Why ACO REACH is the best alternative-payment model in Medicare

“The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document.”


By: Bill Lane, Executive Vice President of Network Development and Global Risk Contracting

For more than a decade, the Centers for Medicare & Medicaid Services (CMS) has tested and refined alternative-payment models in Medicare. CMS continually strives to improve these models to achieve better health outcomes for Medicare beneficiaries and reduce healthcare cost expenditures while helping providers sustain and maintain their practices. The new ACO REACH model, which starts January 1, 2023, is the outcome of more than a decade’s worth of innovative learning. The model aims to promote health equity by addressing disparities for underserved communities, continuing the momentum of provider-led organizations, and protecting beneficiaries through greater transparency. Here’s why it’s the best alternative-payment model in Medicare.

Financial pressures force many physicians out of primary care

Becoming a physician requires a substantial investment of time, effort, and finances. In addition to an undergraduate degree, aspiring physicians typically spend another four years in medical school plus another three to seven years in residency. In total, that’s 11–15 years in training, with an average medical-school debt of $218,792.

Physicians need to ensure that their time and effort is worth it, especially when it comes to primary care. The financial strain of school debt and the lower earnings potential of primary care  draws 31% of medical students toward specialty care. The United States already facies a primary care physician shortage, which is projected to get worse by 2034.

As ilumed’s Dr. David Priscal says the U.S. healthcare system is built for triage, not prevention. In contrast, primary care is built for prevention because its focus is on relationships and a holistic, interconnected look at health.  Primary care deserves to be appropriately compensated; and that’s exactly what the ACO REACH model is positioned to do.

The ACO REACH model makes primary care financially sustainable for physicians

The ACO REACH model helps support primary care physicians with creative payment arrangements, including per patient/per month capitation which  helps them focus on providing the  high-touch, valuable care for each patient at the right time in the right place. With ACO REACH,  such arrangements can insulate physicians from financial risk  or reductions to fee schedules and allow for what matters most: helping their patients and improving patient outcomes.

Further, beyond a more predictable cash flow, ACO REACH Participating Physicians (i.e., primary care providers), who deliver high-value care under their cost target may have the opportunity to earn a share of any surplus in addition to quality recognition payments.

ACO REACH extends a physician’s impact

Physicians participating in the ACO REACH model have the potential to do more for their patients without  incurring additional costs or extending their already strained staff. They gain access to the ACO REACH model’s technology, clinical staff, and  patient support services. Below are some examples:

  • Where an ACO REACH model has an electronic medical records platform, practices can leverage that system rather than invest in their own , which can cost about $1,200 per user per year. Using electronic medical records, physicians can pinpoint gaps in care, and better manage their patients’ health. Physicians are notified when a patient hasn’t visited the office in several months, when it’s time  to schedule an annual wellness visit, identify medications and alert for potential adverse drug interactions.
  • The ACO REACH entity team can support patient outreach, concierge support, care management and disease management to help the provider improve patient engagement, relationships, and communication.
  • The ACO REACH entity  may also provide Medicare Advantage-like benefit enhancements, such as transportation  to and from physician visits or pharmacy, and primary care visit cost-share waiver, which help remove barriers to care.

With ACO REACH, physicians can be empowered to do more for their patients without stretching themselves, their staff, their systems, or their finances too far. This allows physicians to focus more on care quality. As Dr. Margarita Vendrell of Jacksonville, Florida, said, “It’s really important to me to deliver the best quality of care that I can for my patients, and I take pride in that.”

ACO REACH helps physicians maintain their autonomy

The COVID-19 pandemic accelerated the acquisition of private practices into hospital systems and corporate entities like private equity firms and health insurers. Now, nearly 70% of U.S. physicians are employed by a hospital system or corporation. While some physicians prefer  having the business-side of their practice managed by someone else, it might not be for everyone.

If a physician wants to maintain their independence, the ACO REACH model helps them do that while offering many of the benefits of working for a hospital system or corporation with financial, infrastructure and personnel support:

  • A reliable cash-flow with no downside financial risk means physicians have the financial foundation they need to operate their practice by meeting payroll and paying their expenses.
  • Infrastructure support for electronic health records and operations means the practice can run smoothly and efficiently.
  • Dedicated case managers and concierge staff can help lighten the load for the practice’s office staff.

An ACO REACH entity’s business savvy can help physicians focus on the basics of helping people by spending less time on logistics and empowering them to be the best practitioners they can be.

Ready to make the switch to the ACO REACH model?

Connect with us to see if your practice might be a good fit for the ACO REACH model. We’re ready to help practices like yours provide sustainable high-quality care.

Collectively, the ilumed team has more than 300 years of experience in healthcare and Medicare. We put that experience into practice with providers across the country to help them help their patients. “My patients are more aware that they’re not alone, and we have a team that supports them,” said Dr. Vendrell. “They feel more confident in the care they are receiving.” That’s how we can heal healthcare together.