CMS Updates ACO REACH Model for 2024 to Improve Health Equity

CMS has announced revisions to the ACO Realizing Equity, Access, and Community Health (ACO REACH) model to improve health equity and predictability for participants.

CMS replaced the Direct Contracting model with the ACO REACH model to prioritize provider-led participants and improve care quality for Medicare beneficiaries. Since the announcement, ACO REACH has faced backlash from healthcare organizations that claim the model retained controversial elements from the Direct Contracting model.

In response to stakeholder feedback, CMS released changes to the model for performance year (PY) 2024. The agency reduced the beneficiary alignment minimum for New Entrant ACOs for PY 2025 from 5,000 to 4,000 and will maintain a minimum of 5,000 for PY 2026. The beneficiary alignment minimum for High Needs Population ACOs will go from 1,200 to 1,000 for PY 2025 and 1,400 to 1,250 for PY 2026.

All ACO types will also receive a 10 percent alignment buffer starting in PY 2024 to allow ACOs to participate in the model even if their beneficiary count temporarily drops below the beneficiary alignment minimum by up to 10 percent.

CMS has changed the risk adjustment in the model and will apply the 2024 Part C risk adjustment model in the Medicare Advantage program to Standard and New Entrant ACOs. Risk scores for PY 2024 will be blended using 67 percent of the risk scores under the current 2020 risk adjustment model and 33 percent of the risk scores under the 2024 risk adjustment model.

The agency is revising the composite measure used for the Health Equity Benchmark Adjustment (HEBA). The measure will incorporate low-income subsidy status and state-based area deprivation index to better identify underserved beneficiaries living in high-cost areas.

The modifications also include adjustments to the HEBA benchmarks, resulting in benchmarks of $30 per beneficiary per month (PBPM for beneficiaries with equity scores in the top decile, $20 PBPM for those in the second decile, $10 PBPM for the third decile, $0 PBPM for the next four deciles, and -$10 PBPM for the bottom three deciles.

The updated ACO REACH model will allow participating nurse practitioners and physician assistants to certify and order pulmonary rehabilitation care plans for beneficiaries with chronic obstructive pulmonary disease.

The National Association of ACOs (NAACOS) commended CMS for the model updates.

“We appreciate that CMS continues to improve on the ACO REACH Model by addressing many concerns raised by NAACOS members. These include financial protections from midyear changes to benchmarks, additions to the Health Equity Benchmark Adjustment to account for more patient characteristics, and updates to its risk adjustment policies. We believe these changes will satisfy many concerns and stabilize future participation,” Clif Gaus, ScD, president and CEO of NAACOS, said in a statement.

“Additionally, we encourage CMS to explore adding features of REACH into a permanent track within the Medicare Shared Savings Program. Using MSSP as a chassis for innovation while infusing lessons learned from Innovation Center models into a permanent program is another path for stabilizing and growing participation in ACOs,” Gaus added.