Evaluation of the ACO REACH Model

An older woman with a health care worker during an appointment

Evaluating the ACO REACH model that is transitioning Medicare from fee-for-service to value-based care

Client

Center for Medicare & Medicaid Innovation within the Centers for Medicare & Medicaid Services
Dates

2021 – 2029

Problem

CMS wants to determine whether the ACO REACH Model is improving quality of care while reducing Medicare spending.

The Centers for Medicare & Medicaid Services (CMS) is committed to ensuring high-value, cost-effective care for all Medicare beneficiaries. The ACO REACH Model (previously the Global and Professional Direct Contracting [GPDC] Model) to help health care providers work together in accountable care organizations (ACOs) to improve care for people with Medicare. The model gives providers new tools—like shared financial risk, upfront payments to support population health, and added benefits—to support better, more coordinated care.

There are three types of ACOs in the model: Standard ACOs, which have experience with Medicare and CMS models; New Entrant ACOs, which are newer to Medicare; and High Needs ACOs, which focus on patients with complex medical needs. CMS needed a skilled evaluation partner to help understand what about the ACO REACH model is working, what’s not, and how to improve care delivery going forward.

Solution

NORC conducted a mixed-methods analyses of the ACO REACH model’s impact on cost and quality of care.

CMS worked with NORC to evaluate whether the model is lowering Medicare costs and improving care for the people it serves. Evaluating the ACO REACH Model poses a complex challenge: how to measure the impact of a fast-changing, multi-cohort model across a wide range of health care settings and populations. To address this challenge, NORC designed a flexible, mixed-methods approach that brings together multiple data sources and perspectives. The team integrated quantitative data on cost, utilization, and quality with qualitative insights from over 100 ACOs to understand how the model is working and why. This approach allowed us to assess not just whether the ACO REACH Model is effective overall, but how different strategies play out in different organizational contexts.

Result

NORC's evaluation revealed significant cost reductions and quality improvements across ACO REACH participants as of 2023.

By 2023, Standard ACOs and New Entrant ACOs achieved significant reductions in gross spending alongside improvements in quality measures. High Needs ACOs showed non-significant reductions in gross spending, but promising improvements in quality.

All three ACO types saw increases in net spending, once accounting for CMS shared savings and losses and performance bonuses. At the same time, gross savings, quality, and utilization measure performance show signs of trending in a positive direction overall.

Examining impacts for beneficiaries with specific characteristics showed significant reductions in spending among beneficiaries with eight or more chronic conditions, those dually eligible for Medicare and Medicaid, and those with a disability or end-stage renal disease.