The benchmark rewrite is here, and it is holding your PY2025 check to prove it
The headlineOn July 14, CMS issued the CY2027 Physician Fee Schedule proposed rule (CMS-1848-P), and the MSSP package inside it is the deepest rework of the program's financial methodology since the track redesign. The moves, in order of money: the shared savings rate for BASIC track Level E rises from 50 to 60 percent, while the maximum weight on the positive regional adjustment for ENHANCED track ACOs falls from 50 to 35 percent, a deliberate rebalancing aimed at ACOs that CMS believes have been selecting ENHANCED for its benchmark advantages rather than its risk. The prior savings adjustment's scaling factor climbs from 50 to 75 percent, real relief from the rebasing ratchet for ACOs that have been earning. The 5 percent cap on upward benchmark adjustments becomes risk adjusted, so ACOs with sicker populations get more headroom. And a new growth adjustment rewards ACOs that recruit clinicians and beneficiaries new to value-based care, stacking on top of the largest adjustment you already qualify for, within that risk-adjusted cap.
Then there is the part that touches this year's money. CMS is proposing guardrails on the Accountable Care Prospective Trend so the projection can land no more than 1 percentage point below, or 1.5 above, observed national growth. For ACOs in agreement periods that started in 2024, 2025, or 2026, the lower guardrail would apply retroactively, beginning with PY2025. To make that possible, CMS has delayed PY2025 financial reconciliation to November 2026, after the final rule. If your distribution planning assumed checks on the usual early-fall cycle, that assumption just moved by roughly a quarter. Elsewhere in the package: ACOs could reduce or eliminate Part B cost sharing for selected beneficiaries starting April 2027, an idea imported from REACH, while the prepaid shared savings option we profiled in Issue #3 gets discontinued for lack of uptake. Advance investment payments shift to flat quarterly per-beneficiary amounts with a rural criterion in PY2028. The conversion factor math is a cut either way: $33.1693 for qualifying APM participants, down 1.19 percent, and $32.8409 for everyone else, down 1.68 percent, as the one-year 2.5 percent congressional boost expires. NAACOS's July 14 statement ran supportive, crediting the ACPT guardrails and the bigger prior savings adjustment and projecting $5.5 billion in Trust Fund savings through 2036, a figure to attribute to NAACOS. Two silences are worth noting: the statement says nothing about the reconciliation delay, and neither the statement nor CMS's own MSSP fact sheet mentions the anomalous-billing benchmark fix the industry campaigned for after the skin-substitute run-up. Expect both to surface in comment letters. Comments close September 14.
Three work streams start now. First, rerun your track election. The BASIC E and ENHANCED comparison your board saw last cycle is stale: at 60 percent sharing with an intact regional adjustment, BASIC E closes most of the gap to ENHANCED's 75 percent, and if your ACO spends below its region, the ENHANCED regional adjustment you have been banking on shrinks by nearly a third of its weight. CMS says January 2027 applicants will get a time-limited window to switch tracks after the final rule lands, which means the modeling has to be done before it lands, not after. Second, move your cash-flow plan. PY2025 shared savings now arrive around November, roughly a quarter later than the pattern, and any distribution commitments, physician payouts, or reinvestment budgets keyed to September need restating; the offsetting good news is the retroactive lower guardrail protects your PY2025 update factor if CMS's projection undershot actual growth. Third, comment by September 14. The regional adjustment cut and the reconciliation delay are where the money is, and CMS explicitly invited track-level analysis. If those provisions help or hurt you, the docket is where that goes on the record.
Every one of these proposals is arithmetic on data you already have: your assignment list, your regional expenditures, your prior savings history, your risk scores. We are building the CY2027 proposals into benchmark scenarios for the ACOs on our platform so a board can see BASIC E versus ENHANCED under the new weights before the switch window opens, and we would start that conversation now rather than after the final rule.
The rule's quality half rewires your collection types and retires PI reporting
The headlineIf the benchmark section moves the money, the quality section moves the work, and for quality leaders it may be the bigger story. Start with the reprieve: the MIPS CQMs collection type, scheduled to disappear after PY2026 and force every ACO onto eCQMs or Medicare CQMs, would instead be extended for PY2027 and beyond, with its reporting incentive intact. Next to it, CMS proposes something new: a Medicare eCQMs collection type, which follows eCQM specifications but is reported only on your assigned beneficiaries rather than all patients across all payers. That is CMS conceding, in regulation, the data-aggregation problem ACOs have been describing for years: the all-payer denominator, not the digital format, is what has made eCQM reporting punishing for multi-TIN organizations. The trade: Medicare eCQMs would be scored on flat benchmarks and would not qualify for the eCQM reporting incentive or the Complex Organization Adjustment. The APP Plus measure set itself shrinks from ten measures to eight, dropping Initiation and Engagement of Substance Use Disorder Treatment and Adult Immunization Status, leaving five ACO-reported clinical measures for PY2027: glycemic status, depression screening, blood pressure control, breast cancer screening, and colorectal cancer screening.
Two more proposals deserve a close read. Starting with PY2026, an ACO could exclude participant TINs from its clinical measure submission when circumstances warrant, a practice closure, a specialty EHR that cannot support the measures, or other CMS-approved situations, so long as the TINs it does report cover at least 95 percent of assigned beneficiaries; the 75 percent data completeness requirement still applies to what is submitted. And the CEHRT use requirement gets rebuilt: instead of reporting all MIPS Promoting Interoperability measures, an ACO in PY2027 would satisfy CEHRT use by doing one of three things: fully reporting at least one clinical measure via eCQM or Medicare eCQM, attesting to FHIR-based API use for quality measurement with certified health IT, or attesting to one ACO-level metric on e-prescribing, HIE, or patient access. Beneficiary notification simplifies too: one standardized notice per agreement period, furnished by May 30, replacing the first-visit timing rule and the follow-up communication requirement. Note the direction of all of this against H.R. 5347, the House-passed bill holding reporting methods still through 2029: CMS is not fighting that current; the rule swims with it, keeping familiar collection types alive while building a gentler on-ramp to digital measurement.
Your PY2027 collection-type decision just went from forced to genuinely strategic, and it deserves a real analysis this fall. If your all-payer aggregation is mature, classic eCQMs keep the reporting incentive and the Complex Organization Adjustment. If aggregation is the blocker, Medicare eCQMs cap your denominator at your assigned population at the cost of the incentive, and flat benchmarks make your scoring more predictable in exchange for the chance of a hot regional percentile. If neither is ready, MIPS CQMs no longer expire out from under you. Run the arithmetic on all three against your actual measure rates before you commit. The TIN exclusion proposal is retroactive relief for PY2026, so if you have a participant whose EHR cannot produce the five measures, document the circumstance now. And the CEHRT change means your PI data collection machinery, the workflows built to chase PI numerators across your TINs, becomes attestation-grade rather than measure-grade in 2027; do not renew tooling contracts for a requirement that is proposed to disappear before checking the final rule this fall.
This is the part of the rule that lands on our desk as much as yours. As a Qualified Registry we already report every collection type in this proposal except the new Medicare eCQM, and building for it is straightforward from where we sit: the specification is the eCQM, the population is the assigned list we already reconcile for Medicare CQMs. What we would tell any quality leader this fall: bring your measure-level rates and your aggregation pain points to one working session, and the right 2027 collection type usually picks itself.
Congress opens a second front on physician payment
The headlineOn July 15, the day after the proposed rule dropped its conversion-factor cuts, the chairs of the House GOP and Democratic Doctors Caucuses, Reps. John Joyce, Greg Murphy, and Kim Schrier, introduced the Patients First Act, a bipartisan physician-payment overhaul with more direct ACO relevance than any bill since the quality-reporting freeze. Per NAACOS's same-day summary and early trade coverage, the bill would tie annual physician payment updates to inflation, exactly the fix the new 1.19 and 1.68 percent cuts make urgent; freeze the qualifying-participant thresholds for the Advanced APM bonus for three years before HHS gains authority to adjust them, protecting the incentive math for ACO clinicians who have been drifting below the line; preserve the higher payment update for clinicians in risk-bearing arrangements; pilot a hybrid per-member-per-month plus fee-for-service payment for primary care; stand up a physician-led task force, POINTS, to thin the quality-measure catalog; and require notice-and-comment rulemaking for mandatory CMMI models while raising the budget-neutrality threshold from $20 million to $54.3 million.
That makes two live bipartisan vehicles touching ACO economics, moving on different clocks. H.R. 5347, which would hold quality reporting methods still through 2029, passed the House without opposition on June 29 and has sat in the Senate since. The Patients First Act starts at the beginning of the committee process with adjournment pressure ahead, so treat it as a marker of direction rather than a bet worth planning on. NAACOS welcomed it within hours, citing APM savings of $37 billion over twelve years and $14 billion net to Medicare; attribute those to the advocates. One caveat on everything above: the provision list traces to sponsor and association materials, and the bill text is the authority once it posts.
The QP threshold freeze is the provision to watch, because it touches current-year planning: clinicians who lose QP status lose the APM incentive payment and fall back into MIPS, and the thresholds were set on a schedule that assumed more Advanced APM volume than the market delivered. If the freeze moves, the participation math for your fence-sitting practices gets three years of certainty. The inflation-linked update would matter even more but faces the harder fiscal path. Meanwhile the conversion-factor cut is the operative reality for 2027 budgeting unless Congress acts, and the last several year-end packages have taught everyone how that movie usually ends: partial, late relief. Plan revenue on the proposed numbers, keep the legislative upside out of the budget, and if your ACO signs association comment letters, the PFS docket and these two bills are one coordinated story this fall.
We track QP status for the clinicians in the ACOs we serve because it decides who we report to MIPS and who is exempt, and threshold years have produced unwelcome surprises before. If the freeze advances we will fold it into this fall's participation-list reviews, where the QP snapshot dates and your TIN decisions actually intersect.
The independent REACH evaluation complicates the victory lap
The headlineTwo weeks after CMS announced REACH's $2.5 billion PY2024 report card, the model's third independent evaluation arrived from NORC at the University of Chicago, covering the first REACH year, PY2023, plus the two Direct Contracting years before it. It reads differently than the press release did. For Standard ACOs, which held 96 percent of the model's 2 million aligned beneficiaries, gross spending fell significantly in PY2023 but not cumulatively, and net Medicare spending, after accounting for what CMS paid out, increased both in PY2023 and cumulatively. New Entrant ACOs cut gross spending cumulatively; their net spending still rose. High Needs ACOs, the same. The care-pattern findings underneath are the ones the trade press picked up: hospice and home health utilization and spending declined for Standard and New Entrant ACOs, ambulatory and specialty spending fell, and quality improved across multiple outcome measures. One structural finding deserves its own sentence: ACOs anchored in hospital systems increased emergency department and post-acute utilization, exactly the direction their underlying economics point.
Hold this against Issue #4's numbers and the tension is instructive, because both are true. Reconciliation says REACH ACOs beat their benchmarks by $2.5 billion in PY2024 and returned $988.3 million net to CMS. The evaluation, built on difference-in-differences comparisons against matched populations rather than against negotiated benchmarks, says that through PY2023 Medicare had not yet spent less than it would have without the model once shared savings and bonuses went out the door. Those are different questions: one asks whether ACOs outperformed the targets CMS set, the other asks whether the targets were set where a counterfactual world would have landed. When the two diverge, the evaluation is telling you the benchmarks were generous, and it is the evaluation, not the reconciliation, that CMMI's statute cares about when models seek expansion or successors get designed.
Read LEAD, and the proposed rule's benchmark tightening, as the policy response to exactly this evidence. A model whose reconciliation pays out while its evaluation shows net cost is a model whose successor gets stingier benchmarks, larger discounts, and less generous adjustments, and that is the LEAD design ACOs are now signing up for and the regional-adjustment trim MSSP ACOs just read about in this issue's lead. Two practical notes. First, if you present REACH-era results to your board, label which instrument produced each number; a savings rate against benchmark and a counterfactual savings estimate can move in opposite directions, as they just did. Second, the utilization findings are a preview of where CMS looks next: the hospice and home-health declines will draw scrutiny about appropriateness, and the hospital-anchored utilization pattern will feed the long-running argument about who should lead ACOs. If your ACO is hospital-affiliated, expect that exhibit to follow you into policy conversations.
The evaluation's whole argument runs on a counterfactual: what your population would have cost without you. You cannot run a difference-in-differences study on yourself, but you can know your utilization deltas against your region by service line, which is the nearest thing to seeing what NORC will see. That view, ED, post-acute, hospice, ambulatory, by cohort, is a standing report we build from claims for the ACOs on our platform, and it is worth reviewing before someone else's version of it shapes a model you are in.
Nine days: the LEAD countdown, itemized
The headlineThe first hard deadline of the LEAD Model era arrives Wednesday, August 5, at 12:00 noon ET, when participant TINs are due to CMS for accepted first-cohort applicants, per CMS onboarding guidance. It shares the day with the close of the MSSP Phase 1 add window, which makes August 5 the heaviest roster-lock date on the 2026 calendar for any organization with a foot in both programs. The rest of the sequence is unchanged since we published it in Issue #4, and it is unforgiving: September 8 is the deadline to drop a LEAD TIN, September 15 opens the Implementation Period, the financial guarantee must be in place by December 31, and Performance Year 1 starts January 1, 2027 on a ten-year run. CMS has still made no public announcement of the first cohort, so the participant list remains one of the stories most likely to break before our next issue.
What should exist by next Wednesday, for an ACO in the cohort: a TIN list reconciled against MSSP participant lists, because a TIN riding in both a LEAD entity and an MSSP ACO is an overlap dispute waiting for a disposition, and the MSSP side of that reconciliation closes at the same noon deadline. Executed agreements with every participant on the list, not verbal commitments; September 8 is the last exit for a TIN that will not sign. A financial-guarantee procurement already in motion, because letters of credit and surety bonds move at bank speed, not deadline speed, and December 31 sits at the end of signing season when everyone else is asking the same institutions for the same paper. And a written Implementation Period workplan, since the September-to-December window with no aligned beneficiaries and no risk is the only free rehearsal the model will ever offer for network operations, beneficiary outreach, and reporting.
If you are in the cohort, treat August 5 as the dress rehearsal for how your organization runs the next ten years of deadline cycles: the ACOs that struggle in new models are rarely surprised by the risk, they are surprised by the operational sequencing. If you are not in LEAD, the date still matters twice over. Your MSSP roster locks the same day at the same noon cutoff, and the overlap-resolution machinery that follows in September can pull your contested TINs into a dispute you did not start; know now which of your participants have relationships with likely LEAD entities. And keep one eye on the cohort announcement itself, because where LEAD lands geographically will redraw recruiting and alignment competition in those markets for 2027.
We said it in Issue #4 and the window is now nine days wide: aligned-cohort reporting is where Implementation Periods get underestimated. If you cannot filter quality data to a CMS-supplied beneficiary list across every participant practice today, the fix belongs in your September workplan, not your January one, and it is the first thing we would pressure-test with any ACO entering the model.
What we're tracking next
- ACCESS has an official roster now, and a correction. CMS's accepted-applicants page lists 150-plus organizations in the first cohort, which supersedes the "nearly 200" we relayed from AMA coverage in Issue #4; use the CMS number. The list itself is the story: alongside regional medical groups sit Noom, Weight Watchers, Headspace, DocGo, and Welldoc, consumer-health brands now billing Medicare for chronic-condition co-management. Rolling starts continue August 17 and October 1, and post-deadline applicants roll to January 1, 2027.
- The GLP-1 Bridge is running quietly. No utilization or enrollment data yet, three weeks in. One operational detail worth filing from CMS's provider materials: prior-authorization requests move through the pharmacy with a 24-to-72-hour turnaround, and prescribers do not need Medicare enrollment, only absence from the Preclusion List. When the first utilization numbers or a BALANCE Model announcement land, this becomes a story again.
- Quiet fronts, loud calendar. The CMS and HL7 Connectathon ran July 14–16 with no public Aligned Networks scorecard yet, so the who-actually-shipped question from Issue #4 stays open. The FY2027 IPPS final rule is due around August 1, the final HIPAA Privacy Rule amendments are still targeted for August and sitting at OMB, and Q2 quarterly assignment reports should reach ACO-MS in mid-August.
- PY2025 MSSP results now follow the reconciliation delay. With PY2025 financial reconciliation moved to November 2026, the public results announcement that usually lands in early fall moves with it. When it comes, it will be the first read on the program under the ACPT lower guardrail, if the proposal finalizes on schedule.