Overwhelmed ACOs: House aims to simplify quality reporting requirements

Accountable care organizations (ACOs) could benefit from new rules that make it easier to report the quality data needed to get paid when they help patients get healthier.

However, it was unclear if the new legislation might be the spark that lights the way to greater ACO participation for smaller, independent and rural physician practices.

This week, the Health Care Efficiency Through Flexibility Act, H.R. 5347, was approved by the House of Representatives Ways and Means Committee 43-0 and cleared the full House by unanimous consent.

The bipartisan bill aims to lock in regulatory stability for ACOs through 2029 by targeting ACO quality reporting requirements. ACOs must meet standards to receive payment through the Medicare Shared Savings Program (MSSP). But the recording and reporting requirements have become one of the most persistent and costly burdens in the Medicare value-based care system

Ways and Means Committee Chairman Rep. Jason Smith (R-Missouri), framed the bill as a targeted fix to a problem that is getting in the way of the program's core purpose.

“Accountable Care Organizations are a critical part of improving the quality and lowering the cost of health care for more Americans. Of course, there are and ought to be necessary reporting requirements to ensure value-based care models are achieving their goals,” Smith said in a news release.

“However, the more onerous such requirements become, the less time and resources these health care providers have to focus on delivering on the best care they can to patients,” Smith said. “Thanks to this bipartisan effort to inject some additional certainty, clarity, and flexibility into the quality measure reporting system, we can make the transition toward better electronic data less costly and less of an impediment to care delivery.”

What the bill does

H.R. 5347, introduced by Health Subcommittee Chairman Rep. Vern Buchanan (R-Florida) and Rep. Jimmy Panetta (D-California), addresses the reporting problem in two ways:

• It locks in stability for current quality measure reporting methods through 2029, giving ACOs, particularly those with less sophisticated health IT infrastructure, a defined runway to modernize without the threat of abrupt regulatory changes.
• It creates a pilot program for digital quality measures to help ACOs begin testing more advanced reporting systems and establishing best practices before any broader transition is mandated.

The stability provision matters because the Centers for Medicare & Medicaid Services (CMS) has not provided a stable transition framework or comprehensive timeline for moving ACOs to newer reporting systems. That regulatory vacuum has left ACOs — and the physician practices within them — reluctant to invest in new technology when the rules could shift unexpectedly.

Why digital quality measures change the math

The legislation's pilot program centers on digital quality measures (dQMs). It will compile quality reporting by drawing data directly from electronic health records (EHRs) rather than requiring separate manual submissions and abstraction processes.

The financial case for the shift is significant. Traditional quality measure reporting is expensive and labor-intensive. One health system reported spending more than $5.6 million on quality reporting in a single year, including more than $600,000 paid to outside vendors and more than 100,000 hours of staff time, as of 2018.

With health systems, some ACOs face added challenges by operating across more than 15 different EHR platforms, each with varying technical capabilities, making standardized data collection difficult.

The dQM program would automate data extraction directly from the EHR systems physicians already use, reducing the need for dedicated reporting staff, third-party vendors and the hours of manual chart review that currently consume enormous practice resources. Digital quality measures could be 95% less expensive to report than traditional quality measures, with estimates suggesting the shift could yield up to $14 billion in national health care savings.

Emily Brower, president and CEO of the National Association of ACOs, said quality reporting requirements will be less burdensome under “a new, more practical approach.”

“This approach would align reporting mandates with accountable care organizations’ efforts to improve the quality of care and reduce administrative costs, allowing physicians and other clinicians to put more resources back into patient care,” she said in a statement.

What it means for smaller practices

For smaller independent practices, the implications are direct. A practice with a modest EHR system and limited administrative staff bears the reporting burden disproportionately, spending a greater share of its revenue and staff time on compliance. A transition to dQMs could return those resources to patient care.

Mara McDermott, CEO of ACO advocacy organization Accountable for Health, said the bill strikes the right balance.

“By maintaining multiple quality reporting options through 2029 and supporting a thoughtful path toward more modern reporting systems, the legislation recognizes both the promise of digital innovation and the realities of today’s health IT infrastructure,” McDermott said in a statement. “ACOs want to be held accountable for quality and outcomes, but reporting requirements must be workable, consistent, and designed to support participation in accountable care.”

The bill drew broad endorsements from across the health care sector, including the American Academy of Family Physicians, the National Association of ACOs, and Aledade, a company that helps independent physician practices form and manage ACOs.

A proven model under pressure

At scale, savings have added up due to good patient health. MSSP has saved Medicare more than $12 billion since its launch 14 years ago. As of 2026, 511 ACOs encompassing 687,739 medical providers deliver care to more than 12.6 million traditional Medicare beneficiaries. More than 12,500 of those providers work at federally qualified health centers, rural health clinics and critical access hospitals, institutions that serve some of the country's most medically underserved communities.

But to work well, ACO models demand sustained investment in infrastructure and compliance, and that investment falls unevenly across the organizations participating in it.

The bigger picture: Why independent practices stay out

While H.R. 5347 addresses a real and meaningful barrier, research suggests that reporting burden is one of several challenges keeping smaller independent practices from joining ACOs.

Research published by The Commonwealth Fund examined why primary care physicians without value-based payment experience have not participated in those models. The findings, based on interviews and focus groups with 29 frontline physicians and primary care management experts, identified a cluster of barriers that go beyond paperwork.

A 2022 survey found that just 46% of primary care physicians reported receiving any value-based payments. Least likely to participate are the smaller and independent practices that collectively serve 39% of traditional Medicare beneficiaries. Experts told the researchers that value-based models can feel like fee-for-service "with this extra layer of reporting and accountability that the system is not structured to support."

Fee-for-service payment, reimbursing physicians for each individual services rather than for overall patient outcomes, still dominates primary care revenue. As long as most of a practice's income depends on visit volume, the investment of time and resources required by value-based care can feel prohibitive.

Challenges big and small

Financially, the math of value-based care often doesn't work for small practices. Because they see fewer patients than large health systems, independent practices receive smaller total shared savings payments while facing the same upfront investment costs in new workflows, staffing and technology. Participants said practices with limited financial reserves cannot easily absorb the risk of a poor performance year, and that upfront payments and protection from downside financial risk would make the models more accessible.

The problem takes a different form for practices affiliated with large health systems. Some systems have joined ACOs on behalf of their affiliated physicians but have not reliably passed the associated resources down to practice sites. One expert quoted in The Commonwealth Fund research said health systems were using their "contracting authority to join a model on behalf of those doctors but not reliably transmitting those resources to the primary care practice."

Quality measurement itself drew criticism as well. Physicians said many current measures focus too narrowly on individual conditions or binary screening cutoffs and fail to capture the complexity of primary care. Measures tied to hospitalization rates and total Medicare expenditures were seen as particularly unfair, since those outcomes are heavily influenced by specialists and hospitalists well outside a primary care physician's control. Physicians said they would prefer measures focused on access, continuity and communication, all areas where primary care has genuine influence.

The next step

The legislation still needs to clear the Senate before it can become law. House supporters hope their unanimous passage gives it credibility and momentum.

The bill was introduced by House Ways and Means Committee Vice Chairman Vern Buchanan (R-Florida), who chairs the committee's Health Subcommittee. As the bill's chief sponsor, said the legislation reflects the practical reality that ACOs need multiple reporting pathways during any transition period to newer reporting methods.

"By ensuring ACOs have access to multiple quality reporting pathways, my bipartisan legislation will reduce excess regulatory burden on ACOs and allow providers to focus on delivering high-quality, value-based care," Buchanan said. "I look forward to my bill being considered by my Senate colleagues and ensuring that it is signed into law to improve care, lower costs and make life easier for patients and doctors alike."

Additional co-sponsors are Rep. Dan Crenshaw (R-Texas); Rep. Darin LaHood (R-Illinois); and Rep. Mike Lawler (R-New York).