What the MSSP is
The Medicare Shared Savings Program is Medicare's permanent, voluntary Accountable Care Organization program. It was created by the Affordable Care Act of 2010 and became operational in 2012, and it is the largest ACO program in the country. An ACO is a group of doctors, hospitals, and other providers who come together to coordinate care for their Traditional, or fee-for-service, Medicare patients, and the ACO is held accountable for the total cost and quality of that assigned population.
How an ACO earns savings
CMS sets each ACO a financial benchmark, a risk-adjusted, regionally trended spending target for its assigned population. If actual per-capita spending comes in below the benchmark by more than a minimum savings rate, and the ACO meets its quality requirements, the ACO earns a share of the savings. In two-sided models, if spending exceeds the benchmark, the ACO must pay a share of the losses back to CMS. Earning savings is conditioned on quality: an ACO that hits its savings target but fails quality does not get paid in full.
The tracks: BASIC and ENHANCED
Under the Pathways to Success redesign, ACOs sign agreement periods of at least five years on one of two tracks. The BASIC track includes a five-level glide path, Levels A through E: Levels A and B are upside-only, with shared savings up to 40%, and Levels C, D, and E phase in two-sided risk, with shared savings up to 50%. The ENHANCED track is two-sided for the full period and carries the highest risk and reward. All ACOs are expected to progress toward downside risk, and by 2025 about 71% of ACOs carried it.
How beneficiaries are assigned
CMS assigns Traditional Medicare beneficiaries to an ACO based on where they receive the plurality of their primary-care services from the ACO's participating clinicians. ACOs choose between prospective assignment, set at the start of the year, and preliminary prospective assignment with retrospective reconciliation, trued up at year-end. Beneficiaries are not locked in: they keep full freedom of choice and can voluntarily designate their primary clinician.
What it means operationally
Quality gating makes measure capture a payment gate, not a report card, so closing gaps on measures like blood-pressure and glycemic control converts directly into dollars. Benchmarks are partly built from an ACO's own history, which rewards durable rather than one-time savings, and under retrospective reconciliation the final assigned panel is not known until year-end. The through-line is that poor cost or quality execution now costs real money, which raises the value of operational tooling that closes gaps and captures quality reliably.
How Pelica supports ACOs
Pelica gives ACO teams one live record across risk, quality, and care management, and an AI workforce that closes gaps and follows up until work is resolved. CMS is also pushing ACOs off the legacy reporting interface toward all-payer digital quality measures, an aggregation lift that sits squarely in Pelica's lane. Across deployments, customers improve gap closure by 41% and run three times the outreach capacity per coordinator without adding headcount.
Related terms
See value-based care for the broader shift, capitation and ACO REACH for the full-risk alternative, and HEDIS measures for how ACO quality is scored.