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What’s New: The CMS Innovation Center released the third annual evaluation report and early results ahead of the fourth report for ACO REACH that shows the model improved healthcare quality and reduced gross spending during its first four performance years.
Why it Matters: This latest evaluation of ACO REACH provides strong evidence that accountable care organizations (ACOs) deliver on the Innovation Center’s mission to improve health care affordability and quality; future results for 2025 and 2026 will reflect model updates aimed at increasing the chances of saving money in the model’s final years.
What to Expect: While ACO REACH ends this year, lessons-learned will help inform the next generation of ACO models, including the Long-term Enhanced ACO Design (LEAD) Model, which launches in January 2027, will run for 10 years, and improves benchmarking to appeal to a broader mix of health care providers, including those with specialized patient populations and those new to ACOs.
The Big Picture: The Administration is strongly committed to helping Americans live healthier lives and reduce cost barriers to care and ACOs put greater emphasis on increased care coordination and provider accountability to achieve better health outcomes for people with Original Medicare.
Additional Information: Gross spending decreased and quality improved more in 2024 than in any prior year of model performance, all while ACOs served larger numbers of people with Medicare—2.5 million. Survey data for 2023 showed that over 70% of ACOs reported prioritizing initiatives to reduce avoidable hospital utilization, increase interaction with primary care providers, and manage care for patients with complex needs. Additionally, performance year 2024 early results show a net savings for standard and new entrant ACOs, though those results were not statistically significant.
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