What Does The MSSP 2026 Proposed Rule Mean For ACOs?

"Learn how the MSSP 2026 Proposed Rule affects ACOs, including two-sided risk requirements, beneficiary thresholds, and updates to quality measures. Prepare your organization for compliance and value-based care success."

CMS proposes limiting ACO participation in one-sided tracks to five years, encouraging transition to two-sided risk arrangements. Organizations that plan early have time to develop infrastructure, test care strategies, and optimize care models before new requirements take effect.

The MSSP 2026 Proposed Rule reorganizes the role of ACOs in the value-based care programs of Medicare. CMS recorded years of performance data and came to the conclusion that the program had reached the stage where it needed quicker adoption of accountability.

Understanding the Core Changes

The MSSP 2026 Proposed Rule fundamentally restructures how ACOs participate in Medicare's value-based care programs. CMS studied years of performance data and concluded that the program matured enough to require faster accountability adoption. The voluntary phase is gradually being phased out, with new risk requirements taking effect for agreement periods beginning January 1, 2027.

What Two-Sided Risk Actually Means

Two-sided risk means ACOs share both savings and losses. Organizations earn bonuses for reducing costs while meeting quality metrics, and they are financially responsible if spending exceeds benchmark targets, ensuring accountability for care decisions.

Previously, many ACOs operated under one-sided agreements. They collected savings without risking losses. CMS found that these arrangements didn't drive meaningful behavior change. Risk-bearing ACOs performed better, reducing hospitalizations, improving chronic disease management, and generating actual Medicare savings.

The Five-Year Timeline

CMS proposes a five-year timeline for one-sided ACOs to transition into two-sided risk arrangements, beginning with agreement periods that start January 1, 2027. Organizations currently on one-sided tracks must plan their migration. This includes building data systems, training care teams, and establishing financial reserves for potential losses.

Beneficiary Assignment Rule Changes

CMS changed the 5,000-beneficiary minimum requirement to be met by ACOs. The agency acknowledged that smaller and rural ACOs require flexibility in order to expand their patient panel without opening up to immediate penalties.

New Flexibility for Growth

CMS allows ACOs with fewer than 5,000 beneficiaries to participate in benchmark years 1 and 2, but they must meet the 5,000-beneficiary threshold by benchmark year 3. This will provide the organizations with time to grow in underserved markets and establish stable patient relationships.

Restrictions That Apply

ACOs dropping below 5,000 beneficiaries in any benchmark year face specific limits:

• Must participate only in the BASIC track

• Cannot join the ENHANCED track

• Face caps on both savings and losses

• Lose access to low-revenue organization benefits

These safeguards prevent small ACOs from taking excessive risks without adequate resources. However, they also limit growth opportunities for organizations struggling to maintain patient populations.

Quality Measure Updates for 2026

CMS simplified quality reporting to emphasize core clinical performance over process metrics. The changes remove overlapping requirements and tighten eligibility standards. Starting in Performance Year 2025, three major updates take effect.

Health Equity Adjustment Removed

CMS proposes removing the health equity adjustment from ACO quality scores, simplifying calculations, and focusing measurement on direct clinical performance. Removing it streamlines scoring and focuses attention on direct performance data.

Social Determinants Screening Dropped

The APP Plus measure set will no longer include Quality ID 487 for social determinants screening, reflecting a shift toward core clinical performance metrics.

Clinical Quality Measure Eligibility Tightened

Medicare Clinical Quality Measures now apply to beneficiaries with at least one primary care service annually. Behavioral health integration and psychiatric collaborative care management are formally included under primary care, emphasizing the role of mental health in value-based care.

Also, in 2026, CMS will track both standard and alternative quality performance standards, which will provide the agency with improved insight into the performance of the ACOs under various systems of measurement.

What ACOs Must Do to Prepare

The compressed timeline to embrace risk means ACOs need immediate action. Companies will have to establish data integration proficiencies, transition to proactive care management, and elaborate risk plans.

Build Advanced Data Systems

ACOs require platforms that consolidate clinical records, claims information, and social determinants information. The digital health platform would need to develop longitudinal patient records for monitoring care across various settings. In the absence of this, organizations are unable to detect at-risk patients as well as plan interventions.

Shift to Proactive Care Models

Reactive care doesn't work in risk-based contracts. ACOs need to learn to recognize high-Risk patients early and intervene before the conditions deteriorate, and to integrate specialties. This needs real-time analytics and constant monitoring.

Develop Strategic Risk Management

Effective ACOs constantly evaluate provider network capabilities, demographics, and historical trends. This information helps them to maximize the involvement in value-based models and the quality results, as well as financial gains. Key priorities include:

• Network optimization by identifying high-performing providers

• Population segmentation to tailor interventions

• Trend analysis to predict future outcomes

• Agile adjustments based on performance data

Technology's Role in ACO Success

Successful ACOs and struggling ones are divided by the advanced analytics and care coordination platforms. Top platforms combine claims and clinical data and provide full population health visibility. The platform combines EHRs, clinical systems, and social determinants information sources to form comprehensive patient profiles.

ACOs with strong analytics solutions switch the care paradigm between reactive and proactive faster. They detect high-risk patients prior to the occurrence of expensive events, track quality standards in real-time, and report Clinical Quality Measures effectively. It results in an enhancement of compliance with the standards of CMS and an increase in reimbursement results.

Takeaway

The MSSP 2026 Proposed Rule integrates the concept of two-sided risk and asks ACOs to undertake it in 5 years, with measurable quality improvements, and transition to proactive care management. Companies that invest in holistic data platforms and strategic planning in the current world will succeed. Delayed ones will find it difficult to compete as obligatory risk requirements become effective.

Persivia offers an integrated clinical and claims data platform that can help organizations gain real-time population health information, enhance quality reporting, and risk-based ACO management to enhance CMS compliance and financial performance. Explore more about this platform.