CMS Redesigns ACO Model

WASHINGTON, D.C. (March 1, 2022)—Building on the Biden-Harris administration’s priorities for a better health care system, the Centers for Medicare & Medicaid Services (CMS) has announced a redesigned Accountable Care Organization (ACO) model that better reflects the agency’s vision of creating a health system that achieves equitable outcomes through high quality, affordable, person-centered care. The ACO Realizing Equity, Access and Community Health (REACH) Model—a redesign of the Global and Professional Direct Contracting (GPDC) Model—addresses stakeholder feedback, participant experience, and administration priorities, including CMS’s commitment to advancing health equity.

In addition to transitioning the GPDC Model to the ACO REACH Model, CMS is canceling the Geographic Direct Contracting Model (also known as the “Geo Model”) effective immediately. The Geographic Direct Contracting Model, which was announced in December 2020, was paused in March 2021 in response to stakeholder concerns.

In the announcement, CMS acknowledged there are currently 99 direct contracting entities (DCE). Direct contracting gives private health care providers a chance to participate in risk-sharing arrangements with traditional Medicare, with an ultimate goal of lowering costs and improving care. Home-focused health care providers such as LifeSpark and Humana Inc. were approved to become DCEs.

However some, including Sen. Elizabeth Warren, expressed doubts about the GDPC model. 

“It is completely baffling to me that the Biden administration wants to give the same bad actors in Medicare Advantage free rein in traditional Medicare,” Warren recently said during a Senate Finance Committee hearing. “President Biden should not permit Medicare to be handed over to corporate profiteers. Doing so is going to increase costs and put more strain on the hospital insurance trust fund.”

The ACO REACH Model, tested under the CMS Innovation Center’s authority, will adhere to the following priorities: a greater focus on health equity and closing disparities in care; an emphasis on provider-led organizations and strengthening beneficiary voices to guide the work of model participants; stronger beneficiary protections through ensuring robust compliance with model requirements; increased screening of model applicants, and increased monitoring of model participants; greater transparency and data sharing on care quality and financial performance of model participants; and stronger protections against inappropriate coding and risk score growth.

“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,” said CMS Administrator Chiquita Brooks-LaSure in a statement. “To fulfill that commitment, CMS, through the Innovation Center, 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. The Innovation Center is making improvements to existing models and launching new models to increase participation in our portfolio, and CMS will be a strong collaborator to health care providers that participate in those models.” 

According to a CMS press release, the ACO REACH Model will require all participating ACOs 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. Additionally, under the ACO REACH Model, CMS will use an innovative payment approach to better support care delivery and coordination for people in underserved communities.

REACH ACOs will be responsible for helping all different types of health care providers—including primary and specialty care physicians—work together, so people get the care they need when they need it. In addition, people with Traditional Medicare who receive care through a REACH ACO may have greater access to enhanced benefits, such as telehealth visits, home care after leaving the hospital, and help with co-pays. They can expect the support of the REACH ACO to help them navigate an often complex health system.

The GPDC Model will continue until Dec. 31, 2022 and then will transition to the ACO REACH Model. The first performance year of the redesigned ACO REACH Model will start on Jan. 1, 2023, and the model performance period will run through 2026. CMS will operate the GPDC Model with more robust and real-time monitoring of quality and costs for model participants. GPDC model participants that do not meet model requirements, such as participants that restrict medically necessary care, will face corrective action and potential termination from the model.

CMS is releasing a Request for Applications for provider-led organizations interested in joining the ACO REACH Model. Current participants in the GPDC Model must agree to meet all the ACO REACH Model requirements by Jan. 1, 2023 in order to participate.

Find a fact sheet on the ACO REACH model here. A comparison table of ACO REACH and GPDC is available here.