2027 Medicare Payment Changes Strengthen the Push Toward Accountable Care

The Centers for Medicare & Medicaid Services’ (CMS) 2027 Physician Fee Schedule (PFS) final rule gives healthcare organizations more reasons to enter and expand accountable care. It changes Medicare Shared Savings Program (MSSP) benchmarks, increases potential shared savings in BASIC Level E, and pays more for qualifying longitudinal care delivered by accountable care organization (ACO) participants. The opportunities come with tradeoffs: some benchmark support shrinks, and new payments remain part of an ACO’s total cost of care.

The broader payment backdrop is tighter. The 2027 conversion factors fall to $32.95 for qualifying Advanced alternative payment model (APM) participants and $32.63 for other clinicians, decreases of 1.83 percent and 2.31 percent, respectively, largely reflecting the expiration of the temporary 2026 increase. Actual payment changes depend on service mix and other policies, and MSSP participation alone does not establish qualifying APM participant status.

MSSP benchmarks reward growth and prior savings

For agreement periods beginning January 1, 2027, or later, CMS finalized four important changes:

1. Growth adjustment. ACOs can receive an additional benchmark adjustment for bringing in beneficiaries new to accountable care through clinicians inexperienced in shared savings initiatives. Eligibility depends on both clinician and beneficiary history, and continuing ACOs must achieve net growth. The combined upward adjustment remains subject to a risk-adjusted cap of 5 percent of national per capita expenditures.
2. Prior savings adjustment. The scaling factor increases from 50 percent to 75 percent, returning more prior savings to the rebased benchmark.
3. BASIC Level E. The maximum shared savings rate rises from 50 percent to 60 percent.
4. ENHANCED regional adjustment. The maximum positive regional-adjustment weight for lower-spending ACOs stays at 35%, rather than rising to 50% in later agreement periods. This makes the overall effect organization-specific.

CMS also changes the Accountable Care Prospective Trend (ACPT). Agreements beginning in 2027 or later receive annually refreshed prospective growth rates and cumulative growth guardrails of 1.0 percentage point below and 1.5 points above corresponding observed national spending growth. Existing agreements beginning in 2024-2026 receive only the downside guardrail, beginning with PY2025 reconciliation where applicable and continuing through their remaining years.

Assignment and entry support expand

Beginning in PY2028, CMS will exclude relevant non-ACO primary care charges from assignment competition when the same clinician treats the same beneficiary through both ACO and non-ACO TINs. CMS also relaxes enrollment status rules, allowing assignment when a beneficiary has at least one qualifying month of Parts A and B enrollment without Medicare group health plan enrollment during that month.

Advance Investment Payments also change in PY2028. CMS removes the Area Deprivation Index from quarterly payment calculations. Payments become $45 per beneficiary per quarter for beneficiaries receiving the Part D low-income subsidy, those dually eligible for Medicare and Medicaid, or those living in rural counties, and $25 for others. The 10,000-beneficiary cap remains. Separately, the prepaid shared savings option ends after PY2027.

Quality reporting retains flexibility

Beginning in PY2027, APP Plus includes eight measures, and a new Medicare eCQM collection type becomes available. MIPS CQMs and their reporting incentive remain available. CMS anticipates a PY2030 sunset, subject to future rulemaking.

ACOs gain three pathways to demonstrate certified EHR technology use: 1) qualifying eCQM reporting, 2) qualifying reporting supported by certified FHIR API use, 3) attestation to specified EHR-use metrics. Limited participant TIN exclusions are permitted in quality submissions, but included TINs must represent at least 95 percent of assigned beneficiaries before measure specifications are applied. This is separate from measure-level data completeness.

CMS’ FHIR reporting roadmap points toward 2030, but the future reporting mandate still requires rulemaking.

PFS changes alter practice economics

The most direct ACO incentive is the replacement of G2211 with two optional E/M visit complexity modifiers beginning January 1, 2027. B1 adds 16% of the base visit’s total RVUs. B2 adds 32% for eligible practitioners participating in MSSP, LEAD, or ACO PC Flex. The qualifying longitudinal care requirements still apply. B2 can be used for eligible visits with beneficiaries beyond the ACO’s assigned population, but its spending remains included in ACO financial and assignment calculations.

Other changes worth watching:

• Remote monitoring. Initiating visit requirements and the established patient requirement for RTM take effect in 2027. The requirement that clinical staff be directly employed by the billing practitioner or practice is delayed until January 1, 2029. Existing oversight and billing requirements continue.
• Same-day visits and procedures. For qualifying modifier 25 office/outpatient visits paired with 0-day global procedures, the highest-paid service is paid at 100 percent and other applicable services at 80 percent. The policy is limited to the same physician or same-specialty physicians in the same group.
• Team-based services. New codes recognize clinical staff advance care planning and shared medical appointments. Shared appointments must include individualized clinical assessment and care for groups of 2–10 patients.
• MIPS transition. Traditional MIPS remains available through the 2030 performance year, with MVP or APP reporting required beginning in 2031.

Beneficiary support becomes more tangible

Approved ACOs may fund reduced or eliminated Part B cost sharing through voluntary arrangements with their participants, with an April 1, 2027 target start. Eligible beneficiaries must be assignable and lack secondary coverage for the relevant obligation. DMEPOS and prescription drugs are excluded. CMS also eliminates the required beneficiary follow-up notice in 2027 and sets May 30 as the standardized notice deadline unless it specifies a later date.

For ACOs, the next step is to model the combined effect on benchmarks, practice revenue, and performance year spending. Organizations applying for a 2027 agreement can revisit eligible BASIC-versus-ENHANCED selections November 12-17, 2026, with changes due by 12:00 PM ET on November 17. The rule favors growth in accountable care, but the financial result depends on each organization’s starting point. CMS says it wants ACOs to choose a track based on their actual capacity to reduce costs, which makes confidence in benchmark, quality, and spending data central to that decision.