CMS Proposes Major Reforms to Medicare ACOs and Physician Pay

CMS has proposed major reforms to Medicare accountable care organizations (ACOs), the Physician Fee Schedule (PFS), and the traditional Merit-based Incentive Payment System (MIPS). CMS Deputy Administrator John Brooks said the goal is to “…deliver better outcomes for patients by appropriately incentivizing providers, improving quality measurement, and reducing administrative burden.”¹

Enhancements to the Medicare Shared Savings Program

CMS is suggesting significant enhancements to the Medicare Shared Savings Program (MSSP), which has shown strong financial results. In 2024, 75% of 476 participating ACOs earned $4.1 billion in shared savings, netting Medicare $2.5 billion after payments for the eighth consecutive year.¹ The American College of Physicians (ACP) praised the proposal's enhanced 32% adjustments for providers participating in MSSP ACOs and the newer Long-term Enhanced ACO Design (LEAD) model.² This proposed enhancement would provide increased savings-sharing opportunities, new incentives for organizations joining MSSP for the first time, and more predictable spending targets. It would also reduce administrative burdens by streamlining patient notices and simplifying technology requirements.

ACOs with applications approved to begin the agreement period on April 1, 2027, would gain the opportunity to reduce or eliminate beneficiary out-of-pocket costs for certain services.¹

Improving the Physician Fee Schedule

The proposal aims to better reflect modern clinical practice and the time and complexity involved in care, but some don’t see the changes as being sufficient. Ted Okon, MBA, executive director of Community Oncology Alliance (COA), addressed the reimbursement inconsistencies

“This has pushed more independent physicians into higher-cost hospital systems or driven many to retire altogether,” he said in a statement. He added that “…delaying these corrections until 2027 leaves independent radiation oncology practices under payment policies that CMS has already acknowledged are inadequate.”³

This proposal would adjust payments to account for efficiencies gained when multiple services are delivered during the same visit and reform how payment rates are calculated to improve transparency. Additionally, the proposal addresses oversights in current billing practices to ensure providers are properly incentivized to deliver value-based care.¹ ACP points out that the proposal is a positive step for practitioners; however, the expiration of the temporary 2.5% statutory payment increase will still reduce the 2027 conversion factors compared with 2026.²

Sunsetting Traditional MIPS for MVPs

Traditional MIPS would be sunset in 2029, and MIPS Value Pathways (MVPs) would become the primary reporting option going forward. Aiming to support more preventive care, three new specialty-focused MVPs are proposed for diabetes, hypertension, and hospital-based care.¹ ACP adds that CMS plans to make changes to all previously finalized MVPs as well.² According to CMS, the proposed MVPs would cover approximately 98% of specialties.

Additionally, new MIPS Core Measures that are replacing the current outcome and high-priority measure requirement would begin in 2027. This will require physicians to report at least one measure relevant to their specialty and patient population. The goal is expected to improve experiences for patients and providers alike by generating more meaningful data, according to CMS.¹

What CMS's Proposed Reforms Mean for Providers and Patients

CMS Administrator Mehmet Oz, MD, said the goal is to make it easier for clinicians to focus on prevention and be appropriately incentivized for it, rewarding outcomes rather than service volume. In doing so, CMS says, patients will receive better outcomes and improved quality of care, while physicians benefit from reduced administrative burden.¹

While reactions have been mostly favorable, the ACP and COA pointed out potential concern regarding reimbursement stability.^2,3 The public comment period remains open through September 14, 2026, and the proposal has not yet been finalized.¹

References

1. CMS proposes transformational Medicare reforms to expand accountable care, modernize physician payment. Press release. CMS. July 14, 2026. Accessed July 17, 2026. https://www.cms.gov/newsroom/press-releases/cms-proposes-transformational-medicare-reforms-expand-accountable-care-modernize-physician-payment

2. ACP says 2027 Medicare payment proposal is a positive step for internal medicine physicians. Press release. American College of Physicians. July 15, 2026. Accessed July 17, 2026. https://www.acponline.org/acp-newsroom/acp-says-2027-medicare-payment-proposal-is-a-positive-step-for-internal-medicine-physicians

3. Community Oncology Alliance on proposed 2027 Physician Fee Schedule. Press release. Community Oncology Alliance. July 15, 2026. Accessed July 17, 2026. https://mycoa.communityoncology.org/news-updates/press-releases/community-oncology-alliance-on-proposed-2027-physician-fee-schedule