On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) issued the calendar year (CY) 2026 Medicare Physician Fee Schedule (PFS) proposed rule (CMS-1832-P) that includes proposed changes to the Medicare Shared Savings Program (Shared Savings Program) to allow for timely improvements to program policies and operations. The Trump Administration is committed to ensuring that participation in the Shared Savings Program will promote better chronic disease management and prevention, more efficient use of resources, promote innovation, and drive increased savings for the Medicare Trust Fund.

As of January 1, 2025, the Shared Savings Program has 477 Accountable Care Organizations (ACOs) with over 650,000 healthcare providers providing care to over 11.2 million people with Traditional Medicare. We continue to gain experience with and observe the impact of changes to the Shared Savings Program’s quality performance standard and other quality reporting requirements, financial methodology, beneficiary assignment methodology, participation options, and availability of new payment options, among other changes, finalized in recent years through the annual PFS rulemaking process.

This Fact Sheet summarizes the major proposed changes to the Shared Savings Program that are included in the CY 2026 PFS proposed rule. We are proposing to reduce the length of time an ACO can participate in a one-sided model of the BASIC track to a maximum of 5 performance years, during the ACO’s first agreement period in the BASIC track’s glide path (if eligible), instead of 7 performance years.  This proposal would be applicable for agreement periods beginning on or after January 1, 2027 and is intended to encourage participation in two-sided risk models.

We are proposing modifications to the Shared Savings Program eligibility and financial reconciliation requirements with respect to the eligibility requirement that ACOs have at least 5,000 assigned Medicare fee-for-service (FFS) beneficiaries, to increase flexibility regarding the minimum number of assigned beneficiaries required in benchmark years, while establishing safeguards to protect the Medicare Trust Funds and ACOs from normal variation in expenditures. We propose to apply these revised policies to ACOs in agreement periods beginning on or after January 1, 2027.

We are proposing changes to the Shared Savings Program quality performance standard and other quality reporting requirements, including removing the health equity adjustment applied to an ACO’s quality score beginning in performance year 2025 and revising terminology used to describe the adjustment and other related terms, in the Shared Savings Program regulations, for performance years 2023 and 2024. We are also proposing to revise the definition of a beneficiary eligible for Medicare Clinical Quality Measures (Medicare CQMs) for ACOs participating in the Shared Savings Program, for performance year 2025 and subsequent performance years, so that the population identified for reporting within the Medicare CQM collection type would have greater overlap with the beneficiaries that are assignable to an ACO, and thereby reduce ACOs’ burden in the patient matching necessary to report Medicare CQMs. For alignment with CMS’ quality programs, we are proposing to update the Alternative Payment Model (APM) Performance Pathway (APP) Plus quality measure set for Shared Savings Program ACOs, including to remove Quality ID: 487 Screening for Social Drivers of Health, and to expand the survey modes for the Consumer Assessment of Healthcare Providers and Systems (CAHPS) for Merit-based Incentive Payment System (MIPS) Survey from a mail-phone administration protocol to a web-mail-phone administration protocol beginning with performance year 2027.

We are proposing to expand the application of the Shared Savings Program quality and finance extreme and uncontrollable circumstances (EUC) policies to an ACO that is affected by an EUC due to a cyberattack, including ransomware/malware, as determined by the Quality Payment Program, for performance year 2025 and subsequent performance years.

We are proposing changes to other programmatic areas, including: proposed modifications to require ACOs to report certain changes to their ACO participant list during the performance year, such as when an ACO participant experiences a Change of Ownership (CHOW), and similarly to require ACOs to report changes during the performance year to the ACO’s Skilled Nursing Facility (SNF) affiliate list, such as when a SNF affiliate undergoes a CHOW; proposed updates to the Shared Savings Program beneficiary assignment methodology to revise the definition of primary care services used for purposes of assignment to align with payment policy proposals under the Medicare PFS; proposed changes to the Shared Savings Program regulations specifying the financial benchmarking methodology applicable for agreement periods beginning on January 1, 2025, and in subsequent years, to rename the “health equity benchmark adjustment” the “population adjustment,” and proposed changes to revise the Shared Savings Program quality monitoring policies, such that for performance years beginning on or after January 1, 2026, we would also monitor whether ACOs have met the alternative quality performance standard, in addition to monitoring whether ACOs  have met the quality performance standard.

There is a 60-day public comment period on the CY 2026 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 September 12, 2025. Comments can be submitted at: https://www.regulations.gov/ (in commenting, please refer to file code CMS-1832-P).

Section 1.0   Shared Savings Program Participation Options Under the BASIC Track

We are proposing to modify the requirements for determining an ACO’s eligibility for Shared Savings Program participation options, applicable for agreement periods beginning on or after January 1, 2027. Under the proposed approach, an ACO identified as inexperienced with performance-based risk Medicare ACO initiatives (defined in 42 CFR § 425.20) may participate in the Shared Savings Program under a one-sided model for up to 5 performance years under the ACO’s first agreement period in the BASIC track’s glide path (if eligible), instead of a maximum of 7 performance years spanning two agreement periods in the BASIC track’s glide path, as currently allowed. We would also require ACOs inexperienced with performance-based risk Medicare ACO initiatives to progress more rapidly to higher levels of risk and potential reward under a two-sided model by their second or subsequent agreement period, by allowing for participation under Level E of the BASIC track for all performance years of the agreement period, or the ENHANCED track (subject to the  proposed exception prohibiting ACOs with fewer than 5,000 assigned beneficiaries in certain benchmark years from participating in the ENHANCED track).

We would maintain an approach similar to our existing requirements for determining the participation options of an ACO that CMS determines is experienced with performance-based risk Medicare ACO initiatives (defined in § 425.20). That is, for agreement periods beginning on or after January 1, 2027, if an ACO is determined to be experienced with performance-based risk Medicare ACO initiatives, the ACO may enter either the BASIC track Level E for all performance years of the agreement period, or the ENHANCED track (subject to the proposed exception prohibiting ACOs with fewer than 5,000 assigned beneficiaries in certain benchmark years from participating in the ENHANCED track).

ACO Assigned Beneficiary Minimum Eligibility and Related Financial Reconciliation Requirements

Under current Shared Savings Program regulations, CMS “deems” an ACO to have initially satisfied the statutory requirement to have at least 5,000 assigned Medicare FFS beneficiaries if 5,000 or more beneficiaries are historically assigned to the ACO participants in each of the three historical benchmark years as defined in regulations (§ 425.110(a)(2)). This regulatory provision was established to align with the statutory requirement and to ensure CMS is able to reliably and accurately assess ACO financial and quality performance. Since the inception of the program, we have gained additional experience with the requirement for an ACO to have 5,000 beneficiaries assigned in each benchmark year. This experience shows we can both retain the financial integrity of benchmark calculations and ensure CMS can reliably and accurately assess ACO financial and quality performance while allowing for ACOs that have fewer than 5,000 beneficiaries assigned in their benchmark years to enter the Shared Savings Program, if we implement additional safeguards that protect ACOs and the Medicare Trust Funds.

We are proposing that, as an eligibility requirement for the Shared Savings Program, ACOs applying to enter a new agreement period beginning on or after January 1, 2027, must have at least 5,000 assigned beneficiaries in benchmark year (BY) 3, but may have fewer than 5,000 assigned beneficiaries in BY1, BY2, or both. To establish safeguards to protect the Medicare Trust Funds and ACOs from the potential greater variation in expenditures caused by the reduction in the size of the ACO’s assigned beneficiary population in benchmark years, we are proposing to (1) require that an ACO applying to enter a new agreement period that has fewer than 5,000 assigned beneficiaries in BY1, BY2, or both, may only enter the BASIC track; and (2) cap shared savings and shared losses at a lesser amount if an ACO, at any time during the agreement period, has fewer than 5,000 assigned beneficiaries in any of the three BYs. We are also proposing to exclude ACOs that fall below 5,000 assigned beneficiaries in any benchmark year from being eligible to leverage existing policies that provide certain low revenue ACOs participating in the BASIC track with increased opportunities to share in savings.

Revisions to the Quality Performance Standard & Other Quality Reporting Requirements

Proposal to Remove and Revise the Health Equity Adjustment Applied to an ACO’s Quality Score

We are proposing to remove the health equity adjustment applied to an ACO’s quality score beginning in performance year 2025. We believe that the application of the Complex Organization Adjustment and the extension of the electronic Clinical Quality Measure (eCQM)/MIPS CQM reporting incentive, as finalized in prior rules, have made it unnecessary to continue applying the health equity adjustment to an ACO’s quality score. The Complex Organization Adjustment upwardly adjusts an ACO’s MIPS Quality performance category score when an ACO reports quality data via eCQMs. The eCQM/MIPS CQM reporting incentive supports ACOs in meeting the quality performance standard and in sharing in the maximum shared savings allowable by track. These policies underscore our commitment to all payer/all patient quality measure reporting. Our proposal to remove the health equity adjustment would deduplicate scoring factors and further simplify our quality scoring methodology.

Additionally, to accurately reflect the data used to calculate the health equity adjustment in performance years 2023 and 2024, we are proposing to revise the terminology used to describe this adjustment and other related terms in the Shared Savings Program regulations.

Proposal to Revise the Definition of a “Beneficiary Eligible for Medicare CQMs”

We are proposing to revise the definition of a beneficiary eligible for Medicare CQMs, for performance year 2025 and subsequent performance years, to require at least one primary care service with a date of service during the applicable performance year from an ACO professional who is a primary care physician or who has one of the specialty designations included in § 425.402(c), or who is a physician assistant, nurse practitioner, or clinical nurse specialist.

Our proposal to revise the definition of a beneficiary eligible for Medicare CQMs would reduce ACOs’ burden in the patient matching necessary to report Medicare CQMs because the list of beneficiaries eligible for Medicare CQMs would have greater overlap with the list of beneficiaries that are assignable to an ACO.

Promoting Alignment with CMS’ Quality Programs

Proposal to Update the APP Plus Quality Measure Set

For performance year 2025 and subsequent performance years, Shared Savings Program ACOs are required to report the APP Plus quality measure set. We are proposing several updates to the APP Plus quality measure set for Shared Savings Program ACOs, including the removal of Quality ID: 487 Screening for Social Drivers of Health.

Table 1: Quality Measures in the APP Plus Quality Measure Set for Shared Savings Program ACOs

Proposal to Add a Web-based Survey Mode to the CAHPS for MIPS Survey

Shared Savings Program ACOs are required to administer the CAHPS for MIPS Survey, an annual survey, in order to meet the quality reporting requirement under the Shared Savings Program. Currently, data is collected using a mail-phone survey administration protocol. In order to help increase survey response rates, we are proposing that beginning with performance year 2027, we would implement a web-mail-phone protocol and discontinue the mail-phone protocol for the CAHPS for MIPS Survey.

For a fact sheet on the CY 2026 Quality Payment Program proposed changes, please visit the QPP Resource Library (cms.gov).

Expand Extreme and Uncontrollable Circumstances Policies Used to Determine ACO Quality and Financial Performance 

Currently, the quality and finance extreme and uncontrollable circumstance (EUC) policies under the Shared Savings Program are aligned with the MIPS EUC policy which accounts for natural disasters and public health emergencies. We are proposing that, for performance year 2025 and subsequent performance years, we would expand the application of the quality and finance EUC policies to an ACO that is affected by an EUC due to a cyberattack, including ransomware/malware, as determined by the Quality Payment Program.

Under the proposed approach, if an ACO is affected at the legal entity level by an EUC due to a cyberattack, including ransomware/malware, and wants relief from the Shared Savings Program quality reporting and financial performance requirements, then the ACO must submit a MIPS EUC Exception application to the Quality Payment Program as an APM Entity for the affected performance year. If the Quality Payment Program approves an ACO’s MIPS EUC Exception application, as an APM Entity, for a cyberattack, including ransomware/malware, for the affected performance year, then we would apply the Shared Savings Program quality and finance EUC policies to provide relief to the ACO for the affected performance year.

Section 1.04    Allow ACOs to Modify Their ACO Participant List and SNF Affiliate List During the Performance Year for Change of Ownership Scenarios

To be eligible to participate in the Shared Savings Program, under § 425.118(a)(1), an ACO must maintain, update, and submit to CMS an accurate and complete ACO participant list. The ACO participant list identifies each ACO participant by its Medicare-enrolled Taxpayer Identification Number (TIN) and legal business name. Currently, during a specified timeline, within the annual Shared Savings Program change request cycle, ACOs are able to add an entity to their previously certified ACO participant list according to the form and manner specified by CMS (§ 425.118(b)(1)). To provide flexibility for ACOs and to support ACOs’ participation in the Shared Savings Program, we are proposing to require ACOs to update their certified ACO participant list with a TIN newly enrolled in the Provider Enrollment, Chain, and Ownership System (PECOS) with no prior Medicare billing claims history, for an ACO participant that experiences a CHOW during the performance year and outside of the annual change request cycle. Similarly, we are proposing to require ACOs to report changes which occur during the performance year to the ACO’s SNF affiliate list if a SNF affiliate undergoes a CHOW resulting in a new TIN. These proposals would ensure that an ACO participant or SNF affiliate that goes through a CHOW and remains the exact same entity with a new TIN can continue participating in the Shared Savings Program without interruption.

Section 1.05    Revisions to the Definition of Primary Care Services used in Shared Savings Program Beneficiary Assignment

Under its claims-based assignment methodology, CMS assigns Medicare FFS beneficiaries to Shared Savings Program ACOs based on their utilization of “primary care services” as defined in the program’s regulations. We propose to revise the definition of primary care services used for purposes of beneficiary assignment under the Shared Savings Program to align with payment policy proposals under the Medicare PFS. We propose to include, among other services for the purposes of determining beneficiary assignment for the performance year starting on January 1, 2026, and subsequent performance years, new behavioral health integration and psychiatric collaborative care management add-on services, when these services are furnished with advanced primary care management services. Additionally, we are proposing to not include G1036 Administration of a standard, evidence-based social determinants of health risk assessment tool in the definition of primary care services used for purposes of assignment, beginning January 1, 2026, and in subsequent years.

Section 1.06    Revisions to Terminology in Shared Savings Program Regulations Describing Financial Benchmarking Methodology

CMS is proposing to revise the Shared Savings Program regulations for performance year 2025 and subsequent performance years to rename the “health equity benchmark adjustment” to the “population adjustment,” to more accurately reflect the nature of the adjustment which accounts for the proportion of the ACO’s assigned beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS) or dually eligible for Medicare and Medicaid.

Section 1.07    Revisions to Shared Savings Program Quality Reporting Monitoring Provisions

CMS is proposing to modify the Shared Savings Program quality reporting monitoring requirements under § 425.316. We inadvertently did not modify the program’s monitoring policies when we established the alternative quality performance standard through earlier rulemaking. In addition to our existing policy, under which we monitor whether ACOs meet the quality performance standard, under the proposed approach, for performance years beginning on or after January 1, 2026, we would also monitor whether ACOs meet the alternative quality performance standard. We are also proposing to extend the specific actions CMS may take if an ACO fails to meet the quality performance standard, to apply where an ACO fails to meet the quality performance standard or the alternative quality performance standard, including actions prior to termination or immediately terminating the ACO’s participation agreement.

Source: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-proposed-rule-cms-1832-p-medicare-shared