Calendar Year (CY) 2027 Medicare Physician Fee Schedule Proposed Rule (CMS-1848-P) — Medicare Shared Savings Program Proposals

Calendar Year (CY) 2027 Medicare Physician Fee Schedule Proposed Rule (CMS-1848-P) —  Medicare Shared Savings Program Proposals

On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the calendar year (CY) 2027 Medicare Physician Fee Schedule (PFS) proposed rule (CMS-1848-P), which includes proposed changes to the Medicare Shared Savings Program (Shared Savings Program). These proposals aim to accelerate accountable care service delivery, further CMS’ goal of aligning spending and value in Original Medicare, and support achieving other related strategic objectives. This fact sheet summarizes the major proposed changes to the Shared Savings Program included in the CY 2027 PFS proposed rule.

We are proposing changes to the Shared Savings Program’s benchmarking and financial methodology to strengthen financial incentives for ACOs to participate in the program while mitigating selection issues and benchmark rebasing concerns. 

There is a 60-day public comment period on the CY 2027 PFS proposed rule. CMS encourages all interested members of the public, including ACOs, providers, suppliers, and Medicare beneficiaries, to submit comments so that CMS can consider them as we develop the final rule. The 60-day comment period closes on Month XX, 2026. Comments can be submitted at: https://www.regulations.gov/ (in commenting, please refer to file code CMS-1848-P).

Proposed Modifications to the Shared Savings Program Financial Methodology

Strengthen Financial Incentives to Participate and Encourage Additional Savings in Two-Sided Risk

We are proposing the following changes to the Shared Savings Program’s financial methodology which, in combination, would balance incentives between Level E of the BASIC track and the ENHANCED track, mitigate selection issues and benchmark rebasing concerns, and encourage participation by ACOs with higher risk and higher cost populations. 

Given the timing of CY 2027 PFS rulemaking and the Shared Savings Program application cycle for the January 1, 2027, start date (occurring in CY 2026), we anticipate providing additional flexibility to applicants in making their final selection of track/level of participation. Accordingly, following the issuance of the CY 2027 PFS final rule, ACOs applying for an agreement period start date of January 1, 2027, will have a time-limited opportunity to change their final selection between the BASIC track and ENHANCED track (if eligible).

(1) Increase the shared savings rate (“sharing rate”) for Level E of the BASIC track from 50% to 60%. The Shared Savings Program is structured into risk tracks that financially reward ACOs that transform their care delivery practices by taking on higher levels of financial risk and reward on behalf of taxpayers. Currently, evidence suggests that ACOs in BASIC track Level E generate higher savings to the Trust Funds than ACOs in the ENHANCED track, and there are less ACOs participating in Level E of the BASIC track than the ENHANCED track. Increasing the sharing rate for BASIC track Level E could more properly balance this participation option relative to the ENHANCED track (with a 75% sharing rate). By reducing the savings percentage gap between BASIC track Level E and the ENHANCED track, we may increase the participation and long-term success of ACOs, particularly those with less experience with the Shared Savings Program, with unique patient and/or provider populations, and low revenue ACOs (which tend to be small, rural, and physician-only ACOs).

(2) Reduce the maximum weight used in calculating the positive regional adjustment for ACOs participating under the ENHANCED track from 50% to 35%. Our analysis indicates that ENHANCED track ACOs on average, achieve higher gross savings than BASIC track Level E ACOs and have substantially larger positive regional adjustments. Moreover, the average size of the positive regional adjustment has gone up while the share of ACOs receiving such an adjustment has remained stable over the same period. This pattern suggests that, while the prevalence of regional adjustments has remained broadly unchanged, the financial impact of those adjustments has increased over time, amplifying the influence of regional cost variation adjustments on ACO benchmark calculations. 

In the current structure, ENHANCED track ACOs with lower spending than their region are receiving both a higher shared savings rate and larger positive regional adjustment on average. Together, these advantages may incentivize selection into the ENHANCED track independent of an ACO’s capacity to achieve genuine cost savings to Medicare. The proposed reduction in the positive regional adjustment weight for these ACOs, paired with a proposed increase in the shared savings rate for BASIC track Level E, is designed to rebalance financial incentives across tracks and encourage ACOs to select their tracks based on their actual capacity to reduce costs rather than differences in financial advantages embedded in track design, thereby potentially improving Trust Funds net savings.

(3) Increase the prior savings adjustment’s scaling factor from 50% to 75%. Increased prior savings adjustment amounts could provide additional relief from the rebasing “ratchet effect,” in which the savings an ACO achieves in one agreement period can reduce its rebased benchmark for the subsequent period by lowering the historical spending that forms the basis for that benchmark. This proposed change could incentivize ACOs to generate more savings in their initial agreement period and encourage long-term participation in the Shared Savings Program.

(4) Risk adjust the 5% cap on upward adjustments to the historical benchmark. ACOs with higher risk populations have expressed concern that the current 5% cap that applies to the three upward adjustments to the historical benchmark (regional adjustment, prior savings adjustment, and population adjustment) is too restrictive. Under the proposed approach, we would account for the severity and case mix of the ACO’s assigned population in calculating the 5% cap, which is based on national per capita FFS expenditures for the assignable beneficiary population. This approach would result in potentially higher upward adjustments to the benchmark for ACOs whose assigned beneficiary populations have higher risk, and potentially higher costs, and thereby encourage such ACOs to enter and remain in the Shared Savings Program.  

Growth Adjustment to the Historical Benchmark to Incentivize New Participation

We are proposing to establish a growth adjustment to the historical benchmark to reward ACOs for recruiting ACO professionals who are inexperienced with value-based care arrangements and serving beneficiaries new to value-based care. This growth adjustment would be applied on top of the highest existing benchmark adjustments for which an ACO is eligible, either a positive regional adjustment, prior savings adjustment, or population adjustment, and would not exceed the proposed risk adjusted 5% cap. Additionally, the growth incentive would be included in a subsequent agreement period’s prior savings adjustment (if applicable), if the ACO continued to maintain or increase the growth it achieved in the previous agreement period.

Reform ACPT Component of the Benchmark Update Factor

The Accountable Care Prospective Trend (ACPT) is part of a three-way blended benchmark update factor that projects an administrative growth target to partially insulate ACOs from a downward “ratchet effect” in benchmarks from both individual and collective success in lowering programmatic costs. However, the ACPT depends on cost growth projections that could be subject to potential projection errors. For agreement periods beginning on January 1, 2027, and in subsequent years, we are proposing an ACPT guardrail policy that limits the effect of under-projection or over-projection as compared to observed growth in expenditures for the national assignable FFS population such that the ACPT is no more than 1 percentage point below (or no more than 1.5 percentage points above) national growth. For ACOs within existing agreement periods with 2024, 2025, and 2026 start dates, we are proposing to retroactively apply the lower guardrail, which would limit the ACPT to no more than 1 percentage point below the national growth rate in determining financial reconciliation for PY 2025 and any subsequent performance year of the ACO’s agreement period. We are delaying PY 2025 financial reconciliation until November 2026, after the final rule is issued, so that, if finalized, we can implement this proposal for PY 2025 reconciliation. 

We also are proposing to calculate annualized growth rates used in determining the ACPT for each performance year for all ACOs in agreement periods beginning on or after January 1, 2027, rather than calculating the annualized growth rates on an agreement period basis (under the existing policy). This approach would improve consistency in the calculations across agreement periods.

Proposed Changes to the Shared Savings Program Beneficiary Assignment Methodology 

We are proposing several changes to the Shared Savings Program’s beneficiary assignment methodology, applicable for the performance year starting on January 1, 2028, and subsequent performance years, with the goal of increasing the number of Medicare beneficiaries involved in accountable care relationships. 

First, we are proposing to exclude from assignment calculations allowed charges for primary care services billed through a non-ACO Taxpayer Identification Number (TIN) by an ACO professional used in assignment. We would apply this approach in determining whether a beneficiary received the plurality of primary care services under the stepwise claims-based assignment methodology. This approach would be a tailored approach to reduce the potential for ACO professionals’ billing patterns, inside and outside the ACO for the care of the same beneficiaries, to result in differences in assignment outcomes that advantage the ACO’s financial performance.

Second, we are proposing to modify assignment eligibility criteria and prospective assignment exclusion criteria based on Medicare enrollment status. Currently, to be eligible for assignment to an ACO for a performance year or benchmark year, a beneficiary must meet criteria including having at least one month of Part A and Part B enrollment without any month of Part A only or Part B only enrollment, or Medicare group health plan enrollment (including Medicare Advantage (MA)), during the assignment window. For an ACO participating under prospective assignment, a beneficiary may be excluded later from the ACO’s prospective assignment list if they no longer meet these eligibility criteria. We are proposing to modify the assignment criteria based on Medicare enrollment status to align with our current operational approach to identifying the assignable beneficiary population. Under our proposed approach, we would consider as eligible for assignment beneficiaries who have at least one month of Part A and Part B enrollment and no Medicare group health plan enrollment (including MA) during that same month during the 12-month assignment window for the relevant performance year or benchmark year. 

Third, we are proposing updates to the definition of primary care services used for beneficiary assignment under the Shared Savings Program to align with payment policy proposals under the Medicare PFS. We are proposing to include, among other services for determining beneficiary assignment for the performance year starting on January 1, 2027, and subsequent performance years, new codes for Screening, Brief Intervention, and Referral to Treatment, Vaccine Adverse Effects Management, and Advance Care Planning. 

Shared Savings Program ACOs and ACO participants may also be impacted by the proposal to replace HCPCS code G2211 (E/M Visit Complexity Add-On) with a modifier and should review the CY 2027 PFS Proposed Rule Fact Sheet for additional information.

Enhance Beneficiary Engagement — Allow ACOs to Reduce or Eliminate Part B Cost Sharing

Informed by experience in the ACO REACH model, we are proposing to allow ACOs to reduce or eliminate Part B cost sharing for beneficiaries in accordance with an approved implementation plan starting April 1, 2027, which we believe would remove cost barriers for beneficiaries to receive services that will positively impact their health. Under the proposed approach, eligible ACOs could enter Part B cost-sharing support arrangements with ACO participants to reduce or eliminate cost sharing for certain categories of Part B items and services and eligible beneficiaries identified by the ACO. We would allow ACOs to reduce or eliminate beneficiary cost sharing for all Original Medicare Part B items and services except for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), and prescription drugs. An ACO must apply to, and be approved by, CMS to enter Part B cost-sharing support arrangements with its ACO participants. To allow ACOs to participate as quickly as possible, should we finalize this proposal, we anticipate collecting initial applications in early 2027 to approve eligible ACOs and their ACO participants to begin eliminating or reducing Part B cost sharing for beneficiaries by the second quarter of CY 2027.

We also are proposing to remove the prepaid shared savings payment option from the Shared Savings Program because of low uptake and because similar outcomes could be achieved for beneficiaries through the proposal to offer ACOs the ability to reduce or eliminate Part B cost sharing. Under this proposal, no additional cohorts of ACOs would be allowed to apply for the prepaid shared savings payment option after the application cycle for the January 1, 2027, start date. Participating ACOs would receive prepaid shared savings payments through December 31, 2027. 

Proposed Modifications to the Shared Savings Program Quality and CEHRT Use Requirements to Advance ACO Use of dQMs

Extending the Availability of the MIPS CQMs Collection Type and the MIPS CQM Reporting Incentive for Shared Savings Program ACOs 

We are proposing to extend the availability of the MIPS CQMs collection type for Shared Savings Program ACOs reporting the APP Plus quality measure set for PY 2027 and subsequent PYs. Maintaining the availability of the MIPS CQMs collection type for PY 2027 and subsequent PYs would eliminate the administrative burden associated with ACOs changing their current quality reporting collection type to another collection type after PY 2026 when the MIPS CQMs collection type would no longer be available under current policies. It would also allow ACOs to instead focus their resources and efforts on the transition to dQM reporting. 

To continue to align the reporting incentive with the MIPS CQMs collection type, we are proposing to extend the reporting incentive to ACOs reporting MIPS CQMs for PY 2027 and subsequent PYs to further support ACOs in meeting the Shared Savings Program quality performance standard to be eligible to share in savings at the maximum rate available for the ACO’s track/level of participation and for ACOs participating in the ENHANCED track to avoid maximum shared losses. 

Extending the Use of Flat Benchmarks to Score Medicare CQMs 

For PY 2027 and subsequent PYs, we are proposing that all measures of the Medicare CQMs collection type would be scored using flat benchmarks. In addition, we are proposing that Diabetes: Glycemic Status Assessment Greater Than 9% (Quality ID: 001), Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID: 134), and Controlling High Blood Pressure (Quality ID: 236), if reported via the Medicare CQMs collection type for PY 2026 (and subsequent PYs), would be scored using flat benchmarks. 

Addressing ACOs’ Challenges with Meeting the MIPS Data Completeness Requirement

Revise the Shared Savings Program Quality Reporting Requirements beginning in PY 2026

Given the concerns raised by ACOs about challenges meeting the Shared Savings Program quality reporting requirements, we are proposing to revise the quality reporting requirements. For PYs beginning on or after January 1, 2026, we are proposing that ACOs may exclude one or more ACO participant TINs from an ACO’s submission of eCQM/MIPS CQM/Medicare CQM/Medicare eCQM (if finalized) data (as applicable) for each measure if certain exclusions are met, including due to unforeseen circumstance(s) outside the ACO’s control (such as the unexpected closure of a group or individual practice that bills under the ACO’s participant TIN), an ACO participant TIN having CEHRT that is intended for specialty use and does not support the measure(s) included in the APP Plus quality measure set, or other circumstances as determined by CMS, so long as the ACO can report on ACO participant TINs that represent at least 95% of the beneficiaries assigned to the ACO before applying the measure specifications. 

Under our proposal, ACOs would still be required to meet the MIPS data completeness requirement (that is, the ACO must report on at least 75% of the APM Entity's applicable beneficiaries who meet the measure’s denominator criteria) for each eCQM/MIPS CQM/Medicare CQM/Medicare eCQM for which the ACO submits data. 

Medicare eCQMs for Accountable Care Organizations Participating in the Medicare Shared Savings Program (Medicare eCQMs) Collection Type for Shared Savings Program ACOs

For PY 2027 and subsequent PYs, we are proposing to establish Medicare eCQMs as a new collection type for Shared Savings Program ACOs reporting on the APP Plus quality measure set. A Medicare eCQM is essentially an eCQM that is part of the APP Plus quality measure set and reported by an ACO on only the ACO’s assigned beneficiaries, instead of its all payer/all patient population. That is, the Medicare eCQMs will generally follow the eCQM measure specifications; however, they will be reported on a different population and use a different identifier to distinguish that the submission is for a Medicare eCQM rather than for an eCQM. We believe the addition of Medicare eCQMs would help our efforts to transition to dQMs by supporting ACOs that want to report eCQMs but are unable to operationally report on all patient/all payer data due to data aggregation challenges.

In addition, we are proposing that measures of the Medicare eCQMs collection type would be scored using flat benchmarks beginning with the CY 2027 performance period/2029 MIPS payment year. We note that ACOs that choose to report Medicare eCQMs would not be eligible for the eCQM/MIPS reporting incentive or the Complex Organization Adjustment.

For PY 2027 and subsequent PYs, we are proposing that ACOs would have the option to report the five Medicare eCQMs, or a combination of eCQMs/MIPS CQMs/Medicare CQMs/Medicare eCQMs, to meet the Shared Savings Program quality reporting requirement and the quality performance standard.

Revise the Definition of a “Beneficiary Eligible for Medicare CQMs”

We are proposing to revise the definition of a “beneficiary eligible for Medicare CQMs” for PY 2027 and subsequent PYs, to align with the population of beneficiaries assigned to the ACO. Our proposed revision would build on the revisions finalized in the CY 2026 PFS final rule and further refine and align the definition of a "beneficiary eligible for Medicare CQMs" to correspond to an ACO’s assigned beneficiary list to continue to address ACO challenges with patient aggregation. 

Revising the Shared Savings Program Scoring Policy for Excluded APP Plus Measures and APP Plus Measures That Lack a Benchmark 

We are proposing to revise the scoring policy at § 425.512(a)(7) with respect to excluded APP Plus measures and APP Plus measures that lack a benchmark, such that for PY 2027 and subsequent PYs, the current scoring policy would apply only if the ACO’s MIPS quality performance category score is calculated on less than five measures for a PY. In other words, if four or more measures in the APP Plus quality measure set are excluded from MIPS, then we would apply a different proposed scoring policy (§ 425.512(a)(7)(iii)). We are also proposing that the current scoring policy would no longer apply when at least one of the required measures in the APP Plus quality measure set does not have a benchmark for PY 2027 and subsequent PYs. 

We believe that revising the current scoring policy such that it would only be applied for four or more excluded measures in PY 2027 would ensure that ACOs are fairly assessed on their quality performance in our determination of whether they meet the quality performance standard.

Updating the APP Plus Quality Measure Set

For PY 2025 and subsequent PYs, Shared Savings Program ACOs are required to report the APP Plus quality measure set. We are proposing several changes to the APP Plus quality measure set for Shared Savings Program ACOs, including the removal of Initiation and Engagement of Substance Use Disorder Treatment (Quality ID: 305) and Adult Immunization Status (Quality ID: 493) from the APP Plus quality measure set. 

We are proposing that the APP Plus quality measure set for Shared Savings Program ACOs would include eight measures (five eCQMs/MIPS CQMs/Medicare CQMs/Medicare eCQMs, two administrative claims-based measures, and the CAHPS for MIPS Survey measure) beginning with PY 2027.

Table 1 below displays the list of the quality measures to be included in the APP Plus quality measure set for Shared Savings Program ACOs for PY 2027 and subsequent PYs with the proposed removal of Initiation and Engagement of Substance Use Disorder Treatment (Quality ID: 305) and Adult Immunization Status (Quality ID: 493) from the APP Plus quality measure set.

Table 1: Quality Measures in the APP Plus Quality Measure Set for Shared Savings Program ACOs for PY 2027 and Subsequent PYs 

Simplifying Shared Savings Program Requirements to Reduce Participant Burden — ACO CEHRT Use Requirements

To be considered an Advanced APM, in which qualifying participants are exempt from MIPS, an APM must require participants to meaningfully use CEHRT that meets specific requirements. ACOs have expressed confusion about current Shared Savings Program requirements that ACOs report MIPS Promoting Interoperability measures, as well as difficulty collecting data to report for their larger organizations.

In response to these challenges and in the interest of supporting ACOs’ meaningful advancement toward the digital exchange of health information, including digital quality measurement, we propose to sunset the current Shared Savings Program CEHRT use requirement (that ACOs report all MIPS Promoting Interoperability measures and activities) and instead require that, for PY 2027 onward, ACOs complete one of the following three activities: 

1. Completely report at least one of the five ACO-reported measures in the APP Plus quality measure set through the eCQMs or Medicare eCQMs collection type; or
2. Use CEHRT support complete reporting of at least one of the five ACO-reported measures¹ in the APP Plus quality measure set and attest to using data collected from an HL7® Fast Healthcare Interoperable Resources (FHIR®)-based API to support quality measurement using a certified Health IT Module; or 
3. Select and attest to one of the Shared Savings Program ACO CEHRT use metrics from the list of metrics we would establish for each performance year. Table 2 reflects the metrics we are proposing for PY 2027. Unlike similar MIPS Promoting Interoperability performance category measures, which are specified for clinicians and groups, these Shared Savings Program ACO CEHRT use metrics would be specific to ACOs and would have specific allowable exclusions. 

Table 2: Available Metrics for Shared Savings Program CEHRT Use Attestation

In reporting the above metrics, we propose ACOs would be permitted to apply, without filing a request to CMS, TIN-level exclusions similar to those that MIPS-eligible clinicians can request. ACOs would be permitted to exclude a TIN composed solely of providers and/or suppliers who: meet the definition of “special status” for Shared Savings Program purposes or meet hardship conditions enumerated in the proposed rule preamble. 

ACOs electing to report one of these three CEHRT use metrics would be required to maintain documentation on excluded TINs and produce it for a CMS audit. ACOs could face compliance actions if they fail to meet Shared Savings Program CEHRT requirements and/or demonstrate that their TIN exclusions were appropriate in PY 2027 and subsequent years. 

We also propose replacing the existing public reporting requirement with a requirement that ACOs publicly report which of the allowable CEHRT use activities they elected to complete, to promote transparency for beneficiaries who want to make an informed choice on where to receive care.

Revising Beneficiary Notification Requirements 

We are proposing changes to the beneficiary notification requirements to address concerns that beneficiary notices under current program policies are burdensome for ACOs to distribute and potentially confusing for beneficiaries. Under existing requirements, an ACO or ACO participant must provide certain Original Medicare beneficiaries with a standardized written notice before or at a beneficiary’s first primary care service visit during the first performance year in which the beneficiary receives a primary care service from an ACO participant. We propose to remove the requirement that ties the timing of the notification to a beneficiary’s first primary care service visit and instead require the ACO or ACO participant to provide a beneficiary with a standardized written notice at least once during an agreement period in the form and manner specified by CMS. Under the approach, the notice must be furnished by May 30, unless CMS specifies a later date during the performance year. This would better align with CMS Innovation Center ACO model policies. Further, we propose to remove the requirement, applicable to all ACOs, specifying the ACO or ACO participant must provide a verbal or written follow-up communication to a beneficiary, following the provision of the standardized written notice. As proposed, these changes would be effective January 1, 2027. 

Advance Investment Payments Changes to Encourage Greater Rural Participation

We are proposing changes to the calculation methodology for setting quarterly advance investment payment amounts for eligible ACOs. Under the proposed approach we would no longer use a risk factors-based score, which includes consideration of a beneficiary’s Area Deprivation Index (ADI) national percentile rank, to determine the payment amount, as there have been methodological issues identified with the ADI metric. Instead, we propose to include a rural criterion and use a flat per-beneficiary payment amount in setting an ACO’s quarterly payments for PY 2028 and subsequent performance years. Specifically, the ACO would receive a quarterly payment of $45 for each beneficiary who meets one or more of the following criteria: is enrolled in Medicare Part D LIS, is dually eligible for Medicare and Medicaid, or is residing in a county with rural census status (either Micropolitan or Noncore as proposed). The ACO would receive a quarterly payment of $25 for each beneficiary who does not meet any of the criteria, capped at 10,000 beneficiaries. 

Revising Approach to Determining an ACO’s Experience with Risk Based on Prior Participation of ACO Participants

CMS identifies whether an ACO is experienced or inexperienced with performance-based risk Medicare ACO initiatives as part of determining the ACO’s eligibility for participation options under the Shared Savings Program, including whether an ACO is eligible to enter the BASIC track’s glide path or is limited to participating under higher levels of risk and potential reward (either Level E of the BASIC track or the ENHANCED track). In determining the ACO’s experience or inexperience with performance-based risk, CMS considers ACO participant TINs’ prior participation in a performance-based risk Medicare ACO initiative, including CMS Innovation Center ACO models under which an ACO accepts risk for shared losses, among other factors. Under our proposal, effective January 1, 2027, an ACO participant TIN that did not have a written agreement to participate in a performance-based risk Medicare ACO initiative would not be considered to have participated in such initiative, even if the TIN was or will be included in financial reconciliation for the initiative during the five-year lookback period. Under this approach, a “Legacy” TIN, whose claims history is solely used for financial reconciliation for an ACO participating under a CMS Innovation Center ACO model would not be considered to have participated in a performance-based risk Medicare ACO initiative for purposes of determining a Shared Savings Program ACO’s experience with risk, as we do not believe including these TINs aligns with the original intent of our policy. 

1.  This excludes administrative claims and CAHPS for MIPS Survey measures. For PY 2027, the reportable measures would be #001, #112, #113, #134, and #236.

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