The MSSP 2026 Proposed Rule eliminates the optional approach to risk-based contracts. CMS requires 477 ACOs covering 11.2 million Medicare beneficiaries to adopt two-sided risk within five years. This timeline has significant implications for organizations that are unprepared.
ACOs comfortable with shared savings now prepare for shared losses. The rule changes beneficiary assignment requirements, quality measure eligibility, and track participation options. Organizations must prepare to manage financial downside risk. The knowledge of these timeline changes is what makes the difference between your ACO easily adapting to the new system and being a struggling business that cannot meet the deadlines.
The Accelerated Risk Participation Timeline
The MSSP 2026 Proposed Rule compresses the transition from one-sided to two-sided risk arrangements. CMS analysis shows most ACOs now have enough experience to manage financial risk sooner than previously scheduled.
Mandatory Five-Year Progression
ACOs must adopt two-sided risk within five years of MSSP entry. Previous frameworks permitted extended one-sided participation, but CMS eliminated those extensions. All new participants must progress on this five-year timeline.
Key timeline modifications:
- One-sided risk participation is capped at specific durations
- Automatic advancement to two-sided tracks after designated periods
- No extension requests accepted for timeline delays
- Quality performance determines eligible tracks and progression speed
The Medicare Trust Fund needs greater savings, and two-sided arrangements deliver results. CMS removed the safety net that allowed indefinite cautious participation.
Beneficiary Assignment Flexibility and Restrictions
CMS adjusted the 5,000 beneficiary minimum requirement while adding performance-based restrictions. ACOs can meet the 5,000-beneficiary minimum by the third benchmark year instead of every year, giving smaller and rural organizations more time to grow their patient populations.
Consequences for Population Instability
ACOs with fewer than 5,000 beneficiaries in a benchmark year face:
- Participation is limited to the BASIC track
- Savings and loss caps applied
- Removal of low-revenue organization benefits
- Ineligibility for the ENHANCED track
This change helps underserved markets while preventing organizations from gaming assignment rules. ACOs must maintain stable populations or accept limited participation options affecting financial performance.
Quality Measure Changes Affecting Timelines
CMS streamlined quality reporting while expanding oversight. These changes directly affect track eligibility and shared savings calculations, influencing how quickly ACOs progress through risk levels.
Simplified Scoring and Tighter Eligibility
The health equity adjustment disappears from ACO quality scores starting Performance Year 2025. Quality scores now focus strictly on clinical performance data without overlapping modifiers.
Medicare Clinical Quality Measures require beneficiaries to receive at least one primary care service annually from designated providers. CMS has expanded the definition of primary care to include behavioral health integration and psychiatric collaborative care management.
The APP Plus quality measure set dropped the social determinants screening measure (Quality ID 487), pivoting toward a tighter clinical focus.
Dual Performance Monitoring
From 2026, CMS will monitor both standard and alternative quality performance standards. ACOs will face increased oversight across multiple frameworks to ensure consistent performance.
| Quality Update | Implementation | Timeline Impact |
| Health equity adjustment removed | Performance Year 2025 | Simplified track qualification |
| Primary care eligibility tightened | 2026 | Affects beneficiary attribution |
| Behavioral health included | 2026 | Expands primary care services |
| Dual monitoring launched | 2026 | Stricter performance tracking |
Infrastructure Requirements for Compressed Timelines
Adopting two-sided risk faster requires immediate technology upgrades. ACOs need a capable data and analytics infrastructure in place to manage financial and clinical risk effectively.
Essential Technology Capabilities
A digital health platform puts together clinical and claims information into a single patient portal. High-risk patients are identified in real time before the onset of an acute event, and proactive measures can be taken to avoid an expensive hospital stay.
Critical infrastructure includes:
- Longitudinal patient records showing complete care histories
- AI-driven risk stratification for targeted interventions
- Automated quality reporting, ensuring accurate CQM submissions
- Financial scenario modeling projecting outcomes under different risk arrangements
These capabilities aren’t future investments; they’re immediate requirements. The compressed timeline means ACOs lack years to build systems gradually.
Preparation Strategies for Two-Sided Risk
Begin with a universal population health examination. Assess the existing distribution of patient risk, prevalence of chronic diseases, and cost drivers. It is also important to know who the beneficiaries will cause the most expenses for so that specific intervention strategies can be employed.
Network and Workflow Readiness
Evaluate provider network capacity for increased care coordination:
- Primary care capacity for expanded patient panels
- Specialist availability for timely referrals
- Behavioral health integration supporting mental health needs
- Post-acute care partnerships reducing readmissions
Deploy care management processes, namely, patient identification of high risk, elimination of care gaps, monitoring of medication adherence, and prevention of hospital readmission. These processes directly impact financial performance under two-sided risk.
Strengthen quality reporting systems, ensuring accurate, timely submissions. Missing quality targets costs money even when achieving utilization reductions.
Bottom Line
The MSSP 2026 Proposed Rule accelerates the move to two-sided risk, removes participation extensions, and raises performance expectations. ACOs have five years to comply, but preparation should start immediately to meet quality, beneficiary, and monitoring requirements.
Persivia CareSpace® equips ACOs with integrated data, real-time analytics, and automated quality reporting to manage accelerated risk transitions, improve outcomes, and control costs under compressed MSSP timelines. Learn more about this platform.
