In late February, CMS announced a redesigned version of the Direct Contracting model called Realizing Equity, Access and Community Health, or ACO REACH. This new model will launch in January 2023 and is open to health providers ready for a higher level of financial risk. Current Direct Contracting Entities can transition to the new program if they demonstrate compliance with the new program terms.

A key feature of ACO REACH is the focus on health equity. REACH ACOs will develop and implement a health equity plan to measurably reduce health disparities. The program even includes an adjustment to increase the benchmark for ACOs serving higher proportions of underserved beneficiaries.

The new program increases the role of beneficiaries and providers in ACO governance. ACO governing bodies will have both a Medicare beneficiary and consumer advocate. The roles can no longer be combined, as they can under Direct Contracting. The governing body also must have 75 percent representation from participating providers, an increase from the 25 percent required under Direct Contracting.

Similar to Direct Contracting, which launched last year, there are two options for participating in ACO REACH. Both the Professional and Global options are designed to test payment changes, including capitation, in fee-for-service Medicare. The Professional option is the lower risk of the two tracks, with 50 percent shared savings/shared losses and capitation only for primary care costs. The higher risk Global option features 100 percent shared savings/shared losses and either primary care capitation or total cost of care capitation.

We are reviewing all the details of the new model and will follow up with more analysis soon. Signify Health held an informational webinar, featuring Signify leaders François de Brantes, Laurel Douty, Tim Gronninger, and Lynn Barr to share initial thoughts on the new model. This webinar discusses important aspects of the new model such as the mechanics of capitation, benefit enhancements, and payment changes that could make ACO REACH attractive to providers.

Last month, Signify Health’s François de Brantes discussed the transition from Direct Contracting to ACO REACH in an interview with Home Health Care News. Read more here.

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