Why ACOs still need Congress after the 2027 fee schedule, with Aisha Pittman of NAACOS

The final 2027 Medicare Physician Fee Schedule, which the Centers for Medicare & Medicaid Services (CMS) released Nov. 4, cuts the conversion factor 1.83% for clinicians in qualifying advanced alternative payment models (APMs) and 2.31% for everyone else. Both cuts are deeper than CMS proposed in July.

For physicians in accountable care organizations (ACOs), the rule also adds guardrails on benchmark growth, replaces the G2211 add-on with modifiers B1 and B2 that pay ACO clinicians more for complex visits and, starting April 1, 2027, lets ACOs reduce or eliminate patient cost sharing for Part B services.

Aisha Pittman, M.P.H., senior vice president of government affairs at the National Association of ACOs (NAACOS), says ACOs got several wins in the rule, but the payment cuts still need a fix from Congress.

Medical Economics Senior Editor Richard Payerchin sat down with Pittman to walk through what the rule means for physicians in value-based care. Pittman explains why ACOs that have cut costs for years have watched their own benchmarks work against them, why NAACOS wants Congress to extend advanced APM incentive payments for another year and why she wants CMS to bring primary care capitation into the Medicare Shared Savings Program.

She also covers changes to beneficiary notifications and quality reporting, the end of the Merit-based Incentive Payment System (MIPS), the delayed remote patient monitoring policy and what the midterm elections could mean for long-term physician payment reform.

For more on the final rule, see how physician and health care groups reacted and listen to our special report on the cuts.

Register for the Medical Economics Practice Academy: Beneath the Surface: Efficiency, Revenue and Burnout, a free virtual event on Thursday, Nov. 19, from 1 to 4 p.m. ET.

Don't miss our recent episodes on Medicaid coverage outreach, heart health habits, the physician pay debate and the Medical Group Management Association's 100th annual conference.

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Editor's note: Episode timestamps and transcript produced using AI tools.

0:00 – 0:38 | Cold open. Pittman on why physicians need adequate payment before they can take on downside risk in an ACO.

0:38 – 1:45 | Introduction. Austin Littrell introduces the episode and the guest and previews the Medical Economics Practice Academy on Nov. 19.

1:45 – 2:35 | Meet NAACOS. Pittman describes the association and its members, who take part in the Medicare Shared Savings Program, CMS Innovation Center ACO models and risk-based contracts with other payers.

2:35 – 5:09 | Guardrails on ACO benchmarks. Pittman says the provision that matters most to NAACOS members is a new limit on the accountable care prospective trend, which she says lowered benchmarks in its first two years instead of raising them. The final rule keeps it within 1% below to 1.5% above health care inflation.

5:09 – 6:18 | The long-term benchmark problem. With the Shared Savings Program nearing 15 years, Pittman says repeated benchmark resets have lowered targets for ACOs that have cut costs since the start, and a permanent fix is still needed.

6:18 – 11:28 | Payment cuts and APM incentives. Pittman says physicians need adequate payment before they can take on risk. NAACOS is asking Congress to reverse the 2027 cut, build an inflation update into physician pay and extend advanced APM incentive payments for another year.

11:28 – 14:27 | Why accountable care takes three to five years. Pittman explains why practices usually need three to five years to see results and how upfront payments could shorten that timeline.

14:27 – 15:52 | Fixing cash flow with capitation. Pittman wants CMS to bring primary care capitation or hybrid payment, already tested in ACO REACH and planned for the LEAD model, into the permanent Shared Savings Program.

15:52 – 16:44 | P2 Management Minute. Keith Reynolds invites listeners to submit their own practice management tips.

16:44 – 21:56 | Cutting administrative burden. Pittman says changes to beneficiary notification requirements will save ACOs staff time, and keeping existing quality reporting options matters while ACOs struggle to pull electronic quality data from hundreds of practices ahead of CMS' 2030 goal for digital quality measures.

21:56 – 23:14 | Modifiers B1 and B2. Pittman says CMS' decision to keep a higher complexity payment for clinicians in ACOs adds an incentive Congress never required.

23:14 – 25:56 | Waiving Part B cost sharing. Starting in April 2027, ACOs can cover patients' cost sharing for services such as chronic care management and transitional care management. Pittman notes Medicare still pays its full share and the ACO absorbs the patient's portion.

25:56 – 27:44 | The end of MIPS. Pittman says the change matters less for most ACO clinicians, but MIPS Value Pathways still don't fully fix quality measurement for physicians outside APMs.

27:44 – 29:46 | The midterms and physician payment. Pittman says accountable care has had bipartisan support and points to the Patients First Act as a first bipartisan step toward long-term payment reform.

29:46 – 31:51 | Remote patient monitoring delay. Pittman says CMS listened to concerns about a proposal requiring clinicians to deliver remote patient monitoring themselves and delayed the policy until 2029.

31:51 – End | Outro. Littrell wraps the episode and reminds listeners about the Practice Academy.