Reading the Tea Leaves for Accountable Care’s Future in Medicare

While the Medicare Advantage (MA) program may have exploded in enrollment over recent years, that’s not the only way that Medicare is incentivizing accountability and value, according to speakers during a session of the University of Michigan Center for Value-Based Insurance Design (V-BID Center) 2026 V-BID Summit. Their perspectives, whether advocating for the accountable care organizations (ACOs) on the forefront of innovation or representing the regulatory agency setting policy, highlighted the successes of ACOs in recent years and the opportunities to improve as technology and payment evolve.

Achieving Pricing Accuracy to Build a Foundation for Value

Bringing the administrative viewpoint to the conversation was Jacob Quinton, MD, MS, MPH, chief medical officer of original Medicare at CMS, who explained that the agency is focused on encouraging choice and competition between MA and original Medicare, including improving the latter by bringing in learnings from the Center for Medicare and Medicaid Innovation (CMMI). A foremost priority is achieving empirical payment accuracy, such as by cross-referencing actual procedure times against estimates and introducing adjustments as needed.

This focus on ensuring payment alignment in original Medicare shows that CMS isn’t just trying to move every beneficiary to MA, but rather making sure that traditional Medicare patients are receiving high-quality care from clinicians in ACOs and other innovative models instead of an unmanaged fee-for-service structure.

“Original Medicare operates on a chassis of fee-for-service codes and those are incredibly important, but we want to grow the important quality outcomes and improvements for beneficiaries that come from accountable care adoption. So we’re saying that we want to rapidly expand both the Shared Savings Program, and we want the CMMI models to do the same,” Quinton said. “Pricing accuracy is sort of getting our house in order, but we really want to expand our ACO program, and that’s how we think they’re going to be delivering high-quality care for the American people.”

Why ACOs Succeed: The Right Incentives to Prevent Poor Health Outcomes

Reducing cost growth in traditional Medicare is essential, agreed Farzad Mostashari, MD, MSc, CEO and cofounder of Aledade, Inc, not least because of its spillover effects on taxpayers. But ACOs are asking a different question: “What is the right price for a stroke that shouldn't have happened? Simply adjusting fee-for-service rates will not get us to where we need to go. We actually need to make it more profitable for somebody to prevent strokes than to treat strokes,” Mostashari argued.

The ACOs receiving enablement through Aledade’s services are succeeding at taking accountability for total cost of care and implementing evidence-based chronic disease management because they are incentivized to prevent costly acute spending, as exemplified through Mostashari’s example of Aledade’s hypertension control efforts.¹

“Maintaining and expanding and strengthening the incentives for primary care to care about reducing downstream suffering is at least as important, in my view, as the saving money part of this,” he said. But in order for practices to stay in ACO programs like the Medicare Shared Savings Program, the rules need to be set up for them to succeed, including fair benchmarking, and allow them to be rewarded for their investments.

When Catching Suspicious Spending, There’s No Substitute for Having Skin in the Game

At the forefront of mobilizing for those fairness regulations is Mara McDermott, JD, CEO and founder of Accountable for Health, which advocates for accelerating the adoption of effective accountable care. She highlighted how ACOs have proven successful at finding abnormal patterns in health care data, most recently around apparently anomalous billing for skin substitutes,² which varied in payment rates from $11 to an eye-popping $5770 per square centimeter before CMS took action to cap spending.

“Skin substitutes, to me, are the shining example of why more oversight is needed, why more management is needed,” McDermott said, “and why you need somebody looking out for the beneficiaries in traditional Medicare.” Quinton agreed that ACOs were the bellwether to bring the waste to CMS’ attention, but that’s not the only reason they’re important: they also represent a testing ground for payment models looking to refine care for particular patient populations.

Choosing Models and Looking Ahead

McDermott and Quinton discussed the alphabet soup of payment models—past, present, and upcoming—offered through CMMI, including the Long-term Enhanced ACO Design (LEAD) Model, the ACO Realizing Equity, Access, and Community Health (REACH) Model, and more specialized options like Kidney Care Choices or the Enhancing Oncology Model. Looking forward, the members of Accountable for Health “see a lot of really interesting tea leaves around managing complex populations,” such as patients who are frail, home-bound, or multimorbid, said McDermott. “We see a lot of the infrastructure built into the LEAD model that I think is going to enable those companies that are focused on that population to be very successful and also invite in ACOs [that] had maybe not focused on that population to bring those beneficiaries into their ACOs through some creative risk adjustment strategies, attribution strategies, and other things.”

Not every model will be a fit for each practice, but with the right support and tools, organizations can choose a path that makes the most clinical and financial sense. The panelists agreed that the next step is to bring the patient into the ACO decision, with voluntary alignment allowing them to research and elect participation.

Another exciting development contributing to the speakers’ optimistic outlook for the future of accountable care is technology, particularly artificial intelligence (AI). “The future of our ACO program is necessarily going to be incorporating technology-enabled care in ways that just can be really tough for us to predict at the moment: how and where AI is going to be incorporating clinical decision-making and actually making care better,” Quinton explained.

After the session concluded, V-BID Center advisor Michael Chernew, PhD, of Harvard Medical School, wrapped up the meeting’s insights by saying, “We need more of the good stuff and less of the bad stuff, and in order to make that happen, we need to change the way we pay, we need to employ new technologies effectively, and we need to make sure that our regulation, or our regulatory bodies, are optimized to achieve that core goal.”

That idea of a core goal to get everybody rowing in the right direction will be essential to achieve the aspiration of making Medicare entirely value-based, explained Chernew, who is also co–editor in chief of The American Journal of Managed Care^®.

“I think experimentation matters,” he said, “but I think more important is having some version of a North Star.”

References

1. Controlling blood pressure the Aledade way: saving lives through innovative technology and clinical support. Aledade. February 12, 2026. Accessed March 12, 2026. https://aledade.com/value-based-care-resources/case-studies/controlling-blood-pressure-the-aledade-way

2. Mattina C. ACOs’ focus on rooting out fraud aligns with CMS vision under Oz. AJMC^®. April 23, 2025. Accessed March 12, 2026. https://www.ajmc.com/view/acos-focus-on-rooting-out-fraud-aligns-with-cms-vision-under-oz