Calendar Year (CY) 2027 Medicare Physician Fee Schedule Final Rule (CMS-1848-F), Medicare Shared Savings Program

On November 4, 2026, CMS issued the CY 2027 Medicare Physician Fee Schedule final rule (CMS-1848-F), which finalizes extensive changes to the Medicare Shared Savings Program. CMS projects the benchmarking and financial methodology changes will add up to 1 million assigned beneficiaries in an average year over the 10-year projection period, increase net federal savings by $5.5 billion over 10 years (range of uncertainty +/- $3.3 billion), and generate an overall increase in shared savings net of losses to ACOs by $1.1 billion over 10 years (+/- $3.6 billion). The rule finalizes four modifications to the Shared Savings Program financial methodology. First, the shared savings rate for BASIC track Level E increases from 50% to 60%. Second, the maximum weight used in calculating the positive regional adjustment for lower-spending ENHANCED track ACOs decreases from 50% to 35%. Third, the prior savings adjustment scaling factor increases from 50% to 75% to reduce the rebasing ratchet effect. Fourth, the existing 5% cap on upward adjustments to the historical benchmark is risk-adjusted to account for the severity and case mix of an ACO's assigned population. The rule also finalizes a growth adjustment to the historical benchmark rewarding ACOs for recruiting professionals inexperienced with value-based care arrangements. The rule finalizes an Accountable Care Prospective Trend (ACPT) guardrail policy for agreement periods beginning January 1, 2027, limiting the ACPT to no more than 1 percentage point below or 1.5 percentage points above national growth in FFS expenditures. CMS retroactively applies the lower guardrail to ACOs with 2024, 2025, and 2026 agreement period start dates, delaying PY 2025 financial reconciliation until November 2026 to implement this policy. For agreement periods beginning on or after January 1, 2027, annualized growth rates used in determining the ACPT will be calculated on a per-performance-year basis rather than an agreement-period basis. Beginning April 1, 2027, eligible ACOs may reduce or eliminate Part B cost sharing for most Original Medicare Part B items and services for identified beneficiaries under an approved implementation plan, excluding DMEPOS and prescription drugs. CMS will collect initial applications in early 2027. The prepaid shared savings payment option is eliminated; no new cohorts may apply after the January 1, 2027 application cycle, and existing participants receive payments through December 31, 2027. Beneficiary assignment changes take effect January 1, 2028, and include excluding allowed charges billed through non-ACO TINs from assignment calculations and revising Part A and Part B enrollment eligibility criteria. The rule finalizes quality reporting changes effective for PY 2027, including establishing Medicare eCQMs as a new collection type, extending MIPS CQMs availability and the associated reporting incentive, removing Quality ID 305 (Initiation and Engagement of Substance Use Disorder Treatment) and Quality ID 493 (Adult Immunization Status) from the APP Plus quality measure set, and reducing the APP Plus set to eight measures. CEHRT use requirements for PY 2027 are replaced with three elective activity options: reporting via eCQMs or Medicare eCQMs, reporting via FHIR-based API-supported CEHRT, or attesting to one of three ACO-specific metrics (electronic prescribing, HIE bi-directional exchange, or provider-to-patient exchange). Advance investment payment calculations for PY 2028 and subsequent years shift to flat per-beneficiary amounts of $45 or $25 based on rural, dual-eligible, or low-income subsidy criteria, eliminating the Area Deprivation Index methodology.