Washington, D.C., October 24, 2023 — This week the Centers for Medicare and Medicaid Services (CMS) released financial results for the Direct Contracting model (modified to become the Accountable Care Organization (ACO) Realizing Equity Access and Community Health or REACH model) for performance year 2022 and a full performance evaluation of the model for 2021.
These results show the substantial investment that practices are making to improve care for their communities through these models. The detailed evaluation shows that in the model’s first year participating Direct Contracting Entities (DCEs) deployed a wide array of population health management approaches to improve care, focusing on reducing avoidable hospital utilization, applying complex or population-specific care management, and improving primary care. In addition, DCEs frequently expanded access to care by offering extended or weekend hours and offering telehealth services to expand capacity. In the second year, we continue to see these investments pay off for Medicare, with DCEs achieving gross savings of $870 million; a savings of approximately $372 million net to Medicare after considering shared savings payments.
In response to the CMS release, Accountable for Health (A4H) CEO Mara McDermott issued the following statement:
“These results are impressive, demonstrating that participants in accountable care models have delivered programs and interventions that improve care for their senior populations.
“The data also demonstrate that providers are successfully leveraging new approaches, through global risk models like ACO REACH and Direct Contracting, that allow participants to move away from a flawed fee-for-service (FFS) system and toward accountable care that prioritizes quality health outcomes over volume of services provided.
“This evidence builds on similar successes from other accountable care models, including the Medicare Shared Savings Program, the ACO Investment Model, and Vermont’s All-Payer ACO Model, all of which have demonstrated that financial and clinical accountability result in better care for populations and lower costs for payers.
“Importantly, this data comes at a critical time when policymakers are considering the future of incentives for providers to continue shifting from FFS to accountable care models. I look forward to meeting with lawmakers to discuss this information alongside the impressive stories A4H members share about the ways their teams bring these models to life to improve the quality of care for millions of Americans every day.”
Spotlight on the Success of the Direct Contracting Model
The Direct Contracting model built on a long, bi-partisan history of advancing ACO delivery models that allows providers to take accountability for quality and cost for their populations. ACOs encourage providers to come together to improve the care of their patient populations. Like other ACO models run through the CMS Innovation Center, Direct Contracting allows greater flexibility in payment design, permitting clinicians and practices to use payment mechanisms other than fee-for-service to encourage investments in care management, population health, and improved patient experiences of care. The model subsequently was modified and evolved to become ACO REACH.
About Accountable for Health
Accountable for Health (A4H) is a 501(c)(4) national advocacy and policy analysis organization accelerating the adoption of sustainable, effective accountable care that improves health care quality and outcomes and lower costs. We represent a broad, diverse group of accountable care stakeholders working to improve the way health care is delivered to people across the county, across various payers, programs, and delivery models. A4H provides advocacy, research, and education to improve outcomes and patient experiences while lowering costs.
For more information, visit https://accountableforhealth.org/. Follow us on LinkedIn and Twitter (@acct4health). ###
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Accountable for Health supports the introduction of the bipartisan Patients First Act and looks forward to working with the bill's sponsors to strengthen these proposals and ensure they maximize physician participation in accountable care and improve quality while lowering costs for Medicare beneficiaries.
Accountable for Health is encouraged that CMS’s 2027 Physician Fee Schedule proposed rule recognizes the central role primary care must play in building a stronger, more sustainable Medicare program.
Accountable for Health welcomed 2024 ACO REACH results, which showed nearly $1 billion in net Medicare savings while maintaining strong quality, further demonstrating the value of accountable care. We also urged policymakers to modernize how accountable care models are evaluated so assessments better reflect today's landscape and the latest evidence.
