What is ACO REACH and how will it continue the evolution of value-based care?

Healthcare industry leaders never miss a chance to introduce a creative acronym to their peers. The world of value-based care has given them ample opportunity to showcase their skills as new programs are regularly introduced, enhanced, and renamed.

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At the start of 2022, CMS introduced a new entry to the healthcare lexicon: the Accountable Care Organization Realizing Equity, Access, and Community Health Model. More commonly known as “ACO REACH,” this program is an update and replacement for the much less catchy Global Professional Direct Contracting (GPDC) Model, also called the DCE program.

Both initiatives were designed to represent a fresh take on the accountable care organization (ACO) for traditional Medicare beneficiaries. They share the same basic goals of reducing administrative complexity, empowering beneficiaries, and creating financially attractive opportunities for healthcare organizations to participate in value-based care.

ACO REACH builds on these principles with an additional focus on health equity and risk-based options specifically designed for entities new to the value-based care environment. ACO REACH may be a promising opportunity for FQHCs to gain experience with accountable care and earn shared savings for delivering high-quality services.

Let’s take a closer look at how ACO REACH came to be, what it entails, and what this program can offer to FQHCs.

The GPDC Model: Setting the stage for ACO REACH

In 2019, CMS launched the GPDC Model to serve as the next iteration of value-based care within traditional Medicare. The model blended ideas from the Medicare Advantage environment with lessons learned from established accountable care programs, including the Medicare Shared Savings Program (MSSP) and Next Generation ACOs, to create a more efficient and less complex option for healthcare providers.

GPDC required participants to form separate legal entities, called Direct Contracting Entities (DCEs) to serve as coordinating bodies for participating providers. DCEs had to fall into one of three categories:

  1. Standard DCEs – These entities included providers with previous experience serving Medicare fee-for-service (FFS) populations and/or dual-eligible beneficiaries. Members of these DCEs may or may not have experience in other value-based care arrangements.
  1. New Entrant DCEs: New entrant DCEs included providers who have not served Medicare FFS beneficiaries in the past. These could be newly established practices, practices that have just enrolled as a Medicare provider, or those with limited Medicare beneficiary panels.
  1. High Needs Populations DCEs: These DCEs are designed specifically for providers who serve Medicare FFS beneficiaries with complex needs.

DCEs could include a number of different entities, including networks of participants in existing ACOs, independent provider associations (IPAs), hospital systems and/or integrated delivery networks, Medicaid Managed Care Organizations (MCOs), skilled nursing facilities, or groups of providers who band together specifically for this purpose.

Once the DCE was established, it would choose one of two risk pathways.

  1. The Professional option offered 50 percent shared savings and shared losses, subject to risk corridors and paid through the Primary Care Capitation (PCC) structure, which is a risk-adjusted monthly payment for primary care services.
  1. Meanwhile, the higher-risk Global option tied 100 percent of savings and losses to either the PCC method or a Total Care Capitation (TCC) methodology.

Relaunching as ACO REACH to address industry concerns

The GPDC Model attracted 100 DCE participants by 2022, many of whom chose the more advanced Global payment structure. However, some industry observers were unhappy with the program, suggesting that the DCE structure might open the door to private companies who could take a bite out of the traditional Medicare environment.

Instead of shutting down the program entirely, CMS decided to keep the basic structure of GPDC but incorporate industry feedback and create additional guardrails to prevent unwanted participation from entities with suspect intentions.

The new ACO REACH framework also required more physician and beneficiary representation in DCE leadership, bulked up scrutiny of program integrity, and reduced perceived incentives to “up-code” patient health risks in order to take advantage of risk adjustment algorithms.

During this rebrand, CMS also added some key features, most notably an increased emphasis on health equity. Under the ACO REACH plan, all DCEs are now required to develop a health equity plan that includes identification of specific health disparities affecting their populations and action steps to close those gaps for patients.

ACO REACH also includes a health equity benchmark adjustment and a requirement for ACOs to collect beneficiary-reported demographic and social needs data. In addition, nurse practitioners will be able to provide a wider range of services to increase access to care.

Is ACO REACH a good opportunity for FQHCs?

The focus on health equity and the moderate risk options for providers with limited Medicare experience make ACO REACH a potentially valuable learning opportunity for FQHCs.

FQHCs are likely to score highly on the application criteria for ACO REACH. The scorecard considers a number of factors, including a strong track record of direct patient care and demonstrated success with serving historically underserved communities with positive outcomes.

For those FQHCs with relatively small Medicare patient panels, participating in an IPA can help to meet the minimum requirements (Standard DCEs must have 5000 aligned beneficiaries; New Entrant DCEs can start with a minimum of 1000 lives and build up to 5000 patients over time) and gain shared experience in a relatively protected environment.

As members of an IPA, such as Yuvo Health, FQHCs will gain a strong and trusted partner to serve as their Direct Contracting Entity and manage the administrative and financial requirements of programs like ACO REACH. This allows FQHC leaders and clinical staff to focus on serving their communities and meeting quality metrics by delivering proactive, personalized patient care.

FQHCs should consider the benefits of getting their feet wet with value-based care sooner rather than later, especially as more and more payments start to move through models tied to quality and outcomes.

The application period for the 2023 performance year is currently closed for new DCEs, but FQHCs can still align with an existing DCE through August of 2022.

ACO REACH is just one of several different roads to take toward greater participation in value-based care. As CMS continues to refine and iterate upon its approaches to risk-based healthcare, FQHCs will need to start actively exploring the challenging but rewarding world of accountable care.

To learn more about how joining an IPA can support your FQHC’s journey to value, get in touch with a representative from Yuvo Health today. To better understand how your FQHC can find success with value-based care, download this free guide.

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