ACO REACH: What you need to know before August 1st

The August 1st enrollment deadline for participating in Medicare’s ACO REACH model in 2024 is rapidly approaching. As a primary care organization considering participation in ACO REACH in 2024, you may still have questions about the ACO REACH Model, even as the deadline approaches.

In late May, Pearl hosted a free informational webinar on ACO REACH with our Chief Operating Officer, Gabe Drapos, and Head of ACO Operations, Michael Monsegur. This session is now available to stream here on demand.

Whether your practice has had experience with ACOs in the past or you are new to value-based care, we’re here to help you understand the ins and outs of ACO REACH so you can evaluate your options with as much information as possible.

Q&A Session – 5 Key Takeaways

  1. What is ACO REACH?

The Centers for Medicare & Medicaid Services (CMS) redesigned their previous Direct Contracting model to create a new value-based care model: Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH).

The ACO REACH Model was designed specifically to:

  1. Advance Health Equity to Bring the Benefits of Accountable Care to Underserved Communities;
  2. Promote Provider Leadership and Governance; and
  3. Protect Beneficiaries and the Model with More Participant Vetting, Monitoring, and Greater Transparency.

The model presents an opportunity for primary care providers and groups to transition to a more proactive care model for their Medicare patients, align incentives with keeping patients healthy, and increase revenue for effectively managing care.

How ACO REACH is different from previous value-based care models

In addition to their goal to invest more deeply in health equity, CMS created ACO REACH in large part to address stakeholder feedback from previous models and make value-based care more patient- and provider-centric.

Key features of the ACO REACH model include:

  • Stabilized Revenue: Enables transition from fee-for-service (FFS) to capitation;
  • Less Administrative Work: Claims-based quality metrics; no chart submissions, widgets, or MIPS;
  • No Minimum Savings Rate: Groups earn the first dollar of shared savings; and
  • Voluntary Alignment: Allows for midyear voluntary alignment for patients.

In Pearl’s view, ACO REACH is helping to transform risk-sharing arrangements in Traditional Medicare (FFS), empowering beneficiaries to personally engage in their own care, and reducing provider burden to meet healthcare needs effectively.

  1. What are the key financial components to ACO REACH?

There are three key financial mechanisms that primary care providers need to know about partnering with Pearl under Medicare’s ACO REACH model:

  1. Shifting to capitation from fee-for-service (FFS) payments;
  2. Entering into risk-based arrangements; and
  3. Fixed bonuses that guarantee improved revenue over FFS.
ACO REACH: What you need to know before August 1st

These three key financial mechanisms are outlined in brief below, but for an in-depth breakdown, read this blog by Pearl Chief Growth Officer, Steven Duque: Improving Primary Care Providers’ Prospects.

Primary Care Capitation (PCC)

Under the ACO REACH model, Primary Care Capitation (PCC) gives primary care providers and groups financial freedom, enabling autonomy to deliver care to traditional Medicare patients as they see fit. PCC does this by transforming the compensation model — in a revenue-neutral way — from volume-based payments for the number of primary care services they provide to stable, monthly payments for revenue CMS estimates the provider would otherwise make from her Medicare patient panel.

In 2024, providers who participate in the ACO REACH model must receive, at minimum, 20% of their payments for primary care services in the form of capitation payments. This is coupled with a mirrored 20% Fee Reduction in FFS payments.

Pearl supports primary care providers in their transition to capitation from FFS, offering support of the minimum required fee reduction under the ACO REACH model, all the way up to 100% capitation for primary care services.

Risk-Based Arrangements

At a high level, Medicare establishes a benchmark under the ACO REACH model based on historical claims data, factoring in typical regional costs, the projected level of care needed for a given patient panel, and the trend of inflation in healthcare costs, among other factors. This benchmark is basically how much Medicare believes it should cost to deliver primary care services for a typical patient in a given practice’s patient panel.

In value-based risk arrangements like ones supported under the ACO REACH model, practices must deliver care at a lower cost than the benchmark to generate savings. In contrast, if they deliver care at a cost greater than the benchmark, this results in losses. These losses can be shared, both by Medicare and partners like Pearl.

Pearl helps providers enter into risk-based arrangements by taking on asymmetric risk on their behalf — in some cases, supporting no-downside risk arrangements, while going in as 50-50 partners for those practices ready and willing to take on risk. We do this in exchange for portions of the shared savings that we believe providers will generate by leveraging our software and services to help them beat the benchmark.

Pearl’s Financial Offering: Improving Revenue vs. Fee-for-Service

Up to the CMS enrollment deadline on August 1st, we’re offering primary care organizations contracts with a revenue enhancement to help ease the transition to value. Our Revenue Enhancement is in addition to shared savings that practices could earn by choosing Pearl to help them succeed in ACO REACH value-based arrangements.

How much more could your practice earn with Pearl?

Try Pearl's Value-Based Care Advisor tool and get offers on demand.
  1. What primary care services are covered in this model? As a PCP, how much of my revenue can I expect to be capitated?

As outlined in the section above, there are several payment mechanisms under ACO REACH, one of which is Primary Care Capitation (PCC). This is the payment mechanism through which most PCPs will be reimbursed. PCC applies only to Evaluation and Management (E&M) services provided to aligned beneficiaries and replaces some or all of a provider’s E&M fee-for-service revenue. Providers will continue to receive FFS payment for non-primary care services outside the scope of PCC payment.

For an in-depth look at what portion of your FFS revenue can be attributed to E&M services, read this blog by Pearl Data Analyst, Rebecca Kee, and EVP of Data Science & Analytics, Patrick Mauro: Medicare FFS Revenue: How much will be capitated under ACO REACH?

  1. What are the quality measures in ACO REACH?

With ACO REACH, CMS strove to reduce the administrative burden of participating in value-based care programs. The ACO REACH program has significantly fewer Quality Measures (QMs) — only four — when compared to past MSSP ACOs’ 33 QMs or MIPS’ menu of 200!

Here’s a quick run-down of the four QMs:

  1. Risk-Standardized All Condition Readmission (ACR) – claims based
  2. All-Cause Unplanned Admission for Patients with Multiple Chronic Conditions (UAMCC) – claims based
  3. Timely Follow-Up After Acute Exacerbations of Chronic Conditions — claims based
  4. The Consumer Assessment of Healthcare Providers & Systems (CAHPS®) Survey

As noted above, three of the four QMs above are reportable by claims, so chart chasing is no longer required — and Pearl will keep you on track through the normal course of providing outcome-oriented care.

To learn more about how each of the above QMs is defined, read this blog by Pearl’s Head of Data Science, Peter Jamieson: Reach for Simplicity: How ACO REACH Makes Quality Measurement Easy.

  1. What is the role technology plays in helping providers succeed in ACO REACH?

Pearl Health is a physician enablement technology company with a mission to help primary care providers succeed in value-based care, starting with ACO REACH.

Pearl helps primary care providers and groups succeed in ACO REACH with:

  • A financial offering that helps to ease the transition to value;
  • Technology that gives data-driven transparency into which patients are most likely to need care; and
  • Services that significantly reduce administrative burdens.

Pearl’s physician enablement platform gives PCPs data-driven transparency into which patients are most likely to need care. With intelligent recommendations on the next suggested action, Pearl’s software supports PCPs and their staff with clinical insights that enable proactive care for patients and the tools to succeed in value-based risk arrangements.

Our Technology

Platform and services that empower providers to deliver better quality care at a lower cost

Are you a primary care organization looking for an ACO REACH partner before the August 1st deadline?

Try our Value-Based Care Advisor, a first-of-its-kind tool that gives you instant ACO REACH offers on-demand. With easy-to-understand inputs, the Value-Based Care Advisor provides concrete illustrations of your financial opportunity with Pearl, tailored for your practice.

Interested in speaking with our team to learn how Pearl can help your primary care practice or group? Feel free to email us directly at [email protected].

Madison Klein

Madison Klein

Head of Product Marketing, Pearl Health