CMS Proposes 2027 Physician Payment Overhaul: MIPS Sunset and ACO Expansion

Bypaulgruensfelder
CMS Newsroom July 14, 2026
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AI-Generated Summary

CMS’s proposed CY 2027 Physician Fee Schedule rule would sunset traditional MIPS reporting in 2029, replace it with specialty-focused MIPS Value Pathways covering roughly 98% of specialties, and make Medicare ACOs easier to join and more rewarding. The Medicare Shared Savings Program — which paid $4.1 billion in shared savings to 75% of its 476 ACOs for 2024 while generating about $2.5 billion in net Medicare savings — would gain new-entrant financial incentives, more predictable spending benchmarks, and the option to reduce beneficiary cost-sharing starting April 2027. CMS also proposes recalibrating physician payment rates for same-encounter efficiencies, introducing MIPS Core Measures in 2027, and closing an APM incentive loophole worth an estimated $2.38 billion over the next decade.

Why It Matters

Physician groups, MSOs, and value-based care platforms now have a hard deadline: traditional MIPS reporting ends after 2028. Quality reporting infrastructure, ACO participation strategy, and payment-rate exposure all need reassessment before the final rule lands this fall.

medicare physician fee schedule MIPS sunset MIPS value pathways accountable care organizations shared savings program value-based care CMS payment policy

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Frequently asked questions

When will traditional MIPS reporting end under CMS’s proposal?

CMS proposes to sunset traditional MIPS beginning with the 2029 performance period. Clinicians would have until the end of 2028 to transition to a MIPS Value Pathway unless they participate in a MIPS APM and report the APM Performance Pathway. Three new MVPs — diabetes, hypertension, and hospital-based care — would extend MVP coverage to roughly 98% of specialties.

How much has the Medicare Shared Savings Program saved?

In performance year 2024, 75% of the 476 participating ACOs earned shared savings payments totaling $4.1 billion, and the program still generated about $2.5 billion in net savings for the Medicare Trust Funds. The program has now produced net savings for eight consecutive performance years.

What changes would the proposed rule make to physician payment rates?

CMS proposes a targeted recalibration to align payments with the actual time, resources, and complexity of care, account for efficiencies when multiple services are delivered in the same encounter, tighten billing oversight, and increase transparency in how rates are calculated. It would also close an APM incentive payment loophole projected to prevent an estimated $2.38 billion in windfall payments over the next decade.

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