Calendar Year (CY) 2026 Medicare Physician Fee Schedule Final Rule (CMS-1832-F)
Medicare Shared Savings Program Changes

On October 31, 2025, the Centers for Medicare & Medicaid Services (CMS) issued the calendar year (CY) 2026 Medicare Physician Fee Schedule (PFS) final rule (CMS-1832-F) that includes 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 Funds.

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 changes to the Shared Savings Program that are included in the CY 2026 PFS final rule. We are finalizing a policy 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 change will 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 finalizing our proposed changes 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. These revised policies will be applicable for ACOs in agreement periods beginning on or after January 1, 2027.

We are modifying 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 2026 and revising terminology used to describe the adjustment and other related terms, in the Shared Savings Program regulations, for performance years 2023 through 2025. We are also revising 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 will 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 updating the Alternative Payment Model (APM) Performance Pathway (APP) Plus quality measure set for Shared Savings Program ACOs, including removing Quality ID: 487 Screening for Social Drivers of Health, and expanding 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 finalizing policies 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.

Additionally, we are finalizing changes to other programmatic areas, including: a requirement for 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; 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 changes under the Medicare PFS; 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 changes to revise the Shared Savings Program quality monitoring policies, such that for performance years beginning on or after January 1, 2026, we will monitor whether ACOs have met the alternative quality performance standard, in addition to monitoring whether ACOs have met the quality performance standard.

Shared Savings Program Participation Options Under the BASIC Track

We are modifying 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 revised 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 will 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 requiring participation under either Level E of the BASIC track for all performance years of the agreement period, or the ENHANCED track (subject to the exception prohibiting ACOs with fewer than 5,000 assigned beneficiaries in benchmark year (BY) 1, BY2, or both benchmark years, from participating in the ENHANCED track finalized in this rule).

We will 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 exception prohibiting ACOs with fewer than 5,000 assigned beneficiaries in certain benchmark years from participating in the ENHANCED track finalized in this rule).

ACO Assigned Beneficiary Minimum Eligibility and Related Financial Reconciliation Requirements

Under 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 under section 1899(b)(2)(D) of the Act that a participating ACO have at least 5,000 Medicare FFS beneficiaries assigned to it 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 BY1, BY2, or both, to enter the Shared Savings Program, if we implement additional safeguards that protect ACOs and the Medicare Trust Funds.

ACOs applying to enter a new agreement period beginning on or after January 1, 2027. Accordingly, ACOs must have at least 5,000 assigned beneficiaries in benchmark year 3 (BY3) 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 certain benchmark years, we are finalizing policies 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 finalizing policies 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

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

We are finalizing with modification to remove the health equity adjustment applied to an ACO's quality score beginning in performance year 2026 (instead of performance year 2025 as proposed). We believe that the application of the Complex Organization Adjustment, the extension of the electronic Clinical Quality Measure (eCQM)/MIPS CQM reporting incentive, and flat benchmarks for Medicare CQMs' first two performance periods in MIPS, 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. Flat benchmarks for Medicare CQMs support ACOs that report quality data via Medicare CQMs in meeting the quality performance standard by allowing ACOs with high scores to earn maximum or near maximum achievement points while providing room for quality improvement and rewarding that improvement in subsequent years. These policies underscore our commitment to all payer/all patient quality measure reporting. Removing the health equity adjustment will deduplicate scoring factors and further simplify our quality scoring methodology.

Additionally, we are finalizing with modification to revise the terminology used to describe the health equity adjustment and other related terms in the Shared Savings Program regulations to accurately reflect the data used to calculate the health equity adjustment for performance years 2023 through 2025 (instead of performance years 2023 and 2024 as proposed).

Revise the Definition of a "Beneficiary Eligible for Medicare CQMs"

We are finalizing to revise the definition of a beneficiary eligible for Medicare CQMs, as proposed, 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.

Revising the definition of a beneficiary eligible for Medicare CQMs reduces ACOs' burden in the patient matching necessary to report Medicare CQMs because the list of beneficiaries eligible for Medicare CQMs will have greater overlap with the list of beneficiaries that are assignable to an ACO.

Promoting Alignment with CMS' Quality Programs

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 finalizing 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, as proposed.

Table 1 below displays the list of the quality measures to be included in the APP Plus quality measure set for Shared Savings Program ACOs as finalized in the CY 2025 PFS final rule and reflects the removal of Quality ID: 487 Screening for Social Drivers of Health from the APP Plus quality measure set.

Table 1: Quality Measures in the APP Plus Quality Measure Set for

Shared Savings Program ACOs

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 finalizing, as proposed, that beginning with performance year 2027, CMS-approved survey vendors must implement a web-mail-phone protocol and discontinue the mail-phone protocol for the CAHPS for MIPS Survey.

For more information on the Quality Payment Program, 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 finalizing, as proposed, that for performance year 2025 and subsequent performance years, we will 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 this 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 will apply the Shared Savings Program quality and finance EUC policies to provide relief to the ACO for the affected performance year.

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

To provide flexibility for ACOs and to support ACOs' participation in the Shared Savings Program, ACOs will be required 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 change of ownership (CHOW) during the performance year and outside of the annual change request cycle. Similarly, ACOs will be required 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. This change ensures 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.

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 are finalizing policies to revise the definition of "primary care services" used for purposes of beneficiary assignment under the Shared Savings Program to align with payment changes under the Medicare PFS. We are including, 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 not finalizing the proposal to exclude G0136 in the definition of "primary care services" used for the purposes of assignment; rather we are continuing to include G0136 with the updated code descriptor of Administration of a standardized, evidence-based physical activity and nutrition assessment tool in the definition of primary care services used for purposes of assignment.

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

CMS is finalizing revisions to 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.

Revisions to Shared Savings Program Quality Reporting Monitoring Provisions

CMS is finalizing revisions to 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 finalized approach, for performance years beginning on or after January 1, 2026, we will also monitor whether ACOs meet the alternative quality performance standard. We will also 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 both the quality performance standard and the alternative quality performance standard, including actions prior to termination or immediately terminating the ACO's participation agreement.

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