Applications for ACO REACH Model Due in April

The Centers for Medicare & Medicaid Services (CMS) recently announced that it is converting the Global and Professional Direct Contracting (GPDC) model to a new model called Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH). The new model revises several challenging financial mechanisms of the GPDC (e.g., reducing the quality withhold and CMS discount, benchmarking for underserved populations) while adding new health equity requirements that many healthcare organizations may already be addressing under the umbrella of social determinants of health (SDOH).

In short, CMS’s updates make the ACO REACH model even more inviting to provider organizations that were previously considering GPDC as an advanced alternative payment model (A-APM) or that missed out on the opportunity to apply.

Below we have outlined the reasons why providers may want to participate in ACO REACH, key updates (from GPDC to ACO REACH), and next steps in the application process. Given the aggressive time frame—a nonbinding application is due Friday, April 22, 2022—we’ve also shared some of our insights from past experience assessing organizational readiness and successfully submitting applications for Medicare Shared Savings ACOs and GPDCs.

Key Updates in ACO REACH

What’s the Same as GPDC?

Many of the core characteristics of the GPDC model persist with ACO REACH.

• Opportunity for strategic alignment with medical groups
• MIPS bonus as an A-APM^[1]
• Benefit enhancements to facilitate patient engagement with their providers
• Opportunity to coordinate and improve care (e.g., through enhanced benefits and rule waivers, patient-centered care models)
• Capitated care options (e.g., primary care capitation, total care capitation) to support innovative care models and investments in population health infrastructure

What’s New in ACO REACH?

The updates reflect feedback from current participants and health equity requirements that many organizations are already addressing (or beginning to address) as part of SDOH programs. Participation years are PY2021–PY2026 (2026 is new for current DCEs that elect to continue with ACO REACH).

• Consistent with existing ACO models, providers must make up 75% of the board (changed from 25% in the previous GPDC). Additionally, a patient advocate and a Medicare beneficiary must now be separate individuals, and each must be a voting member.
• Quality withhold is reduced from 5% to 2%.
• Discount for the Global model is reduced from a maximum of 5% to 3.5%.
• To cap risk-scoring growth, one year’s population will be used for the entirety of the model; apply a +/-3% cap to HCC risk scores, relative to demographic growth.
• Four additional scoring criteria are added to the application:
  • Expertise at providing quality patient care
  • Track record of serving underserved populations
  • Program integrity risks posed by ACO REACH ownership interest/parent companies
  • Health equity focus and/or experience
• New health equity requirements are as follows:
  • Health equity plan: participants must develop plans to mitigate health disparities.
  • Health equity benchmark adjustment: financial incentive to care for underserved populations using the Area Deprivation Index (and potentially other factors).
  • Health equity data collection requirement: participants will be expected to collect demographic and social risk factors that may impact the ability for care to be rendered to attributed beneficiaries.
  • Nurse practitioner (NP) services benefit enhancement: NPs can assume certain additional responsibilities or furnish certain services not previously allowed by Medicare.
    • Certification for hospice care, diabetic shoes, cardiac rehab, and home infusion therapy plan of care; referral for medical nutrition therapy

Is ACO REACH Right for Us?

ACOs that have been successful under value-based care models (e.g., MSSP’s ENHANCED Track, Next Generation ACO, Medicare Advantage) should consider ACO REACH. Additionally, organizations that have been working on capabilities to manage advanced payment models may find that the time is right to enter into an A-APM via ACO REACH in 2023.

Organizations contemplating participation should consider these questions:

• What are the Medicare and Medicare Advantage trends in our service area?
• Do we have a sufficient provider network? Or, who should we partner with to fortify our network?
• Is our enterprise, and our key partner(s), culturally ready to transform care delivery to align with redesigned payment arrangements?
• What are the financial and strategic implications of the program?

Existing GPDC entities will also have to consider whether the transition to the ACO REACH model is consistent with their objectives and the realities of their network. While GPDC participants do not need to reapply with the new ACO REACH application, they will need to agree to meet the ACO REACH requirements before January 1, 2023 (with an Amended and Restated Participation Agreement with CMS).

What You Need to Do Now

Innovation Center projects often take a “just in time” approach, and there may be uncertainties about critical details. For example, financial methodology details will be published this summer, after nonbinding applications are complete.

• If you are considering the ACO REACH model, apply on April 22, 2022. The application is nonbinding, so providers that apply are not required to participate.
• While the legal entities and contractual relationships do not need to be finalized prior to the application, identify your potential partners in short order, and start writing the narrative responses to the application.
• Determine how to engage with key representatives during and after the application to prepare the application and implementation. This may mean convening a steering committee as soon as possible.
• Implement a strong team to manage your application and implementation and to ensure that your REACH ACO will meet the requirements in the rapidly evolving guidance. We believe strong project management is a critical success factor in bringing ACO models from design to implementation.

We are encouraged to see continued commitment to value-based payment models at the Center for Medicare & Medicaid Innovation (CMMI), along with programmatic changes from GPDC to ACO REACH that improve key areas for provider-led networks.

Published March 9, 2022