House progressives push for CMS to end newly rebranded ACO REACH model

The Biden administration revamped the Direct Contracting payment model after major criticism from progressive lawmakers.

But the House Progressive Caucus still wants to get rid of the model, now rebranded as ACO REACH.

The caucus released a list of recommendations for executive actions it calls for the administration to take. Chief among the recommendations is to quickly end the ACO REACH payment model that provides partial and full capitation payments to physician groups to spur greater coordinated care. 

Progressives wrote that the program enables “third-party middlemen to manage care without seniors’ full understanding or prior consent, and often through for-profit businesses with incentives to restrict care.”

The recommendations underscore that progressive lawmaker concerns around the model still remain despite a slew of changes in ACO REACH. 

Lawmakers such as Sen. Elizabeth Warren, D-Massachusetts, have said that a direct contracting entity could pocket any money that isn't spent on patient care and create an incentive to get overpayments from Medicare. Warren specifically referenced tactics that Medicare Advantage plans have used to increase the number of diagnosis codes to inflate risk scores and glean overpayments. 

Lawmakers have also been concerned over the presence of private equity purchasing stakes in doctor groups. 

To address those concerns, the revamped ACO REACH model requires providers to make up 75% of an entity’s governing board compared with 25% under direct contracting. 

The Center for Medicare and Medicaid Innovation (CMMI) also scrapped the delayed geographic portion of direct contracting that tied quality payments to the health of an entire geographic region and prompted concerns from lawmakers that people would be placed in a direct contracting entity without their knowledge.

Each model participant must also have a separate beneficiary and consumer advocacy representative on their board. Previously, a board could have them be the same member. 

CMMI installed new requirements to promote health equity, including that model participants must submit data on demographics and social needs of their patient population and develop a health equity plan.

The changes drew plaudits from several provider groups who were worried CMMI would scrap the model entirely. 

However, some groups, such as the Physicians for a National Health Program—which pushes for the creation of a single-payer system—have said the changes are not enough. The group led a collection of more than 250 organizations in a letter to the Department of Health and Human Services calling for an end to the model.

It remains unclear whether the continued opposition from progressives will cause CMMI to place more chances on the model which officially launches next year. 

The Centers for Medicare and Medicaid Services said in response to a request for comment on the concerns that it "will continue to listen to stakeholder feedback as we proceed with ACO REACH, and consider making further refinements as needed."