Medicare Updates ACO Models

March 2022

Accountable care organizations (ACOs) are a foundation of Medicare’s value-based purchasing program. Medicare has announced updates to the ACO program, to be known as REACH, which stands for Realizing Equity, Access, and Community Health. The model updates focus on ACO governance updates to ensure better care for underserved populations. CMS is accepting applications for ACO REACH participants until April 22.

ACOs are vertically integrated provider networks that take responsibility for managing the overall health of patient populations. ACOs are accountable for quality of care and accept some level of financial risk for patient health and overall costs of care. Over the past decade, CMS has worked to expand and update its ACO programs as part of the overall shift to value-based care.

Key aspects of the ACO REACH model are:

  • Advance Health Equity. ACO REACH will test an innovative payment approach to better support care delivery and coordination for patients in underserved communities and will require that all model participants develop and implement a robust health equity plan to identify underserved communities and implement initiatives to measurably reduce health disparities within their beneficiary populations.
  • Promote Provider Leadership. The ACO REACH Model includes policies to ensure doctors and other health care providers hold at least 75% control of each ACO’s governing body and further requires at least two beneficiary advocates on the governing board.
  • Greater Transparency. CMS will ask for additional information on applicants’ ownership, leadership, and governing board to gain better visibility into ownership interests and affiliations to ensure participants’ interests align with CMS’s vision. CMS will also explore stronger protections against inappropriate coding and risk score growth.

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