CMS Administrator Chiquita Brooks-LaSure and CMS Innovation Center Director Elizabeth Fowler continue to forge ahead with the Biden-Harris Administration’s plans to evaluate and streamline the alternative payment models being tested at the Innovation Center. The most recent example, announced late last month, includes the redesign and renaming of the controversial Global and Professional Direct Contracting (GPDC) model that aims to introduce value-based payment arrangements in traditional Medicare. The newly announced model, renamed the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model, aligns with CMS’s restated goals for the Innovation Center—as outlined in its October 2021 “strategic refresh” white paper—to drive accountable care, advance health equity, support care innovations, improve access by addressing affordability, and partner to achieve system transformation.

CMS noted it had redesigned the stalled Trump-era GPDC model to advance the Administration’s commitment to health equity “and in response to stakeholder feedback and participant experience.” Rather than scrap the controversial model altogether as some providers, patient advocates, and policy makers had called for—raising concerns it would threaten patient care and outcomes “due to the encroachment of profit-driven organizations on their care,”— CMS chose to adjust the model. According to the CMS fact sheet, the goals of the redesigned model are to improve quality of care and care coordination for patients in traditional Medicare, especially for patients in underserved communities.

ACO REACH is different from the GPDC model in several ways:

  1. All participants will be required to develop and implement a “robust” health equity plan to identify underserved communities and implement actions to measurably reduce health disparities in their beneficiary populations. Participants will also be required to collect beneficiary-reported demographic and social needs data.
  2. CMS introduced a health equity benchmark adjustment to better support care delivery and coordination for patients in underserved communities, and expanded the range of services that may be ordered by Nurse Practitioners to improve access to care.
  3. With a stronger emphasis on provider-led organizations as model participants, participating providers or their proxies must hold at least 75% control of each ACO’s governing body, compared to only 25% in the GPDC. The ACO Reach Model will also require the ACO’s governing body to include two separate individuals (with voting rights) to serve as a Medicare beneficiary representative and a consumer advocate. While the former model required the governing board to include a beneficiary representative and a consumer advocate, they could be the same person and they were not required to hold voting rights.
  4. CMS will apply more stringent screening protocols of applicants and will more closely monitor model participants to ensure compliance with beneficiary protections. The model includes measures for enhanced transparency and data sharing on the participants’ care quality and financial performance, as well as stronger protections against “inappropriate coding and risk score growth.”

Like the GPDC model, participants in ACO REACH can choose from two voluntary risk-sharing options: (1) The Professional Option with 50% shared savings/losses and primary care capitation payment or (2) the Global Option with 100% shared savings/losses and either primary care capitation payment or total care capitation payment. And, also like the GPDC model, ACO REACH offers three participation types based either on the ACO’s degree of experience serving patients with traditional Medicare or the ACO’s patient population: (1) Standard ACOs, (2) New Entrant ACOs, and (3) High Needs Population ACOs.

More details on the ACO REACH model’s requirements can be found on the Innovation Center website, along with a helpful chart comparing the GDPC and ACO REACH models.

The GPDC model will transition to the ACO REACH model at the end of this calendar year and will run through 2026. On March 7, CMMI announced on the ACO REACH webpage it had opened the application process for the first cohort of ACO REACH participants—for Performance Year 2023 (PY2023); applications will be accepted through Friday, April 22nd at 11:59 PM. Current model participants must have a strong compliance record in the current model and agree to meet the new model’s requirements by January 1, 2023, through execution of an Amended and Restated Participation Agreement with CMS in order to shift into ACO REACH.

CMS’ decision to redesign the GDPC model has been met with mixed reactions from stakeholders. The National Association of ACOs (NAACOS) said in a press release that it is “the right decision for both traditional Medicare patients and the future of value-based care,” while others state the model redesign does not address the direct contracting model’s fundamental problems. America’s Physician Groups, which represents more than 300 U.S. medical groups, said it was “extraordinarily pleased” that CMS is retaining the direct contracting model with “important revisions.” Group purchasing organization, Premier, said the redesigned model improves on direct contracting by putting providers in the driver’s seat.

In CMS’ press release announcing the new model, Liz Fowler, CMS Deputy Administrator and Director of the CMS Innovation Center said, “Under the ACO REACH Model, health care providers can receive more predictable revenue and use those dollars more flexibly to meet their patients’ needs — and to be more resilient in the face of health challenges like the current public health pandemic. The bottom line is that ACOs can improve health care quality and make people healthier, which can also lead to lower total costs of care.”

CMS will be hosting webinars about the ACO REACH Model, information for which can be accessed via the Innovation Center website or by signing up for the ACO REACH listserv. We will continue to monitor updates and developments relating to the new model. If your organization or physician group is interesting in applying to the ACO REACH model, please contact us and we would be happy to discuss the model’s requirements and whether the model is right for your organization.

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Photo of Stacie Heller Stacie Heller

Stacie Heller is a senior policy director in Crowell & Moring’s Government Affairs group in the Washington, D.C. office. She assists clients in their efforts to shape legislative and regulatory policy. Stacie brings nearly 30 years of experience leading policy, patient and market…

Stacie Heller is a senior policy director in Crowell & Moring’s Government Affairs group in the Washington, D.C. office. She assists clients in their efforts to shape legislative and regulatory policy. Stacie brings nearly 30 years of experience leading policy, patient and market access, communications, and advocacy strategies.

Photo of Troy A. Barsky Troy A. Barsky

Troy Barsky is a partner in Crowell & Moring’s Washington, D.C. office, and serves as a member of the firm’s Health Care Group Steering Committee where he focuses on health care fraud and abuse, and Medicare and Medicaid law and policy. Troy counsels…

Troy Barsky is a partner in Crowell & Moring’s Washington, D.C. office, and serves as a member of the firm’s Health Care Group Steering Committee where he focuses on health care fraud and abuse, and Medicare and Medicaid law and policy. Troy counsels all types of health care entities, including hospitals, group practices, and health plans on the physician self-referral law (Stark Law) and the Anti-Kickback Statute, innovative healthcare delivery models, such as Accountable Care Organizations (ACOs), and Medicare & Medicaid payment and coverage policy. He also defends clients seeking resolution of government health care program overpayment issues or fraud and abuse matters through self-disclosures and negotiated settlements with the U.S. Department of Justice, U.S. Health & Human Services Office of the Inspector General and the Centers for Medicare & Medicaid Services (CMS).

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Janet Walker is a senior counsel in the Washington D.C. office and member of the Health Care Group. She has a deep understanding of federal and state healthcare law and policy as it relates to value-based care and population health initiatives.

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Savanna Williams is an Associate in Crowell & Moring’s Health Care Group and is part of the firm’s Digital Health Practice. Her practice focuses on counseling health care entities on regulatory matters, including the physician self-referral law and Medicare & Medicaid regulations. With…

Savanna Williams is an Associate in Crowell & Moring’s Health Care Group and is part of the firm’s Digital Health Practice. Her practice focuses on counseling health care entities on regulatory matters, including the physician self-referral law and Medicare & Medicaid regulations. With respect to digital health, Savanna provides strategic, legal, and policy advice to health technology clients navigating the intersection between health care and technology regulations. She also works with U.S. military veterans on discharge status upgrades on a pro bono basis.