An evaluation commissioned by the Center for Medicare and Medicaid Innovation has found that the agency’s Medicare ACO REACH (Realizing Equity, Access, and Community Health) Model is saving money and improving health care outcomes.
A summary of an evaluation of the program’s 2023 performance year explained that
The ACO REACH Model is an advanced accountable care organization (ACO) initiative to promote patient-centered care, lower costs, and align payment systems for Original Medicare beneficiaries through ACO risk-sharing and prospective payment. In performance year (PY) 2023, the model showed stronger improvements in quality than prior years and lowered gross spending across all ACO types by 1% ($126 per beneficiary per year [PBPY]). Although net spending increased for all ACO types, the estimated increase was not statistically significant for New Entrant ACOs and was less than 1% for Standard ACOs. Across all ACO types, the model increased net spending by 0.8% ($102 PBPY; Exhibit ES.1). These promising 2023 results, coupled with more recent model design changes aimed at providing smaller incentive payments to participants, may give the model increased opportunity to reduce spending while improving quality.
The ACO REACH Model shifts risk-sharing from the original Medicare program to new ACOs that accept financial and quality accountability for spending and the care of their members. It seeks to deliver coordinated, value-based care with an emphasis on preventive services that improve health outcomes, and to advance health equity in underserved communities, often doing so by providing benefits not generally covered by Medicare.
In performance year 2023, 132 participating REACH ACOs served more than two million Medicare participants. That year, REACH ACOs reduced Medicare spending by nearly $200 million in comparison to other ACOs and traditional Medicare, with most savings coming, as the program’s creators envisioned, from decreased spending for outpatient, acute, and post-acute care.
Even as the program saved money, according to the evaluation, it improved health care outcomes, most notably for quality measures such as days at home, timely follow-up after exacerbations of chronic conditions, emergency department visits, and ambulatory care-sensitive condition hospitalizations.
Learn more about the ACO REACH Model from the program’s web page, which explains the program in greater detail and includes links to the performance year 2023 evaluation report and previous reports about the program’s performance.