Over the last few years, the excitement over value-based care had decreased, if not vanished. Growth in MSSP was steady but unspectacular. ACO REACH was an interesting experiment with no clear path forward. Specialists stayed mostly outside the tent. In conference rooms, the former golden child “value-based care” was dismissed as a has-been.
The CY2027 Physician Fee Schedule — the annual proposed rule in which the Centers for Medicare & Medicaid Services (CMS) sets Medicare payment policy for physician and other billed services for the coming calendar year, including updates to accountable care organization (ACO) programs such as the Medicare Shared Savings Program (MSSP) — says not so fast.
In this blog, we analyze the contents, contemplate what it means for the industry’s future, and explain why it matters.
Buried in a sprawling physician-payment rule is a consistent signal: CMS wants more providers participating in accountable care arrangements, more beneficiaries assigned to them, and a greater share of Medicare spending governed by value-based incentives. The agency is proposing a benchmark adjustment that would reward qualifying ACO growth, assignment changes that could bring hundreds of thousands of additional beneficiary person-years into MSSP, and a new visit complexity modifier valued twice as highly for qualifying MSSP and LEAD participants as the modifier available outside those arrangements. None of these proposals are final, but together they make participation in accountable care materially more attractive.
Here is a rundown of what is in the proposed rule:
CMS is proposing a new growth adjustment for ACOs that expand by recruiting practitioners who have not participated in specified CMS shared-savings initiatives and who bring beneficiaries who are also new to those initiatives. ACOs would have to exceed defined growth thresholds to qualify. The combined upward adjustment would remain subject to a five percent cap based on the ACO’s risk-adjusted national per-capita expenditures — if CMS finalizes its accompanying cap methodology. The intent is unambiguous: CMS wants the providers that have historically stayed out of risk bearing arrangement to join the ranks.
ACOs get a benchmark adjustment if they can convince providers to join MSSP, but these providers have likely not participated until now for a reason. It isn’t simple to participate. There is red tape to navigate, reporting requirements, EHR requirements, and, of course, risk. Enter MOD2, which could influence these providers financially. CMS proposes replacing G2211, an add-on code that providers bill that captures the complexity of longitudinal care, with two new modifiers valued as a percentage of the base E/M code, temporarily named MOD1 and MOD2. For an otherwise eligible visit-complexity service, MOD2 would be valued at 32 percent of the associated E/M service — twice MOD1’s 16 percent — when furnished by qualifying MSSP or LEAD participants. CMS argues that the higher payment reflects the additional integration and accountability expected in an ACO context. Whatever one thinks of that rationale, the proposal would create a direct differential in physician fee schedule payment based on participation in specified value-based arrangements. This single data point shows CMS is trying to tilt the playing field toward VBC.
CMS is proposing several other benchmark adjustments, and the pattern is consistent: reward the ACOs bearing more risk and be honest about how much of “savings” is really benchmark generosity.
CMS is also overhauling the Accountable Care Prospective Trend (ACPT), the rate used to project an ACO’s historical benchmark forward to the current performance year. Today, that trend rate gets locked in for the whole agreement period. CMS is proposing to instead calculate and publish performance-year-specific ACPT inputs in advance of each performance year, rather than locking a single set of projections into the entire agreement period. To keep that from swinging benchmarks too far in either direction, CMS is pairing it with a new two-sided guardrail (−1.0 to +1.5 percentage points) for 2027-and-later agreements. CMS is also applying a one-sided version of that guardrail retroactively to 2024–2026 cohorts — generous enough that it’s actually delaying PY2025 financial reconciliation into November or December of 2026 while CMS re-runs the numbers. It is a technical change with significant financial consequences: CMS is proposing to modify benchmarks for agreement periods already underway and delay PY2025 reconciliation so ACOs can receive the benefit of the lower-bound protection. CMS is sending a strong message that they would rather ACOs trust the benchmark than flee it.
Two proposed changes to how beneficiaries get assigned to ACOs: excluding non-ACO-TIN-billed charges from the plurality calculation and loosening enrollment-status eligibility. CMS estimates that the two proposals could add roughly 98,000 and 248,000 assigned beneficiary person-years, respectively. Because the affected populations may overlap, those figures should not necessarily be treated as 346,000 distinct beneficiaries — but both changes would expand assignment. More people in the program means more total dollars at stake, and more opportunity for ACOs that know how to manage risk.
Beginning in PY2028, CMS proposes replacing the current Advance Investment Payment (AIP) formula with a simpler two-tier payment: $45 per beneficiary per quarter for beneficiaries who are dual eligible, receive the Part D low-income subsidy, or live in a qualifying rural area, and $25 for other beneficiaries, subject to the program’s beneficiary cap.
A lengthy RFI on integrating specialty care into MSSP — attribution, benchmarking, data tools, all of it — signals where this is headed. MSSP is not just growing; CMS is actively exploring how to make it more hospitable — and potentially more complicated — for specialists.
MSSP is the headline, but three other threads in this rule merit a mention here.
CMS is proposing to sunset traditional MIPS reporting for most non-APP participants beginning with the CY2029 performance period and move them into MVPs. It is also laying out a proposed FHIR transition for quality reporting: optional FHIR-based reporting for applicable measures in PY2028 and PY2029, followed by mandatory FHIR-based reporting beginning in PY2030 where CMS has established a FHIR-based specification. Some of the implementing details would still require future rulemaking. If your quality infrastructure still assumes batch file reporting rather than API-enabled FHIR workflows, the transition window is becoming visible.
A separate RFI asks whether Medicare payment should be conditioned on furnishing a structured FHIR R4 Diagnostic Report, together with a human-readable result, to the ordering provider’s designated endpoint.
CMS is proposing several changes to Remote Physiologic Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) that would make Medicare’s rules considerably tighter. Most significantly, the clinical staff performing billable RPM and RTM services would have to be directly employed by the billing practitioner or practice. Practices could still use outside technology, devices, and administrative support, but they could no longer rely on a third-party vendor’s clinical staff to furnish the billable monitoring services under the practice’s TIN.
CMS would also extend the established-patient requirement to RTM, bringing it in line with RPM, and require the billing practitioner to initiate either service during an otherwise payable face-to-face visit, conducted in person or through telehealth. CMS frames these proposals as program-integrity measures, citing OIG findings that approximately 43 percent of RPM enrollees did not receive all three components typically associated with the service.
The employment requirement could have consequences well beyond compliance. It would sharply undermine vendor models built around outsourced clinical staffing, although technology-only models and arrangements using practice-employed staff could remain viable. One possible strategic implication — not one CMS states in the rule — is that remote-monitoring companies may increasingly look toward outcomes-based models in which payment depends less on billing units of staff time. Models such as ACCESS, which are designed to support technology-enabled care, could become a more attractive path.
None of these changes on their own would be enough to call a trend. Together, they’re hard to read any other way. CMS is recruiting new ACOs, paying more for VBC-aligned care, lowering barriers for the organizations that have historically sat out, and laying the groundwork to extend the same logic to specialists and quality reporting broadly. If your organization has been waiting for a clearer signal before committing to value-based care, this is it.
The rule is still proposed, not final, and comments are open. But the direction of travel is clear enough that “wait and see” is starting to look like a strategy with an expiration date.
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