CMS has proposed one of the most significant sets of Medicare Shared Savings Program (MSSP) financial changes in recent years. While many of the proposed changes create new opportunities for Accountable Care Organizations (ACOs), others could significantly affect benchmark calculations, shared savings, financial forecasting, and strategic planning.
Our latest white paper provides an actuarial and financial analysis of the proposed CY 2027 Medicare Physician Fee Schedule (PFS) Rule and examines how the proposed MSSP changes could affect different types of ACOs.
Download the report to understand what the proposals may mean for your organization and what actions you should consider before the rule is finalized.
DOWNLOAD NOWAI Summary
On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) released the CY 2027 Medicare Physician Fee Schedule Proposed Rule, including one of the most consequential proposed updates to the Medicare Shared Savings Program (MSSP) in recent years.
The proposal calls for several significant financial changes, including increased shared savings rates for BASIC Level E Accountable Care Organizations (ACOs), expanded recognition of prior savings performance, modifications to benchmark risk adjustment methodology, and a new incentive for qualifying provider network growth.
While many of the proposed provisions may improve financial opportunities for some ACOs, the impacts are not universal. Certain ENHANCED ACOs may experience lower benchmark adjustments, lower-risk organizations may encounter revised benchmark limitations, and ACOs planning provider expansion may not realize anticipated benchmark growth if attributed beneficiary populations remain stable.
Importantly, several provisions could affect Payment Year (PY) 2025 and PY 2026 financial reconciliation before many of the 2027 changes take effect. CMS also proposes delaying PY 2025 reconciliation to incorporate the new Accountable Care Prospective Trend (ACPT) guardrail, if finalized.
This white paper explains each proposed change, identifies which organizations are most likely to benefit or face challenges, discusses how multiple benchmark changes interact, and outlines strategic considerations for ACO leaders while the rule remains under review.
Executive Summary
The CY 2027 Medicare Physician Fee Schedule Proposed Rule introduces several important proposed changes to MSSP financial methodology that could materially affect ACO performance.
The most significant proposals include:
- Increased shared savings rates for BASIC Level E ACOs
- Decreased regional efficiency adjustments for ENHANCED ACOs
- Greater recognition of prior savings when calculating benchmarks
- Implementation of risk adjustment to positive benchmark adjustment caps
- A new incentive for qualifying provider network growth
- The proposed Accountable Care Prospective Trend (ACPT) guardrail
- Changes that could affect PY 2025 and PY 2026 reconciliation
The overall impact depends heavily on an ACO’s participation track, historical performance, benchmark methodology, risk profile, and growth strategy.
Because several benchmark provisions interact with one another, evaluating each change independently may produce misleading financial projections. Organizations should model the proposals together before making strategic decisions.
Three Key Takeaways
1. Current agreement periods may be affected sooner than expected.
The proposed ACPT guardrail could influence PY 2025 and PY 2026 shared savings calculations for ACOs that entered agreement periods beginning in 2024, 2025, or 2026. Organizations should revisit financial projections before the final rule is released.
2. CMS is changing the economics of BASIC Level E versus ENHANCED participation.
Higher shared savings rates and benchmark changes could alter the financial tradeoffs between participation options beginning with 2027 agreement periods.
3. Benchmark provisions should be evaluated together.
Several proposed benchmark policies interact with one another. Modeling only one provision at a time might produce inaccurate estimates of future financial performance.
Frequently Asked Questions
What are the key proposed changes in the CY 2027 MSSP rule?
CMS proposes increasing the BASIC Level E shared savings rate, decreasing regional efficiency adjustments for ENHANCED ACOs, expanding recognition of prior savings performance, modifying the maximum benchmark adjustment to reflect beneficiary risk, introducing incentives for qualifying provider network growth, and implementing an Accountable Care Prospective Trend (ACPT) guardrail.
How does the CY 2027 MSSP proposal affect ACO shared savings and benchmarks?
The proposed changes may increase shared savings opportunities for some ACOs while changing benchmark calculations for others. Benchmark methodology, risk adjustment, prior savings recognition, and provider growth incentives all interact to influence financial performance.
Which ACOs are most affected by the proposed rule?
The proposal may have different implications depending on an ACO’s participation track and financial profile.
ACOs who may benefit from the rule include:
- Basic Level E ACOs starting an agreement period in 2027
- Organizations with strong historical savings performance
- Certain ACOs with network growth strategies
- Some ACOs with higher risk scores that are being constrained by benchmark adjustment caps
Organizations that may experience less favorable impacts include:
- Some regionally efficient ENHANCED ACOs
- Lower-risk ACOs affected by revised benchmark caps
- Organizations expecting benchmark increases solely through provider expansion
Why does the proposed rule matter before 2027?
Several proposed provisions (including the ACPT guardrail) could affect PY 2025 and PY 2026 financial reconciliation if finalized. CMS has also proposed delaying PY 2025 reconciliation until November 2026 to incorporate these changes.
Should ACOs revise their financial forecasts?
Organizations participating in the MSSP should consider updating financial models to evaluate how the proposed benchmark methodology, shared savings changes, and risk adjustment provisions could affect expected performance under multiple scenarios.
Who Should Read This White Paper?
This analysis is designed for:
- ACO Executives
- Population Health Leaders
- Healthcare Finance Executives
- Chief Financial Officers
- Medicare Strategy Leaders
- Actuaries
- Healthcare Consultants
- MSSP Program Leaders
- Value-Based Care Executives
- Healthcare Analytics Teams
Why Download This White Paper?
Inside you’ll learn:
- What CMS is proposing for the CY 2027 MSSP
- Which organizations are likely to benefit—or face challenges
- How benchmark methodology is changing
- Why the BASIC Level E versus ENHANCED decision may look different in 2027
- How the proposed ACPT guardrail may affect current agreement periods
- Why multiple benchmark provisions should be modeled together
- Strategic considerations for ACO leadership before the final rule
Download the white paper for a detailed review and practical considerations for Medicare ACO strategy.
DOWNLOAD NOWAbout the Authors
Prepared by Wakely healthcare actuarial and value-based care experts with extensive experience advising Accountable Care Organizations, Medicare Advantage organizations, provider groups, and healthcare systems on financial modeling, benchmarking, risk adjustment, and value-based payment strategy.
