The Service Line

The Centers for Medicare and Medicaid Services (CMS) used its Calendar Year (CY) 2027 Physician Fee Schedule proposed rule, released July 14, to rewrite the math behind every Medicare Shared Savings Program (MSSP) accountable care organization’s (ACO’s) benchmark, the single biggest primary care policy event since the program’s last major overhaul. CMS is proposing to raise the scaling factor on the “prior savings adjustment” from 50 percent to 75 percent, the mechanism that determines how much of an ACO’s own savings get folded back into (and shrink) its next benchmark, directly answering the “ratchet effect” complaint the ACO trade group National Association of Accountable Care Organizations (NAACOS) has pressed CMS on for two years. The same rule proposes a new guardrail capping how far CMS’s regional trend projection can miss actual national spending growth, raises the BASIC track’s top shared-savings rate from 50 percent to 60 percent, and cuts the ENHANCED track’s maximum positive regional adjustment weight from 50 percent to 35 percent. Comments close September 14, 2026, and any ACO modeling its next agreement period should be rerunning those numbers now, not after the final rule. Confidence: High on rule text and figures (primary source); Medium on which provisions survive comment unchanged. Sources: CY2027 Medicare Physician Fee Schedule Proposed Rule, MSSP fact sheet, CMS, Federal Register full text, 2026 Modernize ACOs Recommendations, NAACOS.

Reimbursement: G2211 becomes a modifier, ACOs get a new add-on, and remote monitoring gets a staffing rule

The same CY2027 rule proposes converting HCPCS code G2211, the office-visit complexity add-on, from a flat payment into a modifier that raises the paired evaluation and management (E/M) code’s payment by 16 percent, and creates a second, ACO-only modifier, available only to Shared Savings Program or Long-Term Enhanced ACO Design (LEAD) Model participants, that raises the same E/M payment by 32 percent to offset the cost of total-cost-of-care accountability and quality reporting. Separately, CMS proposes requiring that remote physiologic and therapeutic monitoring (RPM/RTM) services be furnished only by clinical staff employed directly by the billing practice, not contractors, with remote therapeutic monitoring limited to established patients and a separately billable initiating visit required; chronic care management, advanced primary care management (APCM), behavioral health integration, and principal care management are explicitly untouched. An ACO-affiliated primary care group that outsources its RPM program to a vendor has a narrower compliance window than one that doesn’t. Confidence: High on the proposed mechanics; Medium on final adoption given the comment period runs through September 14. Source: CY2027 Medicare Physician Fee Schedule Proposed Rule fact sheet, CMS.

Enforcement: OIG is auditing whether chronic care management patients actually qualify

The HHS Office of Inspector General (OIG) added an audit of Medicare chronic care management (CCM) payments to its Work Plan this year, running through fiscal year 2028, focused specifically on whether billed patients meet the “two or more chronic conditions expected to last at least 12 months” eligibility standard, not just whether the minutes were documented. That is a narrower, harder-to-defend target than the usual time-tracking audits: a practice can have perfect minute-by-minute documentation and still fail if the underlying diagnoses don’t support CCM eligibility on the chart. It lands alongside the broader Medicare Advantage (MA) risk-adjustment enforcement push, CMS’s own estimate that 9.5 percent of MA payments are improper, mostly from unsupported diagnoses, and a DOJ-HHS False Claims Act Working Group that has named MA and managed-care risk adjustment a standing priority. Any ACO or MA-affiliated primary care group running CCM or HCC recapture programs at scale should audit its own eligibility documentation before OIG does. Confidence: High on the Work Plan item itself; Medium on enforcement volume this generates. Sources: Audit of Medicare Payments for Chronic Care Management Services at Risk of Noncompliance, OIG Work Plan, OIG Industry Segment-Specific Compliance Program Guidance for Medicare Advantage.

Who’s Buying: investors are chasing pediatric and value-based primary care, not just adult ACOs

Boston-based growth equity firm Valspring Capital led a $28 million Series B into Pediatrica Health Group, a Miami-based, 21-location pediatric primary care platform operating across Florida and Texas, with existing backer M33 Growth participating; the company said the capital funds both organic growth and acquisitions plus investment in value-based care capabilities. It lands the same week Astrana Health, a serial acquirer of risk-bearing physician groups, reported its affiliated ACOs generated $120.4 million in gross shared savings for the 2024 performance year across eight ACOs, five in MSSP and three in ACO REACH, with one ACO ranking seventh nationally among 476 MSSP participants on net savings per beneficiary. Investors are pricing that kind of demonstrated value-based-care performance accordingly: brokerage FOCUS puts primary care practices with strong Medicare Advantage or ACO track records at double-digit EBITDA multiples now, competitive with specialty practices, versus 6 to 8 times for practices without that positioning. Confidence: High on both transactions (company disclosures); Medium on the valuation-multiple spread, which is a market estimate, not a disclosed transaction term. Sources: Pediatrica Health Group Raises $28 Million Series B, Business Wire, Astrana Health ACOs Deliver $120.4 Million in Gross Shared Savings in 2024 Performance Year, PR Newswire, Physician Practice M&A Multiples: 2026 Data, FOCUS.

Clinical Policy: New York keeps its nurse practitioners independent through 2030, most states already have

Governor Kathy Hochul signed a budget provision on May 28 extending New York’s nurse practitioner (NP) independent-practice authority, which was otherwise set to sunset July 1, 2026, through July 1, 2030, preserving the ability of NPs with more than 3,600 practice hours to see patients without a written collaborative agreement with a physician. A separate bill that would have removed the sunset clause entirely and made independence permanent, S2360/A1220, never came out of committee before the legislature adjourned June 5, so the underlying fight returns in 2030. New York now joins 30 states and Washington, D.C. with full practice authority, including New Jersey, which added primary care and behavioral health independence in March, and Oklahoma, where independent prescriptive authority took effect in November 2025. Every one of those changes shifts who can staff a primary care panel, and at what cost, in states where MSSP and REACH ACOs are trying to scale attribution. Confidence: High on New York’s extension (state legislative record); Medium on the state practice-authority count, which moves as bills pass. Sources: A10007, New York State Senate, New York Extends Nurse Practitioner Independent Practice Authority Through 2030, Dermatology Times.

The Operator Metric: a 33-cent gap per RVU separates qualifying and non-qualifying practices

CMS’s CY2027 proposed rule sets two different physician fee schedule conversion factors: $33.17 for clinicians who qualify as participants in an Advanced Alternative Payment Model (Advanced APM), and $32.84 for everyone else, a 33-cent, roughly 1 percent gap applied to every relative value unit (RVU) on every Medicare Part B claim a practice bills all year. Both figures are proposed cuts from CY2026’s temporarily boosted rate (down 1.19 percent and 1.68 percent respectively), but the spread between them is the number to track: it is the standing financial argument for staying inside an MSSP ACO, REACH, or the incoming LEAD Model rather than billing fee-for-service alone, and it widens or narrows with every rulemaking cycle. Confidence: High, both figures are stated in the proposed rule. Source: CY2027 Medicare Physician Fee Schedule Proposed Rule fact sheet, CMS.