On July 14, the Centers for Medicare & Medicaid Services (CMS) released the Medicare Physician Fee Schedule (MPFS) proposed rule and fact sheet for CY 2027 (CMS-1848-P). This rule updates payment policies and payment rates for Part B services furnished under the MPFS, as well as makes changes to the Quality Payment Program (QPP). Fact sheets for the Medicare Shared Savings Program (MSSP) and the Quality Payment Program can be found here 2027 QPP fact sheet and here 2027 MSSP fact sheet. Comments are due September 14.

Note that the page numbers listed in this document refer to the display copy of the proposed rule. Additionally, new CPT codes do not have final code numbers assigned. The complete code numbers will be provided when the final rule is released in early November.

Medicare Shared Savings Program – p. 514

Highlight: CMS requests information on potential approaches to introducing primary care–focused capitated payment arrangements with the MSSP. in the Shared Savings Program.

The Medicare Shared Savings Program (MSSP) allows eligible healthcare providers, such as physicians, hospitals, and others, to form or join an accountable care organization (ACO). By doing so, they agree to take responsibility for the overall cost and quality of care provided to a specific group of Medicare fee-for-service (FFS) beneficiaries. Providers and suppliers who participate in an ACO still receive traditional Medicare FFS payments under Parts A and B. If an ACO meets certain quality and savings criteria, it may receive shared savings payments. In some cases, it may also be required to share in losses if healthcare spending increases.

CMS’s proposals aim to strengthen financial incentives for ACOs to participate in the program while mitigating selection issues and benchmark rebasing concerns, reducing or eliminating Part B cost sharing for eligible beneficiaries, and reduce burden for ACOs. In addition, CMS proposes giving eligible ACOs applying for a January 1, 2027, agreement period a limited opportunity to change their final participation selection between the BASIC and ENHANCED tracks after the CY 2027 PFS final rule is issued.

CMS estimates that the MSSP proposals in this proposed rule are projected to reduce Trust Fund expenditures by $5.5 billion in total through the end of the 10-year period 2027 through 2036. Specifically, CMS proposes to:

• Revise policies for determining beneficiary assignment under the Shared Savings Program (p. 525)
  • Exclude primary care services billed outside an ACO's Taxpayer Identification Number (TIN) when determining beneficiary assignment to reduce incentives for billing patterns that could unfairly improve ACO financial performance.
  • Update beneficiary assignment eligibility rules to better align with current operations by requiring at least one month of both Part A and Part B enrollment, without Medicare Advantage or other Medicare group health plan enrollment during that same month, within the 12-month assignment window.
  • Update the list of primary care services used for beneficiary assignment to align with Medicare Physician Fee Schedule policies by adding new codes, including those for Screening, Brief Intervention, and Referral to Treatment (SBIRT), Vaccine Adverse Effects Management, and Advance Care Planning.
• Revise the quality performance standard and other quality reporting requirements (p. 580)
• Simplify Shared Savings Program CEHRT use requirements to reduce participant burden (p. 647)
• Revise policies for the Shared Savings Program’s financial methodology (p. 674)
  • Propose changes to balance incentives between Level E of the BASIC track and the ENHANCED track, mitigate selection issues and benchmark rebasing concerns, and encourage participation by ACOs with higher risk and higher cost populations
  • Establish a growth adjustment to the historical benchmark to reward ACOs for recruiting ACO professionals who are inexperienced with value-based care arrangements and serving beneficiaries new to value-based care. 
  • Reform the Accountable Care Prospective Trend (ACPT) component of the benchmark update factor
• Increase beneficiary engagement by allowing ACOs to reduce or eliminate Part B cost sharing for beneficiaries (p. 786) and discontinue availability of the option for prepaid shared savings (p. 800)
• Modify the calculation methodology for advance investment payments to encourage greater rural participation (p. 808)
• Revise the approach to determining an ACO's experience with risk based on prior participation of ACO Participants (p. 819)
• Modify Shared Savings Program beneficiary notification requirements (p. 826)

Finally, CMS is requesting information on potential future policy developments related to MSSP through RFIs, including on the following:

• Potential approaches to introducing primary care–focused capitated payment arrangements in the Shared Savings Program (See RFI on p. 274 in section II.E. of this proposed rule);
• Applying electronic prior authorization measures to shared savings program ACOs (See RFI on p. 673); and
• Potential approaches to more effectively integrate and meaningfully engage specialty care in the Shared Savings Program (See RFI on p. 832).

Updates to the Quality Payment Program – p. 874

Highlight: Traditional MIPS reporting phase-out continues, full transition to MVPs begins with the CY 2029 performance period.

Authorized by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the Quality Payment Program (QPP) is a value-based payment program where Medicare-participating clinicians are subject to the Merit-based Incentive Payment System (MIPS) or can participate in Advanced Alternative Payment Models (APMs). CMS plans to continue developing policies for the QPP that increase opportunities for Advanced APM participation and continues to implement MIPS Value Pathways (MVPs) by connecting activities and measures from the four MIPS performance categories that are relevant to a specialty, medical condition, or a particular population.

• For the MIPS participation track, MIPS eligible clinicians are subject to a MIPS payment adjustment (positive, neutral, or negative) based on their performance in four performance categories: cost, quality, improvement activities, and promoting interoperability. For CY 2027 performance period/2029 MIPS payment year, the scoring weights are as follows: 30 percent for the quality performance category; 30 percent for the cost performance category; 15 percent for the improvement activities performance category; and 25 percent for the promoting interoperability performance category.
• For the Advanced APM track, if an eligible clinician participates in an Advanced APM and achieves Qualifying APM Participant (QP) or Partial QP status, they are excluded from the MIPS reporting requirements and payment adjustment. In alignment with the application of QPP eligibility determinations, CMS proposes to apply QP and Partial QP status to the TIN/NPI under which a clinician achieves QP or Partial QP status. Under current law, eligible clinicians who are QPs for the 2024 performance year/2026 payment year and beyond will receive an increased physician fee schedule update of 0.75 percent qualifying APM conversion factor.

Transforming MIPS: MIPS Value Pathway (MVP) Strategy – p. 886

CMS proposes to sunset the traditional MIPS reporting beginning with the CY 2029 performance period/2031 MIPS payment year and proposes that all MIPS-eligible clinicians not participating in APM Performance Pathway (APP) must report through an MVP. Clinicians in a MIPS APM would continue to be able to report the APP. Currently, there are three reporting options: MVPs, traditional MIPS, and APP;CMS proposes to move towards two reporting options in the QPP: MVPs and the APP. MVPs are intended to focus on specific specialties, conditions, or patient populations to make reporting more meaningful. CMS also proposes that virtual groups would be able to report an MVP beginning with the CY 2029 performance period.

CY 2027 MVP Development and Maintenance – p. 898

CMS proposes to add three new MVPs for a total of 30 MVPs in the CY 2027 performance period: Diabetic Disease; Hospitalist; and Hypertension. The Diabetic Disease and Hypertension MVPs are specifically designed to address the prevention of chronic illnesses by including measures and activities aimed at reducing the incidence and impact of long-term conditions. CMS proposes to address maintenance requests of existing MVPs by modifying 23 previously finalized MVPs with addition and removal of measures and improvement activities. CMS also proposes to modify all 27 previously finalized MVPs by replacing the current requirement for an outcome/high priority measure with one MIPS core measure included in the MVP. (Note: for a complete list and descriptions of new and modified MVPs, see Appendix 3 on p. 1,508-p. 1,592)

APM Performance Pathway (APP) – p. 902

The APP was designed as a reporting and scoring pathway available only to MIPS-eligible clinicians identified as participating in a MIPS APM. The APP is intended to provide a predictable and consistent MIPS reporting option to reduce reporting burden and incentivize continued APM participation. CMS proposes to update quality measures in the APP and APP Plus quality measure set by adopting measure specification changes to certain measures and removing two measures. (Note: See Table C-BC1 and Table C-BC2 on p. 905 and p. 907 for more details.)

Fast Healthcare Interoperability Resources®-Based Digital Quality Measurement in the Quality Payment Program and Other CMS Quality Programs – Request for Information – p. 908

CMS aims to advance quality measurement by transitioning existing quality measures and reporting processes to FHIR®-based digital approaches. CMS proposes a phased transition, a 2-year transition period followed by required FHIR-based reporting for applicable measures, and seeks input on a transition timeline, key milestones, and implementation considerations for FHIR-based quality reporting in the QPP and other CMS clinician and hospital quality programs (see RFI on p. 908) .

MIPS Performance Category Measures and Activities – p.915

• Quality Performance Category: CMS proposes to modify the quality performance category measure inventory to include a set of 180 MIPS quality measures for the CY 2027 performance period/2029 MIPS payment year. This includes implementation of 10 new MIPS quality measures, removal of 20 MIPS quality measurers, and substantive changes to 43 current MIPS quality measures. (Note: for a full summary of the proposed changes to MIPS quality measures, see Table Groups A through DD of Appendix 1 on p. 1,325)

CMS proposes to introduce a new concept called “core measures” in MVPs and traditional MIPS. This designation would apply to 78 measures in the MIPS inventory. CMS proposes replacing the current requirement for MIPS participants to report an outcome or high-priority measure with a MIPS core measure reporting requirement. Small practices would be exempt.

• For traditional MIPS, clinicians would be required to report a MIPS core measure as one of their six quality measures. For MVPs, clinicians would be required to report a MIPS core measure as one of their four quality measures.
• If a clinician, group, virtual group, subgroup, or APM Entity reporting an MVP or traditional MIPS doesn’t have an applicable MIPS core measure available to report, CMS proposes to implement a self-attestation process: 1) the clinician would be required to attest that there wasn’t an applicable MIPS core measure available for them to report; 2) the clinician would then choose another measure to report in place of the MIPS core measure.

CMS proposes to extend the availability of the MIPS Clinical Quality Measures (CQMs) collection type for Shared Savings Program ACOs reporting the APP Plus quality measure set and establish a new collection type—Medicare electronic CQMs (eCQMs)—which would only be available to Shared Savings Program ACOs reporting the APP Plus quality measure set.

• Cost Performance Category: CMS proposes to update the operational list of care episode and patient condition groups and codes to reflect non-substantive measure maintenance updates. There are no proposed cost measure inventory updates for the CY 2027 performance period.
• Improvement Activities Performance Category: In alignment with the goal of promoting preventive care and fostering a more proactive and holistic approach to health management, CMS proposes new improvement activities under the Advancing Health and Wellness subcategory. The proposed improvement activities integrate concepts that address nutrition, implement lifestyle approaches to disease management, and support patient wellness to promote a healthier future. Overall, CMS proposes addition of six new activities, modification of five existing activities, and removal of 11 activities for the CY 2027 performance period. (Note: see Table F-B1 through F-B3 in Appendix 2 for more information).
• MIPS Promoting Interoperability Performance Category: CMS proposes eliminating the ONC (Office of the National Coordinator for Health Information Technology) attestations for the CY 2026 performance period and the Security Risk Analysis measure for CY 2027. CMS also proposes making the Electronic Prior Authorization measure optional in CY 2027 before requiring it in the CY 2028 performance period, while creating a new Electronic Prior Authorization for Prescription Drugs measure that would become mandatory beginning in CY 2028. CMS believes that these proposals will reduce costs and administrative burden by modernizing requirements that delay patient care and create unnecessary paperwork for providers.

MIPS Final Score Methodology – p.1,024

CMS proposes to establish a policy for scoring MIPS core measures. If a MIPS eligible clinician submits data for more than one MIPS core measure, CMS proposes to use the highest scoring MIPS core measure as one of the six or four quality measures, and the remaining scored measures will consist of either the

five highest scoring quality measures or the three highest scoring measures, as applicable, in traditional MIPS and MVP reporting.

Beginning in the CY 2027 performance period, CMS proposes to score the quality performance category for Medicare Shared Savings Program ACOs by using flat benchmarks for Medicare CQMs and Medicare eCQMs. CMS also proposes to retroactively apply flat benchmarks to three Medicare CQMs for the CY 2026 performance period, which includes Diabetes: Glycemic Status Assessment Greater Than 9%; Preventive Care and Screening: Screening for Depression and Follow-up Plan; and Controlling High Blood Pressure.

CMS proposes to apply the defined topped out benchmark for topped out measures (i.e., measures for which measure performance is considered so high and unvarying that meaningful distinctions in performance can no longer be made); and update scoring for the Electronic Prior Authorization measure in the Promoting Interoperability performance category.

Lastly, CMS solicits feedback on the future direction of MVP scoring policies, including on a scoring methodology that would allow CMS to compare performance of clinicians more fairly within the same MVP, with each MVP focusing on measures and activities that are relevant to a given specialty or medical condition. CMS also seeks input on the proposed MVP implementation timeline which would begin with the 2029 performance period. (See RFI on p. 1,045).

Third Party Intermediaries General Requirements – p. 1,050

CMS proposes to update their requirements for third party intermediaries related to conditions for approval for Qualified Clinical Data Registries (QCDRs) and qualified registries, remove the additional requirements for health IT vendors, and update their remedial action/termination policies.

Calculating Final Score – p. 1,064

CMS proposes to change the data source that CMS uses to determine eligibility for reweighting under the automatic extreme and uncontrollable circumstances (EUC) policy beginning with the CY 2027 performance period/2029 MIPS payment year. The goal is to allow more flexibility to use the most up-to-date and accurate data source available. Beginning with the CY 2025 performance period/2027 MIPS payment year, CMS proposes extending the reweighting request deadline from November 1 to December 31 for clinicians whose MIPS data cannot be accessed or submitted due to circumstances beyond their control after delegating submission to a third-party intermediary.

Public Reporting – p. 1,070

CMS proposes publicly reporting all eligible MIPS performance data for new Improvement Activities and Promoting Interoperability measures on the Medicare Compare Tool during their first year in the program. Currently, first-year data reported through the MVP framework are not publicly displayed. The change is intended to provide patients with more timely and comprehensive information about clinician performance. Also, CMS solicits feedback on improvements and alternative options to the current star rating assignment methodology for quality measure scores collected under the administrative claims collection type (see RFI on p. 1,073).

Advanced APMs – p. 1,077

CMS proposes to apply QP and Partial QP determinations at the TIN/NPI level to ensure that financial incentives are directed only to TINs actively participating in Advanced APMs. Under this proposal, clinicians would only be exempt from MIPS at the TIN (or TINs) in which they achieved QP status. CMS also proposes to update the QP and Partial QP thresholds for the CY 2026 performance period/2028 payment year, because of the Consolidated Appropriations Act, 2026.