2026 Strategies for Growth in Accountable Care Organizations

Accountable Care Organizations face major changes in 2026 as CMS implements new financial methodologies and program requirements. Organizations pursuing growth must adapt to tighter risk adjustment caps, updated benchmarking approaches, and increased quality emphasis. CMS aims to have 100% of traditional Medicare beneficiaries in accountable care relationships by 2030, creating opportunities for expansion for prepared organizations.

Transition to Two-Sided Risk Models

ACOs operating under one-sided risk arrangements face pressure to accept downside risk. The MSSP now limits initial one-sided participation to five years for new agreement periods starting in 2027. Organizations must evaluate readiness for enhanced tracks where savings potential increases alongside loss exposure. ACOs with mature care management programs and proven cost control capabilities are better positioned for this transition.

Strengthen Primary Care Networks

Strong primary care foundations drive ACO performance across all models. Organizations expand by recruiting primary care physicians in underserved markets and supporting existing providers with care coordination infrastructure. Primary care attribution determines beneficiary assignment, making physician relationships critical for population growth.

Invest in Care Coordination Infrastructure

Growing Accountable Care Organizations need software that connects hospitals, specialists, rehabilitation facilities, and community services. The software pulls patient data from all these places. Care teams with complete patient information coordinate better than those working from incomplete records.

Optimize Quality Performance Strategies

Quality scores directly affect shared savings percentages and track eligibility. Organizations prioritize measures yielding maximum impact, including patient experience surveys, preventive service delivery, and chronic disease control metrics. Real-time quality tracking allows intervention during patient encounters rather than retrospective gap closure.

Critical Quality Domains

• Patient and caregiver experience measures
• Care coordination and safety measures
• Preventive screenings and vaccines
• Chronic disease management for high-risk patients

Plan for Model Uncertainty Beyond 2026

ACO REACH ends in 2026 unless CMS extends it. Organizations currently in REACH should look at joining MSSP or other programs. Having contracts with multiple value-based programs means organizations stay viable even when one program ends or changes.

Prepare CMS LEAD Model Transition

The CMS LEAD Model represents CMS’s next phase of accountable care following the scheduled end of ACO REACH after 2026. While detailed financial parameters are still forthcoming, CMS has signaled that LEAD will apply tighter guardrails around risk adjustment, benchmarking stability, and coding intensity to support long-term sustainability. Organizations planning to transition into LEAD must evaluate how these controls may affect benchmark revenue, beneficiary growth, and performance strategy as CMS standardizes expectations across advanced risk models.

Key CMS LEAD Transition Considerations

• Stronger limits on risk score growth tied to historical baselines
• Refined coding intensity controls, with adjustments for high-need populations
• Risk adjustment constraints for newly aligned beneficiaries
• Elimination of growth-based exemptions as CMS enforces consistent scale and accountability

Takeaway

Persivia helps Accountable Care Organizations manage transitions between programs. The platforms pull data from hospitals, clinics, and other care locations. Organizations see their quality scores, which patients are assigned to them, and projected savings or losses under MSSP, REACH, and commercial ACO contracts. Organizations using Persivia access real-time data supporting decisions about risk model selection, provider network development, and quality improvement priorities.

What are Accountable Care Organizations ACOs and How Do They Work?

Today, Accountable Care Organizations ACOs have emerged as a pivotal model for delivering efficient and cost-effective treatment. It originated under the Medicare Shared Savings Program, an integral part of the Affordable Care Act (ACA) of 2010. Initially designed to support Medicare participants, these organizations have expanded to encompass private payer networks.

 The ACO Structure

Structured around a patient’s primary care physician (PCP), ACOs extend their reach to include hospitals, pharmacies, specialists, and various service providers. This holistic approach aims to streamline healthcare services and eliminate redundancies for Medicare patients.

Evolution Beyond Medicare

What began as a Medicare-focused initiative has now transcended its initial boundaries. They have embraced private payer networks and platforms like ACO Reach while retaining the fee-for-service payment model of Medicare, introducing a set of incentives to promote efficient care.

Incentivizing Accountable Care Organizations ACOs

The ACA incentive matrix plays a pivotal role in counteracting the rising costs associated with traditional Medicare fee-for-service models. ACO providers are subject to quantitative benchmarks across categories like Patient/Caregiver Experience, Care Coordination/Patient Safety, Preventative Health, and At-Risk Population.

The ACA Incentive Matrix

Under this matrix, the Electronic Health Record (EHR) system collects data on specific criteria in each category. Providers are then ranked against their peers, with rewards in the form of increased reimbursement rates for high performance.

Drawbacks and Criticisms

Despite their merits, these organizations face criticism. Concerns include the potential consolidation among providers, leading to higher costs as a smaller number of health systems hold greater negotiating power over insurers.

Provider Consolidation Concerns

Early research indicates some provider consolidation, driven partly by the costs of complying with the reporting system. Critics worry this consolidation could limit options for consumers.

Consumer Implications

These organizations aim to eliminate the structural obstacles of the HMO system but may pose a risk of consumers feeling trapped in undesirable networks. Due to consolidation, healthcare economists express concerns about potential limitations on consumer choices.

ACO in Private Payer Networks

The integration of ACO into private payer networks marks a significant shift. As these organizations expand their reach, they contribute to reshaping the healthcare landscape and influencing the future of patient care through their ACO Reach system.

ACO Impact on Healthcare Costs

An analysis of Accountable Care Organizations ACOs impact on healthcare costs reveals both positive and negative aspects. While these aim to reduce unnecessary expenditures, concerns persist about potential cost increases resulting from provider consolidation.

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