Aug 23, 2023 – CMS, in its bid to further health equity, has announced some alterations to the ACO Realizing Equity, Access, and Community Health (ACO REACH) model for the coming year.

As a recap, the ACO REACH model replaced the Direct Contracting model and was conceptualized to emphasize provider-centric participants and enhance care standards for those under Medicare. However, its debut wasn’t without detractors. Various health entities expressed reservations, pointing to elements of the Direct Contracting model that ACO REACH seemingly embraced.

Heeding to collective feedback, CMS unveiled some modifications for the 2024 performance year (PY). Notably, New Entrant ACOs will see a reduced beneficiary alignment minimum for PY 2025—shifting from 5,000 to 4,000. Meanwhile, for PY 2026, the number remains at 5,000. Another change is the High Needs Population ACOs’ numbers. 1,200 drops to 1,000 for PY 2025 and from 1,400 to a streamlined 1,250 for PY 2026.

Furthermore, from PY 2024, all ACO categories will benefit from a 10 percent alignment buffer. This means even if ACOs experience a brief dip in their beneficiary count, going below the stipulated alignment minimum by up to 10 percent, their participation remains intact.

There’s a reshuffling regarding risk adjustment as well. CMS will integrate the 2024 Part C risk adjustment model from the Medicare Advantage framework for both Standard and New Entrant ACOs. Here’s the math: Risk scores for PY 2024 will be blended using 67 percent from the 2020 model and 33 percent from the 2024 model.

Another change is in the Health Equity Benchmark Adjustment (HEBA). This now involves elements like the low-income subsidy status and a state-based area deprivation index. The goal of this is to better identify beneficiaries in high-cost regions who are often underserved. 

Additionally, HEBA benchmarks are set to see recalibrations, offering a tiered PBPM system based on equity scores. Those at the top regarding equity scores will see a $30 PBPM. Those in the second decile will see $20 PBPM, and the bottom deciles will see a $10 PBPM.

On the patient care front, a significant update permits nurse practitioners and physician assistants to endorse pulmonary rehabilitation plans for patients battling chronic obstructive pulmonary disease.

Endorsements for these alterations have already begun pouring in. The National Association of ACOs (NAACOS) lauded CMS’s proactive approach. 

Clif Gaus, the guiding force behind NAACOS, expressed gratitude for the updates, stating, ““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. 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.” 

To see all of the changes to the ACO REACH Model for Performance Year 2024, click here.