to the COVID-19 PHE will retake effect for most telehealth services. These include geographic and location restrictions on where the services are provided.

When all these conditions are met, Medicare pays a facility fee to the originating site and provides separate payment to the distant site practitioner for the service. Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth services to include professional consultations, office visits, office psychiatry services, and any additional service specified by the Secretary, when furnished via a telecommunications system. For the list of approved Medicare telehealth services, see the CMS website at https://www.cms.gov/medicare/coverage/telehealth/list-services. Under section 1834(m)(4)(F)(ii) of the Act, we have an annual process to consider additions to and deletions from the list of telehealth services.

Some literature suggests certain beneficial telehealth technologies, which enable health care providers to deliver care to patients in locations remote from providers, are being increasingly used to complement face-to-face patient-provider encounters to increase access to care, especially in rural or underserved areas.\295\ In these cases, the use of remote access technologies may improve the accessibility and timeliness of needed care, increase communication between providers and patients, enhance care coordination, and improve the efficiency of care. We note that certain covered professional services that are commonly furnished remotely using telecommunications technology are paid under the same conditions as in-person physicians' services and thus do not require a waiver to be considered as telehealth services. Such services that do not require the patient to be present in person with the practitioner when they are furnished are covered and paid in the same way as services delivered without the use of telecommunications technology when the practitioner is in person at the medical facility furnishing care to the patient.

\295\ Azizi Z, Broadwin C, Islam S, et al. Digital Health Interventions for Heart Failure Management in Underserved Rural Areas of the United States: A Systematic Review of Randomized Trials. J Am Heart Assoc. 2024;13(2):e030956. doi:10.1161/ JAHA.123.030956.

In other CMS episode-based payment models, such as TEAM and the Comprehensive Care for Joint Replacement Model (CJR) model, participants were permitted to use telehealth waivers that applied to two provisions:

CMS waived the geographic site requirements under 1834(m)(4)(C)(i)(I) through (III) of the Act which allowed telehealth services to be furnished to eligible telehealth individuals when they are located at an originating site at the time the service is furnished via a telecommunications system but without

regard to the site meeting one of the geographic site requirements.

CMS waived the originating site requirements under section 1834(m)(4)(C)(ii)(I) through (VIII) of the Act which allowed the eligible telehealth individual to not be in an originating site when the otherwise eligible individual is receiving telehealth services in their home or place of residence.

These telehealth waivers allowed providers and suppliers furnishing services to ASM beneficiaries to utilize telemedicine for beneficiaries that are not classified as rural and allowed the greatest degree of efficiency and communication between providers and suppliers and beneficiaries by allowing beneficiaries to receive telehealth services at their home or place of residence. We believe similar telehealth waivers would be essential to maximize the opportunity to improve the quality of care and efficiency for ASM. (b) Telehealth Waivers

Specifically, like the telehealth waivers in TEAM and the CJR model, we proposed at Sec. 512.775(b) to waive the geographic site requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act that limit telehealth payment to services furnished within specific types of geographic areas or in an entity participating in a federal telemedicine demonstration project approved as of December 31, 2000. Waiving of this requirement would allow beneficiaries located in any region to receive services related to the episode to be furnished via telehealth, as long as all other Medicare requirements for telehealth services are met. Any service on the list of Medicare approved telehealth services and reported on a claim that is not excluded from the proposed episode (see section III.C.2.c.(3).(b). of this final rule) could be furnished to an ASM beneficiary, regardless of the beneficiary's geographic location. Under ASM, this waiver would support care coordination and increasing timely access to high quality care for all ASM beneficiaries, regardless of geography. Additionally, we proposed waiving the originating site requirements of sections 1834(m)(4)(C)(ii)(I) through (VIII) of the Act that specify the particular sites at which the eligible telehealth individual must be located at the time the service is furnished via a telecommunications system. Specifically, we proposed at Sec. 512.775(b)(2) to waive the requirement only when telehealth services are being furnished in the ASM beneficiary's home or place of residence during the episode. Any service on the list of Medicare approved telehealth services that is not excluded from the proposed episode definition (see section III.C.2.c.(3).(b). of this final rule) could be furnished to an ASM beneficiary in their home or place of residence, unless the service's HCPCS code descriptor precludes delivering the service in the home or place of residence.

The existing set of codes used to report evaluation and management (E/M) visits are extensively categorized and defined by the setting of the service, and the codes describe the services furnished when both the patient and the practitioner are in that setting. Section 1834(m) of the Act provides for the conditions under which Medicare can make payment for office visits when a patient is located in a health care setting (the originating sites authorized by statute) and the eligible practitioner is located elsewhere. However, we do not believe that the kinds of E/M services furnished to patients outside of health care settings via real-time, interactive communication technology are accurately described by any existing E/M codes. This would include circumstances when the patient is located in his or her home and the location of the practitioner is unspecified. To create a mechanism to report E/M services accurately, TEAM and the CJR model used specific sets of HCPCS G-codes to describe the E/M services furnished to the model beneficiaries in their homes via telehealth. We considered whether establishing ASM-specific G-codes would serve a distinct purpose to the model. Upon review of existing G-codes for services provided via telehealth, we identified concerns with administrative burden and duplicative codes. Thus, we proposed to allow ASM participants to bill established G-codes.\296\

\296\ https://www.cms.gov/medicare/coverage/telehealth/list-services.

Under the proposed waiver of the geographic site requirement and originating site requirement, all telehealth services would be required to be furnished in accordance with all Medicare coverage and payment criteria, and no additional payment would be made to cover set-up costs, technology purchases, training and education, or other related costs. The facility fee paid by Medicare to an originating site for a telehealth service would be waived if there is no facility as an originating site (that is, the service originated in the beneficiary's home). Finally, ASM participants furnishing a telehealth service to an ASM beneficiary in his or her home or place of residence would not be permitted to bill for telehealth services that were not fully furnished when an inability to provide the intended telehealth service is due to technical issues with telecommunications equipment required for that service. Beneficiaries would be able to receive services furnished under the telehealth waivers only during the episode.

We plan to monitor patterns of utilization of telehealth services under ASM to monitor for overutilization or reductions in medically necessary care, and significant reductions in face-to-face visits with ASM participants.

We solicited comments on the proposed waivers with respect to telehealth services at Sec. 512.775(b).

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A few commenters supported the proposed ASM telehealth waiver for the geographic site requirements, which currently limit telehealth payment to services provided by ASM participants. A commenter specifically noted that the waiver would enable Medicare beneficiaries to access telepsychiatry, regardless of rural or urban status.

Response: We appreciate the commenters for their support.

Comment: A few commenters generally supported the proposed telehealth waiver for the geographic site requirements, noting that that these waivers would provide quality and cost-effective care to patients at their preferred locations. The commenters recommended that CMS monitor the use of waivers to ensure access, quality, beneficiary experiences and cost, to prevent overutilization and inappropriate billing. Other commenters acknowledged that the existing evaluation and management codes do not adequately reflect telehealth services and appreciated CMS using established HCPCS G-codes in ASM. A few commenters shared their belief that CMS not creating ASM specific billing codes helps reduce burden and maintain consistency for clinicians. One commenter shared their belief that the HCPCS G-codes would help track visit rates, wait times, clinical outcomes, and utilization among disadvantaged groups. A commenter recommended that telehealth waivers for ASM participants should not be restricted beyond what is permitted by law.

Response: We appreciate the commenters for their support. ASM relies upon existing CMS mechanisms to monitor the use of telehealth and the permitted range of telehealth waivers.

Comment: A commenter recommended CMS providing

incentives for ASM participants for telehealth services provided at a patient's home.

Response: We appreciate the commenters for their feedback. At this time, ASM is not considering incentives for telehealth services.

Comment: A commenter recommended CMS expanding telehealth flexibilities beyond ASM to reflect virtual care delivery, use this waiver authority to remove copays and other payment barriers for both telehealth and Remote Patient Monitoring (RPM)/Remote Therapeutic Monitoring (RTM) services, which are relevant to heart failure and low back pain.

Response: We refer the commenter to section III.C.2.k.(1) of this final rule, which discusses how ASM participants may use of the CMS- sponsored model safe harbor for patient incentives.

After consideration of public comments, we will finalize Sec. 512.775(b) as proposed. i. Extreme and Uncontrollable Circumstances (EUC) Policy

Events may occur outside the purview and control of the ASM participant that may affect their performance in the model. We proposed at Sec. 512.780 to apply a variation of the EUC policy for MIPS eligible clinicians (83 FR 60081), but with notable differences around scoring. Currently, MIPS has three mechanisms to adjust scoring MIPS performance categories due to external circumstances that may impact a MIPS eligible clinician's ability to report during a given performance year: (1) the MIPS automatic EUC policy; \297\ (2) the MIPS EUC Exception; and (3) the MIPS Promoting Interoperability Performance Category Hardship Exception.\298\ The latter two require affected MIPS eligible clinicians to submit an application to MIPS for consideration before being granted the exception. The MIPS Automatic EUC Policy, however, grants the exception to any MIPS eligible clinician located in a CMS-designated region affected by EUC, such as a Federal Emergency Management Agency (FEMA)-designated major disaster or an HHS-determined public health emergency. The exception eliminates the need for an application to request reweighting one or more MIPS performance categories.

\297\ https://qpp.cms.gov/resources/document/3579730b-0891-4491-b880-eb21da631b15.

\298\ https://qpp.cms.gov/mips/exception-applications.

We proposed to adopt at Sec. 512.780 a modified version of the MIPS Automatic EUC Policy. We would use the same triggering events from the MIPS Automatic EUC Policy, such as federal disaster and/or public health emergency declarations, as the basis for determining whether an ASM participant may be automatically exempted from submitting ASM performance category data for an ASM performance year during which they were impacted by the EUC. If the ASM participant's CBSA or metropolitan division that we use to determine ASM participant eligibility (as described at Sec. 512.710(e)(5)) is within an area identified by CMS, under Sec. 414.1380(c)(2)(i)(A)(8), as having been affected by extreme and uncontrollable circumstances, then the ASM participant would be exempted from the requirement to submit ASM performance category data, as described at proposed Sec. 512.720. We proposed at Sec. 512.780(c)(1) that ASM participants who qualify for the exemption and do not submit ASM performance category data that meet the requirements at Sec. 512.720 would not receive a final score and would receive an ASM payment adjustment factor that results in a neutral payment adjustment for the applicable ASM payment year. We proposed at Sec. 512.780(c)(2) that ASM participants who qualify for the exemption but still submit ASM performance category data that meet the requirements at Sec. 512.720 would be scored according to the methodology described at proposed Sec. 512.745. We also considered using claims data to determine whether an ASM participant furnishes services in a Federal disaster area or in an area in which HHS has declared a public health emergency. However, we believe that using the same methodology to determine whether a clinician furnishes services in a mandatory geographic area as part of the ASM participant eligibility criteria would ensure consistency across geographic determinations used for EUC- related exemptions.

Furthermore, we recognize the external impact of circumstances outside of the ASM participants' control, such as large-scale cyberattacks and other emergencies outside of those identified in the previous paragraphs. We proposed at Sec. 512.780(b)(1) and (2) to allow CMS to determine, based on information known to the agency prior to the beginning of the relevant ASM payment year, that data for an ASM participant are inaccurate, unusable, or otherwise compromised due to circumstances outside of the control of the clinician and its agents, including third-party intermediaries. We proposed to notify ASM participants of CMS' decision on the existence of circumstances as proposed at Sec. 512.780(b)(1) and the impact of these circumstances upon scoring methodology for affected ASM participants. We also proposed to grant CMS discretion in the form and manner of the notice to ASM participants.

We considered adopting an application-based process for EUC exceptions like the MIPS provisions described at Sec. 414.1380(c)(6). However, we believe that any hardships outside of those contemplated at proposed Sec. 512.780(a) and (b) that renders an ASM participant unable to report on ASM performance categories for quality, improvement activities, or Promoting Interoperability, would likely result in the ASM participant being unable to bill claims for that ASM performance year as well. Accordingly, we believe that ASM participants in these circumstances would likely not meet the case minimums for quality and cost measures in their respective ASM performance categories (as proposed at Sec. Sec. 512.725(g) and 512.730(d)) and would, therefore, be subject to a neutral payment adjustment for the applicable ASM payment year. For example, if the ASM participant does not have 20 EBCM episodes identified in claims data for the impacted ASM performance year, then the ASM participant would not receive a final score and would be subject to an automatic neutral payment adjustment. However, in this scenario, since CMS is unable to determine whether the ASM participant meets the 20 EBCM episodes for the given ASM performance year until all claims for that ASM performance year have been completed, the ASM participant is encouraged to submit as much data as they are able to for all other ASM performance measures.

We considered whether an ASM participant affected by the circumstances at proposed Sec. 512.780(a) or (b) who chooses to report ASM performance category data would be subject to a lower risk level as described at Sec. 512.745(a)(3). Applying a differential risk level for some ASM participants could skew the calculation of ASM payment adjustment factors for all ASM participants depending on how many ASM participants are impacted by the identified circumstances. Instead of adjusting the ASM participant's risk level, we believe it would be preferable for ASM participants not to receive a final score, which would result in an automatic neutral payment adjustment.

We solicited comments on the proposed provisions at Sec. 512.780, as well as the alternatives that we considered.

We did not receive public comments on this provision, and therefore, we are finalizing the proposed provisions at Sec. 512.780 as proposed. j. Data Sharing

Under this model, we aim to incentivize ASM participants to engage in care redesign efforts to improve quality of care and reduce Medicare FFS spending for ASM beneficiaries. As discussed in the CY 2026 PFS proposed rule (90 FR 32619), we expect ASM participants to work toward independently tracking their own data through electronic health records, health information exchanges, or other means that they believe are necessary to best evaluate the health needs of their patients, improve health outcomes, and produce efficiencies in the provision and use of health care items and services. However, we proposed certain data sharing requirements in Sec. 512.760 to assist ASM participants in this process and in meeting the model objectives.

We proposed at Sec. 512.760(d) to provide certain aggregate data that has been de-identified in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule, 45 CFR 164.514(b), for the purposes of helping ASM participants understand their progress towards improving upon the model's performance metrics. We noted that any aggregate data provided in advance of an ASM performance report for an ASM performance year would not be a guarantee of the ASM participant's final score or ASM payment adjustment factor.

Additionally, as with other mandatory Innovation Center models such as TEAM and IOTA, we proposed to provide certain beneficiary- identifiable data to ASM participants regarding the ASM beneficiaries under their care, upon request and execution of a data sharing agreement. We stated that we anticipate ASM participants would use this data to assess their treatment patterns and overall care plans and to identify room for improvement under the model or conducting other “health care operations” under the HIPAA Privacy Rule, 45 CFR 165.501. Specifically, subject to the limitations discussed in this final rule, and in accordance with applicable law, including the HIPAA Privacy Rule (45 CFR part 160 and subparts A and E of part 164), we proposed at Sec. 512.760(b) that CMS may offer an ASM participant an opportunity to request certain Medicare beneficiary-identifiable data. We proposed that CMS would share this beneficiary identifiable data with ASM participants on the condition that the ASM participants and other individuals or entities performing functions or services related to the ASM participant's activities observe all relevant statutory and regulatory provisions regarding: (1) the appropriate use of data; and (2) the confidentiality and privacy of individually identifiable health information, and comply with the terms of the data sharing agreement proposed at Sec. 512.760(e).

Moreover, we stated that we recognize that an individual clinician generally may not be a covered entity. However, the participant clinicians are likely part of a covered entity and therefore are subject to the HIPAA Rules.

We proposed at Sec. 512.760(f) that ASM participants must allow Medicare beneficiaries to request restrictions on sharing data, consistent with 45 CFR 164.522(a). We also proposed at Sec. 512.760(b)(4) that, for the beneficiary-identifiable claims data, we would exclude information that is subject to the regulations governing the confidentiality of substance use disorder patient records (42 CFR part 2) from the data shared with an ASM participant.

We requested comment and feedback on our proposed policies at Sec. 512.760(a) to make certain beneficiary-identifiable data available to ASM participants upon execution of an ASM data sharing agreement.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A commenter recommended that CMS create a portal with episode lists and attribution rosters to reduce clinician burden.

Response: We intend to develop an online tool for ASM participants to access data from CMS at Sec. 512.760. We appreciate the commenter's suggestion regarding episode lists and will consider these items when developing the ASM participant portal. However, we remind the commenter that ASM beneficiaries are defined as “a Medicare FFS beneficiary who is being treated by an ASM participant for a targeted chronic condition.” Therefore, we do not intend to maintain an up-to-date ASM beneficiary attribution roster, although an ASM participant may request beneficiary-identifiable data for their ASM beneficiaries using the data sharing process described at Sec. 512.760(b). Accordingly, we expect that data for their ASM beneficiaries produced under the data sharing process would represent a snapshot of ASM beneficiaries.

Comment: A commenter stated that there are gaps in current CMS data regarding objective pain levels for seniors, women, and individuals with low back pain, and expressed the belief that without this data, CMS, primary care physicians, and specialists may struggle to determine the appropriate volume of low back pain procedures and surgeries. The commenter recommended that CMS provide objective pain data through specialized databases, enabling better decision-making and ensuring appropriate care for patients with pain-related conditions.

Response: We appreciate the commenter's feedback on the availability of pain data to inform clinical decision-making and how access to that data may vary at the practice level. While custom technical solutions, like the databases suggested by the commenter, may offer some clinicians expanded access to pain data or a more efficient process to analyze such data within their patient populations, we also believe that many clinicians would already have access to such data within their practice's medical record systems and EHRs. Accordingly, we currently do not have any plans to use or refer ASM participants to external databases containing objective pain data, although ASM participants are welcome to refer to such databases to support their performance within the model.

Comment: A few commenters encouraged CMS to publish industry data on preliminary performance as early as possible in order for eligible clinicians to prepare for the new model. A commenter recommended CMS to clarify the types of data that CMS could include (for example, benchmarks on performance, cost measures) and suggested that clinicians could also benefit from reviewing Claim and Claim Line Feed (CCLF) information.

Response: We appreciate the commenters for providing this feedback. At this time, we do not intend to publish any data related to ASM participants' performance prior to the start of the model. However, we refer the commenters to provisions at Sec. 512.760(b). Once they have been identified as ASM participants, clinicians may use the process outlined at Sec. 512.760(b) through (e) to request raw claims data, which may include CCLF data, used to determine ASM participant eligibility for an applicable ASM performance year, or data for ASM beneficiaries who triggered an applicable EBCM episode with the ASM participant during the applicable ASM performance year.

Comment: A few commenters recommended that CMS create

safeguards to account for data fluctuations and ensure timely data sharing that is needed for clinical interventions. The commenters expressed the belief that the 2-year lag time between performance and payment would make it challenging for clinicians to correct course and achieve associated savings. Another commenter recommended that CMS prioritize sharing transparent, real-time performance data and clear benchmarks when developing its model to empower practices to monitor progress, adjust interventions, and engage in continuous improvement. A commenter recommended that CMS provide specialists with both aggregated and claims-level data on a monthly basis to understand their own performance. The commenter also recommended that CMS provide aggregated benchmark data on other ASM specialists' performance to increase competition among clinicians.

Response: We appreciate the commenters for their feedback. We would like to clarify that participants will receive their ASM performance report, which contains information on their annual performance in each ASM performance category and their resulting ASM payment adjustment factor and multiplier, in the calendar year following the end of an ASM performance year and before the corresponding ASM payment year begins. Based on the time allowed for participants to report data and the time required for us to analyze the reported data, we believe that our timeline for sharing performance feedback is appropriate and that a more accelerated performance feedback timeline may not be possible. We note that most quality measures are CQM or eCQM collection types, which would allow participants to track their performance on these measures during an ASM performance year. As we have noted throughout this section of this final rule, we intend to consider sharing data with participants that could allow them to understand their performance on claims-based quality and cost measures during an ASM performance year, as well as other potential utilization and spending data related to ASM's targeted chronic conditions. While the data shared will adhere to the data sharing provisions finalized in this section of this final rule, we intend to provide further updates on the scope and content, including release cadence, of the shared data prior to the start of the first ASM performance year. Regarding benchmarks, we refer readers to section III.C.2.d.(2).(i).(ii) of this final rule for discussion of our quality measure benchmarking provisions and to section III.C.d.(3).(g).(ii) of this final rule for discussion of our cost measure benchmarking provisions.

Comment: A commenter stated that it agreed with the ability of ASM participants to request data on their attributed patients in order to track their overall care and recommended that CMS work with electronic medical record groups to find effective ways to access CMS claims data which can then be shared directly with the ASM participants through a patient's electric medical record and reduce costs. A commenter encouraged CMS to leverage its recently announced data strategy to establish a health technology ecosystem and thus further support the integration of PRO-PMs, functional status measures, and other quality metrics across care settings, reducing administrative burden, enabling seamless data sharing between specialists and PCPs, and facilitate tracking longitudinal outcomes.

Response: We appreciate the commenters' suggestions for leveraging health information technology to lower administrative burden and boost care coordination. We note that ASM already integrates a PRO-PM and several eCQMs into its ASM quality performance category measures. As we consider future ASM Promoting Interoperability performance category measures and develop ASM's data sharing capabilities, we will continue exploring how health information technology can be used to promote seamless data sharing between specialists, PCPs, and beneficiaries.

After consideration of public comments, we are finalizing at Sec. 512.760(b) through (e) as proposed with the clarifying modification regarding the removal of “gender” from proposed Sec. 512.760(c)(3). (1) Data Provided to ASM Participants (a) Legal Authority To Share Beneficiary-Identifiable Data and Applicability to ASM Data Sharing Processes

As discussed in the CY 2026 PFS proposed rule (90 FR 32619), we believe that an ASM participant may need access to certain Medicare beneficiary-identifiable data for the purposes of evaluating its performance, conducting quality assessment and improvement activities, conducting population-based activities relating to improving health or reducing health care costs, or conducting other health care operations listed in the first or second paragraph of the definition of “health care operations” under the HIPAA Privacy Rule, 45 CFR 164.501.

We recognize there are sensitivities surrounding the disclosure of beneficiaries' individually identifiable health information, and that several laws place constraints on the sharing of individually identifiable health information. For example, section 1106 of the Act generally bars the disclosure of information collected under the Act without consent unless a law (statute or regulation) permits the disclosure. Here, the HIPAA Privacy Rule would allow for the proposed disclosure of individually identifiable health information by CMS to ASM participants so they can carry out “health care operations” that fall within the first and second paragraphs of the definition of the term as defined at 45 CFR 164.501. We proposed to make ASM participants accountable for quality and cost outcomes during an applicable ASM performance year. We stated that we believe it is necessary for the purposes of this model to offer ASM participants the ability to request certain raw beneficiary-identifiable Medicare claims data that CMS used to determine ASM participant eligibility for an applicable ASM performance year, as well as for the beneficiaries who trigger an EBCM episode with the ASM participant during the applicable ASM performance year. ASM participants would only receive data for the ASM beneficiaries who are their patients. We noted that we believe these data would constitute the minimum information necessary to enable ASM participants to understand care spending patterns, appropriately coordinate care, and target care strategies toward ASM beneficiaries.

Under the HIPAA Privacy Rule, covered entities (defined in 45 CFR 160.103 as health plans, health care providers that conduct certain transactions electronically, and health care clearinghouses) may only use or disclose protected health information (PHI), a subset of individually identifiable health information, as permitted or required by the HIPAA Privacy Rule, without the individual's authorization. The Medicare FFS program, a “health plan” function of the Department, is subject to the HIPAA Privacy Rule limitations on the use or disclosure of PHI without an individual's authorization. ASM participants are also covered entities, provided they are health care providers as defined by 45 CFR 160.103 and they electronically transmit any health information in connection with one or more HIPAA standard transactions, such as for claims, eligibility or

enrollment transactions. ASM participants are clinicians who are either covered entities themselves, or they are part of a covered entity. We believe that the proposed disclosure of beneficiary-identifiable data under ASM would be permitted by the HIPAA Privacy Rule under the provisions that permit disclosures of PHI for “health care operations” purposes. Under those provisions, a covered entity is permitted to disclose PHI to another covered entity for the recipient's health care operation's purposes if both covered entities have or had a relationship with the subject of the PHI being requested, the PHI pertains to such relationship, and the PHI disclosure is for a “health care operations” purpose listed within the first two paragraphs of the definition of “health care operations” in the HIPAA Privacy Rule (45 CFR 164.506(c)(4)).

The first paragraph of the definition of health care operations includes “conducting quality assessment and improvement activities, including outcomes evaluation and development of clinical guidelines,” and “population-based activities relating to improving health or reducing health costs, protocol development, case management and care coordination.” The second paragraph of the definition of health care operations includes “evaluating practitioner and provider performance” (45 CFR 164.501).

We proposed at Sec. 512.760 that, subject to having an ASM data sharing agreement in place, an ASM participant may request from CMS certain beneficiary-identifiable claims for ASM beneficiaries under their care. Under the ASM data sharing agreement, we proposed at Sec. 512.760(b)(5)(i) and (ii) to allow CMS to share data with an ASM participant which includes unrefined (raw) Medicare Parts A, B, and D beneficiary-identifiable claims data used to determine ASM participant eligibility for an applicable ASM performance year, as well as unrefined (raw) Medicare Parts A, B, and D beneficiary-identifiable claims data for ASM beneficiaries who trigger an episode with the ASM participant during the applicable ASM performance year. ASM participants would use the data on their patients to evaluate the performance of the ASM participant and other providers and suppliers, such as clinicians with whom the ASM participant may have entered into a CCA that furnished services to the patient, conducts quality assessment and improvement activities, and conducts population-based activities relating to improved health for their patients. When done by or on behalf of an ASM participant that is a covered entity, these data uses would qualify as “health care operations” under the first and second paragraphs of the definition of health care operations at 45 CFR 164.501. This encompasses the anticipated uses of the beneficiary- identifiable data by an ASM participant so that such uses would be permissible under the HIPAA Privacy Rule. Moreover, when done by or on behalf of a covered entity, these are covered functions and activities that would qualify as “health care operations” under the first and second paragraphs of the definition of health care operations at 45 CFR 164.501, thus encompassing the anticipated uses of the beneficiary- identifiable data by an ASM participant and that such uses would be permissible under the HIPAA Privacy Rule. Moreover, we stated, our proposed disclosures would be made only to HIPAA covered entities that have (or had) a relationship with the subject of the information, the information we would disclose would pertain to such relationship, and those disclosures would be for purposes listed in the first two paragraphs of the definition of “health care operations.”

When using or disclosing PHI, or when requesting this information from another covered entity, covered entities or business associates must make “reasonable efforts to limit” the PHI that is used, disclosed, or requested to the “minimum necessary” to accomplish the intended purpose of the use, disclosure, or request (45 CFR 164.502(b)). Thus, we stated that ASM participants must limit their beneficiary-identifiable data requests to the minimum necessary, as selected from the proposed data elements identified at Sec. 512.760(c), to accomplish the intended purpose of the use, disclosure, or request. We stated that the proposed minimum necessary data elements include, but are not limited to:

Medicare beneficiary identifier (ID).

Procedure code.

Sex.\299\

\299\ As originally proposed, Sec. 512.760(c)(3) stated “Sex or Gender.” We intended to remove the term “gender” to align with current Administration directives, including Executive Order 14168 (Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government).

Diagnosis code.

Claim ID.

The from and through dates of service.

The provider or supplier ID.

The claim payment type.

Date of birth and death, if applicable.

Tax identification number.

National provider identifier.

The Privacy Act of 1974 also places limits on agency data disclosures. The Privacy Act applies when Federal agencies maintain systems of records by which information about an individual is retrieved by use of one of the individual's personal identifiers (names, Social Security numbers, or any other codes or identifiers that are assigned to the individual). The Privacy Act generally prohibits disclosure of information from a system of records to any third party without the prior written consent of the individual to whom the records apply (5 U.S.C. 552a(b)).

“Routine uses” are an exception to this general principle. A routine use is a disclosure outside of the agency that is compatible with the purpose for which the data was collected. Routine uses are established by means of a publication in the Federal Register about the applicable system of records describing to whom the disclosure will be made and the purpose for the disclosure. We stated that, for the purposes of ASM as proposed, we believe that the proposed data disclosures are compatible with the purposes for which the data discussed in this rule was collected, and, thus, would not run afoul of the Privacy Act, provided we ensure that an appropriate Privacy Act system of records “routine use” is in place prior to making any disclosures. The systems of records from which CMS would share data are the Medicare Integrated Data Repository (IDR), the Common Working File, Medicare Provider Enrollment, Chain, and Ownership System (PECOS), the Enrollment Database (EDB), and the Part D Event (PDE) File. We stated that we believe that the proposed data disclosures are compatible with the purposes for which the data discussed in the CY 2026 PFS proposed rule were collected and may be disclosed in accordance with the routine uses applicable to those records (90 FR 32620).

We proposed at Sec. 512.760 that we would share the ASM beneficiary-identifiable lists and data with ASM participants who have submitted a formal request for the data. Under our proposal, the request must be submitted on at least an annual basis in a manner and form specified by CMS. The request also would need to identify the data being requested and include an attestation that (1) the ASM participant is requesting this beneficiary-identifiable data as a HIPAA covered entity, or as part of a HIPAA covered entity, and (2) the ASM participant's request reflects the minimum data necessary for the ASM participant to

conduct activities that are described in the first or second paragraph of the definition of health care operations at 45 CFR 164.501. In addition, we proposed that ASM participants who request this data must have a valid and signed ASM data sharing agreement in place, as described in more detail later in this section of this final rule. We proposed at Sec. 512.760(b) that we would make available beneficiary- identifiable data for ASM participants to request for purposes of conducting activities described in the first or second paragraph of the definition of health care operations at 45 CFR 164.501 on behalf of their attributed patients who are Medicare beneficiaries. We noted that we believe that access to beneficiary identifiable claims data would improve care coordination between ASM participants and other health care providers.

We also proposed at Sec. 512.760(b)(2)(ii) that ASM participants limit the request for beneficiary-identifiable claims data to Medicare beneficiaries who have been seen by ASM participants for an ASM targeted chronic condition, and who did not request to restrict sharing their claims data with the ASM participant, as proposed at Sec. 512.760(f)(1). Finally, we proposed that CMS would share beneficiary identifiable data with an ASM participant on the condition that the ASM participant and other individuals or entities performing functions or services related to the ASM participant's activities, comply with all applicable laws governing the use of data and the privacy and security of individually identifiable health information and the terms of the ASM data sharing agreement proposed at Sec. 512.760(e)(1). (b) Medicare Beneficiary Opportunity To Request Restrictions on Data Sharing

We proposed at Sec. 512.760(f)(1) that ASM beneficiaries would be notified about the opportunity to request restrictions on sharing claims data with an ASM participant, in accordance with 45 CFR 164.522. Recognizing the administrative burden associated with such restrictions, however, we noted that under 45 CFR 164.522(a)(1)(iii), covered entities are not required to agree to such a restriction unless the request fulfills the conditions set forth at 45 CFR 164.522(a)(1)(vi). Furthermore, we proposed that Medicare beneficiaries may not decline to have the aggregate, de-identified data proposed in Sec. 512.760(d) shared with ASM participants. We also noted that, in accordance with 42 U.S.C. 290dd-2 and its implementing regulations at 42 CFR part 2, we would not share beneficiary identifiable claims data relating to the diagnosis and treatment of substance use disorders under this model.

We stated that we recognize this policy is distinct from the data sharing policy in IOTA and other Innovation Center models.\300\ We considered aligning the data sharing provisions with IOTA but decided to propose alignment with HIPAA requested data restriction provisions because they are less administratively burdensome on providers. We requested comments and feedback on our proposed policies at Sec. 512.760(f) to enable ASM beneficiaries to request restrictions on data sharing with their treating ASM participant. We also requested comment and feedback on whether ASM should align its data sharing policies with existing Innovation Center models or retain its existing proposed structure, which is based on HIPAA requirements at 45 CFR 164.522.

\300\ In the CY 2026 PFS proposed rule (90 FR 32621), we originally stated we recognized the proposed policy was distinct from the data sharing policy in IOTA and “other voluntary Innovation Center models.” We recognize this may have caused some confusion, as IOTA is not a voluntary model. We have revised the language for clarity.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A commenter did not support CMS' proposal to allow beneficiaries to decline data sharing and expressed the belief that such decisions are beyond clinicians' control yet could negatively impact and burden clinicians. The commenter recommended that CMS emphasize the benefits of data sharing to beneficiaries and clearly communicate that no action is required for them to remain included.

Response: We appreciate the commenters for the feedback. We recognize that our proposed policy to base the ASM data sharing opt-out policy on HIPAA requirements in 45 CFR 164.522 may have caused confusion, as it was intended to reduce (not increase) the burden on clinicians whose patients request to restrict data sharing under ASM. We also acknowledge the importance of ASM participants obtaining comprehensive data for as many ASM beneficiaries as possible to be able to conduct certain health care operations activities in connection with the model. Thus, we are not finalizing the proposed provisions at Sec. 512.760(f) or the other references to paragraph (f) in that section in this rule. We note that removing these provisions aligns ASM data sharing with certain other Innovation Center Models, such as TEAM, which do not require participants to offer their beneficiaries the opportunity to decline claims data sharing. We also note that our decision not to finalize these proposed ASM provisions has no impact on existing HIPAA Privacy Rule requirements for covered entities or on individuals' rights to request privacy protection for PHI under 45 CFR 164.522.

Comment: A commenter encouraged CMS to align the ASM data sharing restriction provisions with stronger data sharing policies regarding PHI data sharing that are used in other Innovation Center models. The commenter also suggested CMS to develop consumer-friendly language around beneficiary protections related to PHI for use by ASM participants and expressed the belief ASM participants should provide this information to beneficiaries orally or using American Sign Language during an in-person visit.

Response: We appreciate the commenters' suggestions. ASM's data sharing policies were developed to align with the HIPAA Privacy Rule requirements under 45 CFR 164.522. As noted above, we are not finalizing the proposed provisions in paragraph (f) because they may have caused confusion and because we recognize the importance of enabling ASM participants to obtain comprehensive data for as many ASM beneficiaries as possible for their health care operations efforts under the model. However, we will continue to consider whether a data sharing opt-out policy would be appropriate for ASM and may address this issue in future rulemaking. That said, we are finalizing a number of other ASM data sharing policies that protect beneficiary data and align with other Innovation Center models. For example, ASM participants may only obtain beneficiary-identifiable data upon execution of a data sharing agreement and the data requested must be the minimum necessary to accomplish the ASM participants' intended purpose. Additionally, ASM participants and any downstream recipients of the data are bound to the same terms and conditions to which the ASM participant is bound, per the data sharing agreement requirements at Sec. 512.760(e), and are required to adhere to all applicable laws.

Regarding the commenter's suggestion that ASM participants provide information on beneficiary protections related to PHI in person and either orally or using American Sign Language, we appreciate the feedback and will encourage ASM participants to deliver information regarding ASM data sharing

in the manner that is tailored to their patient population's unique needs.

After consideration of public comments, we are not finalizing the provisions at proposed Sec. 512.760(f) regarding the ability of ASM beneficiaries to request to restrict data sharing. In addition, we are removing the corresponding references to paragraph (f) in paragraphs (a) and (b)(2)(ii), and redesignating the proposed paragraph (g) regarding data custodians to be in paragraph (f). (c) Aggregated Data Sharing

We proposed at Sec. 512.760(d) to deliver certain aggregate data that has been de-identified in accordance with the HIPAA Privacy Rule, 45 CFR 164.514(b), for the purposes of helping ASM participants understand their progress towards improving upon the model's performance metrics. Such aggregated, de-identified data could include, when available, claims-based cost, utilization, and quality data. Cost and utilization data could include fields such as average Medicare FFS (Part A and Part B) expenditure per beneficiary, the top diagnosis codes for beneficiaries the ASM participant is seeing, or hospital admission and readmission rates. Quality data could include preliminary measure rates for the claims-based measures in each ASM measure set. We stated that the data would support ASM participants in analyzing care provided to their Medicare patients and their efforts to monitor, understand, and manage utilization and expenditure patterns as well as to develop, target, and implement quality improvement programs and initiatives. We stated that we were considering providing these two forms of performance feedback at regular intervals, allowing insights into trends that could result in improved model performance and beneficiary care. We sought comments on the elements, cadence, and format of this claims-based performance aggregated data and how it could be most beneficial to ASM participants in improving quality and reducing costs.

We noted that any aggregate data provided in advance of an ASM performance report for an ASM performance year would not be a guarantee of the ASM participant's final score or ASM payment adjustment factor. Since this data would be de-identified according to the HIPAA Privacy Rule requirements and would not contain any protected health information (PHI) or personally identifiable information (PII), this aggregate data would be provided to ASM participants regardless of whether they have executed an ASM data sharing agreement with CMS.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A few commenters recommended that CMS provide ASM participants with timelier feedback than proposed with regard to information covering cost, utilization, quality signals, and performance. The commenters recommended that CMS provide clinicians with monthly or quarterly ASM reports on what triggered episodes, to allow clinicians to better understand and improve cost effective care, prevent avoidable penalties, protect beneficiaries, and protect the Trust funds. Another commenter recommended that CMS provide user- friendly tools for eligible clinicians to track patient progression and comparative scoring as close to real-time as possible, as relying on CCLF files for analytics is impractical for most practices and increases provider burden related to the ASM.

Response: We appreciate this feedback. At this time, we have not identified the frequency with which we would share aggregated data to ASM participants beyond the annual ASM performance report, which will contain information on a participant's final ASM performance category scores, final scores, and payment adjustment information for a given ASM performance year. We will take these suggestions under consideration as we determine how often we would share aggregated deidentified data that could help ASM participants understand their potential performance on select metrics relevant to ASM. We are exploring different avenues through which ASM participants could receive more frequent aggregated data to inform clinical decisions and to calibrate their performance within the model.

Comment: A commenter encouraged CMS to establish a mechanism to share data directly with health IT vendors to improve transparency into ASM participant eligibility and help vendors better support clinicians.

Response: We appreciate the commenter's suggestion. We are not currently contemplating making ASM data available to non-ASM participants, as we believe the proposed ASM data sharing policies are appropriate and sufficient. ASM participants may contract with health IT and other data vendors for operational support and share their data with the vendor, but the ASM participant and any such downstream recipients must comply with the data sharing agreement requirements at Sec. 512.760(e).

After consideration of these public comments, we are finalizing the aggregated data feedback provision in Sec. 512.760(d) as proposed. (2) ASM Data Sharing Agreement (a) General Requirement for Beneficiary-Identifiable Data

We proposed at Sec. 512.760(e)(1) that if an ASM participant wishes to retrieve ASM beneficiary-identifiable data, the ASM participant would be required to complete, sign, and submit and thereby agree to the terms of, an ASM data sharing agreement with CMS on at least an annual basis. We proposed to define the “ASM data sharing agreement” in proposed Sec. 512.705 as an agreement between the ASM participant and CMS that includes the terms and conditions for any beneficiary-identifiable data being shared with the ASM participant under proposed Sec. 512.760(e). We proposed that under the ASM data sharing agreement, the ASM participant would be required to comply with the limitations on the use and disclosure of PHI imposed by the HIPAA Privacy Rule, the applicable ASM data sharing agreement, and the statutory and regulatory requirements of ASM. We also proposed that the ASM data sharing agreement would include certain protections and limitations on the ASM participant's use and further disclosure of the beneficiary-identifiable data and would be provided in a form and manner specified by CMS. We proposed at Sec. 512.760(g) that a designated data custodian would be the individual(s) that an ASM participant would identify as responsible for ensuring compliance with all privacy and security requirements, including all applicable laws and terms of the ASM data sharing agreement, and for notifying CMS of any incidents relating to unauthorized disclosures of beneficiary- identifiable data.

As discussed in the CY 2026 proposed rule (90 FR 32622), we believe it is important for the ASM participant to first complete and submit a signed ASM data sharing agreement before it retrieves any beneficiary- identifiable data to help protect the privacy and security of any beneficiary-identifiable data shared by CMS with the ASM participant. We stated that there are important sensitivities surrounding the sharing of this type of individually identifiable health information, and CMS must ensure to the best of its ability that any beneficiary- identifiable data that it shares with ASM

participants would be further protected in an appropriate fashion.

We solicited public comment on our proposal at Sec. 512.760(e) to require that the ASM participant agree to comply with all applicable laws and terms of the ASM data sharing agreement as a condition of retrieving beneficiary-identifiable data, and on our proposal that the ASM participant would need to submit the signed ASM data sharing agreement at least annually if the ASM participant wishes to retrieve the beneficiary-identifiable data.

We did not receive public comments on this proposal.

We are finalizing the provisions at Sec. 512.760(e)(1) and the definition of “ASM data sharing agreement” Sec. 512.705 as proposed. (b) Content of the ASM Data Sharing Agreement

We recognize that ASM participants may already be required to comply with the HIPAA Privacy Security, and Breach Notification Rules “(HIPAA Rules”) as covered entities themselves, or as employees or owners of HIPAA covered entities. However, since ASM participation is at the TIN-NPI level, we recognize that the TINs to which the ASM participants belong may be the covered entities, rather than the ASM participants themselves. Thus, as discussed in the CY 2026 PFS proposed rule (90 FR 32622), we proposed to include language allowing ASM data sharing agreements to be executed between CMS and ASM participants or the covered entities that conduct HIPAA standard transactions on behalf of the ASM participants. We also proposed at Sec. Sec. 512.760(e)(1)(i) through (v) to impose CMS-specific requirements within the ASM data sharing agreement to reinforce the Innovation Center's specific expectations and consequences for misuse, which is intended to protect the privacy and security CMS' beneficiary-identifiable data in the hands of ASM participants and any downstream recipients. We proposed that under the ASM data sharing agreement, ASM participants would agree to certain terms, including:

Complying with the requirements for use and disclosure of this ASM beneficiary-identifiable data that are imposed on covered entities, as defined by 45 CFR 160.103, by the regulations at 45 CFR part 160 and part 164, subparts A and E, including but not limited to ensuring the data will not be used for purposes outside of conducting health care operations as defined at 45 CFR 164.501 and as permitted by 45 CFR 164.506(c)(4) on behalf of their ASM beneficiaries

Complying with privacy, security, breach notification, and data retention requirements specified by CMS in the ASM data sharing agreement if CMS deems such requirements necessary to safeguard beneficiary data, in addition to applicable law, such as the HIPAA Privacy, Security, and Breach Notification Rules

Contractually binding any and each downstream recipient of the ASM beneficiary-identifiable data, such as persons or entities performing functions or services related to the ASM participant's data sharing activities including those that meet the definition of a business associate as defined at 45 CFR 160.103 and non-ASM participant parties to CCAs described at Sec. 512.771, to the same terms and conditions to which the ASM participant is itself bound in its ASM data sharing agreement with CMS as a condition of the business associate's receipt of the ASM beneficiary-identifiable data obtained by the ASM participant

Acknowledging that if the ASM participant or any downstream recipient misuses or discloses the ASM beneficiary- identifiable data in a manner that violates any applicable statutory or regulatory requirements or that is otherwise non-compliant with the provisions of the ASM data sharing agreement, CMS may do any or all of the following: deem the ASM participant ineligible to obtain ASM beneficiary-identifiable data for any amount of time, or subject the ASM participant to additional sanctions and penalties available under applicable law.

An ASM participant must comply with all applicable laws and the terms of the ASM data sharing agreement to obtain ASM beneficiary-identifiable data.

We proposed at Sec. 512.760(e)(2) that CMS would share beneficiary-identifiable data with an ASM participant on the condition that the ASM participant and other individuals or entities performing functions or services related to the ASM participant's data sharing activities, including business associates of the ASM participant as defined at 45 CFR 160.103 and non-ASM participant parties to CCAs described at Sec. 512.771, comply with all relevant laws governing the use of data and the privacy and security of individually identifiable health information and the proposed terms of the ASM data sharing agreement.

We stated that we believe that those proposed terms for sharing beneficiary-identifiable data with ASM participants are appropriate and important, as CMS must ensure to the best of its ability that any beneficiary-identifiable data that it shares with ASM participants would be further protected by the ASM participant, and any business associates of the ASM participant as defined at 45 CFR 160.103 and non- ASM participant parties to CCAs described at Sec. 512.771, in an appropriate fashion. We noted that we have these types of agreements in place as part of the governing documents of other models tested under section 1115A of the Act and in the Shared Savings Program. In these agreements, CMS typically requires the identification of data custodian(s) and imposes certain requirements related to administrative, physical, and technical safeguards for data storage and transmission; limitations on further use and disclosure of the data; procedures for responding to data incidents and breaches; and data destruction and retention. We stated that these provisions would be in addition to any restrictions imposed by applicable law, such as the HIPAA Rules, and would not prohibit the ASM participant from making any disclosures of the data otherwise required by law.

We solicited public comments on the proposal at Sec. 512.760(e)(2) to impose certain requirements in the ASM data sharing agreement related to privacy, security, data retention, breach notification, and data destruction.

We did not receive public comments on this provision, and therefore, we are finalizing this provision at Sec. 512.760(e)(2) as proposed. k. ASM Beneficiary Incentives, Collaborative Care Arrangements (CCAs), and Applicability of CMS-Sponsored Model Safe Harbor at Sec. 1001.952(ii) (1) ASM Beneficiary Incentives

As part of CMS' commitment to empower patients to actively participate and be accountable for quality and whole health outcomes, we invited ASM participants to think outside the box with regards to physical and lifestyle factors that contribute to the ASM's targeted chronic conditions. We proposed at Sec. 512.770(a)(1) through (8) to allow ASM participants the option of providing in-kind patient engagement incentives, so long as the following criteria are met:

The incentive must be provided directly by the ASM participant or by an agent of the ASM participant under the ASM participant's direction and control to an ASM beneficiary who is an established patient of the ASM participant.

The ASM participant must be solely responsible for any costs associated with the provision of the incentive,

including but not limited to, the retail value of the item or services offered as the ASM beneficiary incentive.

The item or service provided must be reasonably connected to medical care provided by the ASM participant to an ASM beneficiary for an ASM targeted chronic condition.

The item or service must be a preventive care item or service or an item or service that advances a clinical goal for an ASM beneficiary by engaging the ASM beneficiary in better managing an ASM targeted chronic condition. ASM's clinical goals are centered around promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and PCPs to increase independent physician participation in value-based payment programs.

The item or service must not be tied to the receipt of items or services outside the services furnished by the ASM participant to the ASM beneficiary.

The item or service must not be tied to the receipt of items or services from a particular provider or supplier.

The availability of the items or services must not be advertised or promoted, except that an ASM beneficiary may be made aware of the availability of the items or services at the time the ASM beneficiary could reasonably benefit from them.

The cost of the items or services must not be shifted to any Federal health care program, as defined at section 1128B(f) of the Act.

The totality of items or services, including technology as described at paragraph (b) of this section, provided to an ASM beneficiary may not exceed $1,000 in retail value for any one ASM beneficiary.

We envisioned this could take the form of remote patient monitoring devices such as blood pressure monitors or scales with or without the capability to send data to their providers, vouchers for healthier food options or meal planning, and promotions for regular physical activity such as gym memberships or classes. These are, however, just examples and are not inclusive of all options available to ASM participants who offer beneficiary incentives. To safeguard against potential fraud, waste, and abuse, however, we proposed to require limits on the retail value of offered items or services, when offered items must be retrieved from the ASM beneficiary, and when an ASM beneficiary becomes eligible for ASM beneficiary incentives. Specifically, due to the multi-use nature of technological items and devices, we proposed at Sec. 512.770(b)(1) and (2) the following stipulations for technology that are provided to ASM beneficiaries:

Items or services involving technology provided to a ASM beneficiary must be the minimum necessary to advance a clinical goal of the model as proposed at Sec. 512.770(b), which are: promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and PCPs to increase independent physician participation in value-based payment programs.

Items of technology exceeding $75 in retail value must remain the property of the ASM participant. However, upon the end of their care relationship with the ASM participant, that technology must be retrieved from the ASM beneficiary with documentation of the ultimate date of retrieval. The ASM participant must document all retrieval attempts. In cases when the item of technology is not able to be retrieved, the ASM participant must determine why the item was not retrievable. If it was determined that the item was misappropriated, then the ASM participant must take steps to prevent future beneficiary incentives for that ASM beneficiary. Following this process, documented, diligent, good faith attempts to retrieve items of technology would be deemed to meet the retrieval requirement. If the provided technology breaks or is otherwise rendered unusable for its intended purposes, the technology must be retrieved from the ASM beneficiary with documentation of the ultimate date of retrieval. The ASM participant may replace the unusable unit with the same or similar technology, to the extent practicable, that meets the original requirements for the technology.

In addition to the requirements on audits and record retention at Sec. 512.135, we proposed at Sec. 512.770(c)(1) through (4) that ASM participants who wish to offer ASM beneficiary incentives must also ensure documentation of the incentives distributed according to the following requirements:

ASM participants must maintain documentation of items and services furnished as beneficiary incentives that exceed $75 in retail value.

The documentation must be established contemporaneously with the provision of the items and services with a record established and maintained to include at least the date the incentive is provided and the identity of the ASM beneficiary to whom the item or service was provided.

The documentation regarding items of technology exceeding $75 in retail value must also include contemporaneous documentation of any attempt to retrieve technology at the end of an episode, or why the items were not retrievable.

The ASM participant must retain and provide access to the required documentation.

We sought comment on the proposed parameters at Sec. 512.770 for allowed ASM beneficiary incentives, especially regarding the practicality and feasibility of the requirements around items of technology.

Comment: A few commenters supported the proposal allowing ASM participants to choose in-kind patient engagement incentives for beneficiaries with heart failure and low back pain, noting that this approach would improve upstream chronic disease management, health outcomes, and care delivery. A few commenters shared their belief that the proposed incentives would encourage whole-person care and wellness, reduce disparities, and improve population health and engagement in heart health-related prevention and management behaviors. A commenter supported the use of vouchers for healthier food options and meal planning and recommended that CMS clarify the methodology for attributing and applying the incentives. Another commenter supported the proposed $1,000 for in-kind incentives, noting that it would enable clinicians to provide meaningful patient engagement incentives.

Response: We appreciate the commenters for their support.

Comment: A commenter recommended that CMS consider financial incentives and provide resources to assist practices with integrating new patient-engagement tools. Another commenter recommended that CMS offer financial support to small, rural practices for providing beneficiary incentives, such as Wi-Fi-enabled scales and blood pressure cuffs.

Response: At this time, we do not intend to offer financial support for ASM participants who wish to provide beneficiary engagement incentives. The decision to offer beneficiary engagement incentives is determined by each ASM participant and is not a mandatory requirement for the Model. We do not believe direct financial incentives are

appropriate to promote an optional feature of the Model. Any future considerations regarding this policy would be discussed in future notice-and-comment rulemaking.

Comment: A few commenters supported the proposed ASM beneficiary incentives and recommended that CMS offer additional support such as best practices and templates for contract and financing structures, and technical assistance to help ASM participants integrate digital tools and work with solution vendors.

Response: We appreciate the commenters for their feedback. As we continue to develop model operations, we will consider the suggestions regarding additional CMS support for beneficiary engagement incentives and, if applicable, inform ASM participants of their availability.

Comment: Several commenters offered recommendations to CMS on the types of ASM beneficiary incentives CMS should consider. A few commenters recommended that CMS include incentives for wearable health devices, noting they empower patients to manage their own health, provide predictive insights, deliver timely alerts, and integrate directly into patient care plans. Another commenter recommended that CMS publish a list of preferred, high-value digital tools to support treatment options for patients with low back pain and heart failure. A few commenters recommended that CMS should consider beneficiary incentives for promoting screening for food insecurity, referrals to a community- or hospital-based program for food and nutrition assistance, memberships to fitness facilities, supervised exercise therapy, and Needs Navigation assistance.

Response: We appreciate the commenters for their feedback; however, we believe that ASM participants are best suited to identify the unique needs and preferences of their beneficiary population. Therefore, to ensure we do not unduly influence ASM participants or inadvertently stifle innovation, we decline to limit the types of beneficiary engagement incentives that ASM participants may offer.

Comment: A commenter acknowledged CMS providing an up to $1,000 incentive to provide non-cash benefits to patients and recommended that CMS provide guidance on what qualifies as a non-cash incentive, such as approved technology for coordination between the participating specialists and PCPs.

Response: We refer the commenters to the provisions at proposed Sec. 512.770(a) and (b) for details on the requirements for beneficiary engagement incentives permitted in ASM. As previously discussed, we do not intend to perform preemptive reviews of the types of technology offered by ASM participants to their ASM beneficiaries. However, at Sec. 512.135, the Federal Government, including CMS, HHS, and the Comptroller General, or their designee, has the right to audit, inspect, investigate, and evaluate any documents and other evidence regarding implementation of ASM, including records of all patient engagement incentives offered to ASM beneficiaries.

After consideration of public comments, we are finalizing the regulations at Sec. 512.770 as proposed. (2) Collaborative Care Arrangements (CCAs)

To support the goals of ASM, we proposed to encourage ASM participants to enter into CCAs with primary care practices to further the ASM participant's performance in the improvement activities ASM performance category or advance the clinical goals of ASM.

To allow ASM participants greater flexibility when negotiating CCAs, we proposed at Sec. 512.765(a) to make the CMS-sponsored model arrangements safe harbor at 42 CFR 1001.952(ii)(1) available to ASM participants when establishing CCAs so long as they comply with the requirements of that safe harbor and proposed Sec. 512.771. We proposed at Sec. 512.771(a) to require all CCAs to:

Be in writing, signed by both parties, and containing the effective date of the CCA.

Be exclusively between the ASM participant and the primary care practice with whom the ASM participant shares at least one established patient who is an ASM beneficiary.

The arrangement must be entered into for the purpose of furthering the ASM participant's improvement activities or advancing at least one of ASM's three clinical goals proposed at Sec. 512.771(b), which are: promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and PCPs to increase independent physician participation in value-based payment programs.

Participation in a CCA must be voluntary and without penalty for nonparticipation.

Both parties to the CCA must comply with all applicable statutes, regulations, and guidance, including without limitation: Federal criminal laws; the False Claims Act (31 U.S.C. 3729 et seq.); the anti-kickback statute (42 U.S.C 1320a-7b(b)); the civil monetary penalties law (42 U.S.C. 1320a-7a); and the physician self-referral law (42 U.S.C. 1395nn).

The opportunity to enter into a CCA, and the amount of any payment or other remuneration under a CCA, must not be conditioned directly or indirectly on the volume or value of past or anticipated referrals or business generated by, between, or among the parties to the CCA or any other person.

Any payment between parties set forth in a CCA must not exceed fair market value and must be determined in accordance with a methodology that is solely based on the purposes identified at paragraphs (b)(2)(i) and (b)(2)(ii) of this section.\301\

\301\ There was an error in proposed Sec. 512.771(a)(7), where the regulatory text stated, “Any payment or other remuneration between the parties set forth in a CCA must not exceed fair market value and must be determined in accordance with a methodology that is solely based on the purposes identified at paragraphs (b)(2)(i) and (ii) of this section.” However, due to formatting changes, the referenced language was actually moved and thus refers to proposed (a)(3)(i) and (a)(3)(ii).

Any payment or other remuneration set forth in the CCA must be solely between the parties to the arrangements. Any payment between the parties must be made by check, electronic funds transfer, or another traceable cash transaction.

Both parties to the CCA must retain the ability to make decisions in the best interests of the ASM beneficiary, including the selection of clinicians, devices, supplies, and treatments.

The CCA must not induce any party to reduce or limit medically necessary services to any Medicare beneficiary, or reward the provision of items and services that are medically unnecessary.

ASM participants must maintain contemporaneous documentation, in accordance with Sec. 512.135, regarding all CCAs to which they are a party.

The CCA must stipulate that any non-ASM participant party is considered a downstream recipient for CMS data sharing purposes, and must require the non-ASM participant party to comply with applicable data sharing requirements at proposed Sec. 512.760.

Any non-ASM participant party to a CCA shall be a downstream participant subject to the standard provisions for Innovation Center models specified in subpart A of this part 512.

As proposed, a CCA would be exclusively between an ASM participant and a primary care practice. We considered expanding this definition to allow multiple ASM participants in the same TIN to enter into a CCA with a primary care practice. We were concerned about the burden that may be introduced by having each ASM participant enter these arrangements individually; however, elevating the arrangement to the TIN level opens risks of not being able to accurately track remuneration exchanged between the parties under a CCA. We welcomed comments on our proposed CCA definition and how to address the burden it may impose on ASM participants and partnered primary care practices. We also welcomed comments on the types of services and remuneration that ASM participants may contemplate in their CCAs to meet improvement activity specifications or advancing at least one of ASM's three clinical goals as proposed at Sec. 512.771(b).

We welcomed comments on these proposals at Sec. 512.771(a) and (b).

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A few commenters supported the proposed ASM CCAs, noting that CCAs would encourage coordination between specialists and PCPs, and promote outcomes while lowering costs for patients with chronic conditions. Similarly, another commenter supported the proposals on CCAs, because they would advance the goals of the ASM, foster better collaboration between specialists and primary care physicians, and improve quality of care and patient satisfaction.

Response: We appreciate the commenters for their support.

Comment: Several commenters expressed concern about the proposed CCA requirements in ASM, especially given the independent nature of many specialists and the variability in patient care settings. The commenters expressed concerns that patients often see primary clinicians not associated with specialists' practice or may not have a designated PCP.

Response: We appreciate the commenters for their feedback. However, ASM was designed to bridge the often independent nature of many specialists with PCPs. As such, the ASM improvement activities performance category is precisely intended to establish care coordination pathways between specialists and PCPs who would not otherwise have the incentive to formalize their communications. Moreover, proposed IA-1 requires specialists to take a more active role in confirming that the ASM beneficiary has a PCP, or if they do not have one, assist the ASM beneficiary in finding a clinician who provides primary care services. Not only does this allow specialists to ensure their ASM beneficiaries are receiving necessary follow-up care to prevent exacerbation of their condition, but it also facilitates greater opportunities for cross-specialty innovation to benefit Medicare beneficiaries.

Comment: The commenters recommended that CMS allow flexible, system-level CCA implementation, provide standardized templates and guidance, and offer technical assistance and funding to support integration. Another commenter recommended that CMS publish a model CCA template outlining minimum elements, such as information-sharing, care- transition expectations, and escalation pathways and allow secure e- signatures to streamline coordination.

Response: We appreciate the commenters for their feedback. At this time, we do not intend to provide funding to support the integration of CCAs into specialist and PCP workstreams. We intend to provide resources and materials to support the improvement activities performance category requirements, such as CCAs. We intend to make these resources available on the model website. However, we note that would prefer to allow ASM participants and any collaborative care partners to negotiate arrangements that are best suited to their practices. As we continue developing operational processes around CCAs, we will release additional guidance, if applicable.

Comment: A few commenters recommended that CMS clarify when CCAs are required between PCPs and specialists. A commenter also recommended CMS to exclude CCA requirements for ASM participants in Shared Savings Program or REACH ACOs to reduce redundancy and burden. The commenters also recommended CMS provide bonus points to independent or small- practice specialists participating in CCAs with PCPs in an Advanced APM.

Response: To receive the maximum score available for the ASM improvement activities performance category, ASM participants must enter into at least one CCA with a clinician who provides primary care services to at least one shared ASM beneficiary. Regarding the commenter's suggestion to exclude ASM participants in the Shared Savings Program or ACO REACH from CCA requirements, we do not believe the establishment of a CCA requirement is redundant since ASM's CCA requirements have meaningful deviations from primary care relationship requirements in ACO REACH or the Shared Savings Program. Rather, ASM participants who are already in the Shared Savings Program and ACO REACH should be able to leverage existing care collaboration relationships to fulfill ASM's CCA requirement. We appreciate the suggestion of providing bonus points to small practice specialists that form CCAs with PCPs in an Advanced APM. We note that we will provide eligible ASM participants a positive small practice scoring adjustment on their final score; however, that scoring adjustment is not tied specifically to ASM participants in small practices that are also participating in an Advanced APM. We do not believe that limiting that adjustment to Advanced APM participants would be appropriate because the goal of the small practice scoring adjustment is to provide a fair adjustment for all ASM participants in small practices.

Comment: A few commenters expressed concern that the proposed CCAs may not advance ASM goals and could create conflicting incentives between PCPs and specialists, potentially leading to misalignment, tension, and greater fee-for-service uptake. The commenters also shared their concerns about a lack of clear incentives and support for transitioning to shared accountability and aligned financial models.

Response: We appreciate the commenters for their feedback and agree that additional support for transitioning to shared accountability and aligned financial models is necessary. We particularly agree that clear incentives are necessary to ensure all parties to a CCA are equally accountable for the health outcomes of their shared ASM beneficiaries. Thus, we are refining our proposal at Sec. 512.771(a)(7) to clarify that payments between the parties to a CCA cannot exceed the sum total of the payment adjustments made to an ASM participant's claims for a given ASM payment year as a result of the application of the ASM payment adjustment factor to the ASM participant's Medicare Part B payments for covered professional services during an ASM payment year. For example, if an ASM participant earns an ASM payment adjustment factor of +4 percent for the 2029 ASM payment year, then that ASM participant cannot offer remuneration to a CCA partner that is greater than the sum total of the

difference between the amount they receive in Part B payments for CY 2029 minus the amount they would have received for applicable Part B payments for CY 2029 without the ASM payment adjustment factor. Similarly, if the ASM participant receives an ASM payment adjustment factor of -4 percent, then the ASM participant cannot recover from their CCA partners more than greater than the sum total of the difference between the amount they receive in Part B payments for CY 2029 minus the amount they would have received for applicable Part B payments for CY 2029 without the ASM payment adjustment factor. We believe this is a fair and reasonable refinement of our proposed policy as it ties potential financial incentives associated with CCAs with patient outcomes, similar to the distribution of shared savings and losses in ACO models, and thus is sufficiently related to ASM's clinical goal identified at Sec. 512.771(b)(3) to “increase independent physician participation in value-based payment programs.” We did not propose a definition for “value-based payment programs” because it is an industry-acknowledged term that rewards program participants for making improvements in accepted and evidence-based quality standards and processes.\302\ Thus, the modifications serve to clarify how we intend ASM participants to structure any CCAs that involve financial components.

\302\ Kim H, Mahmood A, Hammarlund NE, Chang CF. Hospital value- based payment programs and disparity in the United States: A review of current evidence and future perspectives. Front Public Health. 2022 Oct 10;10:882715. doi: 10.3389/fpubh.2022.882715. PMID: 36299751; PMCID: PMC9589294.

This refinement also ensures that ASM participants who introduce a financial component to their CCAs continue to comply with all applicable statutes, regulations, and guidance, as stated in proposed Sec. 512.771(a)(5).Per OIG's rationale for the creation of the CMS- sponsored model safe harbors at Sec. 1001.952(ii) at 84 FR 55694 the significant flexibility of the safe harbor relied upon the Innovation Center's ability to oversee, monitor, and embed program integrity protections in the models. To ensure ASM upholds the standards for program integrity contemplated by the OIG in making this safe harbor available for ASM participants, we are also identifying a requirement for all ASM participants to screen any potential care collaborators against the OIG Exclusion List. The OIG Exclusion List is a publicly available, searchable website that identifies individuals and entities currently excluded from participation in Medicare, Medicaid and all other Federal health care programs. We considered requiring ASM participants to regularly submit lists of all non-ASM participant parties with which they have established CCAs but recognized the high level of administrative burden on both the ASM participant and on CMS resources. Thus, while we will not require ASM participants to submit information on the primary care practitioners with whom they have executed CCAs on a regular basis, we reserve the right at Sec. 512.150 to request such a list as part of CMS monitoring and compliance activities at any time in a form and manner to be determined by CMS.

Regarding commenters' concerns about conflicting incentives created by CCAs between participants and primary care practitioners, we do not agree with the commenters' statement that CCAs may create tension and shift care patterns in an undesirable direction. Using lessons learned from Making Care Primary (MCP) and ACO REACH, ASM's CCA requirements focus on improving communication and information-sharing between specialists and primary care practitioners. They are not intended to reward more visits, and instead, are meant to reduce the volume of medically unnecessary or duplicative care by encouraging shared responsibility for the ASM beneficiary's health outcomes between ASM participants and primary care practitioners.

After consideration of public comments, we are finalizing our proposals with modifications to support the transition to shared accountability between ASM participants and their collaborative care partners and to ensure ASM participants perform their due diligence in ensuring their care collaborators are not excluded from participation in Federal health programs. (3) Application of the CMS-Sponsored Model Arrangements and Patient Incentives Safe Harbor to ASM Beneficiary Incentives and Collaborative Care Arrangements (CCAs)

Consistent with the authority under section 1115A(d)(1) of the Act, the Secretary may consider issuing waivers of certain fraud and abuse provisions in sections 1128A, 1128B, and 1877 of the Act. As noted in the CY 2026 PFS proposed rule, no fraud or abuse waivers are being issued in this final rule; fraud and abuse waivers, if any, would be set forth in separately issued documentation (90 FR 32624). Any such waiver, if issued, would apply solely to ASM and could differ in scope or design from waivers granted for other programs or models. Thus, notwithstanding any provision of this final rule, ASM participants must comply with all applicable laws and regulations, except as explicitly provided in any such separately documented waiver issued under section 1115A(d)(1) of the Act specifically for ASM.

In addition to or in lieu of a waiver of certain fraud and abuse provisions in sections 1128A and 1128B of the Act, CMS proposed to make a determination that the anti-kickback statute safe harbor for CMS- sponsored model arrangements and CMS-sponsored model patient incentives (Sec. 1001.952(ii)(1) and (2)) is available to protect remuneration exchanged under certain CCAs and patient incentives that may be permitted under the final rule, if issued. Specifically, we proposed at Sec. Sec. 512.765(a) and (b) that the CMS-sponsored models safe harbor would be available to protect CCAs and ASM beneficiary incentives so long as they meet specified requirements at proposed Sec. Sec. 512.770 and 512.771 under the model and the requirements of the safe harbor at Sec. 1001.952(ii).

We considered not allowing use of the respective safe harbor provisions for ASM participants who enter into CCAs or who wish to provide beneficiary incentives. However, we determined that use of the safe harbor would encourage the goals of the model. We believe that a successful model requires integration and coordination among ASM participants and other health care providers and suppliers. We believe the use of the respective safe harbor provisions available for CCAs and beneficiary incentives would encourage and improve beneficiary experience of care and coordination of care among providers and suppliers. We also believe these safe harbor provisions offer flexibility for innovation and customization of the patient care experience. Use of the respective safe harbor provisions for CCAs and beneficiary incentives allow for emerging arrangements that reflect up- to-date understandings in medicine, science, and technology.

Thus, we proposed at Sec. 512.765 making the CMS-sponsored model arrangements and patient incentives safe harbor at Sec. Sec. 1001.952(ii)(1) and 1001.952(ii)(2) available for ASM participants to foster stronger connections with PCPs in their communities and to promote a more holistic approach to ASM beneficiary care outcomes, so long as they comply with the requirements of the safe harbor at Sec. 1001.952(ii) and with the proposed

requirements at Sec. Sec. 512.770 and 512.771. We sought public comments on this proposal.

We did not receive public comments on this provision, and therefore, we are finalizing as proposed at Sec. 512.765. l. Evaluation Approach (1) Background

ASM is designed to incentivize specialist providers to engage in accountable care and aims to improve quality of care while lowering spending. An evaluation of ASM would be required in accordance with section 1115A(b)(4) of the Act, which requires the Secretary to evaluate each model tested by the Innovation Center (84 FR 34533). All Innovation Center models are rigorously evaluated on their ability to improve quality of care and reduce costs. Additionally, we routinely monitor Innovation Center models for potential unintended consequences of the model that run counter to the stated objective of lowering costs without adversely affecting quality of care. Outlined later in this section are the proposed design and evaluation methods, the data collection methods, key evaluation research questions, and the evaluation period and anticipated reports for the proposed ASM. (2) Design and Evaluation Methods

We proposed an evaluation methodology for ASM that would be consistent with the standard Innovation Center evaluation approaches that we have taken in other models, such as TEAM and CJR. Specifically, the evaluation design and methodology for ASM would be designed to allow for a comparison of historic patterns of care among ASM participants to any changes made in these patterns in response to ASM. The overall design would include a comparison of ASM participants with comparable specialist providers not participating in ASM to help us discern simultaneous and competing providers and market level forces that could influence our findings.

Our proposed evaluation methodology for this model builds upon our proposal to use CBSAs and metropolitan divisions as the geographic unit of selection for participation in the model based on a stratified random assignment as described in section III.C.2.c.(4) of this final rule. Under this approach, researchers evaluate the effects of the model on outcomes of interest by directly comparing CBSAs and metropolitan divisions that are randomly selected to participate in the model to a comparison group of CBSAs and metropolitan divisions that were not randomly selected for the model but could have been. Randomized evaluation designs of this kind are widely considered the “gold standard” for social science and medical research because they ensure that the systematic differences are reduced between units that do and do not experience an intervention, which ensures that (on average) differences in outcomes between participating and non- participating units reflect the effect of the intervention.

We plan to use a range of analytic methods, including regression and other multivariate methods appropriate to the analysis of stratified randomized experiments to examine each of our measures of interest. Measures of interest could include, for example, quality of and access to care, utilization patterns, expenditures, and beneficiary experience. With these methods, we would be able to examine the experience of the ASM participants over time relative to those in the comparison group controlling for as many of the relevant confounding factors as is possible. The evaluation would also include rigorous qualitative analyses to understand the contextual factors influencing the implementation and impact of ASM and the evolving nature of care delivery transformation.

In our proposed evaluation methodology, we plan to account for the impact of ASM at the geographic unit level, the TIN/NPI level, and the beneficiary level. We would also consider various statistical methods to address factors that could confound or bias our results. We would also account for clustering of beneficiaries within TINs and markets. Accounting for clustering ensures that we do not overstate our effective sample size by failing to account for the fact that the performance of participants in a market may not be fully independent of one another. Accounting for clustering may also improve statistical precision and allow us to better examine how patterns of performance vary across TINs and markets. Thus, in our analysis, if a large TIN consistently has poor performance, clustering would allow us to detect improved performance in the other, smaller TINs in a market rather than place too much weight on the results of one TIN and potentially lead to biased estimates and mistaken inferences.

Finally, we plan to use various statistical techniques to examine the effects of the ASM while also accounting for the effects of other ongoing interventions such as the Shared Savings Program. For example, we are considering additional regression techniques to help identify and evaluate the incremental effects of adding ASM in areas where patients and market areas are already subject to these other interventions as well as potential interactions among these efforts. (3) Data Collection Methods

As part of our proposed evaluation methodology, we proposed to consider multiple sources of data to evaluate the effects of ASM. We expect to base much of our quantitative analyses on secondary data sources including Medicare FFS claims. The beneficiary claims data would provide information such as utilization and expenditures in total and by type of provider and service. In conjunction with the secondary data sources mentioned previously, we would consider a CMS-administered survey, guided interviews, and focus groups of beneficiaries who experienced a heart failure or low back pain episode during the ASM test period. This survey would be administered to ASM beneficiaries who were in an episode or similar patients selected as part of a control group. The primary focus of this survey would be to obtain information on the ASM beneficiary's experience in episodes relative to usual care. We are also considering a survey administered by CMS to ASM participants. These surveys would provide insight into providers' experience under the model and further information on the care redesign strategies undertaken by health care providers.

In addition, we would consider site visits and focus groups with selected active ASM participants. We believe that these qualitative methods would provide contextual information that would help us better understand the dynamics and interactions occurring between ASM participants and other providers. For example, these data would help us better understand ASM participants' plans for engagement with PCPs in accountable care arrangements, as well as how those plans were implemented and what they achieved. Additionally, in contrast to relying on quantitative methods alone, qualitative approaches would enable us to capture variations in implementation as well as identify factors that are associated with successful interventions and distinguish the effects of multiple interventions that may be occurring within participating providers, such as simultaneous ACO and bundled payment participation.

We are considering the primary data collection efforts with providers and beneficiaries within the comparison group. The systematic data collection from comparison group providers would allow for parsing out changes in

standard of care from the ASM impact. Additionally, primary data collection with beneficiaries who received care at comparison group providers would provide critical information about the impact of the model on self-reported health status, experience of care and overall satisfaction. (4) Key Evaluation Research Questions

Our evaluation would assess the impact of ASM on the dual aims of improved care quality and reduced costs. The evaluation would include assessments of Medicare expenditures, utilization, quality outcomes, and patient experience of care. Our key evaluation questions would include, but are not limited to, the following:

Payment. Is there a reduction in Medicare expenditures in absolute terms? By subcategories including major cost drivers for heart failure and low back pain episodes? Does ASM reduce variations in expenditures that are not attributable to differences in health status? Did ASM result in net savings to the Medicare program, after accounting for any payment adjustments made under the model?

Utilization. Are there changes in Medicare utilization patterns overall and for specific types of services including services identified as “low value”? How do these patterns compare to historic patterns, regional variations, and national patterns of care? How are these patterns of changing utilization associated with Medicare payments, patient outcomes, and general clinical judgment of appropriate care?

Quality of care. What impact did the model have on quality of care for beneficiaries? Did the incidence of relevant clinical outcomes such as hospital admissions remain constant or decrease? Were there changes in beneficiary outcomes under the model compared to appropriate comparison groups?

Beneficiary experience. What impact did the model have on beneficiary experience overall and for beneficiary subgroups? Did the model have an impact on beneficiaries' engagement in their health care decisions?

Care delivery transformation. How has provider behavior in the mandatory geographic areas changed under the model? Is there evidence of broader market-level changes? Are provider relationships changing over the course of the model? Is the model facilitating continuity of care between specialty and PCPs? Is there evidence that the participants' changes in care delivery that were made in the response to the model will be sustained?

Unintended outcomes. Did ASM result in any unintended consequences, including adverse selection of patients, access problems, cost shifting, evidence of stinting on appropriate care, anti- competitive effects on local health care markets, evidence of inappropriate referrals practices? If so, how, to what extent, and for which beneficiaries or providers? (5) Evaluation Period and Anticipated Reports

As discussed in section III.C.2.b. of this final rule, we proposed that the ASM test period would be 7 years that includes both ASM performance years and ASM payment years. The evaluation period would encompass the ASM test period. We would plan to evaluate ASM on an annual basis. However, we recognize that interim results are subject to issues such as sample size and random fluctuations in practice patterns. Hence, while we intend to conduct periodic summaries to offer useful insight during the model test, a final analysis after the end of the 7-year ASM test period would be important for ultimately synthesizing and validating results.

We sought public comments on our proposed design, evaluation, data collection methods, and research questions.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: A few commenters made recommendations on the proposed evaluation methodology. A commenter recommended that the agency monitor the model's impact on care coordination, access, and clinician workload and that CMS should make midcourse adjustments as needed to protect patient care quality. Another commenter suggested that CMS assess whether care teams can successfully prevent major complications and ensure that services are coordinated around the primary episode. A commenter also recommended that CMS study successful integrated models, such as Allina Health integrated pain management programs; use existing data from integrated pain programs showing improved outcomes and reduced cost; and ensure access to comprehensive pain management options for all Medicare beneficiaries.

Response: We appreciate the commenters for their feedback on the ASM evaluation methodology. The evaluation approach will measure the model's impact on various measures of quality of care, including care coordination, care utilization, beneficiary experience, and provider experience with ASM. The evaluation will measure important outcomes such as the rate of adverse events and, to the extent possible, will collect primary data, including qualitative data, to understand the model's implementation and impact.

Comment: A commenter recommended that CMS evaluate ASM by comparing cost and quality measures between participating and non-participating physicians, and by assessing changes in physician performance over time, rather than requiring participation or limiting the model to randomly selected regions.

Response: We appreciate the commenter for their feedback on the evaluation approach. A mandatory, randomized selection approach allows for a more robust and reliable evaluation compared to voluntary participation because it allows us to account for unobserved differences between physicians and practices that may account for differences between the intervention and comparison groups. We believe that the current approach is preferable in order to allow for a reliable evaluation.

Comment: A few commenters offered recommendations regarding the proposed analytic methods to evaluate the ASM. The commenters recommended that CMS implement robust monitoring to ensure beneficiary access is not negatively affected by ASM and use quality measures to assess whether care teams are meeting patient goals.

Response: We appreciate the commenters for their feedback on the ASM evaluation methodology. The evaluation approach will measure the model's impact on various measures of quality of care, including beneficiary experience. The evaluation approach accounts for primary data collection, such as interviews and focus groups, to help measure beneficiary experience and aspects of care quality that cannot be captured from secondary data sources.

Comment: A few commenters supported the proposed ASM evaluation approach, noting that ASM would improve quality of care, reduce costs, incentivize specialists to prioritize outcomes and enhance greater collaboration and coordination of care between PCPs and specialists.

Response: We appreciate the commenters for their feedback on the proposed ASM evaluation approach. We agree that ASM is positioned to improve quality of care, reduce costs, and enhance collaboration and coordination of care between PCPs and specialists.

The proposed evaluation approach is designed to accurately and robustly measure the impact of the model on these outcomes.

Comment: A few commenters offered additional recommendations for CMS to consider in ASM evaluation, such as evaluating reduced Part A spending based on improved utilization outcomes and capabilities of clinicians and practices to handle complexity of care. A commenter recommended that CMS prioritize model designs that align incentives to reward meaningful care transformation and equitably share savings, improving financial outcomes for both CMS and ASM participants.

Response: We appreciate the commenters for their feedback on the ASM evaluation methodology. The current evaluation approach will measure the impact of the model on total spending, including Parts A and B, and will also measure impact on several utilization measures, including services such as imaging and surgeries, and adverse events such as hospitalizations and ED visits.

Comment: A few commenters requested additional information regarding the specific methodology and criteria CMS will use to determine whether a service administered under the model is of low value, and how patient complexities and comorbidities will be integrated into these assessments. A commenter additionally requested the clinical evidence to support the value determination.

Response: Studies in the literature have developed methods for identifying low-value service utilization low back pain services including for back imaging, spinal injections, and vertebroplasty or kyphoplasty using claims data. CMS plans to identify and measure low- value use of these services based on specific criteria (for example, diagnoses) developed from the literature. Two relevant studies include:

(1) Schwartz, A.L., Landon, B.E., Elshaug, A.G., Chernew, M.E., & McWilliams, J.M. (2014). Measuring low-value care in Medicare. JAMA internal medicine, 174(7), 1067-1076. https://doi.org/10.1001/jamainternmed.2014.1541.

(2) Fleming, C., Shin, E., Powell, R., Poznyak, D., Javadi, A., Burkhart, C., Ghosh, A., & Rich, E.C. (2022). Updating a Claims-Based Measure of Low-Value Services Applicable to Medicare Fee-for-Service Beneficiaries. Journal of general internal medicine, 37(13), 3453-3461. https://doi.org/10.1007/s11606-022-07654-7.

After consideration of public comments, we are finalizing our proposed design, evaluation, data collection methods, and research questions. m. Overlap With Other Models Tested Under Section 1115A and CMS Programs

We proposed to permit ASM to overlap with other Innovation Center models and CMS programs, with the exception of MIPS, from which ASM participants would be excluded from reporting and participation, as proposed in in the CY 2026 PFS proposed rule (90 FR 32627).

We intentionally designed ASM to apply to Medicare FFS beneficiaries that are assigned, aligned, or attributed to other CMS Innovation Center models, such as existing or forthcoming population- based total cost of care models, or CMS programs, such as the Shared Savings Program, while ensuring compatibility and alignment towards improving care and reducing spending. The ASM payment methodology allows for overlaps between ASM and other Innovation Center models or CMS programs by avoiding shared savings payments to participants in more than one shared savings model, as barred by statute in 42 U.S.C. 1395jjj(b)(4)(A).

Overlapping incentives are key to aligning incentives across the care team because clinicians are more likely to change their behavior or engage in care transformation when the incentives directly affect them.\303\ Because specialists drive the majority of spending within Original Medicare, increasing specialist awareness of their participation in ACOs and better engaging them in care transformation is key.304 305 Given this objective, ASM would apply to all clinicians meeting the ASM participant eligibility criteria, regardless of whether the clinician is excused from reporting to MIPS due to Advanced APM participation or if the clinician is exempt from reporting MIPS due to eligibility requirements. One reason that we proposed to include this broad selection of clinicians as part of ASM is to encourage more specialist engagement with ACOs. The benefits of driving further specialist engagement in value-based care outweigh the additional burdens, especially given the specialists' patient panels make up a smaller portion of ACO-assigned beneficiaries relative to primary care.\306\

\303\ Leao DLL, Cremers HP, van Veghel D, Pavlova M, Groot W. The Impact of Value-Based Payment Models for Networks of Care and Transmural Care: A Systematic Literature Review. Appl Health Econ Health Policy. 2023 May;21(3):441-466. doi: 10.1007/s40258-023- 00790-z.

\304\ Markovitz AA, Ryan AM, Peterson TA, Rozier MD, Ayanian JZ, Hollingsworth JM. ACO Awareness and Perceptions Among Specialists Versus Primary Care Physicians: a Survey of a Large Medicare Shared Savings Program. J Gen Intern Med. 2022 Feb;37(2):492-494.

\305\ Lewis, Valerie A.; Schoenherr, Karen; Fraze, Taressa; Cunningham, Aleen. Clinical coordination in accountable care organizations: A qualitative study. Health Care Management Review 44(2):p 127-136, 4/6 2019.

\306\ Barnett ML, McWilliams JM. Changes in specialty care use and leakage in Medicare accountable care organizations. Am J Manag Care. 2018 May 1;24(5):e141-e149.

Furthermore, for any clinician who achieves Qualifying APM Participant (QP) status in an Advanced APM, the QP is waived from reporting and participating in MIPS (81 FR 77062). In addition, participation in MIPS is optional for those Advanced APM participants who are partial QP (81 FR 77014). ASM, however, was designed to purposely overlap with Advanced APMs and ACOs to increase engagement of specialists, regardless of organizational structure. And for specialists participating in an ACO, ASM intends to capture Medicare FFS beneficiaries across the entire specialist practice rather than only the subset of beneficiaries assigned to the ACO. This would expand the impact of incentives beyond those beneficiaries assigned to the ACO to the specialist's full panel of beneficiaries who are treated for each relevant condition. This ensures that ACOs are enabled by a landscape of specialists, whether participating in an ACO model or not, who are more likely to cooperate in care transformation to achieve their shared goals.

For these reasons, we proposed to allow overlaps between ASM and other Innovation Center models and CMS programs. We proposed that this model would apply to all clinicians meeting the eligibility criteria, regardless of whether the clinician is exempt from MIPS reporting during ASM's performance year due to QP status or Partial QP status as a result of meeting the thresholds for payments or patients tied to participation in an Advanced APM. We sought comment on the proposal to permit overlap between ASM and other Innovation Center and CMS programs.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Many commenters generally supported the proposed approach to include all clinicians participating in other Innovation Center models that meet the proposed participant eligibility criteria in ASM. Another commenter supported CMS' efforts to enhance ACO-specialist risk arrangements with specialists in total cost of care models. Many commenters

recommended that CMS exclude Advanced APMs and clinicians that have QP status or Partial QP status from another model from ASM or allow them to voluntarily opt-in to ASM. The commenters expressed their concerns that applying ASM requirements to QPs undermines MACRA's intent, imposes unnecessary burdens, and risks discouraging participation in APMs, particularly among specialists

Response: We appreciate commenters for their feedback supporting ASM overlap with other Innovation Center models. We also acknowledge their concerns that clinicians with QP or Partial QP status under the Quality Payment Program should be excluded from ASM or allowed to voluntarily participate As we wrote in the CY 2026 PFS proposed rule, we designed ASM so that it would capture a greater share of FFS beneficiaries with ASM's targeted chronic conditions, creating opportunities to improve quality and reduce unnecessary and low-value care spending related to these conditions (90 FR 32627). For ASM participants participating in ACO models, only a subset of their FFS beneficiaries with ASM's targeted chronic conditions may be attributed to the ACO, meaning that a portion of these beneficiaries receiving services from the ASM participant are potentially not within an accountable care arrangement. We believe that allowing for overlap would increase the number of FFS beneficiaries whose specialists are being held accountable for care furnished related to ASM's targeted chronic conditions. We also believe that the layering of incentives between ASM and other models or initiatives creates a complementary but direct incentive on specialists, including those associated with an ACO, to improve care and reduce unnecessary spending. For these reasons, we believe that mandatory participation regardless of QP, Partial QP status, or participation in another APM is appropriate to achieve ASM's goals. Regarding the suggestion for a voluntary opt-in, we did not propose or consider a voluntary opt-in for certain types of ASM participants in the CY 2026 PFS proposed rule, so we believe these comments are out of scope.

We disagree that ASM would discourage specialist participation in other APMs. Given ASM's model overlap policy, we would not preclude an ASM participant from participating in another model or receiving other models' incentives, such as the Advanced APM conversion factor, should they qualify. We also disagree that ASM undermines MACRA's intent. While ASM leverages the MIPS performance assessment framework, ASM is a separate Innovation Center model that waives MIPS requirements. While we did not propose that ASM would meet the criteria for Advanced APM status in the CY 2026 PFS proposed rule, we will consider if there are ways for ASM to qualify as an Advanced APM in the future based on the Advanced APM requirements.

We acknowledge that ASM would have some level of burden for ASM participants to meet its requirements. We believe that we have introduced features into the model to mitigate this burden, such as allowing for group-level reporting of certain ASM performance categories. We also believe that the burden associated with participation in ASM is required to achieve increased accountability on specialists managing beneficiaries with ASM's targeted chronic conditions.

Comment: A few commenters voiced concerns that ASM is not an Advanced APM and does not offer a pathway to specialty-focused Advanced APM participation. The commenters shared their belief that ASM would increase financial risk and administrative burden to specialists without providing the benefits of qualifying APM participant status, hindering CMS' goals of advancing value-based care. The commenters further recommended that CMS develop approaches to create a pathway into Advanced APM participation and collaborate with specialists to design models that enable clinicians to qualify as for QPs.

Response: We appreciate the commenters' questions and feedback about whether ASM would qualify as an Advanced APM. We will consider if there are ways for ASM to qualify as an Advanced APM in the future based on the Advanced APM requirements as defined at Sec. 414.1415.

Comment: Many commenters were concerned about the proposed ASM overlap with the Shared Savings Program, noting concerns that allowing overlapping participation in both models could create conflicting incentives, duplicative penalties, increased administrative burdens, and fragmentation of care. A commenter shared their belief that specialists are motivated to participate in ACOs, in part, to avoid MIPS reporting requirements. Several commenters further recommended that ASM implement approaches to reduce redundancy, streamline compliance, and reduce conflicting obligations for clinicians participating in both programs.

Response: We appreciate the commenters for their feedback on our proposals to allow overlap between ASM and the Shared Savings Program. As we discussed in the CY 2026 PFS proposed rule, we designed ASM to increase engagement of specialists, regardless of organizational structure (90 FR 32627). For ASM participants that participate in the Shared Savings Program, ASM intends to capture more Medicare FFS beneficiaries across the entire specialist practice rather than only focusing on accountable care relationships with beneficiaries assigned to a Shared Savings Program ACO. We do not believe that dual participation in ASM and the Shared Savings Program would lead to fragmentation of care as we believe that care delivery approaches used by ASM participants in a Shared Savings Program ACO would help ASM participants perform well in ASM. Furthermore, we do not believe that overlap would create conflicting or duplicative penalties. ASM's payment incentives are targeted towards Part B payments for covered professional services and would not conflict with any potential shared savings an ASM participant could earn through Shared Savings Program participation. We acknowledge that ASM would require the reporting of some measures and attestations that are different from Shared Savings Program's requirements, and would, therefore, introduce some level of burden. However, we believe that the reporting requirements, which are distinct from MIPS requirements, are necessary to expand specialist accountability for a larger number of FFS beneficiaries to improve quality and reduce unnecessary spending related to ASM's targeted chronic conditions.

Comment: A few commenters expressed concerns about the potential overlap of the ASM with existing Innovation Centers models, citing increased provider burden, operational complexity, and duplication of efforts. A few commenters noted their concerns that participation in multiple models with differing quality and financial incentives could overwhelm clinicians, increase compliance costs, and reduce the effectiveness of each model, and recommended making ASM participation voluntary to reduce complexity. A few commenters raised potential concerns about the suitability of specialists as care coordinators for chronic conditions when patients are already aligned with PCPs through accountable care arrangements and recommended that specialists retain flexibility to collaborate with PCPs

rather than operate under a parallel, mandatory accountability structure.

Response: We appreciate commenters for sharing their concerns related to the overlap of ASM with other Innovation Center models. We discussed in the CY 2026 PFS proposed rule (90 FR 32627) and in the preamble of this section of this final rule that intentionally allowing for overlap with other Innovation Center models would increase direct incentives on specialists, which would incentivize them to improve care for FFS beneficiaries with ASM's targeted chronic conditions. When incentives directly affect a clinician, they are more likely to change their behavior or engaged in care transformation.\307\ We disagree that adding non-conflicting incentives would overwhelm clinicians or reduce the effectiveness of each model; we believe that these layered incentives could increase the effectiveness of individual models in improving care and reducing unnecessary spending. We disagree that voluntary ASM participation would reduce complexity. As we have discussed in section III.C.2.c.(1) of this final rule, voluntary participation undermines the model test due to selection bias concerns and is the not preferred policy approach. We acknowledge that ASM participants would face a burden in meeting ASM's requirements; however, we believe that the reporting requirements are necessary to expand specialist accountability. We also acknowledge that both PCPs and specialists have a role in managing chronic conditions, like heart failure and low back pain. However, we believe that there is an opportunity to increase the incentives on specialists for improving chronic condition management for select conditions. As we discuss in section III.C.1. of this final rule, we designed ASM with a focus on specialists who commonly treat patients with certain chronic conditions in the ambulatory setting, develop longitudinal relationships with patients, and co-manage beneficiaries with PCPs. Specialists who treat chronic conditions are likely to benefit from improved integration between specialty and primary care to maximize opportunities for high- value care. Therefore, we do not view these accountability structures to run in opposition or in parallel; rather, the accountability structures on both PCPs and specialists would function synergistically to improve chronic condition management.

\307\ Leao DLL, Cremers HP, van Veghel D, Pavlova M, Groot W. The Impact of Value-Based Payment Models for Networks of Care and Transmural Care: A Systematic Literature Review. Appl Health Econ Health Policy. 2023 May;21(3):441-466. doi: 10.1007/s40258-023- 00790-z.

Comment: Several commenters recommended that CMS provide additional clarification on the payment reconciliation methodology for ASM participants that participate in other models to account for financial overlap between models. The commenters specifically expressed concern regarding how CMS would reconcile the overlap in the attribution of clinicians to beneficiaries and how the overlap in redistribution payments would include shared savings. Several commenters suggested CMS to consider the potential interaction of ASM with total cost of care measures and the Shared Savings Program, and recommended that CMS exclude participants from ASM payment adjustments. A commenter recommended that CMS evaluate how substantially higher upward adjustments and payment distributions under ASM could potentially affect the financial methodologies used by ACOs.

Response: We appreciate commenters for raising their concerns on allowing model overlap and how ASM payment adjustments could influence payment reconciliation methodologies in other models, particularly ACO models. At this time, we intend for ASM payment adjustments to be handled the same way that MIPS payment adjustments are accounted for in ACO benchmarking calculations. We believe this treatment would be appropriate given the relatively similar risk level between ASM and MIPS, particularly in the first 2 payment years, and the similar application of the payment adjustments on Part B payments for covered professional services. We will continue to work with relevant teams across the Innovation Center and CMS to coordinate on these methodologies. Should we adjust the treatment of ASM payment adjustments in other models or programs' pricing or payment methodologies, we would do so through the appropriate regulatory channel or through additional guidance issued by the applicable model or program.

Comment: A commenter supported the proposal to allow for ASM overlap with other Innovation Center models and programs but did not support overlap with MIPS.

Response: We appreciate the commenter's support for allowing ASM to overlap with other Innovation Center models. However, we note that ASM would not overlap with MIPS. As discussed in section III.C.2.h.(2) of this final rule, we will waive all ASM participants from participation in MIPS for any ASM performance year in which they meet the ASM participant eligibility criteria, unless otherwise specified at Sec. 512.710(a)(2).

Comment: Several commenters requested clarification on how ASM would interact with other CMS programs and guidance on how participation, attribution, quality measures, and incentive payments will be handled for clinicians involved in multiple programs. Several commenters provided several recommendations to improve the integration of ASM with other CMS programs, with an emphasis on reducing administrative burden, eliminating requirements to submit measures without an eCQM collection type, aligning incentives, and supporting value-based care through pathways for specialists transitioning into ACOs or Advanced APMs.

Response: We appreciate commenters for requesting further clarification on how ASM would interact with other CMS programs. We provide clarification throughout this section of this final rule on feedback we received about model and program-specific interactions and overlaps. As we described in the CY 2026 PFS proposed rule (90 FR 32627) and in this final rule, our current position is that ASM participants will not be excluded from participation in other Innovation Center models or CMS programs other than MIPS. We refer readers to section III.C.D.h.(2) of this final rule for further comments and responses related to the finalized MIPS waiver under ASM. Based on our finalized definition of ASM beneficiary at Sec. 512.705, we do not anticipate that beneficiary attribution in other Innovation Center models or programs would be affected by virtue of being identified as an ASM beneficiary. Regarding quality measures, our required quality measure set for each ASM cohort largely pulls from existing measures from other programs, primarily MIPS. We note that we have also tried to include several quality measures with an eCQM collection type and administrative claims-based measures to reduce provider burden. We refer readers to section III.C.2.d.(2) of this final rule for further discussion on how we aligned quality measures we other CMS programs. Regarding aligning payment incentives, as ASM would allow seamless overlaps with other models and programs (with the exception of MIPS), ASM participants would receive payment adjustments in ASM but remain eligible to receive other incentives from participation in other models or programs. We refer readers to responses to comments throughout this section of this final rule on the rationale for allowing overlapping financial incentives under ASM and other

models. Finally, we acknowledge commenters' recommendations to consider on-ramps for participants that may be transitioning into ASM from ACOs or other Advanced APMs. While we understand that preparing for participation in ASM would require time, we believe that ASM participants who previously participated in ACOs or other Advanced APMs would likely have much of the necessary infrastructure and workflows in place in order to meet ASM's requirements. We also note that the advanced notification of mandatory participation coupled with educational resources that we plan to provide ASM participants in advance of the model start date would support this group of ASM participants to prepare for the model.

Comment: A few commenters recommended that CMS ensure greater ACO incentives for clinicians participating in both models. Another commenter recommended that CMS consider implementing a pilot program as an alternative to ASM, offering ACOs with significant numbers of heart failure patients to improve beneficiary outcomes.

Response: We appreciate commenters for their ideas related to ACO- level incentives for ACOs that have participants in ASM. Our goal with ASM is to focus on increasing the incentives on specialists to improve outcomes and reduce unnecessary spending. Through engagement with specialists, ACOs and ASM participants have the opportunity to work collaboratively to improve beneficiary outcomes such as those related to heart failure or low back pain, and to potentially receive shared savings in part because of such efforts. We believe that ASM creates a stronger incentive on the specialist to improve upstream chronic condition management. For those ASM specialists associated with ACOs, there is then an even stronger incentive to improve the outcomes of beneficiary aligned to the ACO given the potential for shared savings. Any consideration of additional ACO incentives for clinicians participating in both ASM and an ACO would need to be taken up by the individual ACO model or applicable program.

Comment: A few commenters recommended potentially using a nested approach within broader population-health reforms like ACOs or prioritizing the total cost of care models over episodic care models. A commenter recommended that CMS develop approaches for engaging ACOs in bundled payments with specialists. A commenter recommended data transparency through “shadow bundle data” reports to include all- payer data, enabling ACOs to better assess specialist performance and make informed partnership decisions.

Response: We appreciate the commenters' ideas on exploring a nested bundle approaches within total cost of care models, approaches for engaging ACOs in bundled payments with specialists, and all-payer shadow bundle data. These suggestions currently fall outside of the scope of provisions considered by ASM.

Comment: Commenters raised concerns about the potential burden, duplicative and resource-intensive efforts, and confusion for participants involved in the overlap between the ASM, the Transforming Episode Accountability Model (TEAM), and the Wasteful and Inappropriate Service Reduction (WISeR) models, highlighting that the overlap may create challenges for model implementation, evaluation, and attribution of quality and cost reduction outcomes for clinicians required to participate in all the three models.

Response: We appreciate commenters raising concerns about the potential burden, confusion, and attribution of quality and cost outcomes in evaluations that could result in ASM participants overlapping with TEAM and the WISeR model. We disagree with these concerns as we believe the potential overlap across the three models would support the delivery of clinically appropriate, evidence-based care that can lead to improved outcomes and reductions in unnecessary spending related to ASM's targeted chronic conditions.

TEAM is a 5-year mandatory alternative payment model tested by the Innovation Center that will begin on January 1, 2026, and end on December 31, 2030. TEAM will test whether an episode-based pricing methodology linked with quality measure performance for select acute care hospitals reduces Medicare program expenditures while preserving or improving the quality of care for Medicare beneficiaries who initiate certain episode categories (90 FR 37074). TEAM requires eligible acute care hospitals within selected CBSAs to participate (89 FR 69663 through 69710). Further, TEAM will test five surgical episode categories: Coronary Artery Bypass Graft Surgery (CABG), Lower Extremity Joint Replacement (LEJR), Major Bowel Procedure, Surgical Hip/Femur Fracture Treatment (SHFFT), and Spinal Fusion (90 FR 37073). Based on the selected episodes in TEAM, we believe there could be synergistic effects across the models should a CBSA be selected for participation in both ASM and TEAM. Given the different participant profiles and model requirements given TEAM's participants are hospitals whereas ASM's are individual clinicians practicing in an ambulatory setting, we do not believe that there is justification for excluding CBSAs selected for TEAM from selection in ASM. In fact, better care and efficiencies generated in TEAM during the post-discharge period after a surgery, such as a spinal fusion or CABG, could support better longitudinal condition management in ASM; the EBCMs on which we will score ASM participants include accountability for downstream care, such as inpatient services related to TEAM episodes.

The WISeR voluntary model targets select services that may be low- value or vulnerable to fraud, waste, and abuse. WISeR will test the use of enhanced technology to decrease certain wasteful (low-value) services shown to have little to no clinical, evidence-based benefit in six states.\308\ To help reduce burden, WISeR is testing enhanced technology to help streamline prior authorization; prior authorization is also voluntary, and providers can opt to undergo pre-payment review after a claim is submitted. Further, WISeR does not change Medicare coverage or payment criteria; it simply enforces existing criteria as specified in the National or Local Coverage Determinations. WISeR includes services that may be applicable to ASM beneficiaries with low back pain such as vertebroplasty/kyphoplasty and epidural spinal injections. Helping to ensure these services are delivered appropriately can help ASM participants achieve their quality and cost goals. Similar to TEAM, we believe that potential synergies between ASM and WISeR could ultimately benefit beneficiaries.

\308\ https://www.cms.gov/priorities/innovation/innovation-models/wiser.

We would also appropriately account for potential spillover effects from other models operating within ASM mandatory geographic areas should we believe it necessary and appropriate to do so. We refer readers to section III.C.2.l of this final rule for further discussion on ASM's evaluation approach.

After consideration of public comments, we are finalizing our proposal to permit ASM to overlap with other Innovation Center models and CMS programs, with the exception of MIPS, as proposed.