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Changes announced to ACO REACH model for 2025 and 2026 will disincentivize providers from achieving meaningful improvements across the quintuple aim, according to Gary Jacobs, executive director at VillageMD's Center for Public Policy.

The VillageMD accountable care organization is a primary care physician-led ACO that has been successful in the full risk and value-based ACO REACH (Accountable Care Organization Realizing Equity, Access, and Community Health) model, according to Jacobs.

In July, the CMS Innovation Center announced several changes that Jacobs said are due to an evaluation done in 2022 of the former direct contracting model that ACO REACH replaced. The evaluation was the catalyst for these changes, he said. It didn't show savings anticipated.

The bottom line is the CMMI models need to save Medicare money.听

But the changes make it less attractive to participate, said Jacobs, who cowrote "Closing the Gap In Value-Based Care: Incorporating Lessons From Provider-Led ACO Experience," published on August 6 in .

The model is set up for ACOs to compete against themselves and their previous success, needing to obtain even greater results than the year before, a phenomenon known as the ratchet effect, Jacobs said.

听"ACOs should be judged on whether they are delivering higher-quality and more cost-effective care than our existing system, not whether they outperform their previous success," Jacobs said.
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Another problem is the program's cost saving analysis that听bunches the ACOs into one cohort. Combined, the ACO REACH program shows negative results, he said. When primary care-centered ACOs like VillageMD are analyzed separately, it is highly successful.

"Our 2023 savings were better than 2022," Jacobs said.

CMMI had planned to address the ratchet effect by reducing the factor of historical expenditure from 55% of the benchmark blend to 50%, and boosting the regional share of the benchmark from 45% to 50%.

Jacobs would like to see the blend be more equal.

The ACO Reach model has been in effect since January 1, 2023 and is scheduled to end on December 31, 2026. The Centers for Medicare and Medicaid Services is expected to release performance results in October.

WHY THIS MATTERS

There are 122 accountable care organizations in ACO REACH that collectively care for about two million patients. It is one of the largest CMMI models out there, according to Jacobs.

Important factors are that it includes downsized risk and accounts for holistic care, such as mental and behavioral health, and also for health equity.

"ACO Reach has given us the ability to extend the team beyond doctors," Jacobs said. "Now we can integrate SDOH (social determinants of health), integrate behavioral health and integrate pharmacy."

Also, he said, "It finally allows providers like us to take full risk, take up to 100% risk and get capitation payments for predictable cash flow to cover expenses."

Jacobs sees the model as a return to the kind of care when physicians were able to spend more than 15 minutes with a patient and knew them throughout their lives.

"In essence, we're trying to reestablish that relationship," he said.

VillageMD is in the Standard ACO Reach program.

ACO Reach also has a high needs track for organizations that meet criteria for populations who have multiple chronic conditions.听

CMS makes changes each year to the program, Jacobs said.

"To invest," Jacobs said, "we need predictability to make it sustainable over a period of time."

THE LARGER TREND

The ACO REACH Model is the redesigned version of the Global and Professional Direct Contracting Model (GPDC) Model and focuses on promoting health equity and addressing healthcare disparities for underserved communities.

Analysis by the Congressional Budget Office that was released in April has shown that primary care-centered, provider-led ACOs have been the most successful in achieving cost savings and improving patient care.

Email the writer: SMorse@himss.org