New Medicare rules could save money for seniors—here’s how
The Centers for Medicare and Medicaid Services (CMS) has proposed an overhaul of Medicare services that could reduce health care bills for some seniors starting from 2027.
On Thursday, as part of wider changes to Medicare, CMS proposed to allow approved Medicare accountable care organizations, or ACOs, to reduce or eliminate cost-sharing for certain Part B services, among a series of other measures.
The move is aimed at strengthening Original Medicare, which CMS said serves roughly 70 million Americans, to move the service away from what CMS called “fragmentation” and fee-for-service incentives.
The planned regulatory overhaul is aligned with the administration’s broader “Make America Healthy Again” directive and comes following the creation of the Make America Healthy Again (MAHA) Commission in February 2025, emphasizing chronic disease prevention and systemic health reform.
For decades, Original Medicare’s unmanaged “fee-for-service” design has paid doctors based on the sheer volume of services provided. CMS characterizes this as “fragmented” and now intends to reward providers for coordinating care and improving long-term health outcomes instead.
Who Could Benefit From the Proposed Changes?
The financial impact could be most visible for seniors assigned to ACOs in the Medicare Shared Savings Program. Under the CMS plan, ACOs that apply and are approved would have the option to cut or remove specific beneficiary charges for certain Part B items and services.
These costs can discourage older patients from sticking with regular primary care, chronic disease monitoring or follow-up visits, so the change could therefore enable beneficiaries to receive high value care, according to CMS.
Primary care groups and ACOs could also benefit because CMS is proposing stronger financial incentives for accountable care.
Technology companies may also benefit from the overhaul. CMS has said it is also recognizing “Software as a Medical Service,” meaning that is actively investigating uses for clinical artificial intelligence that support diagnostics and algorithmic clinical decision-making.
CMS said it is seeking more information about how technology is being used in “increasingly innovative ways throughout primary care,” to develop a “comprehensive and consistent approach to payment for technology-enabled care given likely lower cost-to-serve but potentially higher quality of care delivered.”
Who Could Lose Out?
The likely losers are large hospital systems that benefit from higher payments when routine services are billed through hospital outpatient departments rather than physician offices.
A 2026 Congressional Research Service report said Medicare payments for services are typically higher in hospital outpatient departments.
Could Patients Face Subsequent Risks?
Hospitals have strongly disputed that facility fees are merely inflated charges. The American Hospital Association has previously said that facility fees help pay for 24/7 emergency and trauma services, regulatory requirements, medical equipment and community infrastructure, and warned that limits on those fees could force hospitals to cut services or jobs.
Brian Fuller, a managing director at the health care research firm ATI Advisory, also told the news outlet Home Health Care that CMS’ proposal includes a cost containment risk for home-based care providers. He said that when ACOs find it harder to generate savings, post-acute and home-based services can face tighter utilization management.
Whether the new incentives will enable seniors to experience better, more affordable care, or whether it will mean they face a narrowing of practical services remains to be seen.
CMS is taking public comments on the proposed rule through to September 14. If the rule is finalized, the changes to seniors’ health care bills could appear as soon as 2027.
Contact Newsweek editors on this story: Ben Kelly and James Debens
