Why this matters now
On July 14, 2026, CMS released a proposed rule reshaping how Medicare pays physicians and rewards accountable care. The proposal targets two structures your organization tracks closely: the Medicare Shared Savings Program, the nation's largest value-based payment program, and the Physician Fee Schedule. The comment period is open. Choices you make about ACO strategy, provider contracting, and network economics for 2027 will hinge on where these rules land.
What CMS proposed for ACOs
CMS wants to make Medicare ACOs easier to join and more rewarding to run. The Shared Savings Program proposals would:
- Increase opportunities to share savings for certain participating ACOs.
- Create new financial incentives for organizations joining the program for the first time.
- Establish more predictable spending targets to improve planning and participation.
- Reduce administrative burden by simplifying technology requirements and streamlining patient notices.
- Allow ACOs with approved applications beginning April 1, 2027 to reduce or eliminate beneficiary out-of-pocket costs for certain items and services, extending an approach already used across the ACO REACH Model.
The track record behind the proposal runs strong. In performance year 2024, 75 percent of the 476 participating ACOs earned shared savings payments totaling $4.1 billion. After those payments, the program still delivered roughly $2.5 billion in net savings to the Medicare Trust Funds. The Shared Savings Program has now produced savings for eight straight performance years. CMS wants to build on this record by improving benchmark accuracy and drawing more provider groups into risk.
What CMS proposed for physician payment
CMS also proposed a targeted recalibration of the Physician Fee Schedule. Over the years, the schedule accumulated outdated payment policies and billing conventions no longer matching how care gets delivered. The proposed changes would:
- Better align payments with the time, resources, and complexity involved in delivering care.
- Account for efficiencies when providers deliver multiple services during the same patient encounter.
- Improve oversight of billing practices where claims do not accurately reflect services provided.
- Increase transparency into how CMS calculates payment rates.
What this means for health plans and MA stakeholders
The Shared Savings Program applies to Original Medicare, so the direct rules sit outside Medicare Advantage. The signal for your business runs deeper. Payment recalibration shifts relative reimbursement across specialties, which flows into the cost trends and benchmarks shaping MA bids. Growth in ACO participation reshapes the provider networks you contract with and compete against. Out-of-pocket cost waivers from ACOs reset member expectations about affordability, and your members notice.
Three effects deserve attention on your side of the market:
- Benchmark and spending-target changes alter the financial math for any provider group weighing a move into risk.
- First-time entrant incentives will pull more physician organizations toward accountable care, tightening the pool of independent providers.
- Physician Fee Schedule recalibration changes specialty-level economics, which affects how you price and structure provider agreements.
What to watch next
The proposed rule is open for public comment, so the details will move before anything finalizes. Raise these questions inside your organization: How exposed is your provider network to specialty-level payment shifts? Which contracted groups look likely to enter the Shared Savings Program under the new incentives? How will ACO out-of-pocket waivers affect your competitive position in shared markets?
Risk adjustment and value-based care leaders work through exactly these questions together at RISE National, where teams pressure-test strategy against the newest CMS direction.