Medicare accountable care organizations that the Centers for Medicare & Medicaid Services approves may cut or waive Part B cost-sharing for their assigned patients starting April 1, 2027, under a final rule CMS released on Nov. 4. An accountable care organization, or ACO, is a group of doctors, hospitals and other providers that coordinates care for a set of Original Medicare patients. The rule makes waiving the 20% share a choice each approved ACO can take.
The change sits inside the calendar year 2027 physician fee schedule final rule, which takes effect Jan. 1, 2027. The ACO provision begins later, on April 1, and only for groups CMS approves. Nothing in the rule requires an ACO to cut a patient’s costs, and CMS has not published dollar amounts.
What the 20% share is and what ACOs can drop
Under Original Medicare, Part B patients pay 20% of the Medicare-approved amount after the deductible is met. Hospital outpatient departments usually add a separate copayment for each service. That share is the cost an ACO would be allowed to reduce or eliminate for many items and services.
CMS describes the policy in its Shared Savings Program fact sheet as one that lets ACOs reduce or eliminate Part B cost sharing, informed by the ACO REACH model. The stated goal is to remove cost barriers that keep patients from services that could improve their health. The fact sheet does not say which service categories will qualify.
The people the rule reaches are patients assigned to an ACO. The ACO picks the eligible beneficiaries and the categories of Part B services covered by its arrangement, so the benefit could differ from one ACO to the next. Nothing in the rule asks patients to apply, and the practical step is to ask a doctor’s office whether it takes part in an ACO and whether it plans to offer reduced cost-sharing.
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Which services are left out and how approval works
The policy covers Original Medicare Part B items and services except durable medical equipment, prosthetics, orthotics and supplies, known as DMEPOS, and prescription drugs. A patient’s 20% share of a walker, a brace or a Part B drug is therefore outside what an ACO can waive. Everything else under Part B is, in principle, eligible.
An ACO must apply to CMS and be approved before it enters these arrangements with its participants. CMS plans to collect initial applications in early 2027 so eligible ACOs can begin reducing or eliminating cost sharing by the second quarter of the year. Arrangements start under an approved implementation plan, and some groups may begin later than April 1.
CMS has not said what an implementation plan must contain or how the reduced cost-sharing will be treated financially. Those details will shape which groups apply. Until applications are filed and approved in 2027, no patient can know whether a specific ACO will offer a break.
Patient notices and the end of prepaid shared savings
The rule also revises the general notice ACOs must give patients, effective Jan. 1, 2027. ACOs must furnish a standardized written notice at least once per agreement period, generally by May 30 unless CMS sets a later date, and the separate follow-up communication requirement is removed. The fact sheet describes no extra notice specific to cost-sharing arrangements.
CMS is also removing the prepaid shared savings option, citing low uptake and its belief that the cost-sharing policy can reach the same aims more efficiently. No new ACO cohorts may apply for the prepaid option after the application cycle for the Jan. 1, 2027 start. ACOs already receiving prepaid payments will keep them through Dec. 31, 2027.
In its announcement of the fee schedule, 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.” HHS Secretary Robert F. Kennedy, Jr. said, “Medicare should reward clinicians for keeping people healthy.” The HHS release repeats the April 1, 2027 date for assigned beneficiaries.
Questions for a doctor’s office before April
Part B cost-sharing has three pieces: the yearly deductible, the 20% coinsurance and, in a hospital outpatient department, a copayment per service. CMS’s materials use the single term cost-sharing and do not list the three separately. Patients should ask an ACO which of them it plans to cover, since a waiver of coinsurance alone is a different benefit from a waiver of everything.
Patients can ask three things: whether the practice or hospital belongs to an ACO, whether it intends to apply to reduce cost-sharing, and which services and patients it would include. Because the ACO chooses its eligible beneficiaries, a neighbor in a different ACO could have a different answer. Only a written answer from the ACO is worth planning around.
The rule gives ACOs permission, not patients an entitlement. The words in the rule are that approved ACOs may reduce or eliminate cost-sharing, and CMS has not yet approved any group. The first real numbers will come when ACOs announce what they will waive, and for many patients the 20% share will stay as it is.
Is the doctor’s group an ACO?
For most patients in 2027, the 20% Part B share will still be owed, and an ACO’s waiver is a maybe that depends on the group and on CMS approval. Anyone watching Medicare costs has other places to look for savings in the meantime, and a missed form can cost more than the waiver would save.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
