LUGPA Policy Brief: The Future of Specialty APMs and CMS’s Payment Shift

April 2025

The Center for Medicare and Medicaid Innovation (CMMI) is discontinuing several payment models by the end of the year to realign its focus with federal health priorities. While CMMI aims to expand effective value-based care initiatives, the termination of these models has sparked concerns about the future of specialty-driven programs.

CMS is committed to scaling models that improve patient care and reduce costs, projecting savings of $750 million from these terminations. However, specifics on achieving these savings remain unclear. Discontinued models include:

• Primary Care Models: Making Care Primary and Primary Care First were cut due to limited cost savings and patient outcome improvements.
• Kidney Care Innovation: The End-Stage Renal Disease Treatment Choices Model did not demonstrate significant benefits.
• State-Based Model: The Maryland Total Cost of Care Model will end early, transitioning to the broader 'AHEAD' model in 2026.
• Drug Cost Initiatives: CMS has shelved plans for $2 generic drug pricing and incentives for confirmatory trials on accelerated FDA approvals.

Despite maintaining 23 models, CMS is contemplating additional modifications, prompting concerns about its ongoing commitment to value-based reforms.

LUGPA’s Commitment to Specialty-Driven APMs

LUGPA has long championed specialty-focused APMs that align incentives with clinical best practices, improve patient outcomes, and reduce costs. In 2017, LUGPA proposed an APM to the Physician-Focused Payment Model Technical Advisory Committee (PTAC) designed to promote active surveillance (AS) for low-risk prostate cancer patients. This model aimed to:

• Incentivize AS to reduce overtreatment and unnecessary interventions.
• Support shared decision-making by compensating providers for additional time spent counseling patients.
• Reward practices for meeting quality benchmarks and increasing AS adoption.

Despite PTAC’s recognition of the model’s clinical and economic value, CMS declined its adoption, highlighting broader challenges in approving specialty-driven APMs.

LUGPA remains committed to advancing specialty-focused payment models and will continue to engage with policymakers, advocating for the approval of APMs that reflect the needs of independent specialty practices.

LUGPA’s Call to Action

As CMS reevaluates its payment strategy, LUGPA urges policymakers to:

• Support Specialty-Specific APMs – CMS must expand opportunities for specialty care models, not just primary care and hospital-based initiatives.
• Ensure Transparent Model Evaluations – Clear criteria are needed to fairly assess specialty-driven APMs.
• Expand Physician-Led Value-Based Care – CMS should directly engage specialty groups in developing sustainable models.
• Increase Payment Innovation Flexibility – Independent specialists require adaptable reimbursement strategies to participate meaningfully in reform efforts.

LUGPA remains committed to ensuring specialty practices have a voice in shaping value-based care, advocating for fair, sustainable models that preserve access to high-quality care.