Future Of Accountable Care: Lessons Learned And Potential Paths Forward During A Time Of Transition

Editor’s Note

This article is the latest in the Health Affairs Forefront series, Accountable Care for Population Health, featuring analysis and discussion of how to understand, design, support, and measure patient-centered, cost-efficient care under the umbrella of accountable care. Additional articles will be published throughout 2025. Readers are encouraged to review the Call for Submissions for this series. We are grateful to Arnold Ventures for their support of this work.

The change of Presidential administration is a natural time to take stock of progress made to date and identify further opportunities for improving federal policies in key areas, especially given the new policy directions that featured prominently in the recent election. Accountable care is not at the top of the news, and, historically, the shift to paying for value has had bipartisan support, including across the prior Trump and Biden administrations. But accountable care itself is at an inflection point, more prevalent than ever but still an “alternative” to fee-for-service (FFS). Trump administration priorities related to preventing chronic disease complications and reducing federal spending could provide tailwinds for accountable care, but policy disruptions and uncertainty could create headwinds as well. This piece examines the landscape during the transition when opportunities are emerging but by no means resolved.

Past Administration Policy Is Only Part Prologue 

Top leaders in the new administration’s Department of Health and Human Services (HHS), starting with Secretary-nominee Robert F. Kennedy Jr., are in the confirmation process. But key appointees have quickly filled leadership slots at the Centers for Medicare and Medicaid Services (CMS), the most influential agency for accountable care, and CMS administrator nominee Dr. Mehmet Oz will soon have a chance to start articulating his agenda. More clarity on how CMS will advance accountable care is coming soon.

Some priorities relevant to accountable care may reflect extensions from the first Trump administration, including attention to expansion of direct contracting models, drug pricing reforms, and specialty care reforms under the Centers for Medicare and Medicaid Innovation (Innovation Center). Indeed, to achieve the goal of widespread adoption of accountable care initially set during the previous Trump administration, the Innovation Center has continued to implement and iterate Trump-era reforms including direct contracting through the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model, drug pricing reforms (such as the $35 copay cap for insulin), and specialty reforms (such as in oncology and kidney care). The new administration is also expected to support other traditionally Republican priorities, such as ongoing growth of Medicare Advantage (MA). 

New elements in shaping the incoming administration’s health care priorities come from Robert F. Kennedy Jr.’s focus on reducing chronic disease burden and improving health through nonmedical services, as well as steps to prevent, detect, and reduce the burden of major chronic diseases. Conceptually, this focus is aligned with accountable care reforms, including supports for healthier behavior and advanced primary care, preventive care, and digital and telehealth tools that demonstrate evidence of health improvements and cost reductions when targeted effectively.

At the same time, the administration has signaled a clear priority to reduce government spending and regulatory burdens. Achieving this goal will occur through recommendations from the newly established Department of Government Efficiency (DOGE), now formally established as the United States DOGE Services (USDS) in the Executive Office of the President, with staff support from CMS and other federal agencies. It will also occur through legislative efforts, including potential budget reconciliation legislation that enables federal health care spending reductions with a simple majority vote. 

These spending reduction efforts will be debated in light of campaign promises and tight Congressional margins. For Medicare, that means accounting for President Trump’s promise during the campaign to protect Medicare beneficiaries from benefit reductions. Beyond Medicare, there have been a range of Republican proposals for reducing federal spending on Medicaid and Affordable Care Act exchange tax credits.

The Context For Accountable Care In 2025

For several decades, accountable care has had bipartisan support as a means to align health care payments and benefits with care that improves quality, access, and affordability. Across previous Republican and Democratic administrations, accountable care uptake has increased, including the Medicare Shared Savings Program (MSSP) in Traditional Medicare (TM) and Innovation Center pilots like ACO REACH. CMS recently announced 54 percent of TM beneficiaries in January 2025 are in accountable care relationships. For all payers, advanced accountable care participation increased to almost 29 percent by 2023.

The growing evidence related to accountable care reforms illustrates why accountable care is growing and also why further refinements that build on this evidence are needed. Academic studies using longitudinal data and more recent analyses of Medicare ACO performance have demonstrated that ACOs – particularly those led by physician groups – have reduced health care spending and maintained or improved quality compared to what may have happened without these programs. Moreover, health care organizations have leveraged accountable care flexibility to redesign benefits and care, with impacts that “spill over” beyond a given model. Overlapping with these studies, a 2021 assessment of over 50 Innovation Center pilots focusing on total Medicare spending within the model period found only four demonstrated significant Medicare spending reductions. For MA, accountable care models where providers are accountable for total cost and quality have shown evidence of care improvement, coordination, and lower spending compared to FFS in MA. In MA, evidence broadly points to better prevention, coordination, and lower health care spending per person, but overall MA spending has been higher compared to TM due to greater risk coding and other factors.

These findings highlight the technical difficulty of designing and implementing accountable care. While many models improved quality and reduced health care costs, for some models savings were offset by incentive payments. In others, the model did not save money overall due to its benchmarks and risk coding being higher than savings. Other challenges include implementing through voluntary models and the political difficulty of implementing mandatory or systemwide reforms; the need for improving data and methods for determining beneficiary risk, benchmarks, and quality; and the potential for reforms and evaluations that consider systematic impacts (such as spillover effects and lasting impacts of investments to enable care coordination, data interoperability, and better quality measurement).

Accountable care adoption has faced related headwinds that highlight the need for reforms. In TM, some organizations are leaving MSSP after participating for years, pointing to barriers such as the “ratchet effect” of their benchmarks being rebased each contract period. In MA, participants have raised concerns with “topped out” quality measures, and uncertainty about further reforms in risk adjustment and Stars performance incentives that may have major financial implications.

Moving to accountable care at scale also requires addressing substantial administrative burdens and data limitations given ongoing provider burnout and workforce shortages. Administrative and data challenges include financial pressures in clinical encounters to detect diagnoses associated with higher FFS payment without clear ties to care improvement, multiple non-aligned performance measures and accountable care models across health plans and purchasers, and limited access to critical data for care management despite substantial federal investments in electronic health record interoperability. Health care consolidation, both horizontal and vertical, has also raised concerns that payment and other health care policies aiming to increase value need to do more to support integrated care without formal consolidation.

Finally, specialists are critical for managing care across the patient journey. But outside of care for advanced kidney disease and some intensive cancer episodes, specialist participation in accountable care models to date remains limited. CMS has begun to implement a strategy to support person-centered value-based specialty care, which complements broader efforts to develop longitudinal specialty payment models.

Potential Policy Directions For Accountable Care To Meet The Moment

The current moment in American health care and politics presents new challenges but also new opportunities to advance the goals of accountable care, building on past experience and broader participation across public and private programs. This section details policy areas to watch to speed progress and increase impact.

Transparency

A major continuing challenge for accountable care is the limited data available to clinicians and patients alike to support better care decisions, including timely and accurate data to intervene effectively for a patient facing avoidable health risks, make an informed specialty care referral, or identify and address medication authorizations. Data limitations continue despite bipartisan price transparency efforts dating back to the previous Trump administration, as well as ongoing efforts to reduce gaps and inconsistencies in the exchange of useful electronic health data. Incentives for uptake of current data interoperability standards, coupled with efforts to streamline and advance trusted data exchange, can strengthen the infrastructure for accountable care. The new administration can build on current efforts to implement a unified approach to health data exchange, leveraging improved electronic data standards, interoperability rules, and common “use cases” for successful data transfer across health care systems.

Additionally, progress in generative artificial intelligence (AI) can potentially simplify the work of assuring data accuracy and reduce clinical burden. Further progress can be made by supporting data sharing through bipartisan transparency regulations and initiatives as well as leveraging ongoing commercial market efforts to utilize patient decision support tools and value-based insurance design. CMS can expand its programs to facilitate timely data access (such as by expanding the ACO REACH timely feeds of partially adjudicated claims to accountable providers, providing comparable provider data through shadow bundles initiative) to support high quality provider partnerships and specialty care coordination. In turn, further accountable care reforms will provide a stronger “use case” to drive effective interoperability and transparency.

Simplicity

To improve participation and success in accountable care models, administrative simplification is needed. Multipayer alignment can help reduce complexity as models use similar measures (and therefore devote fewer resources to collecting and reporting different measures). Alignment is especially important as the predominant source of coverage in Medicare and Medicaid is now through private plans, which all use the same claims infrastructure for FFS payments but differ in measures, data, and other technical details for accountable care. Multipayer alignment to date has required substantial collaboration and relationship building over time. For example, North Carolina has devoted significant resources through its State Transformation Collaborative to align approaches to reduce the burden of accountable care across payers. CMS could leverage these findings to support accountable care implementation in Medicare, Medicaid, and beyond through public-private partnerships.

Building on other prior efforts can create synergies for simplification. The previous Trump administration implemented the Patients Over Paperwork Initiative, which focused on reducing the number and diversity of quality measures used; the Biden administration took additional steps to align measures across programs. Further progress on electronic data interoperability should make it easier to implement measures that are both meaningful to patients and clinicians, such as objective measures of health risks and patient-reported outcome measures, and simpler to construct.

The new Trump administration will have further opportunities to streamline and improve quality measurement, risk adjustment, and other key standards for an era when accountable care is no longer the “alternative” payment model but increasingly the norm. A major opportunity is to continue the shift from multiple models to a more integrated set of reforms that fit together, relying on a common “chassis” for scaling. In particular, the permanent MSSP core chassis is now a foundation to support advanced primary care in rural and other underserved communities, and for specialized populations, including those with complex conditions. The ACO REACH Model, which evolved from the Global and Professional Direct Contracting Model in the previous Trump administration, could also evolve into a permanent capitated option to support more comprehensive and innovative care within TM. Additionally, CMS can build on its emerging specialty care strategy to more seamlessly integrate specialty and primary care to promote comprehensive, longitudinal support across the care continuum. Complementary reforms could include integration of drugs intro accountable care models on the path to total cost of care.

Explainability

“Accountable care” or “value-based care” mean different things to different people, and the terms do not resonate with most Americans. Long-term support depends on demonstrating progress in clear, meaningful ways that patients recognize and appreciate in their own care. It is also important to make sure that accountable care models engage clinicians on the front lines of care delivery to secure their buy-in and help them succeed, despite competing priorities and capacity barriers. For example, the Innovation Center has initiated rapid learning programs aiming to provide more timely evidence to refine payment policies and improve performance in key models.

Flexibility

Because accountable care links payment to better health and lower costs for people and not just to delivering traditional medical services, it provides more flexibility to pay for services that are difficult to cover in FFS arrangements. This flexibility aligns with key elements of the incoming administration’s Make America Healthy Again agenda, including more upstream preventive care, chronic disease management, and targeted benefits to address major nonmedical drivers of health such as poor nutrition, exercise, housing insecurity, and lack of connections to community supports. For example, Medicaid programs like North Carolina’s Healthy Opportunities Pilots Program, approved under the previous Trump administration, support targeted nonmedical services to improve health in the context of demonstrating reductions in overall Medicaid costs.

Sustainability

Current Medicare policies have favored growth in accountable care through MA plans, in part because plans provide an infrastructure for bearing full risk related to health care costs and outcomes, but also potentially due to differences in the core accountable care model design elements between TM accountable care models and MA programs. These include differences in benchmarking, risk adjustment, and quality incentives that contribute to higher Medicare spending in MA despite lower costs of delivering core Medicare benefits. Such policies may also contribute to care delivery organizations leaving TM accountable care models, as well as vertical consolidation with health plans.

Policymakers will need to continue to explore benchmarking reforms to promote sustained and new participation. Nuanced benchmarks may be needed for different patient and provider types. For example, the ACO REACH model includes a benchmark approach for its high-needs population participant track, and MA Special Needs Plans enable tailoring to higher-risk patients as well.

The increase in accountable care arrangements (for both TM and MA) presents an opportunity to modernize the current risk adjustment system. Risk adjustment reform that shifts from the current claims-based system to one that leverages accurate data more reflective of accountable care models – more accurate and timely interoperable data that the new administration could advance – has the potential to improve efficiency and program integrity and create a level playing field between TM and MA.

Accountable care will need further refinements to address sustainability challenges for rural, smaller, safety net, and independent primary care practices and the beneficiaries they serve. CMS has taken steps to modify Innovation Center models to increase participation in these groups, including a 16 percent increase the number of safety net providers participating MSSP from last year. But these reforms are not yet systematically incorporated into longer-term accountable care payment policies.

Sustainable accountable care reforms should also address the administration’s priority to reduce health care spending. Some broader policy proposals may be synergistic with the goals of accountable care (including site neutral payments, streamlining Medicaid state-directed payments that support accountable care, investments in digital technologies and AI for burden reduction). Expanding mandatory payment reforms into accountable care programs also seems like a critical part of increasing uptake while reducing costs, but such reforms have been politically difficult to sustain. At the same time, the administration and Congress will have to weigh how cost-cutting policies for deficit reduction may affect other priorities, including the Make America Healthy Again agenda and campaign promises not to reduce Medicare benefits.

From Uncertainty To Certainty…

At this point, significant uncertainty remains about how competing priorities for the new administration and Congress will translate into policy initiatives. What does seem clear is that biomedical innovation, digital technologies, and AI have great potential to support better prevention, care, and population health, all amidst a backdrop of political pressure to address the chasm between these possibilities and current dissatisfaction with the system. Accountable care is an important strategy for closing the gap, and the new administration has many opportunities to leverage it. At the same time, budgetary pressures and the need to reduce the administrative burdens of accountable care remain top of mind. As with other major challenges facing the United States, the new administration has highlighted that the status quo is not sustainable – but the path forward is challenging. What is certain is the administration’s policy actions can have a substantial impact on accountable care, and the health and health care costs of Americans.

Authors’ Note

We would like to acknowledge that this piece reflects discussions and feedback from a host of stakeholders across the health care system, and we appreciate their comments to inform development of this piece. Additionally, this work is supported by a collaborative initiative between the Duke-Margolis Institute for Health Policy and the West Health Institute and West Health Policy Center to advance and accelerate value-based payment reform in the U.S. health care system.

Robert Saunders is a co-chair for the Health Evolution Summit Roundtable on Value-Based Care for Specialized Populations.

Mark B. McClellan is an independent director on the boards of Johnson & Johnson, Cigna, Alignment Healthcare, and PrognomIQ; co-chairs the Guiding Committee for the Health Care Payment Learning and Action Network; and receives fees for serving as an adviser for Arsenal Capital Partners, Blackstone Life Sciences, and MITRE.