CHA News

CMMI Announces ACO REACH Model

For CEOs, CFOs, COOs, CMOs, CNOs

This post has been archived and contains information that may be out of date.

On Feb. 24, the Centers for Medicare and Medicaid Innovation (CMMI) announced the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) model.  

As part of the announcement, CMMI will require current Direct Contracting (DC) model participants — if they meet the requirements — to transition into the new model for the performance year starting Jan. 1, 2023.  Similar to Direct Contracting, ACO REACH will run through Dec. 31, 2026. 

As in Direct Contracting, the ACO REACH model includes three participant options: standard, new entrant, and high needs population. Each participation option requires either primary care or global capitation. CMMI also made several modifications to the ACO REACH model based on concerns from stakeholders. These include changes to: 

  • ACO Governance: Requires participating providers to hold at least 75% of governing board voting rights (up from 25%). Additionally, ACO REACH requires a Medicare beneficiary and a separate consumer advocate participate on the ACO’s board with voting rights.  
  • Discount Rate Reduction: The maximum discount rate for global participants is reduced from 5% to 3.5%.  
  • Quality Withhold Reduction: The quality withhold applied to the benchmarks of professional and global participants is reduced from 5% to 2%.  
  • Risk Score Caps: The new model bases risk score caps on a static reference year for the population and adjusts the cap based on demographic changes in the underlying population over time.  

This table compares the Direct Contracting and ACO REACH models.  

In line with the Biden administration’s focus on health equity, all REACH ACOs must develop a health equity plan that identifies health disparities and specific actions intended to mitigate the disparities identified. Participants are also required to collect beneficiary reported demographic and social needs data. To address concerns about historic underutilization in underserved communities, the model will include a benchmark adjustment to support care delivery and coordination.  

In addition to being available to current Direct Contracting participants, CMMI has issued a request for applications for new entrants into the ACO REACH model. Applications for 2023 new entrants are due on April 22. CMMI will host a webinar on the ACO REACH model on March 1 at 1 p.m. (PT).