Medicare Shared Savings Program (MSSP): Executive Intelligence Brief

ValuesEdge Institutional Analysis | Based on CMS Source Documents through November 4, 2026

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1. Executive Summary and Strategic Context

What Is This Model and What Problem Does It Solve?

The Medicare Shared Savings Program (MSSP), formally the Shared Savings Program, is a permanent, statutory alternative payment model established under the Affordable Care Act that organizes Medicare fee-for-service (FFS) providers into Accountable Care Organizations (ACOs). These ACOs—comprising doctors, hospitals, and other health care providers—accept collective accountability for the quality, cost, and care experience of an assigned Medicare FFS beneficiary population. The program's core value proposition is straightforward: when an ACO delivers high-quality care while reducing unnecessary expenditures relative to a risk-adjusted benchmark, it earns a share of those savings, known as performance payments. When an ACO operates under two-sided risk tracks and generates losses, it is obligated to repay a portion of those losses to CMS.

The fundamental problem MSSP addresses is Medicare's legacy fee-for-service payment architecture, which rewards volume rather than value—incentivizing high service utilization regardless of clinical necessity or outcome. MSSP creates a population-level accountability mechanism by assigning beneficiaries to ACOs based on their primary care utilization patterns, then measuring the ACO's total cost of care against a historical and regional benchmark. This structure aligns provider incentives with Medicare's fiscal sustainability goals while encouraging care coordination, the elimination of unnecessary services, and the prevention of medical errors.

Strategic Significance for the Value-Based Care Market

MSSP is not a time-limited CMMI pilot—it is CMS's permanent, large-scale ACO infrastructure codified in statute, making it categorically distinct from Innovation Center models with defined sunset dates. Its scale is unmatched among federal value-based care programs: by the 2026 performance year, CMS had released ACO participation data confirming continued growth, with the program historically covering tens of millions of Medicare FFS beneficiaries across hundreds of ACOs. The 2022 performance year produced more than $1.8 billion in net savings to Medicare; 2021 produced more than $1.6 billion. These figures establish MSSP as the most consequential single accountable care vehicle in the federal portfolio.

For health system executives, MSSP participation is no longer primarily a strategic experiment—it is a default infrastructure question. ACOs that have been in the program across multiple agreement periods have developed risk stratification capabilities, care management workflows, and data infrastructure that confer durable competitive advantages in both Medicare FFS and Medicare Advantage markets. The quality measurement framework, population attribution methodology, and financial reconciliation logic embedded in MSSP increasingly serve as the blueprint for commercial ACO contracting as well.

The program's connection to the Quality Payment Program (QPP) is a critical strategic lever. MSSP ACOs reporting through the Alternative Payment Model (APM) Performance Pathway (APP) Plus qualify as participants in an Advanced APM. Clinicians within MSSP who achieve Qualifying APM Participant (QP) status are exempt from MIPS and, beginning in 2026, receive a higher fee schedule update that grows by 0.5% annually relative to non-QPs. This compounding payment differential makes MSSP participation increasingly valuable for physician groups seeking to escape MIPS administrative burden while building toward value-based revenue.

Political Context and Administrative Alignment

The CY 2027 PFS Final Rule, finalized November 4, 2026 by the Trump administration under CMS Administrator Dr. Mehmet Oz and CMMI Director Abe Sutton, explicitly frames MSSP and broader QPP reforms around the goals of reducing administrative burden, promoting prevention and wellness, and modernizing digital health infrastructure. The press release title—"CMS Finalizes CY2027 Physician Fee Schedule to Shift from Sick Care to Healthcare and Curb Waste"—reflects a rhetorical alignment between traditional ACO-model goals (prevention, care coordination, waste reduction) and the current administration's cost-containment and deregulatory priorities.

Notably, the administration moderated its initial proposal to sunset traditional MIPS reporting after the CY 2028 performance period, finalizing instead a CY 2030 sunset, providing an additional two years for clinicians to transition. This accommodation of market readiness concerns signals administrative willingness to respond to stakeholder feedback—a strategic consideration for ACO leaders and physician group administrators engaged in comment processes or advocacy.

The administration's emphasis on digital transformation—including finalizing new electronic prior authorization measures and removing outdated ONC attestations—directly affects MSSP ACOs' Certified Electronic Health Record Technology (CEHRT) requirements, which were also modified in this rule.

Market Transformation Implications

Several structural changes in the CY 2027 final rule carry significant market transformation implications for MSSP participants and their strategic advisors.

First, the finalization of Prepaid Shared Savings (PSS) as a new payment option for experienced, high-performing ACOs creates a capital flow mechanism that did not previously exist. ACOs with an established history of earning shared savings can now access those savings prepaid, enabling them to invest in care infrastructure mid-year rather than waiting for annual reconciliation. This changes the working capital dynamics of ACO operations fundamentally.

Second, the QP determination methodology shift—moving from NPI-level to TIN/NPI-level determinations—means financial incentives and MIPS exemptions will now flow only to tax identification numbers actively participating in Advanced APMs. For multi-specialty physician groups with complex billing structures that include both MSSP-participating and non-MSSP-participating TINs, this change requires a thorough billing and contracting audit to ensure QP status benefits are optimally captured.

Third, the trajectory toward mandatory MVP reporting by CY 2031 (for clinicians not in a MIPS APM) reshapes how ACOs and their participating clinicians should be thinking about quality infrastructure investments. Traditional MIPS will sunset after the CY 2030 performance period, and by CY 2031, MVPs become the sole MIPS pathway for non-APM participants. ACOs whose clinician participants have not begun transitioning to MVPs by 2027–2028 will face disruption.

Fourth, the introduction of Medicare eCQMs as a new collection type exclusively for MSSP ACOs—with patient populations based on the ACO's assigned beneficiaries—creates a more precise, attribution-aligned quality measurement approach. However, ACOs choosing Medicare eCQMs forgo both the Complex Organization Adjustment and the eCQM/MIPS CQM reporting incentive, requiring a performance-based cost-benefit analysis before electing this pathway.

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2. Model Architecture and Payment Structure

Participation Structure: Who Can Participate

The Shared Savings Program is a voluntary program open to defined categories of Medicare-enrolled providers and suppliers. Eligible ACO participants include:

• ACO professionals in group practice arrangements
• Networks of individual practices of ACO professionals
• Partnerships or joint ventures between hospitals and ACO professionals
• Hospitals employing ACO professionals
• Critical Access Hospitals (CAHs) billing under Method II
• Federally Qualified Health Centers (FQHCs)
• Rural Health Clinics (RHCs)
• Teaching hospitals that have elected to receive payment on a reasonable cost basis for direct medical and surgical services of their physicians

An ACO participant is defined as an entity identified by a Medicare-enrolled Taxpayer Identification Number (TIN) through which one or more ACO providers/suppliers bill Medicare. ACOs must maintain a compliant ACO Participant List and executed ACO Participant Agreements. ACOs may also affiliate Skilled Nursing Facility (SNF) affiliates, which must be listed separately with executed SNF Affiliate Agreements.

Applicant categories are formally distinguished between Initial Applicants (entities not previously in MSSP, entities returning after a break in participation, or re-entering ACOs where more than 50% of ACO participants have prior participation in the same ACO in any of the five most recent performance years) and Renewal/Early Renewal Applicants (currently participating ACOs in their final performance year seeking a new agreement period without a break).

Track Architecture and Risk Models

MSSP offers two primary participation tracks—BASIC and ENHANCED—with the BASIC track structured as a glide path of increasing risk levels (Levels A through E). Levels A and B of the BASIC track are one-sided (savings only); Levels C, D, and E introduce two-sided risk. The ENHANCED track represents the highest level of performance-based risk and reward. ACOs in two-sided models (BASIC Levels C–E and ENHANCED) must establish a repayment mechanism prior to their agreement period start date.

Track / Level	Risk Type	Repayment Mechanism Required	SNF 3-Day Waiver Eligible	BIP Eligible
BASIC Level A–B	One-sided (savings only)	No	No	No
BASIC Level C	Two-sided	Yes	Yes	Yes
BASIC Level D	Two-sided	Yes	Yes	Yes
BASIC Level E	Two-sided	Yes	Yes	Yes
ENHANCED	Two-sided	Yes	Yes	Yes

Repayment mechanism forms available include escrow agreements, letters of credit, and surety bonds, each with CMS-provided templates. Repayment mechanism amounts are calculated by CMS and provided to ACOs during the Phase 1 RFI-1 window.

Payment Options: AIP and PSS

Two specialized payment options are available to eligible ACOs:

Advance Investment Payments (AIP): Available to qualifying initial applicant ACOs, AIP provides upfront payments to support infrastructure development. ACOs interested in AIP must complete supplemental information and a spend plan as part of their application.

Prepaid Shared Savings (PSS): A newer payment option available to experienced ACOs with an established history of earning shared savings. PSS allows eligible ACOs to access prepaid shared savings mid-year, with repayment mechanism templates specifically designed for PSS arrangements (escrow, surety bond, and letter of credit variants all finalized).

Quality Reporting Architecture for MSSP ACOs

MSSP ACOs reporting under the APM Performance Pathway (APP) Plus quality measure set face a specific quality framework as finalized in the CY 2027 PFS Final Rule.

APP Plus Quality Measure Set for CY 2027 (8 Measures):

Quality ID	Measure Title	Collection Type(s) Available to MSSP ACOs
001	Diabetes: Glycemic Status Assessment Greater Than 9%	eCQMs, Medicare eCQMs, Medicare CQMs, MIPS CQMs
112	Breast Cancer Screening	eCQMs, Medicare eCQMs, Medicare CQMs, MIPS CQMs
113	Colorectal Cancer Screening	eCQMs, Medicare eCQMs, Medicare CQMs, MIPS CQMs
134	Preventive Care and Screening: Screening for Depression and Follow-up Plan	eCQMs, Medicare eCQMs, Medicare CQMs, MIPS CQMs
236	Controlling High Blood Pressure	eCQMs, Medicare eCQMs, Medicare CQMs, MIPS CQMs
321	CAHPS for MIPS	CAHPS for MIPS Survey (administered by CMS)
479	Hospital-Wide, 30-day, All-Cause Unplanned Readmission (HWR) Rate	Administrative Claims (calculated by CMS)
484	Clinician and Clinician Group Risk-standardized Hospital Admission Rates for Patients with Multiple Chronic Conditions	Administrative Claims (calculated by CMS)

Two measures were removed from the APP Plus set for CY 2027: Quality ID 305 (Initiation and Engagement of Substance Use Disorder Treatment) and Quality ID 493 (Adult Immunization Status), reducing the set from 10 to 8 measures.

Collection Type Changes:

• MIPS CQMs collection type is extended permanently (CY 2027 and subsequent years) for MSSP ACOs—a reversal from the prior scheduled sunsetting.
• Medicare eCQMs is a new collection type established for CY 2027, exclusively available to MSSP ACOs reporting APP Plus. The patient population is based on assigned beneficiaries (consistent with Medicare CQMs). ACOs reporting Medicare eCQMs are ineligible for the Complex Organization Adjustment or the eCQM/MIPS CQM reporting incentive.
• ACOs reporting Medicare eCQMs use existing eCQM measure specifications but report on their assigned beneficiary population and use a distinct identifier to flag the submission as a Medicare eCQM.

Benchmarking Policy for Medicare CQMs: All Medicare CQMs will be scored using flat benchmarks for CY 2027 and all subsequent performance periods. Additionally, flat benchmarks are retroactively applied to three measures for the CY 2026 performance period: Quality IDs 001, 134, and 236. This means historical benchmark escalation will not disadvantage ACOs on these measures.

CEHRT Requirements: The CEHRT definition has been modified in the CY 2027 final rule to align with ONC's HTI-5 Final Rule deregulatory policies, removing several ONC Health IT Certification Criteria from the required CEHRT definition (including Family Health History, Patient Health Information Capture, Automated Numerator Recording, Automated Measure Calculation, and Clinical Quality Measures – Filter).

MIPS Performance Threshold and Payment Adjustment Stakes

For MSSP ACO clinicians who do not achieve QP status and remain subject to MIPS, the payment stakes for the CY 2027 performance period (2029 MIPS payment year) are as follows:

CY 2027 Final Score	2029 MIPS Payment Impact
0.00 – 18.75 points	-9% payment adjustment (maximum negative)
18.76 – 74.99 points	Negative adjustment (between -9% and 0%)
75.00 points	Neutral (0%) — Performance threshold
75.01 – 100.00 points	Positive adjustment (scaling factor applied for budget neutrality)

The performance threshold remains at 75 points through the CY 2028 performance period and 2030 MIPS payment year.

Application Timeline for January 1, 2027 Agreement Start Date

Phase	Window	Key Actions
Phase 1 Submission	June 9 – June 23, 2026 (noon ET)	ACO-MS registration; ACO Participant List; Banking Information; SNF Waiver application; Track selection; Assignment methodology election
Phase 1 RFI-1	July 15 – August 5, 2026 (noon ET)	Final opportunity to add participants/SNF affiliates; Participation Options Report issued; Estimated repayment mechanism amounts provided
Phase 1 RFI-2	August 27 – September 11, 2026 (noon ET)	Final repayment mechanism documentation; Final opportunity to withdraw participants; SNF waiver completion
Phase 1 Final Disposition	October 20, 2026	ACO Participant List and SNF Affiliate List dispositions; AIP and PSS eligibility determinations
Phase 2 Submission	October 21 – October 30, 2026 (noon ET)	Governing body documentation; AIP/PSS supplemental information and spend plans; BIP application
Phase 2 RFI	November 12 – November 17, 2026 (noon ET)	Final opportunity to correct Phase 2 deficiencies
Final Application Dispositions	December 8, 2026	Full application, SNF waiver, BIP, AIP, and PSS dispositions
ACO Signing Event	December 9 – December 16, 2026 (noon ET)	Review, certify, and electronically sign program participation documents
Agreement Start Date	January 1, 2027	New performance year begins

Application dates for the January 1, 2027 agreement start date are confirmed as posted. All dates are subject to change. The primary application management system is ACO-MS (ACO Management System). ACOs with operational questions should contact their assigned ACO Coordinator as first point of contact, or email SharedSavingsProgram@cms.hhs.gov with their ACO ID and name.

SNF 3-Day Rule Waiver and Beneficiary Incentive Program

The SNF 3-Day Rule Waiver waives the standard Medicare requirement for a 3-day inpatient hospital stay prior to covered SNF services, available only to ACOs in two-sided risk tracks (BASIC Levels C–E or ENHANCED). Application is made separately during the annual application cycle. SNF affiliates must be listed on a separate SNF Affiliate List with executed SNF Affiliate Agreements.

The Beneficiary Incentive Program (BIP) is available to ACOs in certain two-sided models and allows the ACO to provide financial incentives to beneficiaries to encourage engagement in their care. BIP application occurs during the Phase 2 submission window.