To amend title XVIII of the Social Security Act to establish a full risk ACO program.
- Sponsor
- Rep. Tenney, Claudia [R-NY-24]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Mar 26, 2026
Bottom line
This bill creates a permanent, full-risk Accountable Care Organization program within Medicare to improve health outcomes and lower costs by shifting providers to value-based care models.
What it actually does
This bill establishes a permanent "full risk ACO program" under Title XVIII of the Social Security Act, allowing groups of healthcare providers to manage and coordinate care for Medicare fee-for-service beneficiaries through either "standard" or "complex care" full risk Accountable Care Organizations (ACOs). It incentivizes high-quality care and cost reduction by offering capitated payment models and requiring ACOs to assume 100% financial risk for savings and losses, subject to discounts and risk corridors.
Proponents argue
Supporters argue that the bill builds on successful pilot programs, providing a permanent framework for full-risk ACOs that have demonstrated improved health outcomes and cost savings in traditional Medicare. They contend it offers providers greater flexibility and diverse payment options beyond fee-for-service, encouraging better care coordination, especially for beneficiaries with complex chronic conditions, and reducing clinician burden through streamlined quality measures.
Opponents contend
Critics might argue that shifting to full-risk models could incentivize providers to limit necessary care to reduce costs, potentially compromising patient access or quality, especially for vulnerable populations. Concerns could also be raised about the complexity of the financial arrangements and risk adjustment methodologies, which might disproportionately impact smaller or rural providers lacking the infrastructure to manage full financial risk effectively.
The bill is moderately complex, requiring careful reading to understand the new program's structure and financial implications, which may exceed the time typically allotted for legislative review.
Section 1899B(a)
Congressional Findings on Full Risk ACOs
This section outlines Congress's rationale for creating the program, stating that previous pilot programs have shown full-risk Accountable Care Organizations (ACOs) successfully improve health outcomes and reduce costs in traditional Medicare. It emphasizes the need for a permanent program to offer providers flexibility beyond time-limited pilots and to encourage better care coordination for beneficiaries with multiple chronic conditions.
Supporters argue
Supporters argue these findings accurately reflect the proven benefits of full-risk ACOs and justify the creation of a permanent program to expand these successes.
Critics contend
No specific opposition to the findings themselves, but opponents might challenge the interpretation of pilot program success or the broad applicability of full-risk models.
Tradeoffs
None explicitly in the findings, but implicitly, the tension between traditional fee-for-service and value-based care.
Section 1899B(b)
Establishment of the Full Risk ACO Program
This provision mandates the Secretary of Health and Human Services to establish a permanent "full risk ACO program" by June 30, 2026. Under this program, groups of healthcare professionals will manage and coordinate care for Medicare fee-for-service beneficiaries, operating as either "standard" or "complex care" full risk ACOs. The program aims to incentivize high-quality care tailored to beneficiaries' needs while reducing overall costs.
Section 1899B(c)
Program Structure and Requirements for ACOs
This section details the structure and requirements for ACOs participating in the program. It specifies eligible ACO participants (e.g., group practices, hospitals, FQHCs), mandates a structure for payment distribution, and sets minimum beneficiary alignment numbers (2,500 for Standard, escalating for Complex Care ACOs). It also outlines required clinical services, quality reporting standards (including MIPS exemption), and rules for beneficiary communications, emphasizing individualized care and patient experience.
Section 1899B(d)
Financial Models and Benchmarking for Full Risk ACOs
This provision outlines the financial mechanisms for the program. It introduces three payment options: primary care capitation (up to 7% of Part B costs), total care capitation (for all Part A and B services with 100% fee-for-service claims reduction), and a claims reduction/population-based payment option. All ACOs must assume full financial risk (100% of savings and losses), subject to a discount and risk corridors. It also details distinct benchmarking methodologies for Standard and Complex Care ACOs, incorporating historical spending, regional expenditures, and risk adjustment.
Section 1899B(e)
Risk Adjustment Methodologies
This section specifies the risk adjustment methodologies for the program. Standard Full Risk ACOs will use prospective risk adjustment, similar to Medicare Advantage, meaning risk is assessed at the beginning of the performance period. Complex Care Full Risk ACOs, however, will use concurrent risk adjustment, which uses current year diagnoses and demographics to predict costs in the same year, better accounting for the rapidly changing health status of complex patients.
Section 1899B(f)
Beneficiary Alignment and Opt-Out
This provision details how Medicare beneficiaries are assigned to Full Risk ACOs. It allows for methodologies consistent with the Medicare Shared Savings Program, including prospective assignment or prospective assignment with retrospective reconciliation. Additionally, both Standard and Complex Care Full Risk ACOs can use signed voluntary alignment, which takes effect monthly. Crucially, Medicare beneficiaries retain the ability to opt out of participating in the full risk ACO program at any time.
Section 1899B(h)
Data Provision to Program Participants
This provision mandates the Secretary to provide regular reports to participating Full Risk ACOs. These reports must include up-to-date provider claims data and payment information for Medicare fee-for-service beneficiaries attributed or aligned with the ACO. The Secretary is also required to provide other necessary data to ACOs, enabling them to effectively manage care and monitor performance.
Section 1899B(i)
Advanced Alternative Payment Model Status
This provision designates ACOs participating in the full risk ACO program as an "advanced alternative payment model" (APM) under the Medicare Access and CHIP Reauthorization Act (MACRA). This classification provides significant incentives for providers, typically including higher payment updates and exemption from the Merit-Based Incentive Payment System (MIPS), as also stated in subsection (c)(4)(C).
Grants the Secretary of HHS broad authority to waive provisions of Title XVIII and Title XI of the Social Security Act as necessary to implement the full risk ACO program.
Section 1899B(g)
Why it matters:While common in demonstration programs and new model implementations to provide flexibility, broad waiver authority can also be used to bypass existing regulations that might otherwise protect beneficiaries or ensure program integrity. Its placement might be standard legislative practice for administrative flexibility.
Case for: Proponents argue that such flexibility is crucial for adapting a complex new program to real-world challenges and removing unforeseen regulatory barriers that could impede innovation and success.
Case against: Critics might argue that this broad authority could lead to a lack of transparency or accountability, potentially undermining existing patient protections or program integrity measures without sufficient oversight.
Estimated impact: Potentially significant, as it could alter fundamental aspects of Medicare operations and beneficiary protections for participating ACOs.
Allows participation in the program at the Taxpayer Identification Number (TIN) and National Provider Identifier (NPI) level.
Section 1899B(c)(2)(H)
Why it matters:This level of detail is technical and often placed within operational requirements. It's standard for defining participation granularity.
Case for: Proponents argue that allowing TIN-NPI level participation provides greater flexibility for individual providers or smaller groups to join the program, rather than requiring entire large organizations to commit, potentially increasing participation.
Case against: Critics might argue that fragmented participation at the TIN-NPI level could complicate care coordination and accountability within larger ACO structures, potentially undermining the "accountable" aspect of the organization.
Estimated impact: Could significantly broaden the pool of eligible participants, especially smaller practices or specialists who might otherwise be hesitant to join larger, more rigid ACO structures.
Mandates the Secretary to determine and apply a "discount" to the full risk ACO's benchmark and to develop "risk corridors" appropriate to the program.
Section 1899B(d)(2)(B)(ii) and (E)
Why it matters:These are technical financial mechanisms common in value-based care models. The specific values are typically left to regulatory determination, making their detailed specification outside the scope of primary legislation.
Case for: Proponents argue that a discount ensures that the program generates savings for Medicare, while risk corridors protect ACOs from extreme financial volatility, making the full risk model more palatable and sustainable.
Case against: Critics might argue that an unspecified "discount" could be set too high by the Secretary, making it difficult for ACOs to achieve shared savings, while the design of risk corridors could either be too generous (costly to Medicare) or too restrictive (insufficient protection for ACOs).
Estimated impact: The discount directly impacts the financial upside for ACOs and the savings for Medicare. Risk corridors determine the extent of financial exposure for both ACOs and the federal government.