Weekly Roundup -
July 29, 2026
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Rural Health Transformation Program: Beyond the Grant Approval Phase – Implementing for Sustainability
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Trending: In Focus
How CMS’s Proposed MSSP Changes Could Strengthen ACO Growth and Sustainability
Last week’s Health Management Associates (HMA) Weekly Roundup reviewed the Calendar Year (CY) 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program (PFS) proposed rule (CMS-1848-P). That overview highlighted provisions that signal a broader shift in how the Centers for Medicare & Medicaid Services (CMS) is approaching physician payment, primary care, digital healthcare, and value-based care.
This week, our focus turns to the rule’s proposed changes to the Medicare Shared Savings Program (MSSP).
Why CMS Is Proposing MSSP Changes
The proposed updates are designed to address feedback and challenges that accountable care organizations (ACOs) have identified over multiple agreement periods, including benchmark volatility, concerns about rebasing, and questions about whether financial incentives adequately reward ongoing performance.
CMS is seeking to make the program more predictable while continuing to encourage accountability for quality and total cost of care. The proposals also reflect broader agency goals to make the MSSP more attractive to current and prospective ACOs, strengthen primary care, and improve access for beneficiaries in underserved and provider shortage areas. The impact, however, will vary by region and practice.
In a July 27, 2026, paper, CY 2027 MSSP Proposed Rule Analysis: What the Medicare Shared Savings Program Changes Mean for ACOs, Wakely, an HMA Company, explains that the financial effect of certain provisions depends on an ACO’s track, agreement period, historical savings, regional efficiency, risk profile, beneficiary assignment, and provider growth strategy.
Key Proposed Changes to MSSP
Several proposed changes stand out for ACO leaders and provider organizations, including:
- Higher Shared Savings for BASIC Level E ACOs. CMS proposes to increase the BASIC Level E shared savings rate from 50 percent to 60 percent for agreement periods beginning in 2027 or later. This change could make the highest-risk BASIC track more attractive relative to other options and improve financial returns for ACOs that are successfully managing cost and quality performance.
- Changes to Benchmark Methodology. CMS proposes to modify how prior savings are incorporated into future benchmarks. The changes are intended to better recognize organizations that have generated savings while addressing long-standing concerns among providers that benchmark rebasing can diminish incentives for high-performing ACOs over time.
- New Accountable Care Prospective Trend (ACPT) Guardrails. The proposal would establish guardrails and annual recalculation mechanisms for the ACPT to reduce the likelihood that prospective spending projections diverge significantly from actual national cost trends. CMS also proposes applying certain guardrail provisions to payment years 2025 and 2026, potentially before many 2027 provisions take effect. For agreement periods beginning in 2027 or later, CMS proposes a two-sided guardrail and annual recalculation approach designed to reduce the risk that the prospective trend materially diverges from observed national spending trends.
- Qualifying Provider Network Growth Incentive and Quality Reporting Updates. CMS proposes a new incentive to support ACO growth and participation. Provider entities should evaluate how beneficiary assignment interacts with provider expansion. As Wakely’s actuaries note, adding providers does not necessarily translate into meaningful assignment growth or financial benefit. The proposed rule also includes changes to quality reporting policies intended to reduce administrative burden and better align program operations with care delivery realities, particularly in rural and underserved areas and markets with access constraints.
Potential Market-Shifting Effects
The proposed MSSP changes could influence market behavior beyond annual participation decisions. By making changes to BASIC Level E economics, refining benchmark rules, and adding protections against certain trend-related volatility, CMS may encourage more organizations to consider where they want to be on the spectrum of risk -based arrangements.
Regionally efficient ENHANCED ACOs that rebase or enter the program in 2027 could face less favorable benchmark adjustments. Lower-risk ACOs may have less room under the proposed risk-adjusted benchmark cap. Organizations that pursue provider growth without corresponding increases in assigned beneficiaries may not realize the intended network growth incentive. These dynamics could create winners and losers based on local market position, historical performance, patient mix, and each organization’s financial and operational strategy.
How HMA and Wakely Can Help
ACO and provider leaders should use the proposed rule period to assess how the MSSP changes could affect their 2027 strategy and near-term financial projections. Current ACOs should revisit payment year 2025 and 2026 forecasts, evaluate the proposed ACPT guardrail, and model how the 2027 benchmark changes may affect renewal, track selection, and downside risk exposure. Organizations considering MSSP entry should evaluate whether the proposed changes improve the business case for participation and what capabilities would be needed to succeed.
Although the proposals focus on MSSP, their significance extends beyond Medicare ACOs. The changes reflect CMS’s broader effort to strengthen participation incentives, improve benchmark stability, and refine value-based payment models based on operational experience. As a result, the proposals may influence how Medicare Advantage plans, Medicaid programs, and commercial payers structure risk arrangements.
Providers and partners should also prepare comments grounded in data and operational experience. HMA and Wakely help ACOs, providers, health systems, payers, enablement organizations, and investors evaluate the policy, actuarial, operational, and market implications of Medicare accountable care changes. Our teams support MSSP strategy, benchmark and shared savings modeling, risk assessment, provider network analysis, care management design, comment letter development, and implementation planning.
As CMS considers comments and moves toward a final rule, organizations should not wait to understand how the proposed MSSP changes could affect participation decisions, market strategy, and accountable care capabilities. HMA and Wakely can help stakeholders translate the proposed rule into actionable scenarios and prepare for the financial and operational choices ahead.
Federal Policy News
Fueled By Leavitt Partners Weekly Health Intelligence
Congress Leaves Washington with Major Funding and Health Policy Decisions Still in Play
Last week, before leaving for recess, the House passed a full slate of legislation including the Continuing Appropriations Act, 2027, which funds the federal government at current levels through December 4, including programs such as Supplemental Nutrition Assistance Program (SNAP), Supplemental Nutrition Assistance Program for Women, Infants, and Children (WIC), and Temporary Assistance for Needy Families (TANF). The House also passed the Concurrent Resolution on the Budget for federal fiscal year (FY) 2027, which includes reconciliation instructions for specific committees to draft legislation focused on defense, agriculture, and election-related spending. Those committees must report back to the House Budget Committee by September 11.
Additionally, the House passed several pieces of legislation to reauthorize public health programs that have expired, or are set to expire at the end of the fiscal year, including grant funding for school-based health centers (H.R. 8209), HHS programs related to traumatic brain injuries (H.R. 1493), the CDC’s National Breast and Cervical Cancer Early Detection Program (H.R. 4541), and HRSA healthcare workforce programs (H.R. 2001, H.R. 3747). The House also passed several bills intended to support medical innovation, including H.R. 2821, the FDA Modernization Act 3.0, which would require FDA to implement various modernization measures to its clinical trial requirements, such as implementing computer models for laboratory testing as a way to reduce the use of animal models in clinical science.
The Senate remains in session until August 7. The Senate could take up the legislation advanced by the House for a vote over the next two weeks, but is likely to prioritize government funding and its own slate of administration nominees before recess. These include nominations for Dr. Erica Schwartz to be Director of the Centers for Disease Control and Prevention (CDC) Director and Mr. Sean Kaufman to be the Assistant Secretary for Preparedness and Response, neither of which has yet to be voted out of the HELP Committee.
With the August recess quickly approaching, high-stakes midterm elections on the horizon, and a government funding deadline roughly two months away, must-pass items will take on a heightened sense of urgency. Many other agenda items may need to move to the lame duck for consideration, or to the next Congress.
CMS Proposes New Medicaid Provider Tax Limits, Enhanced Reporting Requirements
The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to implement the healthcare-relate tax provisions of the 2025 budget reconciliation act requirement. Consistent with the statutory requirement, CMS proposes to replace Medicaid’s current 6 percent indirect hold-harmless safe harbor for health care-related taxes with state and provider class specific limits based generally on taxes enacted and imposed as of July 4, 2025. This change is effective as of October 1, 2026. In Medicaid expansion states, the limits would phase down from 5.5 percent in federal fiscal year 2028 to 3.5 percent in 2032, although taxes on nursing facilities and intermediate care facilities for individuals with intellectual disabilities would be exempt from the phase-down.
CMS would also eliminate prospective use of the 75/75 test, add health insurers other than managed care organizations as a permissible taxable class, and establish a zero threshold where no qualifying tax was in place by July 4, 2025. States would submit one-time data by June 30, 2028, operate under interim limits until CMS establishes final thresholds by September 30, 2028, and provide more detailed quarterly tax reporting. CMS estimates the changes would reduce state provider-tax revenue by approximately $198.7 billion from 2026 through 2035. The public comment deadline is September 21, 2026.
HHS Unveils AI Initiative to Advance Chronic Disease Research
On July 22, US Department of Health and Human Services (HHS) announced new efforts to support the Trump Administration’s Genesis Mission and accelerate biomedical innovation through AI, with a particular focus on chronic disease. In coordination with the White House Office of Science and Technology Policy, HHS said it will launch a series of national research challenges targeting chronic disease, pediatric cancer, and drug discovery and development. In the announcement, HHS specifically highlights the NIH-led Bio Genesis Mission, as the “centerpiece” of its efforts. The Bio Genesis Mission will include six new National Science and Technology Challenges including “scaling biology for American industrial leadership,” “unlocking cures for pediatric cancer through artificial intelligence,” and “early detection and attribution of biological threats.”
New MACPAC Analysis Examines Medicaid Technology Infrastructure Spending
The Medicaid and CHIP Payment and Access Commission (MACPAC) released a new issue brief examining Medicaid Enterprise Systems (MES), the IT infrastructure supporting state Medicaid program functions. Federal and state spending on these systems totaled $9 billion in fiscal year 2025, representing about 20 percent of Medicaid administrative spending. MES spending has remained relatively flat since 2015 despite steady growth in overall administrative costs. Spending is expected to increase as states upgrade their systems to implement provisions of the 2025 budget reconciliation act (P.L 119-21, OBBBA), including community engagement requirements.
FDA Compounding Advisory Committee Recommends Several Peptides for Section 503A List
On July 23 and 24, FDA’s Pharmacy Compounding Advisory Committee (PCAC) held a meeting to discuss several peptide-based bulk drug substances being considered for inclusion on the Section 503A Bulks List for compounding. This list identifies substances that may be used in certain compounded drugs. The committee reviewed BPC-157, KPV, TB-500, and MOTs-C on July 23, and Emideltide (DSIP), Semax, and Epitalon on July 24. The proposed uses for these drugs included ulcerative colitis, wound healing, obesity, osteoporosis, insomnia, opioid withdrawal, migraine, and neurological conditions. The meeting will help inform FDA’s review of bulk drug substances nominated for inclusion on the Section 503A Bulks List for compounding. Compounded products on the Section 503A list are not FDA-approved and are primarily overseen by state regulators. Although in each of the briefing documents FDA staff determined the criteria weighed for each of the peptides pointed against placing them on the Section 503A Bulks List, the PCAC voted by narrow margins to recommend that BPC-157, KPV, TB-500, MOTS-c, Semax, and Epitalon be added to the list. Advisory committee recommendations are nonbinding, however, most times FDA follows their recommendation.
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State Policy News
Arizona Releases Draft Section 1115 Demonstration Renewal Through 2032
The Arizona Health Care Cost Containment System (AHCCCS) issued on July 23, 2026, a draft five-year renewal of its Section 1115 demonstration for the period from October 1, 2027, through September 30, 2032. The proposal would continue authorities for the Arizona Long Term Care System, increase KidsCare eligibility up to 225 percent of the federal poverty level, Housing and Health Opportunities, Targeted Investments 2.0, Tribal dental services, and Medicaid reentry services. AHCCCS also proposes a new Enhanced Residential Treatment Demonstration to expand intensive behavioral health services for adults with serious mental illness, authority to expand reimbursement for traditional health care practices provided through Urban Indian Organizations, and authority to implement an extended review timeline for Extraordinary Care Reviews to support more comprehensive person-centered assessments for children receiving home and community-based services. Public comments are due September 6, 2026, and a second public forum is scheduled for August 7.
Georgia Defines Medical Frailty Exemptions; Excludes HIV Diagnoses
Health policy organizations in Georgia are reporting that the state Department of Community Health released two memos outlining proposed lists of conditions that qualify as medically frail and those that will be considered on a case-by-case basis for the upcoming Medicaid work requirements on January 1, 2027. The public comment period for the lists ended on July 21, and comments will be considered at an August 13 meeting. An estimated 67,000 Georgians may be living with HIV in the state.
Idaho Adopts Three-Month Lookback Period for Medicaid Work Requirements
The Idaho Department of Health and Welfare (DHW) released on July 23, 2026, details on the upcoming federal Medicaid work requirements for the adult expansion population. Enrollees will need to document at least 80 hours per month of employment, community service, or approved educational or training activities. The requirements will have a three-month lookback period, requiring individuals applying in January 2027 to show compliance for October, November, and December 2026. DHW identified when individuals qualify for federal and state exemption from the requirement. Additionally, the state will require medically frail Medicaid enrollees to provide immediate proof of their inability to work in order to be exempt from the work requirements despite federal guidelines allowing states to give patients a one-year grace period.
Indiana Receives Federal Approval for HCBS Waiver Provider Moratorium
The Indiana Family and Social Services Administration (FSSA) announced on July 23, 2026, that it has received federal approval to implement a provider moratorium on some home and community-based services (HCBS) available under the 1915(c) waivers, including the Indiana PathWays for Aging (PathWays), Health and Wellness (H&W), Traumatic Brain Injury (TBI), Community Integration and Habilitation (CIH), and Family Supports (FS) waivers. Applications for the H&W, PathWays, and TBI waivers currently under review will be processed, but CIH and FS applications currently under review will not be processed. The moratorium is effective August 1, 2026, and will last for six months, though FSSA may extend the moratorium in six-month increments.
Michigan Invests $168 Million to Implement Federal Medicaid and SNAP Changes
The Michigan Department of Health and Human Services (MDHHS) announced on July 27, 2026, that its fiscal year 2027 budget totals more than $30.7 billion, with approximately $168.6 million allocated toward the implementation of new federal requirements approved under the 2025 budget reconciliation act (P.L 119-21, OBBBA). This includes $94.3 million to cover the increased state share of Supplemental Nutrition Assistance Program (SNAP) administrative costs, $54.3 million for federally required Medicaid and SNAP changes, and $20 million in supplemental fiscal 2026 funding for grants to support community-based organizations helping individuals secure Medicaid and SNAP eligibility. Other MDHHS investments include $13.5 million for targeted Medicaid enhancements, $70.5 million for substance use disorder prevention and treatment, $33.8 million to begin operations at the new Southeast Michigan State Psychiatric Hospital, $4 million to establish and support the Home Help Caregiver Council, and $750,000 to help families navigate services and support available to individuals with intellectual and developmental disabilities.
Private Market News
Fueled By Wakely Consulting Group
ACA Marketplace Policies Face Uncertainty After Federal Court Ruling
The US Department of Health and Human Services (HHS) filed an appeal over a Maryland federal court decision to vacate several provisions of the Affordable Care Act (ACA) 2025 Marketplace Integrity and Affordability final rule. The rule largely applies to the current plan year of 2026, though some provisions were slated to take effect for 2027 coverage. The federal judge ruled that CMS exceeded its statutory authority in adopting several Marketplace policies, including a $5 premium penalty on automatic reenrollments, shorter open enrollment periods, new eligibility checks for special enrollment periods, limits on guaranteed coverage for people past-due on premiums, and disqualifying individuals from receiving advance premium tax credits if they had failed to reconcile prior-year premium tax credits with their taxes.
Federal No Surprises Act Arbitration Volume Continues to Climb
The Centers for Medicare & Medicaid Services (CMS) released additional information regarding the Federal Independent Dispute Resolution (IDR) process. CMS reports that providers and payers initiated nearly 1.4 million independent dispute resolution cases during the second half of 2025, up 16 percent from the first half, while providers initiated 76 percent of disputes and prevailed in approximately 85 percent. Although arbiters improved processing times and largely cleared the older backlog, winning offers exceeded the qualifying payment amount in 87 percent of decisions, reinforcing concerns about the process’s effect on healthcare costs. The detailed information follows the agency’s June 2026 Report to Congress: Interim Report on the Cooling Off Period in the Federal Independent Dispute Resolution Process.
Connecticut Plans to Extend Affordable Care Act Subsidies Through 2027
Connecticut will again provide Affordable Care Act (ACA) premium assistance in 2027, with support expected to remain similar to 2026 levels. The state used roughly $115 million in emergency funds this year to offset coverage losses for lower-income Access Health CT enrollees and some residents who lost all federal assistance. Longer-term proposals differ, with one plan maintaining partial subsidies, another fully replacing the expired federal aid at a cost that could approach $300 million annually.
Our Insights
Fueled By Experts Across Our HMA Companies
Health Management Associates
A Summer Webinar Series (August 12): How New Program Integrity Expectations Affect Medicaid Payments
This webinar series will deliver timely analysis and actionable insights on the evolving policy and operational environment affecting Medicaid funding, enrollment, and access to services. Each session will feature up-to-the-moment information and perspectives from our subject matter experts, with content tailored to reflect the latest federal guidance, waiver activity, litigation, state implementation decisions, and market developments.
Rural Health Transformation Program: Beyond the Grant Approval Phase – Implementing for Sustainability (August 19)
Rural Health Transformation Programs (RHTPs) are creating new opportunities for rural communities to improve both access to care as well as health outcomes while strengthening the long-term sustainability of local healthcare providers. This webinar will go beyond the grant planning processes and explore how an effective RHTP implementation process can support measurable improvements in population health, enhance financial viability for rural hospitals and healthcare organizations, and foster stronger systems of care across our rural communities.
Participants will explore opportunities for creating cross-initiative implementation strategies that enhance the impact of individual initiatives such as workforce, telehealth, maternal care, EMS, behavioral health and chronic disease monitoring and management.
Wakely
Emerging 2026 ACA Data: Enrollment Drops 12% as Relative Risk Rises 6.3%
In Wakely’s new white paper, 2026 Individual Market Risk Pool Considerations: Emerging Data on Marketplace Post Expiration of Enhanced Subsidies, early 2026 data indicate that Affordable Care Act (ACA) individual market enrollment declined 12.0% while normalized relative risk increased 6.3% compared with the same period in 2025. The findings suggest that healthier members may be leaving the market as enhanced premium tax credits expire and premiums rise, potentially increasing underlying claim costs and creating new considerations for 2027 rate development.
Download the full white paper for details on changes to ACA enrollment, morbidity estimates, claimant ratio, and saturation of HCCs—plus the methodology, implications, and limitations behind the analysis.
The Digital Quality Future Is Now on the Calendar: ACOs Should Not Wait to Prepare
For the first time, CMS has outlined a potential roadmap for transitioning Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs) to Fast Healthcare Interoperability Resources (FHIR)-based digital quality measurement (dQM). The CY2027 Medicare Physician Fee Schedule Proposed Rule (CMS-1848-P) introduces an optional transition beginning in 2028 and signals mandatory reporting for applicable measures beginning in 2030 through a Request for Information (RFI).
Wakely’s latest white paper, The Digital Quality Future Is Now on the Calendar, explains what these proposed changes mean for ACOs. It distinguishes between the rule’s formal proposals and the RFI, outlines why organizations should begin preparing now, and explores how investments in FHIR-based quality measurement can support not only future MSSP requirements but also broader value-based care initiatives across Medicare Advantage and commercial contracts.
CY 2027 MSSP Proposed Rule Analysis: What the Medicare Shared Savings Program Changes Mean for ACOs
CMS has proposed one of the most significant sets of Medicare Shared Savings Program (MSSP) financial changes in recent years. While many of the proposed changes create new opportunities for Accountable Care Organizations (ACOs), others could significantly affect benchmark calculations, shared savings, financial forecasting, and strategic planning.
Our latest white paper provides an actuarial and financial analysis of the proposed CY 2027 Medicare Physician Fee Schedule (PFS) Rule and examines how the proposed MSSP changes could affect different types of ACOs..
What Medicare Data Reveals About Oncology Spending Trends, Innovation, and Cost Forecasting
What is driving oncology spending in Medicare? In this new white paper, Wakely finds that oncology costs are shaped less by steady price inflation and more by waves of therapeutic innovation, adoption, replacement, and shifts across Medicare benefit channels. Using Medicare claims for lung and breast cancer, Wakely researchers identified two distinct models of oncology spending. Traditional trend models may miss the timing and magnitude of oncology spending changes because they often rely heavily on historical price and utilization patterns. This analysis suggests that the largest changes in oncology spending may occur when treatment standards shift—not simply when existing therapies become more expensive.
Download this paper to deepen your understanding of oncology trend and what is driving oncology spending.
Webinar Alert
A Summer Webinar Series: How New Program Integrity Expectations Affect Medicaid Payments
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RFP Calendar
RFP Calendar
| Date | State/Program | Event | Beneficiaries |
|---|---|---|---|
| Date: Summer 2026 | State/Program: Illinois Foster Care | Event: RFP Release | Beneficiaries: 33,000 |
| Date: July 28, 2026 (Delayed) | State/Program: Nevada Children's Specialty | Event: Awards | Beneficiaries: NA |
| Date: August 2026 | State/Program: Indiana | Event: RFP Release | Beneficiaries: 1,400,000 |
| Date: January 1, 2027 | State/Program: Illinois | Event: Implementation | Beneficiaries: 2,400,000 |
| Date: January 1, 2027 | State/Program: Nevada CO D-SNP | Event: Implementation | Beneficiaries: 88,000 |
| Date: January 1, 2027 | State/Program: Wisconsin LTC GSR 3 | Event: Implementation | Beneficiaries: 56,000 (all GSR) |
| Date: January 1, 2027 | State/Program: Illinois Tailored Care Management Program | Event: Implementation | Beneficiaries: 22,400 |
| Date: July 1, 2027 | State/Program: Nevada Children's Specialty | Event: Implementation | Beneficiaries: NA |
| Date: September 2, 2026 | State/Program: Missouri | Event: Proposals Due | Beneficiaries: 1,000,000 |
| Date: Fall 2027 | State/Program: Oregon | Event: RFP Release | Beneficiaries: 1,200,000 |
| Date: January 1, 2028 | State/Program: Wisconsin LTC GSR 4,6 | Event: Implementation | Beneficiaries: 56,000 (all GSR) |
| Date: 2028 | State/Program: North Carolina | Event: RFP Release | Beneficiaries: 2,200,000 |
| Date: 2029 | State/Program: California | Event: RFP Release | Beneficiaries: NA |