For most of the fee-for-service era, panel size was a straightforward proxy for practice viability. More patients meant more visits, more visits meant more revenue, and a smaller panel was understood as a constraint — something to grow out of as quickly as possible.

That logic still applies in a purely fee-for-service environment. In value-based care models, including the ACO REACH program and the Long-term Enhanced ACO Design (LEAD) model launching in 2027, it applies less than most NP practice owners realize.

What Value-Based Care Actually Measures

Accountability-based programs like ACO LEAD evaluate performance on a different set of dimensions than fee-for-service. The primary metrics are total cost of care, quality outcomes, and risk-adjusted benchmarks — not visit volume. A practice that manages chronic disease effectively, reduces avoidable hospitalizations, and maintains strong preventive care engagement generates value in these models that does not show up in a fee-for-service revenue report.

This distinction matters for NP-owned practices specifically because the care model that characterizes many smaller NP panels — longer visit times, closer follow-up, more consistent chronic disease oversight, stronger patient relationships — is precisely the model that value-based arrangements are designed to reward.

A practice seeing 18 patients a day with 20-minute appointments and consistent between-visit follow-up will often outperform a higher-volume practice on the metrics that determine ACO performance: HCC capture accuracy, care gap closure rates, preventive engagement, and avoidable utilization. The structure of the care, not the volume of it, is what determines shared savings performance.

Where the Structural Challenge Has Been

This does not mean panel size is irrelevant. It means the challenge for smaller NP practices in value-based care has been structural rather than clinical.

A single practice with 400 to 800 Medicare beneficiaries typically cannot meet ACO participation thresholds on its own. The infrastructure requirements — analytics, quality reporting, risk stratification, compliance — carry fixed costs that are difficult to absorb at that scale. These are real barriers, and they have historically kept smaller independent practices out of value-based arrangements that their clinical performance would otherwise make them well-suited for.

The solution is not consolidation. It is aggregation. When smaller NP-owned panels participate in a shared infrastructure — common analytics, coordinated reporting, collective compliance support — the economics of ACO participation change. The scale that triggers eligibility and supports the operational requirements does not require any individual practice to grow beyond what serves its community well. It requires practices to operate in coordination rather than in isolation.

This is the structural premise of Duet Partners ACO — the first NP-led Medicare ACO in the country. Duet takes on financial risk alongside the practices in its network, which means our incentives are aligned with practice performance in a way that a consulting relationship is not. Practices participate collectively, maintaining full clinical and operational independence while sharing the infrastructure that makes value-based care viable at their scale. That Duet has structured itself to absorb downside risk in this model is, we think, the clearest possible statement about our confidence in what well-run NP-owned primary care can achieve.

What Strong ACO Performance Actually Requires

Panel size, in our experience working with NP-owned practices in value-based arrangements, is rarely the binding constraint on performance. Documentation discipline and operational consistency are.

HCC capture. Hierarchical Condition Categories are the mechanism by which Medicare risk-adjusts payments in ACO models. A patient with well-documented chronic conditions generates higher risk-adjusted revenue than an identical patient whose comorbidities are underdocumented. Many practices are systematically under-capturing HCCs — not because the conditions aren't being managed, but because the documentation doesn't consistently reflect them in billable terms. The revenue gap this creates is recoverable with the right documentation workflow.

Care gap closure. ACO quality metrics reward practices for completing preventive services — screenings, immunizations, annual wellness visits — for eligible patients. Practices with strong recall systems and proactive outreach consistently outperform those that rely on patients to self-schedule. The difference is an operational one, not a clinical one.

Attribution stability. In ACO models, patients are attributed to practices based on where they receive the majority of their primary care. Attribution volatility — patients drifting to urgent care or other providers for visits that should have come to the practice — directly affects the practice's risk-adjusted benchmark and its shared savings calculation. Practices that maintain strong access and consistent follow-up tend to have more stable attribution.

Accurate risk stratification. Knowing which patients are highest-risk and directing proactive care coordination toward them is the core operational discipline of value-based care. This requires data infrastructure — the ability to identify patients by risk level, track care gaps, and trigger outreach — that most independent practices don't have access to on their own.

The Shift Already Underway

CMS approved 134 new and renewing ACOs for the 2026 performance year, serving 12.6 million people with Traditional Medicare — the largest number ever. ACO REACH has 74 ACOs covering an estimated 1.7 million beneficiaries. The LEAD model, launching in 2027, is explicitly designed to include smaller, independent, and rural-based practices that earlier models did not accommodate well.

The direction of Medicare reimbursement policy is not ambiguous. Fee-for-service is not disappearing, but the programs designed to grow are the ones that reward accountability for total cost and quality — exactly the dimensions where well-run NP-owned practices tend to perform.

The practices that are best positioned for that shift are not necessarily the largest ones. They are the ones that have the documentation discipline, the operational consistency, and the infrastructure support to make their clinical performance visible in the metrics that matter.

Learn more about Duet's ACO program for NP-owned practices →