The Centers for Medicare and Medicaid Services (CMS) recently announced changes to the ACO REACH Model, in an attempt to increase health equity and increase participation in the Model. These changes will start with performance year 2024 (some don’t start until performance year 2025) and also aim to increase predictability for model participants, protect against inappropriate risk score growth, maintain consistency across CMS programs and CMMI models.
One of the changes made to the Model is that CMS reduced the beneficiary alignment minimum for new entrant accountable care organizations (ACOs) from 5,000 to 4,000 in performance year 2025, and reduced minimums for high needs populations. Additionally, a 10% buffer will be applied across all ACO types, which will allow an ACO to temporarily drop below even the new beneficiary minimum, provided it does not remain below the threshold for more than one of the Model’s remaining years.
For ACOs that deal with high needs populations, CMS is expanding the criteria to include more beneficiaries and hopefully identify more eligible members with complex needs. Expanded criteria include 90 Medicare-covered days of home health service utilization or 45 Medicare-covered days in a skilled nursing facility. CMS will reevaluate the claims or voluntary aligned beneficiaries submitted for High Needs Population ACOs who did not meet the high needs eligibility criteria every quarter. The minimum for high needs beneficiaries was decreased from 1,200 to 1,000 for performance year 2025 and from 1,400 to 1,250 for performance year 2026.
The revised 2024 Part C risk adjustment model being applied in the Medicare Advantage (MA) program will also be applied to Standard and New Entrant ACOs. PY2024 risk scores will be blended using 67% of the risk scores under the current 2020 risk adjustment model and 33% of the risk scores under the revised 2024 risk adjustment model. CMS estimates the downward impact of the blended risk adjusted model on benchmarks to be roughly 0.4%.
CMS also updated the financial guarantee policy, such that ACOs that have elected Provisional Financial Settlement and have fully paid Shared Losses (or received Shared Savings) are only required to update their financial guarantee to reflect the amount required for the current performance year. Another change involved the Retrospective Trend Adjustment (RTA) benchmarks, with CMS now applying symmetric risk corridors. This means that ACOs participating in REACH will be responsible for 100% of a retrospective trend adjustment up to 4%, with responsibility decreasing as the retrospective trend adjustment increases beyond 4%.
To advance health equity efforts, CMS also added two variables to its composite score used to identify underserved beneficiaries: low-income subsidy status and state-based area deprivation index. These adjustments will be adjusted to better allocate funds to ACOs based on their health equity score and an extra $30 per person per month will be given to ACOs that have the highest-need beneficiaries.
A list of the changes can be found here.
National Association of ACOs President and CEO Clif Gaus appreciated the changes and continued to encourage CMS to innovate, noting that “we encourage CMS to explore adding features of REACH into a permanent track within the Medicare Shared Savings Program. Using MSSP as a chassis for innovation while infusing lessons learned from Innovation Center models into a permanent program is another path for stabilizing and growing participation in ACOs.”
Susan Dentzer, President and CEO of America’s Physician Groups (APG) also supported the changes CMS is making, saying, “APG applauds the Center for Medicare and Medicaid Innovation (CMMI) for making important changes to the ACO REACH Model. APG advocated for many of these changes based on the recommendations of our ACO REACH coalition members, and we appreciate the fact that the Innovation Center was so responsive to our members’ perspectives and input. We look forward to working with CMS on additional refinements to the ACO REACH Model that will further improve the health care of Medicare patients and the model’s financial and operational sustainability.”