“Kicking Off Accountable Care” served as the theme for this year’s America’s Physician Groups’ (“APG”) Spring Conference, a three-day event packed with compelling speakers and breakout sessions focused on the state of accountable or value-based care. While the overall tone of the conference was optimistic, primarily being focused on the promises and expansion of value-based care models, there was also another theme which colored many of the presentations and breakout sessions: expect turbulent times.
This message resonates amid headlines forecasting Medicaid cuts, the sunset of existing payment models, the development of new payment models, reductions in research grants, and shifts in how our country approaches healthcare generally. The tone was not one of pessimism, but rather, a call to action. Indeed, the prospect of turbulence can be a tremendous engine for change and innovation, both of which are hallmarks of the shift to value-based care.
It is more important than ever to closely monitor changes to healthcare systems and payment models to track where the road will lead. Below is a summary of key takeaways from the Spring Conference.
Expect Change
Nearly every conversation at the Spring Conference was abuzz with discussion on the white paper recently published by the Centers for Medicare and Medicaid Innovation (“CMMI”), titled: “CMS Innovation Center Strategy to Make America Healthy Again.” Abe Sutton, the Director of CMMI as well as the Deputy Administrator for the Centers for Medicare & Medicaid Services (“CMS”), served as the keynote speaker and treated conference attendees to a glimpse of CMMI’s priorities in implementing the “Make America Healthy Again” program, which is sure to usher in a range of changes. This is particularly compelling as CMMI is responsible for developing and overseeing implementation of payment models, including but not limited to those promulgated under the Medicare Shared Savings Program (“MSSP”)[1] and the Accountable Care Organization Realizing Equity, Access, and Community Health (“ACO REACH”)[2] model.
The Director highlighted three pillars that will underpin change (all of which were featured prominently in the white paper):
- Promoting Evidence-Based Prevention – CMMI has highlighted that it will incentivize preventative care to support patients in avoiding illness as well as to promote better management of chronic diseases. Director Sutton emphasized that the focus on prevention will include: (a) activities to support avoidance of disease occurrences, such as health and nutrition counseling and encourage tobacco cessation, among others; (b) secondary prevention measures to detect early signs of diseases, such as through cancer screenings and other preemptive assessments; and (c) a greater focus on disease management, with an intent to slow advancement of chronic diseases as well as to improve outcomes of care.
- Empowering People to Achieve Their Health Goals – CMMI emphasized the importance of ensuring that patients are informed about their care and are enabled to make educated decisions in directing such care. Of particular interest, Director Sutton indicated that CMMI models and initiatives will feature tools and processes that support patient access to health data (referred to as “data transparency”). In addition, Director Sutton underscored that payment models will test how tools (such as applications, shared-decision making tools, and supporting educational materials) can support patients in managing their health and related care. Apart from data transparency, Director Sutton indicated that CMMI models and initiatives will work to align financial incentives to achieve optimal health. Interestingly, CMMI signaled that it will test and scale models with direct accountability for health outcomes and costs, such as through assumption of global risk or total cost of care models not only in original Medicare but also in Medicare Advantage and Medicaid.
- Driving Choice and Competition – CMMI flagged that it will prioritize testing models and features that are designed to promote competition in healthcare markets, with a primary focus on balancing participation of independent providers and practices (i.e., those providers and practices that do not participate or are otherwise affiliated with a community memorial health center or provider-led accountable care organization) to “level” the playing field. By way of a preview, CMMI has hinted that models may expand the use of advanced shared savings and prospective payments which are specifically designed to support independent providers and practices, such as by collecting losses over longer periods of time, permitting upfront investments in patient care with advances based on collateralization methodologies, among others. Significantly, Director Sutton (as echoed in the white paper) separately noted that CMMI will work to boost competition by empowering patient choice in terms of coverage and sites of care. Of note, CMMI has indicated that models will require site-neutral payments across settings to reduce costs and increase reinvestment in hospital capacities for outpatient and community-based care, such as through changes to certificate of need requirements. Also, CMMI indicated that models will support expanded scopes of practice, virtual care, and at-home care, all of which are designed to promote flexibility.
We are all eager to see what program changes will be forthcoming as CMMI works to operationalize these pillars. The themes highlighted by Director Sutton and the white paper could prove promising for proponents of value-based care models.
Pain Points for MSSP and ACO REACH
The MSSP and ACO REACH Coalition (the “Coalition”) provided an in depth report on its observations as to where the MSSP and the ACO REACH models have enjoyed success as well as where they have experienced “pain” points.
Specific to the MSSP program, the Coalition was pleased to report that the number of participating lives had risen since 2024 from 10.8 million to 11.2 million in 2025 as well as that CMS has enjoyed roughly $9 billion in net savings attributable to the MSSP Program. As advocates, the Coalition provided a call to action, seeking input from attendees to share their experiences with pain points specific to the MSSP program, including:
- Benchmark Ratcheting – The Coalition reported that CMS is currently applying a three percent (3%) regional risk cap and three-way blend of national/regional (retrospective) and accountable care prospective trend factors (prospective). Building on this point, the Coalition noted that although the regional risk cap can support ACOs in serving higher-risk populations, a performance year (“PY”) trend miss (i.e. a deficit) could have a tremendously negative impact for subsequent PYs which can be challenging to overcome regardless of future performance. As a separate challenge, the Coalition indicated that CMS is applying the higher of prior savings adjustments (“PSA”) minus fifty percent (50%) average of three (3) year gross savings or the regional adjustment. Unfortunately, the Coalition noted, the current PSA is not the “higher of” for most ACOs, and thus, does not adequately address the rebase.
- Quality Reporting – The Coalition reported that it is continuing its efforts to advocate for longer reporting timelines as well as new reporting options, citing grounds that transitioning to the Electronic Clinical Quality Measures Basics system (“eCQM”) has proven expensive and burdensome. In addition, it is unclear how the new measures and reporting mechanisms will impact ACOs in terms of assessing performance and, by extension, compensation under the MSSP.
- Significant Anomalous and Highly Suspicious Billing – The Coalition stated that in recent years, ACOs have flagged certain spikes in FFS billings (also known as significant anomalous and highly suspicious billing (“SAHS”) activities), such as with respect to urinary catheters and skin substitutes. CMS has recently finalized measures allowing adjustments to address SAHS billing that is identified. Such adjustments may impact ACOs differently, which could lead to operational challenges, the extent of which remains unclear.
- Need for Reform in Medicare Physician Payment Systems - The Coalition argued that reform is needed for Medicare physician payment systems, which should be tailored to focus on value. Of note, CMS recently rolled out expanded FFS billing codes which may drive expenditures with an unknown impact as to the quality and total cost of care. The Coalition emphasized such a such a shift is necessary to encourage increased movement to value-based care and related models.
Apart from the MSSP, the Coalition also provided an update on the ACO REACH model, reporting that while the number of aligned beneficiaries has increased over time, the number of participating providers has decreased from 173,004 in 2024 to 160,837 in 2025. Despite the foregoing, the Coalition noted that CMS has enjoyed approximately $1.2 billion in net savings attributable to the ACO REACH model. Separately, the Coalition shared a number of pain points specific to the ACO REACH model, including:
- 2024 Retrospective Trend Adjustments – The Coalition highlighted the fact that CMS may apply a retrospective trend adjustment (“RTA”) where there is a greater than one percent (1%) difference between the prospective and observed benchmark trends. In addition, the Coalition further emphasized that the final observed trend is just beyond one percent (1%) greater than the prospective trend and the final RTA was just below 1.01. To provide greater certainty and transparency, the Coalition advocated that CMS should: (i) provide clarity on whether it would apply the RTA for PY 2024, even without any SAHS changes; (ii) provide a timeline for criteria for any SAHS adjustments; and (iii) provide clarity on the decision to change its trend methodology. It is important to note that the trend for PY 2025 is not yet known.
- Impact of New Risk Corridor Policy – The Coalition emphasized that if PY 2025’s utilization mirrors the statistics for PY 2024, an RTA of 1.083 would be required, but a new risk corridor policy (i.e. mandatory corridors that limit the RTA’s capacity to correct for prospective benchmark errors, being effectively capped at 0.94/1.06) will limit RTA to 1.06. This is a concern, the Coalition reports, as it would dramatically reduce benchmarks by $18 per beneficiary per month, which could result in a negative financial impact for ACOs in excess of $840 million.
- Benchmark Changes – In PY 2025, the Coalition indicated that CMS maintained a blend rate of forty five percent (45%) instead of increasing it to fifty percent (50%), while also reducing the ceiling for a regional blend impact from five percent (5%) to three percent (3%). Separately, with respect to PY 2026, the Coalition reported that CMS increased the benchmark discount to four percent (4%) for the global model. The Coalition noted that benchmark changes may significantly impact performance of ACOs and may drive some away from the ACO REACH model. As a result, the Coalition is advocating for a fifty percent (50%) blend rate to be coupled with a five percent (5%) ceiling for a regional blend impact for future model years. In addition, the Coalition is also advocating for limits on CMS’s ability to make major model changes midway through PYs or other notable measuring periods.
The Coalition concluded its assessment of the ACO REACH model by citing that the methodology used to evaluate the model has been different from those used for other ACO-specific models. Historical evaluations have shown an overall net loss to CMS, but the 2023 evaluation has not yet been released, thus there is still a chance for performance to improve. Significantly, the ACO REACH model is scheduled to sunset after 2026 and it is unclear whether the model will be extended or otherwise reconfigured. Recognizing such uncertainty, the Coalition emphasized that it is more important than ever that ACOs advocate for appropriate revisions to the model as such revisions could be worked into future iterations of the model as well as other models.
Value-Based Care is Here to Stay, But There is Ground to Cover
As highlighted above, the Spring Conference’s official theme centered on “Kickstarting Accountable Care” with a primary goal of encouraging the industry to pick up the pace in the adoption of population-based payment models with value- and quality-centric themes. While such models have gained ground, there is still much ground to cover. Of note, Susan Dentzer, the President and CEO of APG, highlighted a study which found the following statistics on model adoptions in the United States:
- 38.4% in Fee For Service Models with No Link to Quality and Value
- 16.4% in Fee For Service Models with Link to Quality and Value
- 31.0% in Alternative Payment Models Built On Fee For Service Architecture
- 14.2% in Population-Based Payment Models[3]
President Dentzer highlighted that the ultimate goal is to increase adoption of Population-Based Payment Models. The survey results evidence a wide open field of opportunities, as there is tremendous space for expansion of value-based care models in the United States. This is especially true given the CMMI’s stated priorities which will likely color future payment models and incentives.
Conclusion
Despite the inbound turbulence, there is much room for optimism.
FOOTNOTES
[1] The MSSP is a payment program which incentivizes providers and other stakeholders to organize as ACOs as well as to assume allocations of risk while also sharing in cost-savings achieved for the Medicare program.
[2] ACO REACH is a payment model promulgated by CMMI which, at a high level, allows participating ACOs and providers to obtain additional incentive payments that are intended to promote quality of care, reduce costs, as well as to shift away from fee-for-service (“FFS”) models.
[3] The statistics only capture approximately 92.7% of the market which was represented in the survey (with data for the remaining portion being inaccessible at the time of the study), which was based on 73 health plans, 4 states, and traditional Medicare figures.