Everything You Need to Know about ACO REACH

The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document.

Last year, the Biden-Harris administration announced a program to test a new, value-based care model for Medicare beneficiaries, the ACO Realizing Equity, Access, and Community Health (REACH) Model. The program is designed to provide seniors health care that is coordinated, cost-effective, and focused on the quality of patient outcomes not on the number of services rendered. 

Most notably, it is the first program in Medicare history to explicitly prioritize serving historically underserved Medicare beneficiaries – and is designed to foster investments in, and access to, high quality care for communities who need it most while improving the patient experience. At Oak Street Health, we’re incredibly proud to be participating in the initial pilot phase of this model, which began on January 1, 2023. 

ACO REACH builds on what Oak Street Health does best: delivering better, higher value care and putting that quality care within reach for traditionally underserved patients. Results from the Global and Professional Direct Contracting (GPDC) Model – ACO REACH’s predecessor – found that Oak Street Health achieved the highest overall net savings of all 53 entities participating in the program in 2021, a savings rate nearly 12 times greater than the GPDC model as a whole, all while earning a preliminary quality score of 100%. What that means in practice is equipping our providers with the resources, time, and support they need to deliver each member first-rate care, all while reducing costs for the healthcare system as a whole. Just a few examples include longer primary care visits, shorter wait times, and integrated behavioral health care at no additional cost.

In 2023, we’re excited to carry the success seen in GPDC into ACO REACH, especially considering several improvements to ACO REACH that support our approach to healthcare.

First, at its core, ACO REACH is a value-based program, meaning that providers are rewarded/​reimbursed for the quality of care provided and the health outcomes of patients, rather than the number of services rendered.

• This payment structure incentivizes providers to keep each patient happy, healthy and out of the hospital without charging them – or Medicare – for each individual service.
• In fact, providers participating in ACO REACH face financial penalties if they don’t provide higher-quality care that improves outcomes. The program has a 2% ​“quality withhold” — a percentage of dollars withheld by the federal government which can only be earned back by demonstrating they are meeting quality standards for meaningful outcomes such as hospitalization and readmission rates. In the GPDC model, the quality performance hurdle was a ​“pay-for-reporting” measure while the ACO REACH model expands on its focus on quality moving into a ​“pay-for-performance” measure which requires ACOs to actually deliver top-tier patient outcomes. This aligns with the Oak Street Health model and we believe it moves the broader system towards our motto of ​‘Rebuilding healthcare as it should be’.
• In traditional, non-value based fee-for-service (FFS) Medicare, the incentives are not aligned in the same way, which often results in care that is reactive, duplicative, defensive and expensive. Furthermore, the traditional Medicare program lacks any incentive that rewards quality or patient outcomes. Rather than wait until someone needs a hospitalization or until their chronic disease has progressed into an acute condition, ACO REACH is designed to use the traditional FFS Medicare program’s chassis and move our system towards more proactive, preventive care, equipping providers with the time and resources to help patients stay healthy. In addition, ACO REACH has guardrails in place to protect against ​‘gaming’ risk score growth by capping inappropriate risk score gains to +/-3% relative to the ACOs underlying patient population.

Second, ACO REACH is designed specifically to make sure everyone, regardless of their socioeconomic status or where they live, has access to the care delivered through the model.

• As the first program in Medicare’s history explicitly focused on improving health equity, ACO REACH requires participants to develop and implement a robust health equity plan as a fundamental component of its model. ACO REACH explicitly requires participating organizations to invest in the health and success of communities who have historically lacked access to quality, primary care.
• At Oak Street Health, we believe that a patient’s zip code shouldn’t impact the quality of care they are able to receive, and we were founded to put quality care within reach for traditionally underserved Americans. More than 90% of our centers are already located in medically underserved census tracts and, in 2021, 100% of our beneficiaries in the GPDC Model were located in areas designated by the government as medically underserved, mental health provider shortage areas, or both.
• Secondly, ACO REACH provides an additional $30 per member per month to providers caring for the most vulnerable Medicare beneficiaries based on a dual eligibility for Medicaid and the Area Deprivation Index. The model literally pays to care for underserved Americans long ignored by our health system.
• These new equity requirements in ACO REACH should encourage more organizations to follow in our footsteps.

Finally, ACO REACH offers increased flexibility to providers, and more benefits to patients, than typically seen in traditional Medicare.

• ACO REACH empowers organizations like Oak Street Health to assemble all-star teams of providers, clinicians, and care workers – from primary care doctors to specialists to community health and social workers to nurse practitioners to physician assistants – who work together with patients to create a coordinated, tailored roadmap for their care.
• ACO REACH also provides beneficiaries on traditional Medicare with benefits more commonly found in private Medicare Advantage plans. Some examples include allowing for broad use of telehealth services and patient rewards for managing chronic diseases, among others. Of note, because ACO REACH takes place in the traditional, public Medicare program, beneficiaries can see any provider they want that takes Medicare — the model eliminates issues regarding limited networks and prior authorization.

As this is the first year of the ACO REACH program, it will take time to measure the impact that it’s having for Medicare beneficiaries. But based on the resounding success Oak Street Health has achieved through the GPDC model, we are enthusiastic that this program will build on that progress and help more organizations deliver healthcare as it should be.