ACO REACH savings report invigorates calls for extension

Participants in the largest Medicare accountable care organization model are calling on the Centers for Medicare and Medicaid Services to extend the initiative after it produced record savings.

The ACO Realizing Equity, Access and Community Health, or ACO REACH, model collectively generated $1.6 billion in gross savings and $695 million in net savings in 2023, according to a report CMS published Friday. Nearly three-quarters of participants earned net savings.

Related: Shared Savings ACOs saved $2.1B for Medicare in 2023

But CMS hasn’t said whether ACO REACH will continue past its scheduled expiration in 2026, which is stoking anxiety among participants that have made up-front investments.

“Many of the things that we have done to provide better care require infrastructure, require support. When there's any uncertainty around what the future of that looks like in terms of how we're going to fund it, it’s worrisome for us," said Dr. Victoria DiGennaro, CEO of Uniontown, Ohio-based Pioneer Physician Network and a partner with Austin, Texas-based Agilon Health.

"We don't want to have to go back to the old days of running the fee-for-service hamster wheel and providing the lower-quality care that comes with that,” DiGennaro said.

ACO REACH is the latest iteration of a yearslong effort to improve the trajectory of value-based care in Medicare.

In 2021, CMS set a target to have all fee-for-service Medicare enrollees in accountable care arrangement by 2030. That initiative hasn’t advanced as quickly as the agency would like, although some ACO models have demonstrated improved patient outcomes and reduced costs.

CMS needs backing from providers to hit its goal, which means attracting participants to ACOs. At the same time, the agency walks a fine and often politically precarious line when constraining Medicare spending, which makes incentivizing providers even more challenging.

ACO REACH debuted last year with rigorous quality requirements and higher risks in exchange for the promise of larger profits for well-performing participants. Medicare makes monthly prospective payments to ACOs based on the number of beneficiaries they serve. ACO REACH is a revision of the Global and Professional Direct Contracting model, which CMS discontinued in 2022 despite evidence it was saving money.

As the year and the Biden administration wrap up, the clock is ticking for the 132 organizations participating in ACO REACH.

The National Association of Accountable Care Organizations is strongly encouraging CMS to extend ACO REACH another four years, which would align with the 2030 goal and make it a 10-year model akin to others the Center for Medicare and Medicaid Innovation has overseen, said Aisha Pittman, the trade group's senior vice president of government affairs, said ahead of the savings report. The association reiterated its position in a news release Friday.

“The payment and care delivery models tested by the CMS innovation center are structured to be time-limited, with most models spanning five years,” a CMS spokesperson wrote in an email before the agency released the new data. “We are actively considering the future of ACO REACH and policies tested in the model as we continue to pursue the goal of accountability and quality in Medicare.”

If CMS does extend ACO REACH, that also brings the possibility of a second round of applications into play, Pittman said. But the industry expects an extension might be an "uphill battle” because of lackluster savings reports, she said.

"What we would like to see happen in the next administration is some work to think about what the metric of success is,” Pittman said. “Otherwise, nothing will meet the criteria for expansion. And we've seen that happen time again — everything shows moderate savings, but doesn't meet the criteria for expansion.”

DiGennaro said CMS needed to provide information on the future of ACO REACH “yesterday” so providers have the time to prepare. At a minimum, she said, the agency should release information by February to give ACOs time to budget, a process she said normally is done at least 18 months in advance.

“The programs that we're providing are not things that you can turn on or off overnight,” DiGennaro said. “They're not like you flip a switch, where suddenly you do or do not have a care management program and all the staffing that goes into that.”

Even advising ACO REACH participants about an extension by next September would give them time to recruit physicians for 2027, said Kyle Wailes, CEO of Nashville, Tennessee-based Wellvana Health, an ACO REACH participant.

If ACO REACH isn’t extended, participants are left with a few options.

For starters, CMS is trying to preserve popular elements of the model, such as the prepaid savings, by incorporating them into the permanent Medicare Shared Savings Program, and it’s made tweaks to the financial methodology to ensure it saves money.

Some ACO REACH participants are anticipating the end of the model by shifting to the Medicare Shared Savings Program, said Valinda Rutledge, executive vice president of advocacy and education for America’s Physician Groups.

CMS should prioritize implementing ACO REACH’s full-risk elements in the Shared Savings Program, should ACO REACH sunset, Wailes said. “We would just ask for clarity for what these higher-risk tracks can look like over time and what programs they will sit in, so that we can plan for that and make investments,” he said.

Participants could also wait to see what new iteration of ACO REACH the incoming Trump administration may devise. It’s unlikely CMS would allow a lapse between models, which would be administratively and financially disruptive for participants, said Mara McDermott, CEO of Accountable for Health.

But it’s not entirely out of the question — the agency has permitted gaps between other initiatives, such as two iterations of an oncology model in 2022.

Providers could also simply wait for the model to lapse.

Regardless what decision CMS makes, payment experiments are going to look different next year. Value-based care in general is bipartisan, but CMMI focused on different themes under President-elect Donald Trump during his first term than under President Joe Biden, Pittman said.

The record from the first Trump administration could offer clues. For instance, CMMI focused on rural health and geography-based models under Trump, whereas the Biden administration emphasized provider types and disease states, Pittman said.