Transitioning to an ACO in 2025? Here’s What You Need to Know

Performance year 2025 (PY2025) for the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model reflects some changes made by the Centers for Medicare and Medicaid Services (CMS). Included within these changes are ways to improve the model, such as increased predictability for model participants and further advancing health equity.

If you are a healthcare provider or a part of a healthcare organization that plans to join an accountable care organization (ACO) in 2025, here is what you need to know about the ACO REACH changes.

What Are ACOs?

ACOs are accountable care organizations that consist of a network of doctors, hospitals, health care providers and practitioners who provide coordinated care to Medicare patients. Through coordinated care, patients receive higher quality care leading to both increased patient satisfaction and improved health outcomes. It is voluntary for a doctor or other healthcare organization to join an ACO. Through these organizations, adjusted payment models help healthcare providers and practitioners move away from fee-for-service models, opting to promote quality over quantity in healthcare.

Beneficiary Alignment

New Entrant ACOs will experience a reduced beneficiary alignment minimum in PY2025 from 5,00 to 4,000. These ACOs will then need to maintain a beneficiary alignment minimum of 5,000 for PY2026. The change helps set a more consistent, predictable, and attainable growth level for those who are just transitioning to an ACO.

In addition, CMS is providing a 10% beneficiary alignment buffer, which began for PY2024. This allows ACOs to continue to participate in the model, despite a temporary drop below the minimum beneficiary alignment. However, the temporary drop can be no more than 10% below the beneficiary minimum.

Revisions to the Risk Adjustment Model

New Entrant ACOs will use the revised 2024 Part C risk adjustment model in the Medicare Advantage Program, which sees risk scores blended using 67% of risk scores under the 2020 adjustment model and 33% of scores under the 2024 adjustment model. This is expected to reduce the impact of the Coding Intensity Factor (CIF), which shows the difference in scores beneficiaries would have through Medicare Advantage versus their scores in a fee-for-service model.

New Reporting Method

Beginning in 2025, ACOs will be required to submit electronic clinical quality measures (eCQMs). CMS is retiring their Web Interface as a reporting option for ACOs, opting instead for a new reporting framework called the APM Performance Pathway (APP). The goal of the change is to improve the quality of patient care by aligning ACO quality reporting with the Quality Payment Program (QPP) and Merit-Based Incentive Payment System (MIPS). The new system of reporting will be an adjustment, not only for New Entrants but also for current ACOs.

To better transition to the new reporting method being used in 2025, ACOs can use technological resources, such as tools to help adjust care workflows and track analytics, to help with a hassle-free transition.

Ann Mazotta, California Business Journal