Palliative care providers are examining the potential range of impacts following the U.S. Centers for Medicare & Medicaid Services’ (CMS) recently unveiled its 2026 proposed physician fee schedule.
The proposed rule introduced the new Ambulatory Specialty Model (ASM), designed to improve care for patients with chronic conditions. The new payment model focuses on some of the most significant areas of Medicare spending, particularly specialty care for patients with heart failure and low back pain.
If finalized, the proposed rule could potentially improve outcomes among seriously ill patient populations commonly served by palliative care providers, according to Ethan McChesney, policy director at the National Partnership for Healthcare and Hospice Innovation (NPHI). Its provisions could also result in greater care coordination and equitable access, McChesney indicated.
“The proposed rule includes a number of provisions that, if finalized, would improve access to and quality of care for those with chronic illnesses,” McChesney told Palliative Care News in an email. “[These] include expanded remote patient monitoring options, new [billing] codes to support caregiver training services and reforms to making telehealth access more permanent — all of which support longitudinal care coordination for people living with chronic illness.”
Payment, referral effects
The proposed ASM payment model aims to enhance quality and reduce low-value care by improving upstream chronic disease management, particularly for beneficiaries with heart failure and low back pain. Specialty care treatments for these two conditions represent significant costs within Medicare reimbursement, a main factor that CMS cited for the model’s introduction.
If finalized, the mandated payment model will begin in January 2027 and run for five performance years through December 2031. Participants will be held accountable for their performance and for generating savings.
Although palliative care providers would not be explicit participants in the ASM model, having this potential new avenue of reimbursement could present “exciting opportunities,” McChesney stated. These include the ability to form stronger care coordination collaborations with participating ASM providers, as well as with other health care specialists and primary care providers. The upstream engagement could allow palliative care providers to demonstrate their value proposition, most importantly how their services help to improve chronic disease management, prevent rehospitalizations and reduce costs, he explained.
“Despite formal inclusion in the model, participants will be looking for partners who can help improve their metrics and support goal-oriented care, creating an opportunity for palliative providers to illustrate their value,” McChesney said.
The new ASM model could have minimal palliative care impacts, according to the Center to Advance Palliative Care (CAPC).
Previously introduced disease-specific and alternative payment demonstrations have historically yielded few results when it comes to widening palliative care reimbursement, according to Allison Silvers, chief health care transformation officer at CAPC, and Dr. Andy Esch, director of its palliative care program development.
Despite the limited potential for palliative-specific reimbursement improvement, the proposed ASM model could help increase demand and referrals for these types of care consultations, Silvers and Esch indicated. However, without including specific palliative care referral requirements for participating cardiologists and specialists, these opportunities could have nominal effects, they indicated.
“There may not be much impact for palliative care, judging from what we’ve seen with other relevant alternative payment models,” Esch and Silvers told Palliative Care News in an email. “Palliative care [providers] can help the ASM clinicians to succeed in the model, ensuring strong quality measure results and reducing avoidable utilization, but it is still rare that palliative care programs are contracted as collaborators with financial savings/losses. We are not expecting much opportunity for alternative payment for palliative care services, who will still be [bill under] Part B per the existing Medicare codes and rules.”
Palliative’s prowess in chronic illness management
Among the “major changes” for palliative care providers to note in the newly proposed physician rule are provisions to improve integration of behavioral health services into advanced primary care management, according to Silvers and Esch.
Introduced in a payment model within the CY2025 physician fee schedule, the 2026 provisions provided new resources and flexibilities to primary care providers caring for medically complex patients. The new provisions could result in better comprehensive care delivery for patients with co-occurring mental health illnesses alongside their physical conditions and more seamless integration of palliative care, Esch and Silvers indicated.
The newly proposed physician rule contains other notable provisions, particularly in the realm of telehealth, said Katy Barnett, director of home care and hospice operations and policy at LeadingAge.
Among CMS’ provisions was a flexibility that waives telehealth geographic and originating site restrictions under the newly proposed ASM model. This excludes requirements for face-to-face home health certification visits. If finalized, this could complicate reimbursement for some community-based palliative care providers who rely on home health payment models for support, Barnett indicated.
“The new models does waive the telehealth geographic restrictions but explicitly excludes home health face-to-face [visits], which is frustrating because we know a lot of palliative care providers use a home health model to get reimbursed,” Barnett told Palliative Care News. “Excluding that is really tough, especially when it can be hard to get to a homebound individual.”
CMS proposed to add four new billing codes to the approved telehealth list for CY2026. These codes are not used in palliative care reimbursement. But exceptions exist for multiple-family group psychotherapy services that may be occasionally billed by palliative care social workers, according to Silvers and Esch.
Telehealth complexities exist within provisions to the add-on billing code G2211, they added. CMS proposed that the code would now be used not only in office and ambulatory care settings, but also in home-based patient visits, as well as encounters in skilled nursing facility-based. If finalized, this would be a welcomed change for community-based palliative care providers, resulting in an additional roughly $15 for every patient visit, they indicated.
The fate of telehealth flexibilities granted during the pandemic ultimately rests upon congressional action. Currently they are set to expire on Sept 30, the waivers have been extended several times. If they end as planned, palliative care providers, as well as patients and families, could face potentially detrimental impacts, say experts in the field.
Clinicians across the care continuum are waiting to see how telehealth waivers unfold, with many hopeful about the potential to better reach patients and their families in need, Esch and Silvers indicated.
“CMS is not able to allow [telehealth] flexibilities without congressional action and there is nothing in the proposed rule about it,” they said. “The rule discusses changes to how CMS administers the list of codes that are on the approved telehealth list, which may benefit all specialties in the future.”
