Contributor: REACH Is Delivering Savings—RTA Risk Corridors Put Those Gains at Risk

As the Center for Medicare and Medicaid Innovation’s most advanced accountable care organization (ACO) model, the ACO Realizing Equity, Access, and Community Health (REACH) model is demonstrating that sustained investment in transformative models of care can improve beneficiary health and reduce total cost of care. CMS’ performance year (PY) 2023 data show the model generates net savings, with savings increasing the longer organizations participate in the program.¹ However, the growing success is being threatened by a benchmarking policy that would hold REACH participants financially responsible for inaccurate forecasting.

REACH ACOs Generate Savings—and Time in the Model Matters

The positive outcomes we see in REACH stem from long-term investments in patients’ health. Changing care delivery is not a 1-year project. It requires building clinical workflows, staffing models, data infrastructure, and provider relationships that change behavior over time. Participating primary care practices hire care coordinators and extend visit times, partner to coordinate postdischarge follow-up care, and secure walkers and home medical equipment so seniors can stay healthy, safe, and independent.

REACH ACOs invest upfront by supporting beneficiaries today so that results emerge later in the form of reduced acute utilization, fewer avoidable admissions, and lower total cost of care. CMS’ data show the results²: fewer emergency department visits, fewer hospital readmissions, and healthier seniors staying in their homes. This is particularly true for providers who have been with ACOs for more than 3 years. For example, net savings per beneficiary tripled from PY 2021 to PY 2023, and participants that entered the program in PY 2021 generated 3 times the net savings of those entering in PY 2023.³

Patient outcomes improve, and taxpayers save money. Advanced ACOs represent a success for providers, beneficiaries, and CMS, the momentum from which needs to carry forward into CMS’ newly announced ACO Long-term Enhanced ACO Design (LEAD) model.⁴ However, a financing policy intended to support payment accuracy⁵—the Retrospective Trend Adjustment (RTA) risk corridors—now threatens this cost-saving program that improves health outcomes. RTA risk corridors effectively penalize REACH ACOs based on the difference between CMS’ forecast of future Medicare spending and actual realized costs. The result is an arbitrary, retrospective reduction in shared savings unrelated to participant performance.

Just as REACH ACOs are beginning to see the returns from multiyear investments in care transformation, this policy risks forcing organizations to scale those investments back and look to more stable and predictable payment models.

What the RTA Is—and How the Risk Corridors Change It

ACO REACH benchmarks are set prospectively using CMS’ projected national cost growth, as reflected in the adjusted USPCC trend. If actual national spending growth differs from the projection by at least 1%, CMS applies the RTA after the PY concludes to correct the benchmark.

In 2021 and 2022, CMS forecasted that the cost of care for Medicare beneficiaries would rise rapidly, recovering from COVID-19 pandemic lows in health care utilization. Instead, costs remained low, and CMS overpredicted spend by 5.5% in 2022 alone. At the end of that PY, the RTA required REACH ACOs to pay the difference back to CMS.

In 2023, CMS announced a new “RTA risk corridors” policy—effective beginning in PY 2024—to support payment accuracy. Under this structure:

• The first 0% to 4% of RTA impact is fully applied,
• The next 4% to 8% is applied at 50%, and
• No adjustment is applied beyond 8%.

In practice, this caps retrospective benchmark changes at 6% per PY, with any remaining impact retained by CMS.

By 2025, national cost growth had fully recovered, and CMS forecasts faced the opposite problem. Persistent inflation and wasteful and abusive spending on items such as skin substitutes for wound care,⁶ urinary catheters,⁷ and continuous glucose monitors⁸ pushed spending far beyond CMS’ forecast.

Why RTA Risk Corridors Threaten REACH in PY 2025

CMS is already guaranteed 3.5% of gross savings from participants in the Global Risk Option of the ACO REACH program for PY 2025,⁹ rising to 4% in 2026. Because the 2024-2025 trend underpredicted cost growth by an estimated 9% to 10%, current forecasts indicate that the RTA risk corridors may require REACH ACOs to give CMS an additional 3% to 4% of their gross savings.

A policy intended to provide REACH ACOs with financial predictability now threatens program sustainability, cutting directly into the resources needed to maintain and scale the patient interventions that produce savings over time.

What This Means for Independent Primary Care Practices and Beneficiaries

Independent primary care practices rely on shared savings to hire and retain care coordinators, social workers, nurses, and other team members who make prevention and chronic care management feasible. This payment structure allows practices to focus less on the volume of services and more on engaging with patients in ways that keep them healthy and out of expensive acute care settings.

We estimate that independent practices participating in ACO REACH could lose, on average, up to $155,000 in PY 2025 due to the RTA risk corridor policy—often the difference between retaining a nurse care manager and reducing care coordination capacity. Such cuts undermine the compounding returns of sustained investment: fewer proactive interactions, less support for medication management and care transitions, fewer resources to address social needs, and a weaker foundation for long-term cost reduction.

A Simple Fix Before LEAD: Eliminate the Impact of RTA Risk Corridors

CMS has a clear opportunity to protect the progress ACO REACH has made and strengthen the glide path into the Innovation Center’s next generation of accountable care. The Innovation Center’s new LEAD model is designed as a 10-year model, beginning in 2027. If a misaligned savings benchmark undermines trust now, organizations may question whether the long-term work of practice transformation is worth the investment.

Eliminating the impact of the RTA risk corridors in advance of the PY 2025 settlement would restore the RTA to its core purpose: correcting CMS forecasting to reflect reality. REACH ACOs should not be forced to again bear the cost of CMS’ inaccurate spending growth predictions.

We share CMS’ goal of generating Medicare savings through proven wellness and care-delivery innovations. Achieving that goal requires that REACH participants are evaluated against a reliable savings benchmark, enabling sustained investments in practice transformation and long-term beneficiary health.

References

1. ACO REACH model: performance year 2023 financial and quality performance results’ highlights. CMS. Updated May 1, 2025. Accessed February 20, 2026. https://www.cms.gov/priorities/innovation/aco-reach-py2023-financial-and-quality-performance-results-fact-sheet
2. Preview of findings from the evaluation of ACO REACH model for performance year 2023. CMS. May 21, 2025. Accessed February 20, 2026. https://www.cms.gov/priorities/innovation/data-and-reports/2025/aco-reach-preview-py2023-evaluation
3. Brown K, Bonesteel R, Debab S, McStay F, Saunders RS. ACO REACH 2023 performance results indicate a pathway to sustainable accountable care. Health Affairs Forefront. September 11, 2025. Accessed February 20, 2026. https://www.healthaffairs.org/do/10.1377/forefront.20250910.661021/
4. LEAD (Long-Term Enhanced ACO Design) model. CMS. Updated February 18, 2026. Accessed February 20, 2026. https://www.cms.gov/priorities/innovation/innovation-models/lead
5. ACO REACH model performance year 2024 (PY2024) model update – quick reference. Published September 10, 2024. Accessed February 20, 2026. https://www.cms.gov/priorities/innovation/innovation-models/reach-py24-model-perf
6. National impact of skin substitute billing: January 2022-June 2025. National Association of ACOs. October 23, 2025. Accessed February 20, 2026. https://www.naacos.com/wp-content/uploads/2025/10/Skin_graft_US_spending_public_10.23.25_update.pdf
7. CMS, HHS. Medicare program: mitigating the impact of significant, anomalous, and highly suspect billing activity on Medicare Shared Savings Program financial calculations in calendar year 2023. Fed Regist. 2024;89(188):79152-79172. Accessed February 20, 2026. https://www.federalregister.gov/documents/2024/09/27/2024-22054/medicare-program-mitigating-the-impact-of-significant-anomalous-and-highly-suspect-billing-activity
8. Medicare payments for continuous glucose monitors and supplies exceeded supplier costs and retail market prices, indicating Medicare can save at least tens of millions of dollars in one year. HHS Office of Inspector General report OEI‑04‑23‑00430. November 20, 2025. Accessed February 20, 2026. https://oig.hhs.gov/reports/all/2025/medicare-payments-for-continuous-glucose-monitors-and-supplies-exceeded-supplier-costs-and-retail-market-prices-indicating-medicare-can-save-at-least-tens-of-millions-of-dollars-in-one-year/
9. ACO REACH model: PY2025 financial operating guide. CMS. Accessed February 20, 2026. https://www.cms.gov/files/document/py25-reach-fin-op-guide.pdf