Understanding ACO REACH and its Impact

Launched in January 2023, Accountable Care Organisation Realising Equity, Access, and Community Health (ACO REACH), initiated by the Centers for Medicare and Medicaid Services (CMS), has taken a strategic leap towards equity in healthcare. The model is designed to promote health equity through payment model design, data collection on social drivers of health, and financial incentives linked to equity.

A key feature of ACO REACH is the Health Equity Benchmark Adjustment (HEBA). This adjustment allows for increases or decreases in participants’ financial benchmarks based on the beneficiaries they serve. The goal? To remove the disincentives to serve marginalised populations by acknowledging the extra costs of caring for these groups.

Changes to HEBA Calculations in 2024

As we move into 2024, Medicare is taking on board stakeholder feedback and revising its approach to HEBA calculations. This change is significant, as it marks one of the first attempts to alter financial targets based on non-medical factors.

The way HEBA scores are calculated will also undergo changes. Currently, the HEBA is based on measures of individual beneficiary income and area-level social need. However, from next year, CMS will incorporate beneficiaries’ state ADI, a measure that ranks the social need in a beneficiary’s neighbourhood against the need in other neighbourhoods across a given state.

The implications of these changes are substantial. They represent a pragmatic way to improve policymakers’ ability to identify individuals with low-income and high health-related need.

In conclusion, ACO REACH is one of the first models to reflect a national call to action for health care stakeholders to go beyond traditional approaches to value-based payment and address equity.