Permanent full risk ACO Medicare

Summary#

This bill would add a new permanent Medicare program that lets groups of providers run “full risk” accountable care organizations (ACOs). Full risk ACOs would receive capitated (per‑patient, per‑month) payments for some or all Medicare Part A and B services and would take full financial responsibility for spending for their aligned beneficiaries. The bill aims to give providers more payment flexibility, encourage advanced primary care and care coordination, and better serve patients with complex needs.

• Creates two tracks: a Standard Full Risk ACO and a Complex Care Full Risk ACO (for populations with many chronic conditions).
• Allows primary care capitation (up to 7% of a beneficiary’s total Medicare spending in a year) and total care capitation (covers all Part A and B services from participating providers).
• Requires ACOs to assume full financial risk (share 100% of savings and losses) with discounts, risk corridors, and benchmarks based on past spending and regional data.
• Sets minimum beneficiary counts for participation (standard: 2,500; complex care: ramps from 250 to 1,000).
• Exempts program participants from MIPS (the Merit‑Based Incentive Payment System) and treats them as advanced alternative payment models.

What it means for you#

• Medicare fee-for-service beneficiaries (traditional Medicare):

  • You may be aligned or voluntarily sign up to a full risk ACO that coordinates your care.
  • You keep the right to opt out of the ACO program.
  • The bill requires ACOs to provide care coordination, social supports, behavioral health, in‑home care, palliative care, and non‑visit contact (email, phone, video).
  • The Secretary must require clear communications so beneficiaries know their options.

• Patients with complex needs:

  • There is a specific Complex Care ACO track aimed at people where at least two‑thirds have six or more chronic conditions.
  • Complex care ACOs must report a “Days at Home” quality measure among other outcomes.

• Doctors, hospitals, clinics, and other providers:

  • Eligible organizations include physician groups, networks of practices, hospitals, critical access hospitals (CAHs) using Method II, rural health clinics (RHCs), federally qualified health centers (FQHCs), and certain teaching hospitals.
  • Providers can opt into primary care capitation or total care capitation; if they take total care capitation they agree to a 100% reduction in fee‑for‑service claims.
  • ACOs may set up “preferred provider” relationships and distribute payments and performance incentives.
  • Participants must have a financial guarantee (some form of security to cover potential losses) and enter a five‑year agreement with the government.
  • Participation can be on a TIN‑NPI level (tax ID and provider level).

• Small or rural providers:

  • The bill allows certain rural providers (CAHs, RHCs, FQHCs) to be ACO participants, but Standard ACOs need at least 2,500 beneficiaries, which may limit smaller groups unless they join networks.

• Medicare program administration (CMS):

  • CMS must set quality measures, develop benchmarks and risk corridors, provide regular claims and payment data to ACOs, and may waive other Medicare rules to run the program.

Expenses#

No publicly available information.

• The bill itself does not include a fiscal note or cost estimate in the text provided.
• The bill requires CMS to create benchmarks, risk corridors, reporting systems, and payment flows; those steps are likely to require administrative work by CMS, but the bill does not state dollar amounts.
• The bill includes mechanisms intended to limit increased Medicare spending (discounts on benchmarks, a repayment mechanism for primary care capitation). The net fiscal effect (savings or costs) is not specified in the bill text.
• Participating providers must hold financial guarantees and may face financial risk if spending exceeds benchmarks.

Proponents' View#

(The following points follow directly from the bill’s stated findings and provisions.)

• The bill appears intended to make successful full‑risk ACO pilots permanent so providers can use full risk models outside short demonstrations.
• This could be seen as improving care for complex patients by promoting advanced primary care, care coordination, and services beyond office visits.
• Supporters may argue the program could lower Medicare costs by giving providers stronger incentives to manage total care spending.
• The bill appears designed to increase options for rural and underserved areas to participate in full‑risk arrangements.
• Treating participants as advanced alternative payment models and exempting them from MIPS could encourage provider participation by reducing reporting burdens under other programs.

Opponents' View#

(The following are possible concerns or trade‑offs that follow from the bill text.)

• One concern is the financial risk: ACOs must share 100% of savings and losses, so participating providers could face large losses if care costs exceed benchmarks.
• The bill does not include a fiscal estimate, so it is unclear whether Medicare would save money overall or face higher costs from capitation or startup support.
• Benchmarking and risk adjustment details may raise questions. For example, the bill blends historical and regional data and adopts Medicare Advantage‑like risk adjustment “to the extent practical,” which could affect payments differently across regions and patient mixes.
• Allowing ACOs to pay preferred providers instead of paying fee‑for‑service claims could change patient choice or how care is delivered; the bill requires marketing rules but does not fully describe safeguards.
• The bill allows waivers of other Medicare rules as needed; it is unclear which waivers CMS might use and how oversight would work.
• Minimum beneficiary counts (especially the 2,500 standard threshold) may limit participation by small practices unless they join larger networks.