Accountable care organizations (ACOs) now serve nearly half of the people with traditional Medicare, a three percent increase since 2023.

The Centers for Medicare & Medicaid Services (CMS) announced Monday that participation continues to grow in accountable care organization (ACO) initiatives in 2024, which will increase the quality of care for more people with Medicare.

Nineteen newly formed ACOs in the Medicare Shared Savings Program have joined a new, permanent payment option in 2024 that will allow them to receive more than $20 million in advance investment payments for caring for underserved populations.

In addition, the agency said that 50 ACOs are new to the program in 2024 and 71 ACOs renewed their participation, bringing the total to 480 ACOs now participating in the Medicare Shared Savings Program, the largest ACO program in the country.

CMS also announced that 245 organizations are continuing their participation in two CMS Innovation Center models— CO Realizing Equity, Access, and Community Health (ACO REACH) and the Kidney Care Choices (KCC) models.

“One of CMS’ top priorities is to expand access to quality, affordable health coverage and care,” said CMS Administrator Chiquita Brooks-LaSure in the announcement. “Accountable care initiatives–which give more tools to health care providers to deliver better care and help people receive more coordinated care–through programs like the Medicare Shared Savings Program and the Innovation Center accountable care initiatives are critical to achieving this vision.”

ACOs in the program are groups of doctors, hospitals, and other health care providers who collaborate and provide coordinated, high-quality care to people with Medicare, focusing on delivering the right care at the right time while avoiding unnecessary services and medical errors. ACOs that receive advance investment payments must invest in health care infrastructure, staffing, and provide accountable care for underserved beneficiaries. The 19 new ACOs are hiring community health workers, using health assessment and screening tools, and implementing quality improvement activities, such as case management systems, patient registries, and electronic quality reporting. 

CMS also said three innovative ACO initiatives continue to grow in 2024, enabling higher quality care for people with traditional Medicare:

  • The Medicare Shared Savings Program, the permanent ACO program
  • The ACO REACH Model, which intends to increase access to and improve care for underserved populations, including those in rural areas
  • The Kidney Care Choices (KCC) model, which focuses on coordinating care for people with Medicare with chronic kidney disease and end-stage renal disease so more people can live fuller and longer lives

Overall, in 2024 there are about 13.7 million people with traditional Medicare aligned to an ACO, according to the agency. Indeed, ACOs now serve nearly half of the people with traditional Medicare, a three percent increase since 2023. CMS said this growth is important because ACOs have been shown to have superior quality performance compared to similar physician groups that do not participate in an ACO, and ACOs have generated year-over-year savings for the Medicare Trust Fund. 

RELATED: Medicare saved more than $1.8B in 2022 through Shared Savings Program

The agency noted that in the 2023 Physician Fee Schedule final rule, it took several actions in the Medicare Shared Savings Program to better align value-based programs, drive growth in accountable care, and create a more equitable health care system including scaling components from an Innovation Center model test that was shown to produce savings and maintain quality in the Medicare program writ large.

For example, after CMS observed that the ACO Investment Model drove increased ACO participation in rural and underserved areas and saved dollars for the Medicare Trust Funds, the agency incorporated the most essential elements into the Medicare Shared Savings Program as advance investment payments. Already in the first year of implementation, CMS said it is seeing increased participation among health care providers from rural and underserved areas, just like in the model test.

These actions build on parts of previous ACO model tests, such as the Pioneer ACO Model and the Medicare ACO Track 1+ Model, that have already been incorporated into the Medicare Shared Savings Program by informing the development of the higher risk tracks, which are selected by 65 percent of ACOs in the Medicare Shared Savings Program today. 

As a result, for 2024, the Shared Savings Program has 480 ACOs with 634,657 health care providers and organizations providing care to over 10.8 million people with traditional Medicare. With the addition of the ACOs receiving advance investment payments, ACOs are delivering care to people with traditional Medicare in 9,032 federally qualified health centers, rural health clinics, and critical access hospitals, an increase of 27 percent from 2023. 

“The new advance investment payments will enable health care providers in rural and other underserved areas to build the staffing, infrastructure, and care delivery improvements they need to succeed as ACOs providing high quality, equitable, accountable care to their communities,” said Meena Seshamani, M.D., Ph.D., deputy administrator and director of the Center for Medicare in a statement. “Everyone deserves access to the type of whole-person care delivered by ACOs.”

For 2024, the ACO REACH Model has 122 ACOs with 173,004 health care providers and organizations providing care to an estimated 2.6 million people with traditional Medicare. This model has 1,042 federally qualified health centers, rural health clinics, and critical access hospitals participating in 2024—more than a 25 percent increase from 2023. Increasing the number and reach of ACOs in underserved communities will help close racial and ethnic disparities that have been identified among people with traditional Medicare in accountable care relationships, CMS said.

For 2024, the KCC model includes 123 Kidney Contracting Entities and CMS Kidney Care First Practices, which are accountable for the quality and care of their aligned people with Medicare. The KCC Model has more than 9,227 participating health care providers and organizations, a 10 percent increase from 2023, serving 282,335 people with Medicare who have chronic kidney disease and end stage renal disease in 2024.

“The strong participation in our accountable care models in 2024 will help more people access high-quality, coordinated health care that will improve their quality of life,” said CMS Deputy Administrator and Innovation Center Director Liz Fowler in the announcement. “The ACO REACH and KCC models are a cornerstone of our strategy to transform the health care system, focus on equity in everything we do, and deliver person-centered care that meets people where they are.”