CMS Proposes 2026 Updates to the Medicare Shared Savings Program

On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) unveiled the proposed rule for the Calendar Year (CY) 2026 Medicare Physician Fee Schedule, featuring significant updates to the Medicare Shared Savings Program (MSSP). These proposals aim to fine-tune program operations, enhance beneficiary alignment, promote quality improvement, and reduce administrative burden while aligning the program more closely with CMS’s broader quality and financial policies.

ACO Participation: Shifting Toward Two-Sided Risk Models

A major proposed shift in MSSP participation strategy is the reduction of time that newly formed ACOs can remain in a one-sided risk arrangement. CMS proposes capping participation in the BASIC track's one-sided model to five years within a single agreement period, down from the current maximum of seven years across two agreement periods. This change would apply to ACOs beginning new agreements on or after January 1, 2027. The goal is to encourage a faster transition to two-sided risk models that support value-based care.

Eligibility Flexibility: Minimum Beneficiary Threshold Updates

To broaden access while maintaining fiscal integrity, CMS is proposing new flexibility in how ACOs meet the requirement for having at least 5,000 assigned Medicare fee-for-service (FFS) beneficiaries. Starting with agreements in 2027, ACOs would only need to meet the 5,000 threshold in Benchmark Year 3. They may fall below this number in Benchmark Years 1 or 2, but must enter the BASIC track and would be subject to limits on shared savings and losses if their numbers dip below 5,000 during the agreement period. These safeguards are designed to balance access and accountability.

Quality Performance: Health Equity Adjustments and Measure Updates

CMS proposes removing the health equity adjustment from ACO quality scores starting in the performance year 2025. Instead, CMS plans to rely on other mechanisms, such as the Complex Organization Adjustment and incentives for eCQM reporting, to recognize the challenges faced by safety-net providers.

Additionally, CMS would revise terminology related to the health equity adjustment in the regulations for performance years 2023 and 2024 and rebrand the “health equity benchmark adjustment” as the “population adjustment” to better reflect its function, accounting for the proportion of an ACO’s population with dual eligibility or low-income subsidy status.

Medicare CQMs: Streamlining Patient Matching

To reduce administrative complexity, CMS proposes updating the definition of a “beneficiary eligible for Medicare CQMs” to better align with ACO assignment methodology. Beginning in 2025, eligible beneficiaries must have at least one primary care encounter during the performance year with an ACO provider who is a primary care physician, a specialist recognized under the ACO beneficiary assignment rules, or a qualified non-physician practitioner. This change should create greater overlap with assignable beneficiaries and ease the patient-matching process. 

Starting in performance year 2025, the inclusion of nurse practitioners, physician assistants, and clinical nurse specialists in identifying assignable beneficiaries, combined with a proposed requirement that Medicare CQM-eligible beneficiaries must have received primary care services, is expected to raise the alignment between Medicare CQM eligibility and ACO-assignable beneficiaries to about 85 percent for most ACOs.

To support ACOs in understanding and preparing for this proposed change in the CY 2026 PFS Proposed Rule, CMS will continue providing quarterly beneficiary lists using the current CY 2024 definition. Beginning with Q2 of 2025, a new variable, PCS_ENCOUNTER, will be added to indicate whether a beneficiary had at least one primary care service with the ACO during the list period under the proposed definition. This change is reflected in the Medicare CQM Quarterly List Template, where the variable appears on both the Medicare_CQM_Beneficiaries tab and the measure-specific tabs. If finalized, the revised definition will be fully applied to the quarterly lists starting in Q4 of 2025.

APP Plus Measure Set: Quality Measure Refinements

CMS is also proposing revisions to the Alternative Payment Model (APM) Performance Pathway (APP) Plus quality measure set including removal of Quality ID: 487 (Screening for Social Drivers of Health).

Table: Proposed APP Plus Quality Measure Set for Shared Savings Program ACOs

CAHPS Survey: Modernized Delivery

To increase patient response rates, CMS plans to transition the CAHPS for MIPS Survey to a web mail phone protocol, replacing the current mail-phone approach. This change would take effect in performance year 2027.

Cybersecurity and Extreme Circumstances

In a timely update, CMS proposes expanding extreme and uncontrollable circumstances (EUC) policies to include cyberattacks such as ransomware or malware that impact ACOs at the legal entity level. ACOs affected in this way would be able to seek quality and financial reporting relief under the same provisions currently extended for natural disasters and public health emergencies starting in 2025.

Additional Administrative Updates

CMS also proposes that ACOs must report certain mid-year changes to their participant or SNF affiliate lists, especially when entities experience a change of ownership (CHOW) resulting in a new TIN. This policy aims to maintain continuity in ACO operations despite backend organizational changes.

Revised Definitions and Monitoring Enhancements

The definition of primary care services used in beneficiary assignment will be updated to reflect newer care management codes while removing SDOH risk assessment (G0136) from inclusion starting in 2026. CMS will also begin monitoring compliance with the alternative quality performance standard starting in 2026 and may take enforcement actions if ACOs fail to meet either the primary or alternative standards.

Public Comment Period

CMS is accepting public comments on these proposed changes through September 12, 2025. Stakeholders, including providers, ACOs, and beneficiaries, are encouraged to submit feedback via Regulations.gov under file code CMS-1832-P.