WASHINGTON – Some approved Medicare doctors’ groups may cut or drop what assigned patients pay for many Part B items and services. That starts April 1, 2027. The Department of Health and Human Services announced the change on November 4, 2026. It is part of the final Medicare physician payment rule for 2027.
The groups are accountable care organizations, called ACOs. HHS says “starting April 1, 2027, approved ACOs may reduce or eliminate Part B cost-sharing for many items and services for assigned beneficiaries …”
The word “may” carries the weight. An ACO can choose to lower a patient’s share. Nothing in the release says any ACO must.
| Key fact | What the source says |
|---|---|
| Start date | April 1, 2027, for approved ACOs. |
| Who it reaches | Beneficiaries assigned to an approved ACO, for many Part B items and services. |
| Shared Savings Program results, performance year 2024 | 75 percent of 476 participating ACOs earned $4.1 billion in shared savings. Net savings to the Medicare Trust Funds were about $2.5 billion against projected spending benchmarks. |
| New billing codes | Two codes for advance care planning done by clinical staff. |
| Conversion factor for 2027 | $32.95 for qualifying APM participants, who meet thresholds for an Advanced APM. A projected decrease of 1.83 percent. |
| Office visits in a Shared Savings Program or LEAD Model ACO | A new modifier, B2. The fact sheet says it would increase payment for the visit by 32 percent. Voluntary. |
| Mental health visits at rural health clinics and federally qualified health centers | In-person visit requirements do not apply through December 31, 2027. The rule carries out a 2026 law that says so. |
What changed#
Part B is the part of Medicare that pays for doctor visits and outpatient care. Cost sharing is the part of a bill the patient pays. The new rule gives approved ACOs an option to lower it, for many items and services, for the people assigned to them.
HHS says this means “directly lowering out-of-pocket costs for essential care.” Those are the agency’s words. The release gives no dollar figure for what a patient would save.
CMS Administrator Dr. Mehmet Oz said, “For too long, fee-for-service payment has rewarded volume over value, fueling a reactive system of sick care.” He said the rule “breaks from that status quo.”
In Medicare’s Shared Savings Program, an ACO is a group of doctors and other providers. HHS says that in performance year 2024, “75% of the 476 participating ACOs earned shared savings totaling $4.1 billion.” HHS says the program “has generated savings for the Medicare Trust Funds for eight consecutive performance years.”
HHS also cites patient results. It says “data shows” that people aligned with an ACO “are less likely to experience uncontrolled diabetes or hypertension.” They “are more likely to receive recommended preventive care.” It names no study.
The rule also raises shared savings rates for eligible ACOs and adds incentives for first-time participants. HHS says CMS “increases shared savings rates for eligible ACOs, provides new incentives for first-time participants, and sets more predictable spending targets.” It says the rule simplifies electronic health record reporting and “streamlines patient notice mandates.”
The CMS fact sheet adds a payment change for doctors in these groups. A practitioner in a Shared Savings Program ACO or a LEAD Model ACO may add a new billing modifier to an office visit. It is called B2. The fact sheet says it “would increase payment of the associated E/M visit by 32%.” Its wording mixes “propose” and “now being finalized.” CMS says use of the modifier is voluntary. It can be billed for any beneficiary the practitioner furnishes services to, “not limited only to Shared Savings Program-assigned beneficiaries.” The fact sheet does not say what the higher payment means for a patient’s share of the bill.
A second modifier, B1, replaces an existing add-on code for visit complexity. It raises the visit payment by 16 percent instead of a flat amount. CMS says it believes this “will result in more streamlined billing that will be easier for beneficiaries to understand.”
The rule also “finalizes two new billing codes dedicated to Advance Care Planning.” The CMS fact sheet names them as codes G0572 and G0573. They cover advance care planning services furnished by clinical staff under the direct supervision of the billing physician or other practitioner. The existing codes stay for time the billing practitioner spends personally.
The rule also sets up “national payment pathways for health and well-being coaching under general supervision.” It adds billing for shared medical appointments, which are group visits. HHS says it is “boosting valuations for smoking cessation and behavioral health assessments.” It also adds separate billing for “the dedicated clinical time required to diagnose, treat, and counsel patients experiencing vaccine adverse effects.”
Who it affects#
The release describes the cost sharing change for “assigned beneficiaries” of “approved ACOs.” The release does not list which ACOs are approved, which services count, or how a person is assigned.
The question for a reader is simple. Is my doctor in an approved ACO, and will it use this option? The release does not say how a patient will learn the answer.
Doctors are affected too. The CMS fact sheet gives the 2027 conversion factor. That is the dollar figure that turns a service’s relative value units into a Physician Fee Schedule payment rate. For qualifying alternative payment model participants it is $32.95. Those are practitioners who meet thresholds for an Advanced APM. That is a projected decrease of $0.62, or 1.83 percent, from the current $33.57. For other doctors it is $32.63, a projected decrease of 2.31 percent. The fact sheet ties the drop to the end of a one-year 2.50 percent increase for 2026. It does not say how the conversion factor affects what patients pay.
A billing change cuts duplicate payment. When an office visit and a minor procedure happen on the same day, CMS “will reduce payment by 20% for the lower-cost service.” HHS says this reduces duplication in payment “by patients and the Medicare program.” The fact sheet gives the detail. The cut applies when a separately identifiable office visit is billed on the same day as a 0-day global procedure. The proposal limited it to the same physician or a physician in the same practice. The fact sheet’s final wording does not repeat that condition. The proposed rule would have paid the lower-cost service at 50 percent. The final rule pays it at 80 percent and leaves 10-day and 90-day procedures out.
HHS also says the rule “corrects an incentive payment loophole, preventing an estimated $2.38 billion in unintended windfall payments over the next decade.”
For doctors, the rule ends the traditional MIPS reporting option beginning with the 2031 performance period. MIPS is the Merit-based Incentive Payment System. Clinicians have through 2030 to move to MIPS Value Pathways or Advanced Alternative Payment Models. HHS says the pathways already cover about 98 percent of clinicians. That is two more years than the proposed rule gave. The rule adds three new pathways, for diabetes, hypertension and hospitalists. Starting in 2027, clinicians must report at least one specialty-specific “Core Measure.”
Two changes concern rural health clinics and federally qualified health centers. Under the rule, rural health clinics can bill diabetes self-management training and medical nutrition therapy as stand-alone visits, paid at the clinic’s all-inclusive rate. A certified provider must furnish them under the direct supervision of a clinic practitioner. CMS says this “will help expand access to these services for Medicare beneficiaries in rural areas.” At both kinds of clinic, in-person visit requirements for mental health visits do not apply through December 31, 2027. The fact sheet says the rule carries out a 2026 appropriations law that requires this. It also says Medicare may pay these clinics for other visits by telecommunication through the same date.
The rule also carries out a law that limits who can be eligible for Medicare. The fact sheet says the Working Families Tax Cuts legislation “limits Medicare eligibility to individuals in the following four groups.” The first two are a U.S. citizen or national, and a person lawfully admitted for permanent residence. The third is a person granted Cuban and Haitian entrant status. The fourth is a person lawfully residing in the United States under a Compact of Free Association. The rule sets “procedures for termination and applicable appeal rights for those found ineligible.”
The CMS fact sheet says the two codes describe advance care planning services by clinical staff, under a billing practitioner’s direct supervision. CMS says the new codes “more accurately distinguish and value the work furnished by billing practitioners” from the time their clinical staff spend on it.
What to watch, with dates#
- November 4, 2026: HHS and CMS announced the final rule.
- January 1, 2027: the rule takes effect, HHS says.
- April 1, 2027: approved ACOs may begin to reduce or eliminate Part B cost sharing for assigned beneficiaries.
- December 31, 2027: the last day mental health visits at rural health clinics and federally qualified health centers need no in-person visit.
- Through 2030: clinicians have time to move to MIPS Value Pathways or Advanced Alternative Payment Models. The traditional option ends beginning with the 2031 performance period.
The release leaves three things open. It does not say which ACOs are approved, which items and services an ACO may discount, or what a patient would save. HHS says the rule “streamlines patient notice mandates” but gives no detail. HHS links a separate fact sheet on the Shared Savings Program and the full rule at the Federal Register page. This article did not read either.
For who sets Medicare’s payment rules, see who decides what Medicare and Medicaid pay for. For how a Part B bill is built, see the five parts that decide what Medicare pays. For what to do when a plan says no, see grievances versus appeals.
Source: Department of Health and Human Services, “CMS Finalizes CY 2027 Physician Fee Schedule to Shift from Sick Care to Healthcare and Curb Waste,” November 4, 2026; read November 5, 2026. Also the CMS fact sheet, read November 5, 2026.