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

Administration Payment Rules Share 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 fin