Medicare’s Accountable Care Organization REACH Model Aims to Improve Equity and Access to Care

The Medicare program has long tested various approaches to paying for Medicare services through demonstrations and other initiatives. The Center for Medicare and Medicaid Innovation (CMMI) has led these efforts since its creation in 2010. A major focus of CMMI is testing innovative payment and delivery models (also called alternative payment models) for services for people who are enrolled in traditional Medicare, rather than who opted to enroll in one of the private insurance plans that contract with Medicare, called Medicare Advantage plans. These models seek to improve patients’ experiences as well as the quality and cost-effectiveness of care.  Successful models may become permanent parts of the Medicare program.

Accountable Care Organizations (ACOs) are a significant example of payment and delivery innovation in traditional Medicare. ACOs are groups of health care providers such as doctors and hospitals that voluntarily join to take responsibility for the quality and cost of care for a specified group of patients. Medicare has included ACOs for more than a decade, including the permanent Medicare Shared Savings Program.

In 2023, Medicare launched the ACO Realizing Equity, Access, and Community Health (REACH) test program, an initiative that builds on previous ACO models, and explicitly adds the goal of advancing equity in health care to the goals of controlling costs and improving quality.

This Spotlight report describes the key features of the ACO REACH initiative and explains its potential to benefit people who receive services through it. The report also identifies some challenges policymakers may need to consider in assessing the model’s effects.

See the full report.

The ACO REACH Model

For patients, having doctors and other providers that are in an ACO can mean improved coordination of care, more preventive care, more services that help them manage chronic conditions, and health care that overall is more person- and family-centered.

The ACO REACH model aims to achieve its goal of improving equity—along with the goals of controlling costs and improving quality—through several design elements. These features include allowing participating ACOs to offer patients certain additional benefits that are not usually covered by traditional Medicare, such as some personal care at home after a hospital stay and reduced cost sharing for certain services.

The REACH model also uses payment design and other features to encourage expansion of ACOs to locations with historically underserved populations, such as rural areas.

See the report for a discussion of key features that make REACH different.

In 2024, about 2.6 million people—or about 9 percent of people with traditional Medicare coverage (that is, not enrolled in a private Medicare Advantage health plan)—are in a REACH ACO.  In total, nearly half of people with traditional Medicare were in some type of ACO in 2024, most of them in a Medicare Shared Savings Program ACO.

Evaluating the ACO REACH Model

Evaluation of REACH will be an important step in Medicare’s approach to innovative payment and delivery models. Thorough evaluation is essential to understanding not only the model’s benefits for individuals, but also any potential drawbacks or unintended effects. Whenever health care organizations are rewarded for reducing spending, there is a concern that some providers may stint on beneficial care or try to avoid serving patients with the most complex conditions and highest needs. To assess whether REACH succeeds in improving equity, evaluations must examine the experiences of individuals in historically underserved populations and include meaningful ways to measure progress.

Conclusion

While innovative models in traditional Medicare are especially important to people whose doctors and other providers are part of such a model, these models’ effects can extend beyond the models themselves, often referred to as a spillover effect. By changing how physicians, hospitals, and other providers deliver care, Medicare’s innovations can help transform the health care system more broadly and affect health care experiences of other Medicare and non-Medicare populations.