Navigating CMS Payment Model Updates for Small and Solo Practices

by Elena Dicus

In late 2025 and early 2026, CMS announced numerous programmatic changes to current value-based payment initiatives as well as new payment models. These new models reflect CMS' stated intentions to continue transitioning to payments reflecting outcomes rather than fee-for-services. The models offer exciting opportunities for funding streams that support previously unreimbursed activities in care coordination and technology support, along with new tools for care delivery such as AI triaging of care coordination interventions. For small physician practices and ACOs, the new elements bring tweaks to familiar models and increased complexity, along with new programs that will need to be assessed for structural fit, overlapping components for possible efficiencies, as well as potential impact on current revenue streams.

Medicare Shared Savings Program (MSSP)

The Medicare Shared Savings Program (MSSP) is a voluntary ACO program launched in 2012.  As with MIPs (Merit-based Incentive Payment System) , MSSP presents unique challenges for small groups and solo providers who may come together to form small ACOs without the extensive care coordination and data expertise of large ACOs.  While the proportion of ACOs earning payments has improved over time, all ACOs do not achieve shared savings due to a number of factors including higher than predicted utilization, missing quality thresholds, failure to clear minimum savings rate (a sliding scale based on the number of beneficiaries), and patient complexity and dual eligibility status.  In 2022, only 63% of participating ACOs received shared savings payments; this means roughly one in three ACOs earned nothing that year.

For most years of the program, ACOs were required to reduce spending by 2–12% before receiving any shared savings.  However, in 2024, CMS introduced a change for low-revenue ACOs below a defined threshold: those participating in the BASIC track may now share in savings even without meeting the minimum savings rate. The savings rate is half the maximum sharing rate (20% instead of 40% under Levels A and B programs, and 25% instead of 50% under Levels C, D, and E programs). This adjustment allows a small physician practice to achieve savings even for modest cost reductions that wouldn't qualify a larger ACO for any payment.

Analysis shows promising results from the 2024 Shared Savings Program Performance Year Financial and Quality Results in the low revenue category. Although first-year, low-revenue ACOs were of varying sizes, 40 of 46 ACOs (87%) generated savings against their benchmark, and 39 earned actual shared savings payments totaling $119.6M.  The mean savings rate for this cohort was +2.98%, which was notable given the relative inexperience of this group with the program. 

Additionally, this group had notably higher inpatient admissions (295 versus 264 per thousand), ED visits (712 versus 640 per thousand), and SNF admissions (75 versus 47 per thousand) compared to the full MSSP population. This likely reflects a genuinely higher-risk population mix; several ACOs serve populations that are 55–80% dual-eligible, which drives both the elevated utilization and the higher mean per capita spend ($14,546).

However, the first-year, low-revenue group also faced a structural disadvantage.  This group clears their Minimum Savings Rate (MSR) far less often than other groups, most likely because they are predominantly in BASIC Track A, which uses a sliding-scale MSR tied to beneficiary count. Smaller BASIC A ACOs face MSRs of 3–4%, which is a very high bar for a first-year ACO still building care management capacity. This is the gap CMS has attempted to bridge with the new reduced shared savings provision; 10 of the 18 who missed their MSR still received some payment through it. These are the types of challenges small practices and small ACOs face navigating the ever-evolving MSSP program.

Ambulatory Speciality Model

The MIPS program, introduced in 2017, has well-documented challenges for small physician practices. These challenges include:

●      disproportionately high administrative burden for small practices that is not covered by clinical payments due to compliance and quality tracking costs;

●      disadvantages for small practices with limited patient volumes and data support to select quality measures that reflect actual quality of care; and

●      higher penalty rates for small group and solo practitioners than large groups.

At the end of 2025, CMS also introduced the Ambulatory Specialty Model (ASM), a new mandatory payment model that incorporates elements of MIPS and MIPs value pathways (MVPs). ASM is a mandatory model for physicians treating heart failure and low back pain in ambulatory settings in specified geographies. Specialties included in the model for low back pain are anesthesiology, pain management, interventional pain management, neurosurgery, orthopedic surgery, and physical medicine and rehabilitation. General cardiology is the only specialty included for heart failure. The ASM model uses the quality, cost, improvement activities, and promoting interoperability domains from MIPs to determine performance.  ASM performance will have positive or negative impact on all of a provider's Part B reimbursement, not just reimbursement for services related to the ASM. Payment adjustments will begin in CY 2029. CMS will select physicians for ASM at the individual physician level, not as a practice group.

MVPs offer an alternative to traditional MIPS for MIPS reporting requirements. Each MVP includes a subset of measures and activities related to a given specialty or medical condition. MVPs became a reporting option in 2023 but participation has been limited.

Commentary on MVPs suggests this is a pathway CMS may take to further transition into value-based care. CMS has made clear it is considering the development of additional value-based models that prioritize efficiency and cost savings. ASM is among the first new models announced after this directive with the goal to promote higher quality and lower-cost care, while exploring the impact of a new reimbursement model.

Key differences between MIPS and ASM include:

●      Unlike MIPS, which is budget-neutral, the ASM will drive savings for CMS.  ASM would retain a portion of savings by building in a discount factor to the performance target (proposed as 15% of the applicable risk level). In other words, while MIPS is a budget-neutral program (all penalties are used to pay bonuses), ASM is designed to guarantee savings for the Medicare program.

●      In ASM, clinician performance will be compared only to peers treating the same condition.  Thus, the ASM performance threshold is based on a smaller cohort of clinicians and on the relative distribution of scores within the relevant peer group.

●      For MIPs and MVPs, clinicians have some choice of quality measures. For the ASM, clinicians must report all the quality measures within the applicable measure set and are not able to pick and choose which ones to report.

As CMS continues to shift the weight of Medicare payment toward outcomes-based accountability, small physician practices and ACOs face both real risk and genuine opportunity.  Navigating the complexity of overlapping program requirements — from MSSP benchmark thresholds and MSR calculations to ASM's mandatory measure sets and peer-based performance comparisons — demands rigorous analysis of practice-level data to identify risk exposure, surface efficiencies, and protect existing revenue streams.