Starting January 1, 2027, Medicare says it will begin exploring new ways to improve Accountable Care Organizations, including giving provider groups access to smartwatches and other wearable devices to help monitor patients’ health, according to the agency’s 2027 handbook. The handbook sets a firm date and names the technology, but it does not say who pays for the devices, how the data factors into an ACO’s cost or quality scores, or which patients actually receive one. That omission carries weight, because Accountable Care Organizations already operate under a shared-savings formula worth billions a year, and any new monitoring tool changes what providers are rewarded, or penalized, for tracking.
The wearable-access line inside CMS’s 2027 handbook
Accountable Care Organizations are voluntary networks of doctors, hospitals and other providers that agree to coordinate care for a defined group of Medicare patients rather than bill for services in isolation. The model exists inside Original Medicare, not Medicare Advantage, and beneficiaries pay no extra premium or enrollment fee to be part of one; assignment follows wherever a person already receives primary care. Medicare created the arrangement to reward provider groups that hold down spending while keeping quality steady, and it has spent more than a decade expanding how many patients and providers take part.
The 2027 edition of Medicare & You, the CMS handbook mailed to beneficiaries every year, states plainly: “Starting January 1, 2027, Medicare will explore new ways to improve ACOs like encouraging wider provider participation and providing access to new health technology (like smartwatches and other wearable devices to help monitor your health).” The sentence sits inside the handbook’s section on coordinating care, and it is the only place in the current edition that names wearable devices as a technology category Medicare plans to make available to Accountable Care Organizations beginning that date.
The scale behind that plan is not small. For performance year 2024, the most recently reconciled year of results, Shared Savings Program Accountable Care Organizations earned $4.1 billion in shared savings payments while saving Medicare an additional $2.5 billion against their spending targets. Participation kept climbing into 2026: 511 Shared Savings Program ACOs, with more than 700,000 health care providers and organizations, are now serving 12.6 million people with Traditional Medicare, the largest number the program has ever covered, and a broader count that includes other Medicare accountable-care models put total coverage near 14.3 million beneficiaries as of January 2026.
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The Shared Savings Program formula that rewards closer monitoring
The financial design explains the interest in continuous, real-time monitoring. An Accountable Care Organization that lowers spending for its assigned Medicare patients below a CMS-set benchmark, while meeting quality thresholds, keeps a share of the difference as a performance payment. A growing share of participating ACOs also carry downside risk, meaning they owe Medicare money back if spending on their patients rises above the benchmark instead of falling below it. A device that flags a worsening heart condition or an unmanaged blood sugar reading before it turns into an emergency room visit changes that math directly, since avoidable hospital and emergency spending is exactly what the benchmark measures.
That structure already moves real money every year. For performance year 2023, Shared Savings Program ACOs earned $3.1 billion in performance payments against $2.1 billion in net Medicare savings, then the largest single-year total in the program’s history; the newer 2024 figures cited above show both numbers climbing rather than leveling off. Extending device-based monitoring into that same benchmark gives provider groups a direct financial reason to have real evidence of what happens to a patient between office visits, not only at an annual wellness exam.
What the 2027 rollout still leaves undefined
The handbook’s own wording signals a starting point rather than a finished program. Medicare says it will “explore new ways to improve ACOs,” language that describes a direction for the coming year rather than a completed rule with defined eligibility criteria, an approved device list or a funding source. Nothing in the current edition specifies whether an Accountable Care Organization must supply a device to a patient at no cost, whether a patient can decline to participate, or whether the resulting health data becomes part of what Medicare reviews when calculating an ACO’s benchmark.
That distinction matters for cost, because joining a Shared Savings Program ACO carries no premium or copayment for beneficiaries; the financial exposure sits with the provider groups, not with patients, under the benchmark-and-risk structure described above. If a wearable device were billed to a patient rather than absorbed by the ACO, it would represent a new kind of cost that current Medicare materials do not address, since every dollar figure published about this program so far describes payments between the agency and providers, not devices or fees charged to beneficiaries directly.
Broader evidence points the same direction. Medicare’s own Shared Savings Program page shows that the Calendar Year 2027 physician payment rule covering Shared Savings Program requirements was still a proposed rule open for public comment as of its mid-2026 posted update, not a final rule, and a separate Innovation Center model called the Long-Term Enhanced ACO Design is scheduled to launch the same year once the current ACO REACH model ends. Two accountable-care changes landing in the same calendar year, alongside the wearable-device language, is a detail the 2027 handbook does not connect or explain.
The core commitment is not in question: Medicare’s own 2027 handbook confirms a fixed January 1 start date and names smartwatches and wearable devices as technology CMS plans to make available to Accountable Care Organizations, inside a program that already produced $4.1 billion in provider payments and $2.5 billion in Medicare savings in its most recently reconciled year, covering more than 12.6 million people with Traditional Medicare. What Medicare has not yet published is how that access translates into a device in a patient’s hand, a line item on an ACO’s budget, or a new data point in the benchmark formula that decides how much the government pays out each year.
This article was produced with AI assistance and reviewed by The Money Overview editorial team.
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