CMS redesigns ACO model to focus on health equity, improved care for people covered by traditional Medicare

Agency also cancels Geographic Direct Contracting model.

The Centers for Medicare & Medicaid Services (CMS) is revamping one of its accountable care organization (ACO) models to better promote health equity and reduce health care disparities among traditionally underserved communities., the agency says.In a February 24 news release, CMS said its Global and Professional Direct Contracting model will become the ACO Realizing Equity, Access, and Community Health (REACH) model. The redesigned model “addresses stakeholder feedback, participating experience, and administration priorities, including CMS’s commitment to advancing health equity,” the release states.

The agency also said it is canceling the Geographic Direct Contracting model, effective immediately, in response to what it calls “stakeholder concerns.” The cancellation is effective immediately.

“The Biden-Harris Administration remains committed to promoting value-based care that improves the health care experience of people with Medicare, Medicaid and Marketplace coverage,” CMS Administrator Chiquita Brooks-LaSure said in the release. “To fulfill that commitment, CMS…is testing new models of health care service delivery and payment to improve the quality of care that people receive, including those in underserved communities.”

Much of the REACH model’s focus will be on improving care quality for patients with traditional Medicare coverage by providing tools and resources to help providers work together more closely. In addition, participating ACOs will be required to have “a robust plan describing how they will meet the needs of people with traditional Medicare in underserved communities and make measurable changes to address health disparities.”

In an accompanying fact sheet, CMS explains that the model will offer two voluntary risk-sharing options:

  • A “Professional Option,” with 50% shared savings/shared losses and primary care capitation payments, and
  • A “Global Option,” with 100% shared savings/shared losses and either primary care or total care capitation payments

Participation will be open to three categories of organizations: those with substantial experience serving beneficiaries with traditional Medicare (“Standard ACOs”), those with less experience serving the traditional Medicare population (“New Entrant” ACOs) and those servicing small populations of traditional Medicare beneficiaries with complex care needs (“High Needs Population” ACOs).

“Under the ACO REACH Model, health care providers can receive more predictable revenue and use those dollars more flexibly to meet their patients’ needs — and to be more resilient in the face of health challenges like the current public health pandemic, Liz Fowler, PhD, JD, CMS deputy administrator and director of the CMS Innovation Center, said in the release. “The bottom line is that ACOs can improve health care quality and make people healthier, which can also lead to lower total costs of care.”

In addition to reducing care disparities, the REACH model will focus on:

  1. Strengthening beneficiary voices in guiding the work of REACH model participants,
  2. Improving beneficiary protections by ensuring compliance with model requirements,
  3. Increase screening of model applicants and monitoring of participants,
  4. Greater transparency and date sharing in the care quality and financial performance of participants, and
  5. Stronger protections against inappropriate coding and risk score growth

The GPDC model will continue through December 31, 2022 before transitioning to the REACH model. The first performance year of the REACH Model will start on January 1, 2023, with the model performance period running through 2026.