MSSP 2027 Proposed Rule: What Medicare ACO Leaders Should Watch

On July 14, 2026, CMS released the Medicare Shared Savings Program (MSSP) 2027 Proposed Rule as part of the CY2027 Physician Fee Schedule proposed rule, proposing meaningful changes to the MSSP. At nearly the same time, ACO REACH entered its final months before concluding on December 31, 2026, while the new Long-term Enhanced ACO Design (LEAD) model prepares to launch on January 1, 2027. 

Viewed together, the MSSP 2027 Proposed Rule and the transition to LEAD send a consistent message: CMS is continuing to invest in accountable care. The agency is making participation more attractive, creating greater stability for organizations willing to commit to value-based care, and reinforcing that accountability for quality and cost will remain central to Medicare’s future. 

For accountable care organizations (ACOs), these developments present both opportunity and responsibility. As incentives become stronger, success will increasingly depend on an organization’s ability to proactively measure and monitor its performance throughout the year, rather than only after CMS reconciliation.  

What’s included in the MSSP 2027 Proposed Rule 

The MSSP 2027 Proposed Rule is designed to encourage broader participation in the Medicare Shared Savings Program while making the model more sustainable for organizations already participating. 

Among the proposed changes are: 

• New financial incentives for organizations joining MSSP for the first time 
• More predictable spending benchmarks to improve long-term planning 
• Reduced administrative requirements for participating ACOs 
• Beginning April 1, 2027, the option for approved ACOs to reduce or remove certain Part B cost sharing for beneficiaries 

The financial provisions carry the most weight for ACO economics. Four stand out: 

• Raising the shared savings rate for BASIC track Level E from 50% to 60%, narrowing the gap with the ENHANCED track’s 75% rate so ACOs choose a track based on their capacity to reduce cost rather than on built-in financial advantages 
• Reducing the maximum weight of the positive regional adjustment for ENHANCED track ACOs from 50% to 35%, which rebalances an advantage that has grown larger over time for ACOs already spending below their region 
• Raising the prior savings adjustment scaling factor from 50% to 75%, easing the rebasing ratchet effect where the savings an ACO earns in one agreement period lower its benchmark in the next 
• Introducing a guardrail on the Accountable Care Prospective Trend, holding it within 1 percentage point below or 1.5 percentage points above national spending growth, which protects ACOs when national growth projections miss 

These proposals build on a program CMS views as successful. According to the agency, 75% of the 476 ACOs participating in MSSP during performance year 2024 earned shared savings payments totaling $4.1 billion. Even after those payments, the program generated approximately $2.5 billion in net savings for the Medicare Trust Funds, its eighth consecutive year of producing overall savings. 

Those results help explain the direction of the MSSP 2027 Proposed Rule. CMS is signaling confidence in the program by encouraging broader participation while creating a more predictable environment for organizations committed to accountable care. 

A new ten-year model changes the planning horizon 

The MSSP 2027 Proposed Rule arrives alongside another important development: the transition from ACO REACH to LEAD. 

Unlike ACO REACH, LEAD is designed as a ten-year model, the longest performance period CMS has introduced for accountable care. Its benchmarks will remain fixed during that period, providing organizations with greater predictability as they make long-term investments in care delivery and population health. 

LEAD is also intended to broaden participation by encouraging organizations that have historically been underrepresented in value-based care, including smaller independent practices, rural providers, and organizations serving high-needs and dually eligible populations. New CMS-administered specialty risk arrangements further expand opportunities for providers to participate in value-based payment models. 

It’s worth noting that the first LEAD cohort has already been selected, with applications closing in May 2026 for the January 2027 performance year. For participating organizations, the focus now shifts from application to execution. For others, the MSSP 2027 Proposed Rule provides valuable insight into where CMS is heading and what future participation in Medicare accountable care will likely require. 

Both changes reward the same capability 

Although the MSSP 2027 Proposed Rule and LEAD introduce different policy changes, they reward the same organizational capability: understanding performance while there is still time to improve it. 

More predictable benchmarks create greater opportunity, but only for organizations that can see how they are performing throughout the year.  

If an ACO identifies quality gaps, documentation opportunities, or emerging cost trends early enough, it still has time to take corrective action before the performance year closes. If those same insights don’t become visible until months later during reconciliation, the opportunity has already passed. 

As CMS reduces uncertainty around program design through initiatives like the MSSP 2027 Proposed Rule, operational execution becomes an even greater differentiator. Organizations that can continuously measure performance will be better positioned to maximize both quality outcomes and shared savings. 

Why retrospective reporting is no longer enough

This is where many organizations continue to face challenges. 

Managing accountable care requires understanding both financial and clinical performance across an attributed Medicare population. Yet much of the information organizations rely on arrives after the fact. 

Claims data often lags by several weeks. Attribution continues to evolve during the performance year. Risk-adjusted benchmarks are difficult to evaluate in real time, while quality reporting introduces another layer of operational complexity. 

The result is that many organizations are expected to manage performance proactively using data that is largely retrospective. 

The organizations best positioned to succeed under the MSSP 2027 Proposed Rule will be those that can bring together risk adjustment, quality performance, utilization, and cost into a unified view of performance throughout the year. When leaders can monitor progress continuously instead of retrospectively, they have more opportunities to improve outcomes before financial results are finalized. 

What ACO leaders should be evaluating now 

The proposed changes reward preparation. A short set of questions can help ACO leaders gauge how ready they are: 

• Whether current analytics can support near-real-time performance monitoring 
• The completeness and accuracy of risk adjustment documentation 
• Visibility into quality measure performance throughout the year 
• Provider engagement across participating practices 
• Readiness for longer-term financial accountability models such as LEAD 

Inovalon’s perspective 

The MSSP 2027 Proposed Rule reflects an important evolution in accountable care. As CMS creates more stable benchmarks and stronger incentives for participation, the organizations that will benefit most are those with timely, trusted insight into their own performance. 

At Inovalon, we’ve spent years supporting healthcare organizations in Medicare risk adjustment and quality measurement. Those capabilities are foundational to accountable care because they influence how accurately an organization’s population is represented and how effectively quality performance can be managed throughout the year. We believe the next phase of accountable care will reward organizations that treat in-year performance visibility as core infrastructure rather than a year-end reporting exercise. 

Our perspective is straightforward: accurate benchmarks begin with accurate risk capture. Strong quality performance depends on identifying opportunities early enough to act. And organizations that establish a shared, trusted view of performance across their ACO and participating providers will be better positioned to succeed as accountable care continues to evolve. 

The MSSP 2027 Proposed Rule provides greater stability and stronger incentives for accountable care organizations. Participation opens the door. The advantage will come from understanding performance early enough to improve it. 

CMS is accepting public comments on the MSSP 2027 Proposed Rule through September 14, 2026, which gives ACOs a 60-day window to weigh in before the final rule is issued. As CMS reviews those comments and prepares for the launch of LEAD in 2027, we’ll continue following what these changes mean for organizations participating in Medicare accountable care.