Understanding the Game-Changing MSSP Rule Changes in the 2023 Medicare Physician Fee Schedule

New MSSP Rule

The Centers for Medicare and Medicaid Services (CMS) recently published the 2023 Medicare Physician Fee Schedule Final Rule, introducing significant rule changes for the Medicare Shared Savings Program (MSSP). These changes have the potential to reshape the accountable care organization (ACO) landscape and drive substantial impact on healthcare providers. In this blog post, we’ll explore the key rule changes and their implications for ACOs.

Easing of transition to downside Risk

The 2023 fee schedule update offers a welcome relief to ACOs concerned about downside risk. ACOs currently on the BASIC glide path under Levels A or B will have the option to continue at their current level for the remainder of their agreement. This flexibility, effective from January 1, 2023, allows ACOs to avoid the reduced benefits of being in BASIC Level E, making it an attractive option for many.

Enhanced Optional Participation

The final rule removes limitations on ACOs’ participation in Level E of the BASIC track while making the ENHANCED track purely optional for new agreement periods starting on or after January 1, 2024. This change benefits lower-revenue ACOs that prefer to retain a revenue-based loss-sharing limit to mitigate their total risk exposure. On the other hand, higher-revenue ACOs may find greater value in the ENHANCED track’s higher shared savings rate.

Financial Benchmark Methodology Changes

The updated financial benchmark methodology incorporates the Accountable Care Prospective Trend (ACPT), a prospective trend factor based on the U.S. per capita cost, into the benchmark trend calculation. This change, effective from new agreement periods starting on or after January 1, 2024, enhances ACOs’ budgeting abilities but may come at the cost of benchmark accuracy. ACOs with past success in MSSP but receiving minimal regional adjustment to the benchmark stand to benefit the most from this change.

Dampening Downside Impact of Regional Adjustment

To mitigate the negative regional benchmark adjustment, the rule change reduces the cap on downward adjustment from 5% of national costs to 1.5% of national costs. Moreover, it gradually decreases the negative regional adjustment amount as an ACO’s proportion of dual eligible beneficiaries or hierarchical condition category (HCC) risk score increases. While only a small percentage of ACOs currently receive a negative regional benchmark adjustment, those focused on higher-risk populations can experience a substantial increase in their financial benchmark.

Other Notable Changes

Other changes include aligning regional costs for benchmark methodology with the ACO’s selected assignment methodology, updating the risk adjustment cap to reflect demographic risk score growth, and introducing minimum savings rate (MSR) flexibility for low-revenue ACOs to share in savings at a reduced rate. Additionally, adjustments have been made to the quality score methodology, removing the “all or nothing” approach and replacing it with a sliding quality score scale.


The 2023 MSSP rule changes in the Medicare Physician Fee Schedule Final Rule hold immense potential to reshape the ACO landscape. While some changes provide relief and flexibility, others introduce new considerations and challenges for ACOs. It’s crucial for ACOs to closely review the fee schedule updates and assess the implications specific to their circumstances. By understanding these rule changes and adapting their strategies, ACOs can position themselves for success in the evolving healthcare landscape.

Please note that this blog post is a summary of the content provided in the original source. For a complete understanding of the rule changes, it is recommended to refer to the 2023 Medicare Physician Fee Schedule Final Rule and related resources.