What CMS’s CY 2026 MSSP Proposed Rule Means for ACOs
In July 2025, CMS released the Calendar Year (CY) 2026 Physician Fee Schedule (PFS) Proposed Rule, which introduces significant changes impacting ACOs in the Medicare Shared Savings Program (MSSP). While last July’s post offered a broad overview, this version provides a clearer, more actionable lens on what’s different and what truly matters now.
At Chirpy Bird, we’re breaking down the key points: accelerated risk progression, adjustments to beneficiary size requirements, new quality reporting metrics, and enhanced flexibility around participant changes. More importantly, we’re translating what those mean to your ACO’s financial strategy and operational workflows starting in 2026.
We’ll walk through each proposal with a practical focus, offering planning considerations, prepping, and responding ahead of the September 12 comment deadline.
1. Accelerated Transition from One-Sided to Two-Sided Risk
CMS proposes shortening the BASIC track glide path from seven performance years to five years for ACOs entering one-sided models in a new agreement period after January 1, 2027.
What it means for you: New ACOs must transition more quickly into two-sided risk models, such as the BASIC Level E or the Enhanced track. You will need to plan in year one what infrastructure is necessary for downside accountability.
Why CMS wants this: To accelerate the shift toward value-based care with greater financial exposure.
What you should do now: Map out timelines for building risk management, legal agreements, care coordination, and data systems that can support two-sided models within five years.
2. Beneficiary Minimums, Benchmarks, and Financial Caps
Previously, ACOs were required to have at least 5,000 assigned fee-for-service beneficiaries in each of the three benchmark years. CMS now proposes allowing fewer than 5,000 in the first two benchmark years, provided there are at least 5,000 in benchmark year three.
Upside: This opens MSSP participation to smaller or growing ACOs.
Trade-off: These ACOs face lower shared savings or losses caps and are limited to the BASIC track only.
Your Playbook: Evaluate Your Member Gap Years. If your organization recently grew, calculate your projected count in benchmark year three. Plan financially for capped upside and downside performance, and weigh whether the BASIC track is sufficient for your long-term goals.
3. Quality Reporting Adjustments and Terminology Updates
CMS plans to remove the health equity adjustment starting in Performance Year 2025 and rename it the “population adjustment” to better reflect that it accounts for dual eligibility and low-income subsidy status.
The agency also plans to revise the eligibility criteria for Medicare Clinical Quality Measures (CQMs), aligning them with patients who are actually assigned to ACOs. This is intended to reduce reporting burden and improve data consistency.
Impact: Expect changes to ACO-level quality scoring and shared savings eligibility.
What you should do: Compare 2023 and 2024 scores under the current methodology to projections using the new population adjustment. Prepare staff and IT teams for revised beneficiary matching requirements in CQM reporting.
4. EUC Expansion to Include Cyberattacks
CMS proposes to expand the Extreme and Uncontrollable Circumstances (EUC) policy to include cyberattacks, such as ransomware or malware events. This would allow ACOs to request relief from quality and financial performance penalties if such events disrupt operations in performance year 2025 and beyond.
Direct implication: In the event of a cyber incident, ACOs can apply for a MIPS EUC Exception and avoid penalties related to data or workflow disruptions.
Recommended actions: Update your incident response policies and governance protocols to ensure optimal preparedness. Make sure your leadership and IT teams understand how to document and submit EUC exception requests.
5. Mid-Year Updates for Participant and SNF Affiliate TINs
CMS wants ACOs to report mid-year Change of Ownership (CHOW) updates for participant and SNF affiliate Tax Identification Numbers outside the standard annual cycle. This applies when the new TIN has no prior Medicare billing history.
Why this matters: Failing to update TINs in a timely manner can affect attribution, benchmarks, eligibility, or shared savings.
Your task: Review your provider agreements, especially around ownership changes, and create a process for submitting CHOW requests promptly during the performance year.
6. Revised Definition of Primary Care Services for Assignment
CMS proposes revising the definition of primary care services to include behavioral health integration and psychiatric collaborative care management codes when they are delivered with advanced primary care services. The agency also plans to exclude the G1036 Social Determinants of Health (SDOH) risk assessment code from assignment beginning in 2026.
Effect: This will impact which patients count toward your ACO’s assigned population, and therefore your benchmarks and shared savings potential.
What you should check: Confirm that your billing practices include integration codes that support attribution. Avoid relying on G1036 services for beneficiary assignment going forward.
7. Additional Practical Notes and Timeline
Comment deadline: CMS is accepting public comments on the proposed rule through September 12, 2025.
Effective dates: Most changes take effect January 1, 2027, although some scoring updates apply to performance years 2025 and 2026.
Payment rate context: CMS proposes a conversion factor increase for qualifying APMs (around $33.59) and slightly lower for non-APMs. However, proposed efficiency adjustments could reduce the net benefit, so monitor how these affect your total cost benchmarks.
The CY 2026 MSSP proposed rule outlines a shift toward faster risk adoption, simplified quality reporting, and more adaptable participation policies. These aren’t just regulatory tweaks; they signal CMS’s intent to raise the bar on performance and accountability for ACOs of all sizes.
If your ACO is considering a new agreement cycle or is currently sitting in BASIC levels A through D, now is the time to reassess. The proposed five-year glide path, mid-year reporting changes, and evolving beneficiary rules all require early attention.
Need help modeling your glide path, understanding the impact on quality scoring, or preparing a comment submission before the September 12 deadline? Contact us at Chirpy Bird; we help practices like yours align compliance with opportunity.
