The Centers for Medicare & Medicaid Services (CMS) revealed several updates to the ACO REACH program in 2026, though the model’s long-term future remains unclear.
The CMS said it is making changes to the model based on preliminary data on 2023 performance, which found that standard accountable care organizations saved $197.5 million in aggregate that year. New entrant ACOs, meanwhile, generated $36.8 million in aggregate savings, reducing gross spending at higher rates that standard organizations.
In addition, high-needs ACOs reduced spending by $2.3 million in the aggregate, according to the preliminary report. The CMS is set to release full data on ACO REACH later this year.
The proposed changes come in a confusing environment for ACOs, which have pushed the agency to outline plans for the ACO REACH program, currently set to expire in 2026.
Last fall, for example, data on program performance catalyzed the National Association of ACOs (NAACOs) to press the feds to extend the program. Aisha Pittman, senior vice president of government affairs at NAACOs, said in a statement that “the model’s proven success” should prompt an extension.
The Center for Medicare and Medicaid Innovation unveiled its new strategy approach last week, which incorporates key elements of Department of Health and Human Services Secretary Robert F. Kennedy Jr.’s platform Make America Healthy Again. The agency said it will focus on evidence-based prevention, competition and empowering patients to reach their health goals.
What’s next for ACO REACH specifically wasn’t made clear in that new platform.
Based on the preliminary savings results, the CMS said it will implement an additional 3% cap on risk score growth from 2019 to 2026 for standard ACOs, with the goal of controlling risk score increases compared to the model’s launch window. It will also boost the coding intensity factor ceiling for high-needs ACOs from 1% to 2%, according to a post on its website.
The CMS also said it will reduce the weight for regional benchmarks across all ACO REACH participants. Benchmarks have historically been based on a mix of regional and historical expenses.
The agency said it intends to narrow risk corridors so the CMS will share in savings generated by an ACO sooner. In current policy, the CMS shares savings once an ACO’s savings are 25% above the benchmark. The new policy update will slim that percentage to 10%, the CMS said.
The changes also highlight the continued implementation of V28 risk adjustment model for Medicare Advantage plans, according to the CMS.
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