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Ever since the Centers for Medicare and Medicaid Services (CMS) first opened its Accountable Care Organization (ACO) Realizing Equity, Access, and Community Health (REACH) payment model to participants back in 2023, it has been making waves. Billed as a way "to improve the quality of care for people with Medicare through better care coordination," REACH ACOs are comprised of different types of providers like primary and specialty care physicians.

Traditionally, a major knock against CMS' physician payment models and ACOs is that they often favor primary care physicians (PCPs) over medical specialists. This has made it challenging for CMS to persuade specialists who work in fee-for-service models to make the leap into value-based payment structures.

Despite an inability to recruit specialists at the rate they'd anticipated, CMS remains optimistic about meeting their goal for anyone enrolled in Traditional Medicare (TM) "to be in a care relationship with accountability for quality and total cost of care by 2030." As of January 2025, CMS reports that 53.4% of TM enrollees are currently in an accountable care relationship with a provider. According to them, this "marks a 4.3 percentage point increase from January 2024," which they characterized as substantial.

Critics, however, note that a directive for CMS to create ACOs was given priority status over a dozen years ago under the Affordable Care Act (ACA). The fact that in the intervening years only 53.4% of TM enrollees have come under the umbrella of so-called "value-based care models," and that so little time remains to bring the rest of the nearly 50% of TM enrollees under the banner of such arrangements, doesn't bode well for meeting the 2030 goal.

So how can CMS tap this underutilized resource of specialist coordination to get over the finish line? Can they convince specialists to integrate into models that emphasize longitudinal care relationships? And how can they do so in a way that rebalances the relationship between providers?

Enter ACO REACH, which purports to bridge this gap. Unlike many of its predecessors, the model has been showing some success at saving money. One central reason given for this success is that specialists are integral to its operation…this is what you hear trumpeted all the time, anyway. But how popular is the effort with specialists? And has the model's implementation met expectations?

In any discussion of coordinated care models, it's important to note up front that bundled and episode-based (sometimes called episode-of-care) payment models, along with condition-specific payment models, really do seem to have the potential to spur more specialists to participate in value-based payment schemes. In reality, however, although several such models have been proposed, many have either not been implemented or have seen low participation by specialists – more on that in a minute.

Whether you listen to ACO REACH's proponents or its critics, the time does seem ripe for a new kind of reimbursement model that motivates PCPs and specialists to truly join forces to make healthcare delivery in the U.S. less fragmentary. To gain a better handle on why this new formulation represents a departure from the past, it's important to understand how we got here.

Before discussing the present state of affairs regarding specialist participation in ACOs, it's important to understand why they're so crucial to the success of value-based care models. In a December 2023 Health Affairs article, the authors said this about specialty care providers:

"Specialist engagement in these models is critical given the increasing role of specialists in managing care across the patient journey, the growing importance of specialized diagnostics and early disease interventions (such as biologics and cell and gene therapies), and an increasing array of specialty care capabilities."

Despite their important role in patient care, the authors continue, "specialty care providers have had limited opportunities to engage in accountable care models to date." The main problem is the lack of payment models that align with the healthcare context in which these physicians practice. Again from the Health Affairs article:

"Specialists focusing more on longitudinal condition management—for common cardiovascular conditions, inflammatory bowel disease, or degenerative joint disease, for example—lack alternative payment models that reflect the type of care they provide."

The authors noted that, particularly when it comes to hospital-led and integrated ACOs, adoption of specialty-relevant quality measures would facilitate coordination between primary and specialty care coordination. As it stands now, however, these measures are not in wide use.

I don't want to make it sound like until this point medical specialists have been completely left out of the equation. For years CMS, HHS, and other administrative bodies have expressed an interest in specialist participation. For example, in 2010 Congress enacted health care reform legislation in the form of the aforementioned Patient Protection and Affordable Care Act, or ACA (better known as Obamacare).

This act of Congress involved the creation of an agency called the Center for Medicare and Medicaid Innovation (CMMI), which is also known as the CMS Innovation Center. This division of CMS develops and tests alternative payment models (APMs) that strive to ensure coordinated care delivery.

The promise of CMMI specifically, and APMs in general, is that innovative models can be designed that align incentives among PCPs and specialists to deliver cost-effective, high-quality care. This is often done through risk-sharing with the federal government, where the physicians involved in an APM have a share in the model's financial performance.

In one-sided or upside risk, the participating providers share in savings if the care they provided over a certain length of time comes in under a predetermined cost threshold. If, on the other hand, the care they provide exceeds their allotted budget, they aren't penalized. In addition to cost targets, CMS will also usually set up quality benchmarks for physicians to meet.

In downside risk models, on the other hand, providers are financially penalized if they don't provide cost-effective care. As in upside risk models, quality benchmarks also play an important role in downside risk models. When upside and downside risk is incorporated into the same reimbursement model, it's called a two-sided risk model. Gainsharing is a similar concept in which physicians are rewarded for keeping costs low (as opposed to making the entity profitable).

Also of note, some private insurers have taken CMS' lead and set up APM arrangements with the healthcare entities with which they contract.

The upshot is that instead of treating patients as a series of unrelated illnesses, this kind of value-based, innovative care delivery model can save money while taking the whole patient into account. This approach works optimally when both PCPs and specialists closely coordinate care. To incentivize this collaboration, CMS has introduced some ambitious goals around their reimbursement models.

One of these goals, announced as part of CMMI's strategic refresh in 2021, is to bring 100% of Original Medicare beneficiaries and most Medicaid beneficiaries into accountable care relationships by 2030. In CMS' words, "beneficiaries should experience longitudinal, accountable care with providers that are responsible for the quality and total cost of their care. Accountable care requires access to and coordination of primary care and specialty care to meet the full range of patient needs."

Some of the groundwork for this was laid a decade ago when Congress created the Physician-Focused Payment Model Technical Advisory Committee (PTAC). PTAC was created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). One of the reasons it was enacted was to "improve how the federal Medicare program pays physicians for the care they provide to Medicare beneficiaries."

As the above linked article states, "The statutory mission of PTAC is to make comments and recommendations to the Secretary of Health and Human Services (the Secretary, HHS) on proposals for PFPMs (Physician-Focused Payment Models, my note) submitted to PTAC by individuals and stakeholder entities. MACRA requires the Secretary to review PTAC’s comments and recommendations on submitted proposals and post a detailed response on the Centers for Medicare & Medicaid Services (CMS) website."

One would think that the establishment of a group like PTAC would spur a flood of specialist-focused APMs into the market – but it just hasn't been the case. Models like ACO REACH remain the exception. That said, there have been many attempts to create APMs that encourage cooperation across service lines. Recent examples include the TEAM payment model built specifically for surgeons, along with the Bundled Payments for Care Improvement (BPCI) Advanced model.

The fact remains that specialists aren't clamoring to be involved in these care delivery schemes. Evidence for why specialists have participated in smaller numbers was presented in a 2024 cross-sectional analysis of 2023 ACO survey data where a team of researchers led by Robert E. Mechanic, MBA, attempted to ascertain the level of specialist involvement in ACOs.

To do this, the authors examined data from "101 respondents representing 174 ACOs participating in the Medicare Shared Savings Program or the Realizing Equity, Access, and Community Health ACO model in 2023." They found that while primary care physicians (PCPs) valued specialist participation in coordinating care to optimize patient outcomes, "Only 11% reported that employed specialists were highly aligned and 7% reported that contracted specialists were highly aligned."

The ACO REACH model strives to transcend the barriers that have always existed to coordinated care. It is a "voluntary model that aims to improve quality of care and health outcomes for Medicare beneficiaries through the alignment of financial incentives, emphasis on patient choice, strong monitoring to ensure that beneficiaries maintain access to care, and an emphasis on care delivery." Its defining features are that it provides incentives for PCPs and specialists to work in tighter coordination, and that it requires more transparent reporting on progress toward meeting or surpassing quality benchmarks than previous iterations.

In the service of these aims, "ACO REACH provides novel tools and resources for healthcare providers to work together in an ACO to improve the quality of care for people with traditional Medicare." It makes important changes to the previous Global and Professional Direct Contracting (GPDC) Model (the reason behind the shift from the GPDC model to ACO REACH is a story for another time).

While the ACO REACH Model does interesting things like provide "greater transparency into the model’s progress during implementation," allowing for "stronger protections against inappropriate coding," and going "beyond prior ACO initiatives by requiring at least two beneficiary advocates on the governing board (at least one Medicare beneficiary and at least one consumer advocate), both of whom must hold voting rights," to me, the most important aspect is the emphasis it places on the involvement of specialists.

The fact that specialty care physicians are included isn't what's novel about this — as I noted before, there has been specialist involvement in a range of payment models before. What's new is the degree to which their voices matter. An AJMC article from 2022 highlights the shift:

"ACO REACH makes a return to more traditional ACO models by mandating that 75% of governing bodies—the boards that set the broad, strategic vision of the ACOs’ work—be made up of participating providers. Under GPDC, it was just 25%. Also under REACH, an ACO’s beneficiary representative and consumer advocate must be separate individuals, and each must hold full voting rights. All these recent changes enhance both the provider and patient voices."

What is an ACO governing body? Check out the definition in the Code of Federal Regulations.

It's tricky to convince many specialists to join ACO configurations like the REACH model because they are often still paid on a fee-for-service basis, and thus have no natural inclination towards improving patient care in the name of saving money. Because of this, Robert E. Mechanic suggests that ACOs stand a better chance enticing specialists to join their efforts by shifting their focus to quality patient outcomes.

The reason for this comes down to money, but probably not in the way you think. When Healthcare Finance interviewed Mechanic on his team's research, he noted the following: "Financial incentives probably carry more weight for independent specialists. But referrals are even more important," noting that independent specialists may be spurred to more closely coordinate care if they're at risk for losing referrals.

Mechanic went on to say, "It is important to compensate specialists for their time" because "Medicare only pays specialists about $50 for an e-consult with primary care so ACOs may need to supplement this."

With its growing success in saving CMS money and thus garnering higher reimbursements for many of its participants, it'll come as no surprise that the program has seen steady growth over the past few years. Using data last updated in April of 2025 on data.cms.gov, I tracked the rate at which the model has been adopted. Data for 103 sites are included. Between 2021 and 2023, the numbers have fluctuated somewhat, but overall have grown.

Data courtesy of data.cms.gov

In terms of model type, three varieties of ACO REACH model were captured in the data: Standard ACO, High Needs Population ACO, and New Entrant ACO. For PY 2025, most participants by far are Standard ACOs, followed by High Needs Population ACOs and New Entrant ACOs.

Data courtesy of data.cms.gov

CMS said it is making changes to the model based on preliminary data on 2023 performance. They found that "standard accountable care organizations saved $197.5 million in aggregate that year. New entrant ACOs, meanwhile, generated $36.8 million in aggregate savings, reducing gross spending at higher rates than standard organizations."