ACO REACH Model’s Strategic Ramifications in the Healthcare Industry

ACO Reach Model

The Centers for Medicare and Medicaid Services (CMS) Innovation Center is working on replacing its Global and Professional Direct Contracting model (GPDC), which will be phasing out at the end of 2022, with the highly-anticipated Accountable Care Organization Realizing Equity, Access, and Community Health model (ACO REACH), which will take effect on January 1, 2023. The ACO REACH initiative strives to enhance the quality of care for Medicare beneficiaries, focusing on marginalized patients who are undeserved.

Participants in the present setup will be transferred directly to the ACO REACH Model if they fulfill the new model’s prerequisites. CMS has published a Request for Applications (RFA) for more partners to join the ACO REACH Model commencing in the Performance Year 2023.

The ACO REACH Model is intended to bring together a diverse group of providers and suppliers under the same legal framework, focusing on primary care as a method of efficiently managing healthcare services generally.

Issues to Consider for Service Providers

The GPDC model has been modified and relaunched as ACO REACH to accurately define the agency’s vision and goals and the Administration’s top priorities for the reform agenda. The revised ACO REACH model integrates input from stakeholders to address GPDC opponents’ concerns while keeping the model’s essential characteristics and expanding on the accountable care movement’s momentum. In conjunction with the Innovation Center’s Ten-Year Plan, issued late in 2021, ACO REACH includes intriguing additional features focused on eliminating health equity disparities.

The ACO REACH Model gives provider groups the chance to succeed from risk-adjusted incentives that result in higher quality care and cheaper costs. It creates an opportunity for health facilities and systems to collaborate with such provider groups to achieve operational excellence by concentrating on more excellent acuity referrals while alleviating staff recruitment and retention and budgetary constraints for the lower-acuity patient load.

CMS’ previous experience with unconventional models, initiatives, and demos has established that aligning incentives for primary care practitioners or service providers to reward the effective performance and delivery of high-value care enhances patient care quality and cost-efficiency.

Issues to Consider for Health Plans

The ACO REACH Model broadens risk-sharing alternatives and relies on CMS’ ACO profile’s lessons. It articulates stakeholders’ severe concerns regarding the lack of a consistent method for performance monitoring or bench marking, the financial framework in other CMS risk-based programs proposed under Medicare FFS, namely the Shared Savings Program and NGACO Model, not lending enough from private market initiatives, and the inaccessibility to an authentic population-based payment scheme to influence complete transition.

Through modifications in the bench-marking approach and risk adjustment, the financial incentives are aimed to attract those healthcare companies that properly treat complicated, chronically, and critically sick patients. Risk stratification of patients and customizing care management practices to match their patient group may also boost ACOs’ functionalities and economic sides.

Risk-Sharing Approach and Options

The risk is the real king in ACO REACH with two risk-sharing alternatives. The Professional choice comes with lesser risk. It mandates capitation of primary care services and gives partial risk-sharing of revenues and losses of 50%. The second choice, the Global approach, is not the scary one. It provides 100 percent risk sharing of profits and losses and capitated reimbursements for all services delivered by providers that have decided to participate in the ACO.

The ACO REACH Model’s risk-sharing mechanisms are designed to cut costs while maintaining or improving care quality for beneficiaries. The ACO REACH Model attempts to align financial rewards, provide participants with a proactively defined and consistent revenue source, and place a stronger focus on the beneficiary decision by:

• Offering both capitated and partially capitated population-based incentives that shift away from typical FFS risk-sharing alternatives in Medicare FFS.
• Allowing organizations newer to Medicare FFS, such as physician-controlled organizations now functioning only under the MA program and organizations insufficient to fulfill the beneficiary basic standards of previous ACO initiatives, to participate in CMS Innovation Center models.
• Encouraging beneficiaries to participate in the process of their care delivery via voluntary alignment and practical Benefit Enhancements;
• Minimizing healthcare provider workload to successfully address care needs, for instance, by using a reduced number of core quality metrics (already utilized in the Pioneer ACO Model, NGACO Model, and Shared Savings Program) exemptions to make care delivery smoother and quicker.

CMS is dedicated to enhancing care for intended recipients. As a result, it has the authority to alter or cancel the ACO REACH Model if it fails to meet its objectives.