All Themes

Medicare value-based care is showing a sharper split between scale-enabled winners and exposed incumbents: third-party convener firms are helping create geographically dispersed, high-earning Medicare ACOs, while CMS’s Medicare ACCESS Model is drawing attention as a potential catalyst for new health-tech infrastructure around accountable specialty and longitudinal care models ([Health Affairs on convener-led ACOs](https://news.google.com/rss/articles/CBMi7AFBVV95cUxQZzBkcEZQTjlhUkF3ZjRTOUFtaGljNi1ncHVzMFQ3Y3BjM3NvYzFOQURIS0p6ZnhmRWRPYjEzRHhjU3U4eExUQ0pIRERaQWo1N2tHdXlkNXNtdU14Vm85WEExb0R0cW91QkFFQ2dhY2xZckl1aVU1V2RZdHNQZFhNcGZtMUdreHAybkdEM05BQ3dnb1NvSFhuWTdXNy1RLTJMNExxdFYza3kxaTJrNldRN0FpZEZVOV9lUG0wbVdUREJUVVgxRHN5S1g5cHpZcUFmdmdzamNQN2FtX1pJOGVxVUdiSWhXOGdNc

Affordability policy is shifting toward tighter federal control of public-program spending and more explicit ROI tests for VBC: the Trump administration’s proposed Medicaid state-directed payment crackdown would materially constrain supplemental payment strategies and is projected by CMS to save more than $500 billion, while scrutiny of Medicare Advantage overpayments keeps pressure on risk adjustment, coding intensity, and plan-provider economics. At the same time, CMS innovation is moving into contested affordability tools—AI-enabled prior authorization through WISeR and Medicaid drug-cost experimentation through GENEROUS—creating a strategic tension between cost discipline and access safeguards for ACOs, specialty VBC models, and payers. Commercial and specialty-care actors are positioning VBC as the affordability counter-narrative, with Blue Cross NC’s outcomes-based Advanced Kidney Care program cited as a concrete example of specialty care redesign aimed at reducing total cost while improving outcomes ([HCTTF case study](https://hcttf.org/blue-cross-ncs-advanced-kidney-care-program-featured-in-national-case-study-on-value-based-specialty-care/); [Medicaid payment crackdown](https://www.healthcaredive.com/news/trump-administration-proposes-cracking-down-medicaid-state-directed-payments/820794/)).

CMS is pushing value-based contracting toward larger, longer-duration, and more risk-bearing structures: CMMI’s new 10-year Long-term Enhanced ACO Design (LEAD) Model creates a strategic fork for ACOs considering participation by the May 17, 2026 deadline, while the FY 2027 IPPS proposal signals continued movement toward mandatory episodic payment through a redesigned, potentially nationwide CJR model. At the same time, CMS’s 2027 Medicare Advantage rate direction aims to narrow MA plans’ payment advantage, increasing pressure on payers and providers to prove risk-adjusted performance, specialty-care ROI, and population health infrastructure rather than relying on coding or benchmark arbitrage. For health systems, ACOs, and payer partners, the near-term positioning question is whether to scale accountable care capabilities across primary care, specialty models like kidney care, and episodes—before CMS and market contracts make downside-risk readiness less optional. [LEAD Model overview](https://www.wakely.com/blog/to-lead-or-not-accountable-care-organizations-have-a-decision-to-make-by-may-17/) | [MA payment changes](https://www.hfma.org/medicare/cms-moves-to-curb-ma-plans-unfair-payment-advantage/)

CMS is pushing Medicare value-based care toward a more mandatory, infrastructure-heavy phase: the proposed nationwide redesign of CJR for hip and knee replacements, the ongoing TEAM model, and the new LEAD ACO design all signal that providers will face broader episode-based and longitudinal accountability, with less room to remain purely voluntary participants. At the same time, the Trump administration’s CMS is tightening the Medicare Advantage payment environment—addressing MA plans’ perceived coding and payment advantages—while also testing technology-enabled utilization management, creating a strategic tension between curbing overpayment, expanding accountable care, and managing provider concern over administrative burden and AI-driven prior authorization. For ACOs and health systems, the key positioning issue is whether to build durable care-management, data, and contracting capabilities internally or rely on conveners and enablement firms as models like [LEAD](https://news.google.com/rss/articles/CBMiggFBVV95cUxQMjMwak1tRDRZS2lVam5pcXNYd2IxVS1ROWpGYXdGS2RYQUZwNUNYSExIZ092Z092bFMyV0dfNld0QV9rbG5GZnNkbmxXWENPQVZwUWxKbkF6Z09pWHg0NHdVdkJHUmpuS2luVUZNREZHdGdMNGxsTmk1SjRmSndHMnpR0gGSA

CMS’s push toward tech-enabled Medicare payment models is sharpening the VBC infrastructure race: CMMI’s ACCESS Model is being positioned around technology-enabled care, data integration, and access improvement, while provider organizations are investing in AI-assisted HCC coding, risk stratification, and embedded care-management workflows to make risk contracts operationally sustainable. At the same time, the Trump administration’s Medicare AI prior authorization experiment is drawing congressional Democratic pushback, underscoring a core tension for ACOs and risk-bearing providers: AI may reduce administrative friction and target utilization, but only if governance, transparency, and clinical accountability keep pace with payment-model automation. The strategic signal is that interoperability and AI are moving from back-office IT priorities to prerequisites for success in Medicare risk, with models like [ACCESS](https://www.healthcarefinancenews.com/video/tempo-and-access-encourage-technology-enabled-care-medicare-patients) and fights over [AI prior authorization](https://www.statnews.com/2026/05/20/democrats-force-vote-to-end-medicare-ai-prior-authorization-pilot/?utm_campaign=rss) likely to shape how payers and providers deploy automation in VBC.

CMS quality measurement is being pulled in two directions: stakeholders are pushing to reduce reporting burden in ACOs and MIPS, while CMS continues to use quality infrastructure to steer behavior across models, including proposed MIPS changes and finalized updates to the Increasing Organ Transplant Access Model. For VBC leaders, the near-term strategic issue is whether quality programs evolve toward fewer, more outcomes-oriented measures—or remain administratively complex enough to distort participation and performance incentives, a concern reflected in [NAACOS’ support for reducing ACO reporting burden](https://news.google.com/rss/articles/CBMixwFBVV95cUxOamI4X2w0ODhJWHJfYWtFTWxkemFlVU9oN2FZdlNJY1FLTGg5YWlaOUdHU3drLWVpVHZGeUo2YnY4cEVjVEQwS3hmdy1DdGw3SHlSS1ZfU1RRR1RJRkVxRDBqREdRSGFIWDZ1b2xEcVdVRzYwMWdUOEZ1YXBfVmxSLV9DNjJJLTh4VlhiUUFOTVlMSUwyMUVUUTVqcTRrWUk2ZXNyaUthMEdvbnotaE5DS1dOTE1jT2lBSmUydEFQRDhvSn

Health equity and SDoH strategy in VBC is shifting from standalone equity initiatives toward risk-bearing infrastructure: kidney, home health, rural, and dual-eligible populations are being framed as tests of whether payment models can align financial risk with social complexity, as seen in Blue Cross NC’s value-based Advanced Kidney Care program and findings that Home Health VBP may reduce dementia-care disparities. At the same time, Medicaid financing and AI governance are becoming central equity risks: the House-passed One Big Beautiful Bill Act would reduce federal Medicaid spending by an estimated $793 billion over ten years and lower enrollment by 10.3 million people, including 1.3 million dual-eligible Medicare beneficiaries, while MACPAC is pushing for greater transparency and human oversight in Medicaid AI prior authorization to prevent biased access restrictions. For ACOs, payers, and health systems, the strategic tension is whether AI-enabled risk adjustment, prior authorization, and population health tools can improve targeting without exacerbating disparities—especially as Medicaid cuts and rural delivery stress could weaken the social supports VBC models depend on ([KFF on Medicaid reconciliation impacts](https://www.kff.org/medicaid/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/); [MACPAC on Medicaid AI prior authorization](https://www.healthcaredive.com/news/macpac-increased-transparency-oversight-ai-prior-authorization)

Care coordination is being repositioned as the operating core of value-based specialty and post-acute models, with Blue Cross NC’s Advanced Kidney Care program tying nephrology partnerships, CKD/ESRD risk alignment, and outcomes-based accountability to earlier intervention and reduced avoidable utilization ([HCTTF case study](https://hcttf.org/advancing-value-based-kidney-care-through-risk-aligned-partnerships/)). At the same time, CMS under the Trump administration is pushing technology enablement and broader mandatory model momentum—alongside industry concern over prior authorization workflows, rural capacity, and nursing home readiness for LEAD ACO participation—making referral management, data integration, and cross-setting care teams strategic differentiators rather than back-office functions. Prisma Health’s embedded care managers, transition nurses, ED navigators, and interdisciplinary care-team pods show where high-performing ACO/CIN infrastructure is headed: real-time, frontline population health operations that can manage risk across primary care, hospitals, Medicaid high utilizers, and specialty referrals ([Prisma Health strategy](https://www.healthcareitnews.com/news/how-prisma-health-turned-data-frontline-care-strategy)).

CMS’ drug-pricing agenda is moving further into value-based purchasing under the Trump administration, with the Medicaid-focused GENEROUS Model positioning supplemental rebate negotiation as a state/federal savings lever—though KFF notes its impact will depend heavily on confidential model terms, baseline Medicaid rebate dynamics, manufacturer participation, and utilization management tradeoffs ([KFF GENEROUS analysis](https://www.kff.org/medicaid/a-look-at-the-generous-model-and-factors-that-could-impact-medicaid-drug-costs/)). For VBC stakeholders, the strategic tension is shifting from “lower unit price” to “total-cost accountability”: ACOs and risk-bearing providers will need tighter formulary alignment, biosimilar uptake, and specialty-drug management capabilities as biosimilar adoption becomes increasingly linked to performance in Medicare value-based payment models ([AJMC biosimilar analysis](https://www.ajmc.com/view/biosimilar-adoption-and-provider-performance-in-medicare-value-based-payment-models)). The emerging $50 monthly access pathway for certain GLP-1s reinforces that obesity, diabetes, and cardiometabolic drug access are becoming population-health infrastructure decisions—not just pharmacy-benefit issues—raising near-term affordability opportunities but also actuarial and care-management pressures for MA, Medicaid managed care, and ACO-aligned delivery systems.

Population health management is moving deeper into specialty risk and operational execution: Blue Cross NC’s Advanced Kidney Care program shows payers using risk-aligned partnerships for CKD/ESRD management, while Strive Health and similar kidney-focused platforms are doubling down on AI, advisory depth, and care model infrastructure to support value-based kidney care at scale ([HCTTF case study](https://hcttf.org/advancing-value-based-kidney-care-through-risk-aligned-partnerships/)). At the same time, health systems are tightening the mechanics of VBC performance—Prisma Health is embedding care managers, transition nurses, ED navigators, and interdisciplinary pods into frontline workflows, and AtlantiCare is investing in HCC coding accuracy to improve risk stratification and reimbursement alignment ([Prisma Health care model](https://www.healthcareitnews.com/news/how-prisma-health-turned-data-frontline-care-strategy)). The strategic tension for ACOs, payers, and health systems is no longer whether VBC will expand, but whether organizations can build the data, coding, care-management, and specialty-partnership capabilities needed to manage risk while still operating under mixed fee-for-service and value-based payment environments.

Primary care payment reform is moving toward more condition-specific, infrastructure-heavy models, with Medicare’s ACCESS model drawing scrutiny for its care-delivery tradeoffs, specialty integration challenges, and uneven appeal to digital health entrants—especially as cardiology and chronic-care stakeholders assess how much risk, workflow change, and technology enablement the model requires under Traditional Medicare ([Health Affairs on ACCESS](https://news.google.com/rss/articles/CBMisgFBVV95cUxQNlJPdHp5azdsd2x0SDhELXNBalEwcFU4Ymh6RnJHY2ZnTi13YWJ3aEhIdW1rdkVRMUhwUXl5VW51NGh2Qi1KOTBFZk5VOF91TnB2cVg2WF9KOVBBdUtMWHQ3alh4c0ROQVBNLTNXRUEwNmtDaVJKTk5DWFFyeE5SY01MMVZuYVNMNF9lejlnYUJUWHVOMTFLNURaZGtLYzUyN3BERDU5SXpNUTIwOWc0WjNB?oc=5)). In Medicaid and commercial markets, risk adjustment and specialty VBC are becoming central design questions: MassHealth’s work on a primary care-specific risk model and Blue Cross NC’s outcomes-based Advanced Kidney Care program show payers trying to align payment more tightly with patient

CMS is tightening the payment-integrity frame around Medicare Advantage and model design: the 2027 MA rate announcement is being interpreted as a move to curb plans’ long-running payment advantage, while OIG findings that CMS may have overpaid MA plans $462 million for unsupported acute stroke diagnoses reinforce pressure for more aggressive risk-adjustment validation and coding oversight ([HFMA](https://www.hfma.org/medicare/cms-moves-to-curb-ma-plans-unfair-payment-advantage/)). At the same time, the Trump administration’s WISeR Medicare AI prior authorization model has become a flashpoint, with congressional Democrats seeking to terminate it over concerns that AI-enabled utilization management could deny or delay care—signaling that future VBC and payment-integrity tools will face scrutiny not only for savings, but for transparency, appeals rights, and patient-access safeguards ([Healthcare Dive](https://www.healthcaredive.com/news/senate-democrats-roll-back-medicare-ai-prior-authorization-pilot-wiser/820728/)). For ACOs, MA plans, and risk-bearing providers, the strategic direction is clear: payment integrity is shifting from retrospective audit activity to a core design principle for risk adjustment, prior authorization, drug-cost models, and AI-enabled care management.

Oversight risk is tightening around Medicare Advantage and AI-enabled utilization management: Senate Democrats moved to terminate CMS’s WISeR Medicare AI prior authorization model amid concerns that algorithmic review could delay or deny care, signaling that federal experimentation with automation in payment integrity will face heightened political and provider scrutiny ([Healthcare Dive](https://www.healthcaredive.com/news/senate-democrats-roll-back-medicare-ai-prior-authorization-pilot-wiser/820728/)). At the same time, OIG and DOJ activity around MA risk adjustment—unsupported acute stroke diagnoses, false claims settlements, and fraud discovery disputes—keeps pressure on plans and delegated risk entities to strengthen coding governance, documentation, and audit readiness. For ACOs, MA-aligned providers, and VBC enablement companies, the strategic takeaway is that compliance infrastructure is becoming a core operating capability, not a back-office function, as CMS under the Trump administration balances fraud reduction, AI-enabled oversight, and provider access concerns.

The Trump administration is tightening federal control over Medicaid managed care financing, with CMS proposing major restrictions on state-directed payments that could reduce federal spending by more than $500 billion and materially weaken a key revenue stream states and MCOs use to support provider rates, supplemental payments, and VBC infrastructure. At the same time, House/Senate reconciliation proposals under the One Big Beautiful Bill Act would cut Medicaid spending and enrollment, including among dual-eligible beneficiaries, raising risk for ACOs, health systems, and Medicaid plans managing high-need populations as coverage churn and uncompensated care pressure increase. CMS’ parallel push on fraud enforcement and payment integrity signals that Medicaid managed care strategies will need to pivot toward tighter encounter-data governance, defensible quality/payment arrangements, and demonstrable ROI in population health investments. [CMS state-directed payment proposal](https://www.healthcaredive.com/news/trump-administration-proposes-cracking-down-medicaid-state-directed-payments/820794/) [KFF on Medicaid reconciliation impacts](https://www.kff.org/medicaid/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/)

Care management in VBC is moving from broad “more touchpoints” strategies toward higher-specificity operating models: embedded care managers, transition nurses, ED navigators, pharmacists, behavioral health staff, and data-driven team pods are being positioned as the infrastructure needed to manage risk across ACOs, Medicare Advantage, Medicaid, and specialty models, as illustrated by Prisma Health’s frontline care model and insurer/provider continued commitment to VBC despite cost pressure ([Prisma Health care strategy](https://www.healthcareitnews.com/news/how-prisma-health-turned-data-frontline-care-strategy)). At the same time, the Independence at Home experience underscores a scaling constraint for home-based and high-need care models: savings and quality gains depend on intensive local operations, accurate risk stratification, and workforce capacity that are difficult to replicate nationally without better technology, payment alignment, and attribution design ([Independence at Home scaling issue](https://news.google.com/rss/articles/CBMixgFBVV95cUxQNmhmbTAxSDhmYjg0dkxWdFhYcjBwRzZkZU0tN1BWangzSEJMdUEzVmVwSGl0UnBKa24wbGdkeDBPRmUzblYyOTloYXItT0ZTal8zSEJGTmlVTlFBRGZEWkFPU3A3X0RNSWFOVm5RMHpEcm1W)

CMS and Congress are tightening the fiscal frame around both FFS and VBC: House Energy & Commerce scrutiny of the Medicare Physician Fee Schedule and MACRA underscores broad dissatisfaction with clinician payment updates, while CMS’s Medicaid state-directed payment proposal would extend OBBBA-authorized limits into managed care and certain FFS supplemental payments—pressuring hospitals, safety-net systems, and Medicaid ACO-like arrangements that depend on those dollars ([HFMA on Medicaid SDPs](https://www.hfma.org/payment-reimbursement-and-managed-care/medicaid-state-directed-payments-cms-rule/)). For VBC stakeholders, the strategic issue is no longer a simple migration away from fee-for-service; it is how to operate in a hybrid reimbursement environment where FFS rate adequacy, supplemental Medicaid financing, care coordination codes, and downside-risk contracts all interact. Recent analysis questioning whether Medicare Advantage risk-based contracts materially reduce waste adds to the tension, suggesting payers and provider groups will face more scrutiny on whether risk transfer is producing measurable utilization, quality, and cost outcomes—not just shifting financial exposure ([Penn LDI on MA risk contracts](https://ldi.upenn.edu/our-work/research-updates/risk-based-contracts-are-unlikely-to-cut-waste-in-medicare-advantage/)).

Community Health Centers are facing a tightening Medicaid financing environment as CMS under the Trump administration moves to cap Medicaid state-directed payments and extend limits beyond hospitals into broader supplemental payment streams, raising revenue risk for CHCs, FQHC partners, and safety-net systems that rely on Medicaid to fund population health infrastructure and uncompensated care capacity ([HFMA](https://www.hfma.org/payment-reimbursement-and-managed-care/medicaid-state-directed-payments-cms-rule/)). At the same time, Medicaid work requirements are becoming an operational fault line: NACHC notes CHCs served about 1.5 million homeless patients in 2024 and that 55% of Health Care for the Homeless patients rely on Medicaid, making state exemptions—such as Utah’s homeless exemption—strategically important for preserving attribution, continuity, and care management funding in VBC arrangements ([NACHC](https://www.nachc.org/utah-exempts-homeless-individuals-from-h-r-1s-medicaid-work-requirement/)). The near-term implication for ACOs, Medicaid managed care plans, and CHC-led networks is a shift from expansion to coverage-retention and margin-protection strategies, with rural health transformation funds and state VBC network RFPs offering selective offsets but not a substitute for stable Medicaid enrollment and supplemental payment policy.

CMS’s WISeR Medicare AI prior authorization model has become the central flashpoint in the prior auth debate, with Congressional Democrats moving to terminate the pilot amid concerns that AI-enabled utilization management could delay or deny care for seniors while shifting administrative and clinical risk onto providers and ACO-aligned delivery systems ([STAT](https://www.statnews.com/2026/05/20/democrats-force-vote-to-end-medicare-ai-prior-authorization-pilot/?utm_campaign=rss); [Healthcare Dive](https://www.healthcaredive.com/news/senate-democrats-roll-back-medicare-ai-prior-authorization-pilot-wiser/820728/)). At the same time, CMS is accelerating electronic prior authorization infrastructure, signaling a bifurcated strategy under the Trump administration: standardize and digitize prior auth workflows to reduce friction, while testing AI-enabled controls that payers may view as essential to managing spend in Medicare Advantage, VBC contracts, and high-cost service lines. For VBC stakeholders, the strategic tension is whether prior authorization becomes a scalable population-management and affordability tool—or a new source of provider abrasion, patient access risk, and regulatory scrutiny in risk-bearing models.

CMS is tightening supply-side oversight in home-based care, imposing a nationwide six-month Medicare enrollment moratorium for new home health and hospice agencies as part of the Trump administration’s anti-fraud push—signaling that program integrity is becoming a prerequisite for scaling home-based VBC models rather than a back-office compliance issue ([moratorium coverage](https://www.healthcarefinancenews.com/news/cms-issues-moratorium-hospice-and-home-health-agency-enrollment)). At the same time, evidence from the Home Health Value-Based Purchasing Program and renewed scrutiny of the Independence at Home Demonstration point to a core strategic tension: home-based care can reduce disparities and support complex population management, but models still struggle to scale when payment, attribution, workforce, and operational capabilities are not aligned across ACOs, home health agencies, and Medicare risk-bearing entities ([IAH scaling analysis](https://news.google.com/rss/articles/CBMixgFBVV95cUxQNmhmbTAxSDhmYjg0dkxWdFhYcjBwRzZkZU0tN1BWangzSEJMdUEzVmVwSGl0UnBKa24wbGdkeDBPRmUzblYyOTloYXItT0ZTal8zSEJGTmlVTlFBRGZEWkFPU3A3X0RNSWFOVm5RMHpEcm

CMS is pushing technology-enabled care deeper into Medicare delivery models through initiatives like TEMPO and ACCESS, signaling that virtual care, remote monitoring, and digital workflows are becoming infrastructure for VBC—not just convenience benefits—especially for chronic care and rural access strategies ([TEMPO and ACCESS](https://www.healthcarefinancenews.com/video/tempo-and-access-encourage-technology-enabled-care-medicare-patients)). At the same time, the Trump administration’s fraud-enforcement posture is tightening around virtual care and Medicaid/Medicare spending, with improper-payment concerns around virtual check-ins and broader CMS/DOJ scrutiny raising the compliance bar for RPM vendors, ACOs, home health providers, and MA plans ([HFMA compliance analysis](https://www.hfma.org/legal-and-regulatory-compliance/compliance/healthcare-fraud-compliance-cms-oversight/)). The strategic tension for VBC leaders is clear: virtual care remains central to population health and total-cost management, but future growth will depend on proving clinical integration, documentation integrity, appropriate utilization, and measurable outcomes rather than simply scaling billable digital encounters.

CMS and enforcement agencies are tightening the Medicare Advantage risk-adjustment environment, with the Trump administration’s CMS moving to curb MA payment advantages while OIG and DOJ activity targets unsupported diagnoses, including alleged overpayments tied to acute stroke coding and major False Claims Act settlements. The strategic implication for VBC stakeholders is a shift from coding maximization to audit-ready documentation, clinically validated HCC capture, and defensible risk stratification—especially as AI-enabled coding tools are positioned as both an efficiency lever and a compliance risk if they amplify unsupported diagnoses. Providers, ACOs, and MA-aligned networks should expect tighter scrutiny of diagnosis persistence, chart evidence, and vendor workflows as CMS recalibrates MA payments and oversight intensifies around risk-score inflation ([HFMA on CMS MA payment changes](https://www.hfma.org/medicare/cms-moves-to-curb-ma-plans-unfair-payment-advantage/); [OIG stroke diagnosis overpayment findings](https://news.google.com/rss/articles/CBMivgFBVV95cUxOOHBqUlBmeFlQbGs4ZUxHam01MU8xdW9aUDlIUHhlZlEzdk9nODhITUJja1VrTnJ6NXZ3TkthSTEtUV9VcF9XdG0xWHQwVV9ibWhuaklWN1NXM2huNmZpLW5nZFZLRHZsdFJ)

Total-cost-of-care strategies are increasingly shifting from broad primary-care risk to more targeted, condition-specific and site-of-care models: Blue Cross NC’s Advanced Kidney Care program is being positioned as a risk-aligned specialty-care template for CKD/ESRD affordability, while Health Affairs’ analysis of Independence at Home and Medicare’s ACCESS model points to persistent scaling, attribution, and operational-complexity barriers in home-based and specialty VBC models. At the same time, payer enthusiasm for risk contracting remains high, but Penn LDI’s Medicare Advantage analysis suggests risk-based contracts alone may not materially reduce waste—raising the strategic bar for ACOs, MA plans, and health systems to prove that total-cost-of-care models include credible utilization management, care redesign, and specialty integration rather than simply shifting financial risk. [Blue Cross NC AKC case study](https://hcttf.org/advancing-value-based-kidney-care-through-risk-aligned-partnerships/) [Penn LDI on MA risk contracts](https://ldi.upenn.edu/our-work/research-updates/risk-based-contracts-are-unlikely-to-cut-waste-in-medicare-advantage/)

The Trump administration’s CMS is tightening Medicaid financing and eligibility architecture in ways that could reshape provider network stability: its proposed crackdown on Medicaid state-directed payments would restrict supplemental funding streams that many hospitals, safety-net systems, and Medicaid managed care plans use to sustain access and network adequacy, while new Medicaid work-requirement guidance adds operational churn risk for states, plans, and providers managing attributed populations ([Medicaid payment proposal](https://www.healthcaredive.com/news/trump-administration-proposes-cracking-down-medicaid-state-directed-payments/820794/); [work requirements guidance](https://www.healthcaredive.com/news/cms-medicaid-work-requirements-final-rule-state-guidance/821631/)). At the same time, Medicare Advantage instability—slower enrollment growth, provider disruption, and renewed physician pressure for MA reform—is increasing scrutiny on plan-provider contracting, prior authorization, and access standards, making network adequacy a strategic flashpoint for ACOs, MA-aligned providers, and payers trying to balance margin protection with VBC performance. CMS’s national moratorium on new hospice and home health Medicare enrollment signals a parallel fraud-control push that may improve program integrity but could also constrain post-acute capacity in some markets, affecting discharge planning, total-cost-of-care management, and home-based care strategies.

CMS’s Innovation Center is leaning into longer-duration, more scalable VBC infrastructure under the Trump administration, with the new 10-year LEAD ACO model creating a major strategic fork for ACOs that must decide whether to apply by May 17, 2026 for a 2027–2036 participation window ([Wakely on LEAD](https://www.wakely.com/blog/to-lead-or-not-accountable-care-organizations-have-a-decision-to-make-by-may-17/)). At the same time, CMS is expanding pressure on hospitals and specialists through mandatory or quasi-mandatory episode-based models, including TEAM and a proposed nationwide redesign of CJR for hip and knee replacements, signaling that voluntary ACO growth alone will not carry Medicare’s VBC agenda. The main tension for health systems and payers is now portfolio strategy: how to align ACO, episode, home-based, technology-enabled, and AI-supported utilization-management models while managing congressional scrutiny of Medicare AI prior authorization and persistent questions about whether complex demonstrations like Independence at Home and ACCESS can scale equitably.

CMMI is widening the alternative payment model pipeline under the Trump administration, with ACOs now facing a strategic 2026 application decision for the 10-year Long-term Enhanced ACO Design (LEAD) Model, which would run from 2027-2036 and appears designed to broaden accountable care participation while locking organizations into a much longer operating horizon ([Wakely on LEAD](https://www.wakely.com/blog/to-lead-or-not-accountable-care-organizations-have-a-decision-to-make-by-may-17/)). At the same time, CMS is pushing more specialized and technology-enabled models—ACCESS, TEMPO, TEAM, the mandatory heart failure model, and updates to the Increasing Organ Transplant Access Model—signaling a shift from broad ACO experimentation toward condition-, episode-, and tech-enabled accountability, with rising pressure on health systems to build data infrastructure, specialty alignment, and risk-management capabilities before participation becomes harder to avoid ([ACCESS model analysis](https://news.google.com/rss/articles/CBMisgFBVV95cUxQNlJPdHp5azdsd2x0SDhELXNBalEwcFU4Ymh6RnJHY2ZnTi13YWJ3aEhIdW1rdkVRMUhwUXl5VW51NGh2Qi1KOTBFZk5VOF91TnB2cVg2WF9KOVBBdUtMWHQ3

CMS is tightening the Medicare Advantage payment environment under the Trump administration, with the 2027 MA rate announcement signaling a more aggressive posture toward narrowing plans’ historical coding/payment advantage and OIG scrutiny estimating hundreds of millions in potential overpayments tied to unsupported acute stroke diagnoses. At the same time, MA plans face growing legal and operational uncertainty around Star Ratings—illustrated by Clover’s successful challenge—while payers continue to reposition through condition-specific value-based arrangements, such as Humana’s cardiology partnerships, to preserve margins and differentiate on outcomes as risk adjustment, quality bonuses, and documentation practices come under pressure. For ACOs, health systems, and payer strategists, the strategic tension is clear: MA remains a core VBC growth channel, but the economics are shifting from coding intensity and Stars optimization toward defensible care management, specialty risk performance, and audit-ready documentation ([HFMA](https://www.hfma.org/medicare/cms-moves-to-curb-ma-plans-unfair-payment-advantage/); [Becker’s](https://news.google.com/rss/articles/CBMiyAFBVV95cUxPbXNLVnpBcldtQmdiVjJsUHVIMkhIcDNCN3hHcG8zczZJZjlSbmxwRHRyQ25ZWDZLck1hRVhBN0ZNYnh5Q0tHbXBQUjJFM1dRb2p)

Medicare Advantage Star Ratings are becoming a more contested financial and operational battleground as plans challenge CMS methodology ahead of bid and bonus-payment cycles: Clover Health’s federal court win against CMS over its MA Star Ratings signals that litigation risk may now be part of Stars strategy, with direct implications for quality bonus payments, benchmarks, and VBC contract economics ([Clover wins MA Star Ratings lawsuit](https://news.google.com/rss/articles/CBMiogFBVV95cUxQWmVZWVFIQjJyd1k5b2JjV2hoYUdCdU9lNm94VFliTWFmWm1LaVZlRzFyYUpCTGwxaHI1SkpKQTZuX2VhejNMdnhkVnhLelZ0NjVBNjc4Q2NBdlZPV3lmUU9JUmh4Nk5aSjkwdGZ3Z0Q0YXRFM2dyTUNqTF8xQTdYWVN4N0JXRXFoVWt0aElVVjJfMkJmQ185cDlNZTA3WlpBNXc?oc=5)). At the same time, stakeholders are pressing the Trump administration’s CMS—led by Administrator Dr. Mehmet Oz—on MA rulemaking for 2027, with provider groups such as ACP and AHA tying Star Ratings, prior authorization, network adequacy,

CMS is tightening the risk-adjustment and benchmarking environment on both sides of Medicare: the Trump administration’s 2027 Medicare Advantage rate notice includes a 2.48% payment increase while continuing pressure on MA coding intensity and unsupported diagnoses, reinforcing scrutiny of plan risk-score revenue as OIG flags potential overpayments tied to stroke coding. At the same time, CMMI’s new 10-year LEAD ACO model creates a major strategic decision point for ACOs—especially those weighing benchmark methodology, longitudinal risk capture, and downside-risk readiness ahead of the May 17, 2026 application deadline ([Wakely on LEAD](https://www.wakely.com/blog/to-lead-or-not-accountable-care-organizations-have-a-decision-to-make-by-may-17/)). For providers, conveners, and enablement companies, the through-line is clear: sustainable VBC performance will depend less on coding arbitrage and more on defensible HCC documentation, population-risk accuracy, and benchmark positioning as CMS narrows perceived MA advantages and tests new ACO designs ([HFMA on MA payment policy](https://www.hfma.org/medicare/cms-moves-to-curb-ma-plans-unfair-payment-advantage/)).

CMS is moving bundled payments from episodic pilots toward a broader mandatory platform: the FY 2027 IPPS proposal would expand and redesign CJR nationally, while hospitals are simultaneously preparing for TEAM and specialty-specific episode accountability in areas like heart failure—signaling that the Trump administration’s CMS under Dr. Mehmet Oz is continuing to use mandatory models to force operational readiness for value-based care. For health systems, ACOs, and payers, the strategic pressure is shifting from “whether to participate” to building enterprise episode-management infrastructure—pre-op risk stratification, post-acute network control, specialist alignment, and analytics—because future margin protection will depend on managing total episode cost and quality across orthopedics, cardiovascular care, and other high-volume service lines. See coverage of the proposed national CJR expansion in [RAC Monitor](https://racmonitor.medlearn.com/cms-proposes-knee-and-hip-replacements/) and the operational case for TEAM preparedness in [MedCity News](https://news.google.com/rss/articles/CBMivAFBVV95cUxNejRzZWFUUVJfVnZEUDZWNjhoUExnLUZBLXBjaS04SG9fYWRqM2FEemp4SV9lckJyTHhoZXo2MmJjUks5NVdMd0Jibl9LZmNOX0N4eVhiMUd2YnRZb1Z)

CMS’s new Long-term Enhanced ACO Design (LEAD) model is becoming the focal point for Medicare accountable care strategy, with ACOs weighing whether to apply by May 17, 2026 for a 10-year, 2027–2036 model that could reshape participation, benchmarking, and long-term downside-risk planning beyond MSSP and ACO REACH ([Wakely](https://www.wakely.com/blog/to-lead-or-not-accountable-care-organizations-have-a-decision-to-make-by-may-17/)). The market is already positioning around LEAD’s infrastructure demands: conveners, primary care enablement firms, nursing home partners, and AI vendors are aligning around distributed ACO management, post-acute engagement, quality reporting simplification, and clinical workflow automation, while NAACOS is pushing Congress to reduce reporting burden. The strategic tension for VBC stakeholders is whether LEAD broadens access to accountable care or further advantages large, geographically dispersed, third-party-convened ACOs already generating high Medicare savings ([Health Affairs](https://news.google.com/rss/articles/CBMi7AFBVV95cUxQZzBkcEZQTjlhUkF3ZjRTOUFtaGljNi1ncHVzMFQ3Y3BjM3NvYzFOQURIS0p6ZnhmRWRPYjEzRHhjU3U4eExUQ0pIR) ).