ACO REACH is a legal entity which participates in Direct Contracting pursuant to a Participation Agreement with CMS. Various types of organizations may apply to become a ACO REACH including Accountable Care Organizations (ACOs). Under ACO REACH, there will be three types of ACO REACHs with different characteristics and operational parameters.

The ACO REACH creates a new opportunity for the Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation (Innovation Center) to test an array of financial risk-sharing arrangements expected to reduce Medicare expenditures while preserving or enhancing the quality of care furnished to beneficiaries. The ACO REACH leverages lessons learned from other Medicare Accountable Care Organization (ACO) initiatives, such as the Medicare Shared Savings Program and the Next Generation ACO (NGACO) Model, as well as innovative approaches from Medicare Advantage (MA) and private sector risk-sharing arrangements. This model is part of a strategy by the CMS Innovation Center to use the redesign of primary care as a platform to drive broader health care delivery system reform. The model creates a variety of pathways for participants to take on financial risk supported by enhanced flexibilities. Because the model reduces burden, supports a focus on complex, chronically and seriously ill patients, and aims to encourage organizations to participate that have not typically participated in Medicare fee-for-service (FFS) Innovation Center models, we anticipate that this model will appeal to a broad range of physician organizations and other types of health organizations.

The CMS Innovation Center will test up to three voluntary risk-sharing options: 1) Professional, a lower-risk option (50 percent Shared Savings/Shared Losses) and Primary Care Capitation (PCC) equal to seven percent of the total cost of care benchmark for enhanced primary care services; and 2) Global, a full risk option (100 percent Shared Savings/Shared Losses) and either PCC or Total Care Capitation (TCC). CMS has also sought comment on a potential third option, the Geographic Option, which is another full risk option (100 percent Shared Savings/Shared Losses) that will offer an opportunity for participants to assume total cost of care risk for Medicare Parts A and B services for Medicare FFS beneficiaries in a defined target region.

ACO REACH is intended to test whether the risk-based payment strategies available under the model align financial incentives and offer model participants (ACO REACH) flexibility in engaging health care providers and patients in care delivery that results in preserving or enhancing quality of care while at the same time reducing the total cost of care. Specifically, ACO REACH offers:

• Multiple risk-sharing arrangements
• Flexible beneficiary alignment options, including enhancements to voluntary alignment relative  to existing Medicare initiatives
• Capitation payment options that vary by risk-sharing arrangement
• Benefit enhancements and payment rule waivers to improve care coordination and service delivery
• A focus on complex chronic and seriously ill beneficiaries, and
• Options for organizations that have not participated in Medicare FFS previously

The model will be implemented over six performance years (PY1-6), with an optional initial Implementation Period (IP). The IP will occur from October 2020 through March 2021, PY1 will occur from April 2021 through December 2021, and PY2, PY3, PY4, PY5 and PY6 will occur in calendar years 2022, 2023, 2024, 2025, and 2026 respectively.

ACO REACH Participant Providers are the core providers and suppliers in the Professional and Global Options. Beneficiaries are aligned to the ACO REACH through the ACO REACH Participant Providers and these providers and suppliers are responsible for, among other things, reporting quality through the ACO REACH and committing to beneficiary care improvement. ACO REACH Participant Providers, unlike Preferred Providers, are subject to the Capitation Payment Mechanism selected by the ACO REACH, which involves Medicare Fee-For-Service claims reductions and the requirement that the ACO REACH and the ACO REACH Participant Provider enter into a negotiated payment arrangement.

Preferred Providers contribute to ACO REACH goals by extending and facilitating valuable care relationships beyond the ACO REACH. For example, Preferred Providers may participate in benefit enhancements approved and available in PY1 and alternative payment arrangements with the ACO REACH. Services furnished by Preferred Providers will not be considered in beneficiary alignment and Preferred Providers are not responsible for reporting quality through the ACO REACH.

In addition to ACO REACH Participant Providers and Preferred Providers, beneficiaries aligned to a ACO REACH may also choose to receive services from Medicare FFS providers and suppliers that are not associated with the ACO REACH.

For the purpose of assigning accountability for risk sharing and the total cost of care, beneficiaries may be aligned to a ACO REACH in two ways; however, the beneficiary alignment options available to a ACO REACH will depend upon the ACO REACH type. The two beneficiary alignment options are as follows:

• Claims-based alignment where beneficiaries are aligned based on the plurality of primary care services furnished by ACO REACH Participant Providers, as evidenced in claims utilization data.
•  Voluntary alignment where beneficiaries communicate their desire to be aligned with a ACO REACH Participant Provider.