The Centers for Medicare & Medicaid Services (CMS) announced updates to the Medicare Physician Fee Schedule (PFS) and changes to the Medicare Shared Savings Program, effective from January 1, 2027. These changes aim to enhance program policies and operations, focusing on better chronic disease management, efficient resource use, innovation promotion, and increased savings for the Medicare Trust Funds.
Currently, 477 Accountable Care Organizations (ACOs) are part of the Shared Savings Program, involving over 650,000 healthcare providers who serve more than 11.2 million Traditional Medicare beneficiaries. CMS is modifying various aspects of the program based on recent experiences with quality performance standards and other requirements.
A significant change involves reducing the maximum participation time in a one-sided model of the BASIC track from seven to five years during an ACO's first agreement period. This aims to encourage participation in two-sided risk models. Additionally, CMS is adjusting eligibility and financial reconciliation requirements for ACOs with fewer than 5,000 assigned beneficiaries in benchmark years.
Changes also include removing a health equity adjustment from an ACO’s quality score starting in performance year 2026 and revising related terminology for earlier years. The definition of a beneficiary eligible for Medicare Clinical Quality Measures (CQMs) will be revised to reduce reporting burdens by aligning more closely with assignable beneficiaries.
For alignment with CMS’ quality programs, updates are being made to the Alternative Payment Model Performance Pathway Plus quality measure set for Shared Savings Program ACOs. This includes removing certain measures and expanding survey modes for consumer assessments beginning in performance year 2027.
CMS is also expanding extreme and uncontrollable circumstances policies to include relief due to cyberattacks affecting ACOs' legal entities from performance year 2025 onwards. Additionally, ACOs will be required to report changes in their participant or Skilled Nursing Facility affiliate lists during a performance year if there is a Change of Ownership.
Revisions are being made to primary care services definitions used for beneficiary assignment under the Shared Savings Program. New behavioral health integration services will be included when furnished with advanced primary care management services starting January 1, 2026.
Lastly, CMS is renaming the "health equity benchmark adjustment" as "population adjustment" to better reflect its nature regarding assigned beneficiaries enrolled in specific programs like Medicare Part D low-income subsidy or dual eligibility for Medicare and Medicaid.
For further details on these changes and other programmatic updates, visit CMS's official website at cms.gov.
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