How the CY 2027 PFS Proposed Rule Strengthens the Case for ACO Participation
On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) released the CY 2027 Medicare Physician Fee Schedule (PFS) Proposed Rule, which, among other important physician payment updates, includes proposed changes to the Medicare Shared Savings Program (MSSP).
Rather than fundamentally redesigning MSSP, the proposals for ACOs in this rule signal a desire to make accountable care models more attractive to new providers and more sustainable for existing ACOs. The proposals span financial benchmarking, quality reporting, beneficiary attribution, and operational requirements, but they point in a consistent direction: reducing participation barriers while continuing to move providers toward digital quality measurement and long-term accountability.
Financial Sustainability
One of the clearest themes in the proposed rule is CMS's continued effort to strengthen the financial foundation of accountable care. Rather than introducing major changes to MSSP's overall structure (a la the Pathways to Success redesign of 2018), CMS proposes a series of targeted refinements to the benchmarking and shared savings methodology. These changes seek to improve financial predictability and benchmark accuracy, strengthen participation incentives, and protect the Medicare Trust Funds. Collectively, these proposals reduce barriers for organizations considering accountable care while improving long-term sustainability for existing ACOs and the Medicare program.
Guardrails for the Accountable Care Prospective Trend
For ACOs that started agreements in or after 2024, the Accountable Care Prospective Trend (ACPT) has been an area of significant concern as it has substantially under-predicted actual trends in Medicare spending, thereby lowering benchmarks from what they would have been in the absence of the ACPT. CMS has made several proposals related to the ACPT in this rule as well as recent sub-regulatory updates to address these concerns:
For agreement periods beginning in 2027 or later, CMS proposes calculating the ACPT by performance year rather than agreement period and limiting it to no more than 1.0% below or 1.5% above observed national expenditure growth.
For agreement periods that began from 2024 through 2026, CMS proposes applying the lower guardrail beginning with PY 2025. That change would delay PY 2025 reconciliation until November 2026, with shared savings payments expected in December.
Note that CMS is not proposing to retroactively apply the ACPT guardrail to PY 2024. CMS has, however, recently issued sub-regulatory guidance that they identified errors in the calculation of the PY 2024 and PY 2025 ACPT calculations (unrelated to these guardrail proposals). To correct for this, CMS will be re-opening PY 2024 financial reconciliation for ACOs that started agreements in 2024 and providing updated ACPT factors for ACOs subject to the ACPT in PY 2025. The re-opening will only have a neutral or positive financial impact on ACOs.
These proposals and changes may not go as far as some stakeholders would prefer, but they indicate a substantial refinement of a policy intended to provide greater predictability to ACO benchmarks.
Other Benchmark and Shared Savings Changes
The proposed rule contains several other proposals that seek to attract new participants, expand access to accountable care for patients, and improve program sustainability for CMS and taxpayers. Starting with agreement periods that begin in 2027, CMS proposes to add a growth adjustment to the historical benchmark for bringing clinicians and beneficiaries with limited recent accountable care participation into MSSP, and to apply risk adjustment to the 5% limit on upward benchmark adjustments, allowing ACOs serving more complex populations to receive larger adjustments.
Additionally, CMS is proposing to increase the prior savings adjustment scaling factor from 50% to 75%, a shift that seeks to mitigate the “ratchet effect” that renewing ACOs face. An incremental but not inconsequential change for ACOs that have performed well historically.
Finally, CMS is considering changes that would make the BASIC Level E track of MSSP more appealing and competitive with the ENHANCED track by proposing to increase the Level E shared savings rate from 50% to 60%, and reducing the weight of the positive regional adjustment for qualifying ENHANCED-track ACOs from 50% to 35%.
This final set of changes is likely a bit of a mixed bag for regionally efficient ACOs but aligns with the theme of long-term sustainability for the program – in this case, balancing the desire to grow the program while ensuring savings to the Trust Funds.
In light of these proposed changes, CMS is also planning to allow PY 2027 applicants to revise their final track selection between BASIC and ENHANCED after the final rule is issued.
Visit-Complexity Modifier
CMS proposes replacing the flat-dollar G2211 E/M visit complexity add-on payment with a new percentage-based modifier. Eligible MSSP and LEAD clinicians could report a modifier valued at 32% of the associated E/M visit, while other eligible clinicians could report a modifier valued at 16%. MSSP and LEAD clinicians could use the enhanced modifier for all Medicare beneficiaries they treat, not only beneficiaries assigned to the ACO.
Claims associated with the modifier would be included in ACO expenditure calculations for benchmarking and total cost of care.
Taken together, the financial proposals reflect CMS’s broader effort to reduce barriers to accountable care participation while making MSSP more sustainable for existing ACOs. They also create new strategic choices, as the effect of the proposals will vary across ACOs and may affect benchmark methodology, track selection, and overall financial strategy.
Quality Reporting and APM Participation Requirements Offer More Flexibility and Choices
CMS continues to move toward digital quality measurement, but the proposed rule also acknowledges the operational reality that many ACOs and their participating practices are not yet prepared for a fully digital reporting environment. The proposals would preserve multiple reporting pathways and provide targeted flexibility, while maintaining CMS’s broader expectation that providers will continue building digital reporting capabilities.
More Quality Reporting Options
For MSSP quality reporting, CMS proposes to:
Continue MIPS Clinical Quality Measure (CQM) reporting for PY 2027 and beyond, along with the associated reporting incentive.
Add a Medicare-only electronic CQM option based on assigned Medicare beneficiaries rather than an all-payer population.
Continue flat benchmarks for all Medicare CQMs.
Allow certain Participant TINs to be excluded from reporting when they meet CMS-defined special status, hardship, or other exclusion criteria, provided the remaining TINs represent at least 95% of assigned beneficiaries before measure specifications are applied.
Continuing MIPS CQMs preserves a familiar reporting option, while adding Medicare eCQMs would create an additional digital pathway based on assigned Medicare beneficiaries. Flat benchmarks and limited Participant TIN exclusions would provide further flexibility for ACOs facing specific reporting challenges. Additionally, CMS proposes to remove two measures (Adult Immunization Status and Initiation and Engagement of Substance Use Disorder Treatment) from the measure set, keeping the total list of measures MSSP ACO report at a reasonable number. Of course, with more flexibility comes more decision-making and ACOs will need to determine which pathway is most appropriate for their Participants and their operational, quality, and technology capabilities.
Promoting Interoperability and CEHRT Compliance
CMS is taking a similar approach to CEHRT compliance by replacing a highly unpopular ACO reporting requirement with several potential pathways. The proposed framework should provide relief to many ACOs while continuing to advance CMS’s broader digital quality direction.
CMS is waiving enforcement of the MSSP Promoting Interoperability (PI) reporting requirement for PY 2026. The waiver is already in effect and does not change individual PI requirements for clinicians who are not Qualifying Advanced Payment Model (APM) Participants (QPs), but does lessen ACO burden. For providers who are QPs, it removes the requirement altogether for PY 2026.
Beginning in PY 2027, CMS proposes replacing MSSP PI reporting requirements with three options for demonstrating CEHRT use:
Report at least one eCQM or Medicare eCQM.
Attest to using FHIR-based capabilities to report at least one quality measure.
Attest to an MSSP CEHRT use metric based on a subset of MIPS PI measures.
These options appear to be more within ACO-level control than the current requirement, particularly for ACOs whose practices would otherwise be exempt from individual PI reporting because of QP status. They would still require planning and coordination, and ACOs will need to understand which pathway is viable across their Participant TINs.
The proposals also reinforce that CEHRT readiness remains an important participation consideration. ACOs should consider whether practices that lack CEHRT or digital reporting capabilities have a viable pathway toward meeting future requirements.
Beneficiary Attribution and Operational Changes Support Accountable Care Growth and Burden Reduction
CMS’s beneficiary attribution and operational proposals support the same broader direction as the financial and quality changes: expanding access to accountable care while reducing participation barriers and administrative requirements.
Broader Beneficiary Eligibility for MSSP Attribution
CMS proposes to expand the population potentially eligible for attribution to MSSP ACOs and address a technical circumstance that may prevent beneficiaries with an existing relationship to an ACO professional from being assigned to that ACO.
Beginning in PY 2028, beneficiaries could qualify for assignment if they have at least one month of concurrent Medicare Part A and Part B enrollment. Current policy requires continuous enrollment throughout the assignment window. CMS also proposes changing how certain services are treated in assignment calculations beginning in PY 2028. Primary care charges billed through a non-ACO TIN would be excluded from the assignment calculation when the services were furnished by an ACO professional who is used in assignment. This is intended to prevent billing by the same clinician through an outside TIN from causing a beneficiary not to be assigned to the ACO.
While these are not major updates to the attribution logic, these proposals reflect CMS’s continued focus on increasing the number of Medicare beneficiaries in accountable care relationships.
Fewer Beneficiary Notification Requirements
CMS proposes moving the annual beneficiary notification deadline to May 30 and eliminating the 180-day follow-up requirement, which will provide greater clarity and less administrative cost and effort for ACOs that could be using resources for higher-value efforts.
Alongside the quality reporting and CEHRT proposals, these changes reflect a broader CMS effort to reduce selected administrative requirements for ACOs.
What the Proposed Rule Means for ACOs
The CY 2027 proposals are focused on refinement rather than a redesign of MSSP. Across benchmarking, quality reporting, PI and CEHRT requirements, and program operations, the changes reflect CMS’s effort to respond to stakeholder concerns, reduce participation barriers, and encourage both new and continued participation in accountable care.
The quality reporting and CEHRT proposals provide near-term flexibility while maintaining CMS’s longer-term direction toward digital reporting and true interoperability. ACOs will need to consider whether prospective Participants have a viable path to meet CEHRT and digital quality reporting requirements over time.
The effect of these proposals will vary across organizations. ACOs will need a clear strategy for evaluating tradeoffs across benchmark methodology, track selection, quality reporting, CEHRT compliance, and overall participation in MSSP.
Coral Health Advisors helps new and existing ACOs evaluate tradeoffs, assess readiness, and translate changing CMS requirements into an actionable participation strategy.
Organizations considering accountable care participation can also review Coral’s eBook, “A Practical Guide to Launching a Strong MSSP ACO” among other resources on our website. Email us at info@coralhealthadvisors.com to learn more.
Comments on the proposed rule are due September 14, 2026.
Additional Resources
CY2027 Medicare PFS Proposed Rule
CY2027 Medicare PFS Fact Sheet
CY2027 Medicare PFS MSSP Fact Sheet
CY2027 Medicare PFS QPP Fact Sheet