ACO REACH (Accountable Care Organization Realizing Equity, Access, and Community Health) offers participants a unique opportunity to enhance patient care while benefitting from financial incentives. Among the many benefits of ACO REACH, waivers, quality withhold provisions, and favorable benchmarks stand out as key drivers of value and performance improvement for providers.
Benefit Enhancements and Beneficiary Engagement Incentives Providing Flexibility and Innovation
Perhaps one of the most attractive benefits of ACO REACH is the flexibility offered through waivers. These benefits are designed to reduce traditional Medicare constraints, giving providers an avenue for innovation in care delivery. Key waiver benefits include the following:
- Expansion of Telehealth – Practitioners can provide telehealth services to beneficiaries regardless of their location, including in urban areas, reducing barriers to care based on geography. This is especially beneficial for patients who have difficulty traveling or have limited access to transportation. Telehealth may also be provided in the patient’s home.
- 3-Day Skilled Nursing Facility (SNF) Rule Waiver – ACO REACH waives the three-day inpatient hospital stay requirement before transitioning patients to a skilled nursing facility. This provides for seamless transitions into the right post-acute environment, reducing lengths of stay and improving outcomes for patients. In many cases, patients may not require hospitalization to access the care they need. Instead, they can benefit from being admitted directly to a Preferred Provider SNF from various outpatient settings, including their own home.
- Home Health and In-Home Services – Providers can deliver more services in the home, such as primary care and rehabilitation, helping to address the needs of high-risk patients and reduce costs associated with institutional care. This includes Preferred Provider Home Health agencies in addition to providers.
- Concurrent Care for Beneficiaries that Elect Medicare Hospice (Benefit Enhancement) – Allows beneficiaries to continue treatment for a terminal condition under the Medicare Hospice benefit. Waivers provide flexibility to fund care management and other support services, such as social work, patient education, and chronic disease management. These investments enhance patient engagement and long-term health outcomes.
- Chronic Disease Management Reward (Beneficiary Engagement Incentive) – Allows the provision of a gift card reward to qualifying beneficiaries who participate in a Chronic Disease Management Program.
Quality Withholds: Earning Back with High Performance
ACO REACH introduces a quality withhold mechanism as part of its payment model. Under this provision:
- A Portion of the Benchmark is Withheld: CMS holds 2% of the total amount of projected expenditures at the beginning of the agreement period.
- Earn-back Opportunity: The withheld amount is earned back when providers meet or exceed utilization benchmarks, making it a strong incentive to concentrate on keeping beneficiaries out of the hospital.
Benefits of ACO REACH Quality Withhold Model:
- Focus on Outcomes – Providers are rewarded for transitioning beneficiaries from the hospital and preventing their readmission.
- Continuous Improvement – With financial incentives tied to utilization, clinics are motivated to adopt best practices, invest in staff training, and improve workflows.
- Transparency and Accountability – Regular performance tracking ensures providers stay aligned with program goals, fostering a culture of accountability and transparency in care delivery.
By lowering hospital stays, providers not only recover the withheld payments but also position themselves for long-term success under value-based care models.
Favorable Benchmarks: Unlocking Greater Savings Potential
Another standout feature of ACO REACH is its more favorable financial benchmarks, which set targets for cost savings while recognizing the unique characteristics of the patient population.
What makes ACO REACH benchmarks favorable?
- Adjustments for Social Risk Factors – Benchmarks consider social determinants of health, providing a more accurate representation of costs for populations with greater needs. This creates opportunities for providers serving underserved or high-risk communities to demonstrate value.
- Increased Potential for Savings – ACO REACH benchmarks are structured to reward efficiency, offering providers the chance to earn greater shared savings if they can reduce costs below the set threshold while maintaining or improving quality.
- Tailored Financial Targets – By aligning benchmarks to the unique characteristics of the population and provider network, REACH creates a level playing field that allows success for participants at different stages of readiness for value-based care.
- Protection from Unfavorable Adjustments – The model includes mechanisms for preventing significant financial losses by capping downside risk, giving participants the confidence to innovate without fear or disproportionate penalties.
How Do Providers Benefit?
The financial rewards of this model are considerable for providers who manage costs while delivering high-value care, creating a virtuous cycle of reinvestment into patient services, technology, and staff development.
Why These Features Matter
Together, the combination of waivers, quality withhold incentives, and favorable benchmarks make ACO REACH an attractive model for health care providers and finance teams. Here’s how these features drive success:
- Waivers Enable Innovation: More flexibility to deliver care where and how it’s needed most.
- Quality Withholds Drive Down Costs: Incentives encourage providers to lower the cost of care without stinting on care.
- Favorable Benchmarks Offer Opportunity: Providers can unlock greater financial rewards while addressing the unique needs of their populations.
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