REACH ACOs save $2.5B as model prepares for LEAD shift

Accountable care organizations participating in the REACH Model generated over $2.5 billion in gross savings, according to performance results released by the Centers for Medicare & Medicaid Services.

The ACOs participating in the Realizing Equity, Access, and Community Health, or REACH, Model achieved a gross savings rate of approximately 6.7% relative to the retrospective-adjusted benchmarks during the 2024 performance period, the data revealed.

Of those savings, about $988.3 million went back to CMS after qualifying ACOs received shared savings payments and the agency accounted for the benchmark discount. Ninety-six of the 115 REACH ACOs earned net savings in PY 2024, getting a piece of the $1.5 billion in net payments to ACOs that year. Only 19 REACH ACOs ended the year with a net loss.

The class of PY 2024 also achieved high quality scores, with the CMS reporting an average total quality score of 80.4% across the standard and new entrant ACOs. High needs population ACOs, which are in a specialized track within REACH, scored slightly higher with an average of 86.2%, the agency added.

Additionally, 49 of the ACOs met the high-performers pool requirements and will receive more money for their quality measure performance. PY 2024 was the second year for this pool, which the CMS designed a year prior to further incentivize continuous improvement across quality metrics.

The performance results come as the ACO REACH Model is slated to conclude at the end of the current performance period, while the CMS transitions to the Long-term Enhanced ACO Design, or LEAD, Model on Jan. 1, 2027.

The LEAD Model provides ACOs with a pathway to continue quality and cost improvements after REACH ends, while addressing key REACH challenges, such as rebasing. The LEAD Model will be the longest-running test period for the CMS Innovation Center, expected to run for 10 years through Dec. 31, 2036.

The National Association of ACOs applauded the REACH ACOs for their strong performance, saying their results "demonstrate the success and impact of the model's innovative design and focus on high-needs populations."

"We look forward to seeing these features scale through the upcoming LEAD model," NAACOS said in the statement.

The healthcare industry group Accountable for Health also highlighted the success of high-needs ACOs in a statement following the release of the performance results.

"High Needs ACOs led the way with a remarkable 14% net savings rate, underscoring the success of policies that better support providers caring for Medicare's sickest and most medically complex patients," said Mara McDermott, CEO of Accountable for Health, in the emailed statement.

The LEAD Model will not have a separate track for ACOs treating more medically complex patients. Rather, the model will integrate the high-needs concepts across all participating ACOs, with a beneficiary's high-needs status permanently assigned for the life of the model.

Notably, the LEAD Model also will not rebase ACO financial benchmarks as they lower costs, making it harder for ACOs to earn future savings. Instead, the model promises a 10-year period without rebasing, allowing participating ACOs to widen their savings wedge and keep more of what they save throughout the model.

ACO industry leaders have welcomed the LEAD Model, particularly for eliminating frequent rebasing, which groups have criticized as penalizing high-performing ACOs in other CMS-run ACO models, and for its long-term stability.

However, some concerns remain. In particular, ACOs are worried about the introduction of CMS-administered risk arrangements that will require ACOs to share direct financial accountability with specialists for episodes of care. Traditionally, ACOs have been centered around primary care networks.

The lack of rebasing could also put some ACOs at a disadvantage if they fail to control costs early on, according to some critics. Some ACOs are nervous that they don't have the actual sophistication to model and track benchmarks for a decade.

The CMS has not yet announced the final number of approved LEAD ACOs for its inaugural 2027 cohort but expects to publicly release the roster this summer.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy and health IT since 2016.