A Medicare Shared Savings Program accountable care organization (ACO) is a group of doctors, hospitals and other providers that applies to CMS to become accountable, together, for the quality, cost and overall care of an assigned population of Medicare fee-for-service beneficiaries, under 42 CFR Part 425. Formation readiness is for provider groups and health systems forming an ACO, renewing, or changing participants. Integral Healthcare Solutions (IHS) drafts the ACO's compliance plan, governance procedures and application text; your clinical, legal and finance leaders own the model and contracts.
Last reviewed: October 2026.
This work sits within IHS's Program Development practice.
What is the Medicare Shared Savings Program?
CMS describes it this way: “The Shared Savings Program is a voluntary program that encourages groups of doctors, hospitals, and other health care providers to come together as an ACO.” (source)
The governing text is the Shared Savings Program regulation, 42 CFR Part 425 (eCFR, current as of September 30, 2026 when read), together with the CMS Shared Savings Program Application Toolkit for the cycle you apply in. The core duties quoted from the regulation:
- Accountability: “The ACO must become accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to the ACO.” (42 CFR 425.100(a), source)
- Size: “The ACO must have at least 5,000 assigned beneficiaries.” (42 CFR 425.110(a)(1), source). The section also sets how CMS counts historical assignment and what follows if an ACO falls below 5,000. Read 425.110(a)(2) through (b) with counsel.
- Governance: “An ACO must maintain an identifiable governing body with ultimate authority to execute the functions of an ACO” (42 CFR 425.106(a)(1), source)
- Compliance plan: “The ACO must have a compliance plan that includes at least the following elements: (1) A designated compliance official or individual who is not legal counsel to the ACO and reports directly to the ACO's governing body.” (42 CFR 425.300(a), source)
- Agreement term: “For 2020 and subsequent years. (i) The start date is January 1 of that year; and (ii) The term of the participation agreement is 5 years.” (42 CFR 425.200(b)(5), source)
The application cycle for a January 1, 2027 start
CMS publishes an application timeline for each start year. For the 2027 start it lists:
| Step | Dates as published by CMS |
|---|---|
| Phase 1 Submission | June 9, 2026 – June 23, 2026 at 12:00 p.m. (noon) ET |
| Phase 2 Submission | October 21, 2026 – October 30, 2026 |
| Final Application Dispositions | December 8, 2026 |
(CMS application timeline) Application windows are cycle-specific. As of October 2026, Phase 1 (June 9 to June 23, 2026) has closed. CMS's timeline page lists no 2028 start cycle. Check the page for the next cycle before planning.
Who needs it and what triggers it?
The buyer is a provider group or health system forming or administering a Shared Savings Program ACO. Triggers for this work: a first Shared Savings Program application, a renewal at the end of an agreement period, or changes to the ACO's participants.
The regulation sets the threshold questions an organization answers before applying: whether its providers can together reach at least 5,000 assigned beneficiaries (425.110), whether it has a governing body with ultimate authority over ACO functions (425.106), and whether it can name a compliance official who is not its legal counsel and reports to that body (425.300).
How IHS helps
IHS drafts the ACO's compliance plan, governance procedures and application text; your clinical, legal and finance leaders own the model and contracts. The work runs in this order:
- Gap assessment of the ACO's governance and participant agreements against 42 CFR Part 425 and the CMS application materials for your cycle.
- Document and evidence mapping: a crosswalk from each application item to the evidence the ACO holds.
- Drafting: the compliance plan, governance procedures, participant agreement checklists and reporting workflows, for your leaders to review and approve.
- Package review: the assembled application read against the crosswalk before submission.
- Readiness support: drafted application text and drafted responses to CMS questions, for the ACO to submit itself.
What your organization supplies: participant lists, participant agreements, governance documents, the care model, counsel, and finance.
The limits: the care model, contract terms and financial risk belong to the ACO's clinical, legal and finance leaders. IHS does not design the care model, negotiate contracts or model shared savings. Application windows are cycle-specific, so timing follows CMS's calendar.
What to have ready
Items below that cite a section reflect that section's text (eCFR, current as of September 30, 2026 when read) or CMS's published timeline; items without a citation are IHS's working list, and the CMS application materials for your cycle govern.
- An estimate showing the ACO can reach at least 5,000 assigned beneficiaries (42 CFR 425.110(a)(1), eCFR).
- A list of the ACO's participants, which your cycle's CMS application materials will ask you to identify.
- A description of how the ACO will be accountable for quality, cost and overall care of assigned beneficiaries (42 CFR 425.100(a), eCFR).
- Formation documents identifying the governing body and its authority over ACO functions (42 CFR 425.106(a)(1), eCFR).
- A compliance plan naming a compliance official who is not legal counsel to the ACO and reports directly to the governing body (42 CFR 425.300(a), eCFR).
- The participant agreements your organization already holds, reviewed by your counsel before the application is assembled.
- A plan for a five-year participation agreement starting January 1 (42 CFR 425.200(b)(5), eCFR).
- A calendar built from CMS's timeline for your start year, with internal deadlines ahead of each submission window (CMS timeline).
To walk through this list against your own documents, start with the introductory call.
How it compares
Provider organizations have other value-based routes and an optional accreditation track. What the sources say about each:
| Route | What the source says |
|---|---|
| Medicare Shared Savings Program | “a voluntary program” for groups of providers to come together as an ACO (CMS); five-year participation agreements (425.200). |
| ACO REACH Model (CMS Innovation Center) | “ACO REACH's first performance year began on January 1, 2023, and it will run for four performance years (PY 2023 through PY 2026).” (source) CMS has announced the LEAD Model as the successor to ACO REACH from January 1, 2027 (CMS LEAD page). IHS has not reviewed LEAD's terms for this page. |
| DirectTrust ACO accreditation | DirectTrust says its ACO accreditation “provides independent evaluation of an organization's ability to provide for a secure, high-quality and efficient, exchange network”, run “Through rigorous self-assessment and consultative site review process” (source). |
The Part 425 sections quoted on this page do not mention DirectTrust accreditation. IHS's reading (October 2026) is that DirectTrust ACO accreditation is a separate, voluntary track from Shared Savings Program participation. Which routes fit depends on your organization's population, contracts and capital. Related IHS work: compliance program development.
What does forming a Shared Savings Program ACO cost?
CMS does not publish a fee schedule on the pages we reviewed; fees depend on scope. IHS found no Shared Savings Program application fee on the CMS pages opened, and DirectTrust's ACO page lists no fee. The larger costs sit with your organization: counsel for participant agreements, finance for the risk model, and staff time to assemble the application.
IHS scopes each engagement after a free introductory call.
What this is not
- This page is not legal advice, and IHS gives no opinion on how participant agreements or financial arrangements fit federal fraud and abuse laws. Those questions go to your counsel.
- IHS does not submit the application or correspond with CMS. IHS drafts; the ACO submits.
- IHS does not predict CMS's application decision or the ACO's shared savings.
Frequently asked questions
What is a Medicare Shared Savings Program ACO and who can form one?
CMS describes the Shared Savings Program as a voluntary program that encourages groups of doctors, hospitals and other health care providers to come together as an ACO. Under 42 CFR 425.100(a), the ACO becomes accountable for the quality, cost and overall care of the Medicare fee-for-service beneficiaries assigned to it.
How many assigned beneficiaries does an ACO need?
At least 5,000. 42 CFR 425.110(a)(1) says the ACO must have at least 5,000 assigned beneficiaries. The section also sets how CMS counts historical assignment and what follows if an ACO falls below 5,000. Read 425.110(a)(2) through (b) with counsel.
What is the Shared Savings Program application timeline for a January 1, 2027 start?
For a January 1, 2027 start, CMS lists Phase 1 Submission from June 9 to June 23, 2026 (noon ET), Phase 2 Submission from October 21 to October 30, 2026, and Final Application Dispositions on December 8, 2026. As of October 2026, Phase 1 (June 9 to June 23, 2026) has closed. CMS's timeline page lists no 2028 start cycle. Check the page for the next cycle before planning.
What governance structure does CMS require for an ACO board?
42 CFR 425.106(a)(1) says an ACO must maintain an identifiable governing body with ultimate authority to execute the functions of an ACO. Read the full section with counsel when drafting formation documents.
What must an ACO compliance plan contain?
42 CFR 425.300(a) lists minimum elements. The first is a designated compliance official who is not legal counsel to the ACO and reports directly to the governing body. IHS drafts the plan against the full list for your leaders to approve.
How long is a Shared Savings Program agreement period?
Five years. 42 CFR 425.200(b)(5) says that for 2020 and later years the start date is January 1 of that year and the participation agreement term is 5 years.
Shared Savings Program vs ACO REACH: what is the difference?
The Shared Savings Program is a standing Medicare program under 42 CFR Part 425 with five-year agreements. ACO REACH is a CMS Innovation Center model whose first performance year began January 1, 2023 and which CMS says runs for four performance years, 2023 through 2026. CMS has announced the LEAD Model as the successor to ACO REACH from January 1, 2027 (CMS LEAD page). IHS has not reviewed LEAD's terms for this page.
Is DirectTrust ACO accreditation required, and what does it add?
The Part 425 sections quoted on this page do not mention it; IHS's reading (October 2026) is that it is a separate, voluntary track. DirectTrust describes it as an independent evaluation of an organization's ability to provide a secure, high-quality and efficient exchange network, through self-assessment and a consultative site review.