Navigating the challenges: Key priorities for ACOs in the journey to value-based care

By Milliman MedInsight

8 May 2024

In recent years, Accountable Care Organizations (ACOs) have emerged as a recognized force in the shift from fee-for-service models to value-based care. By fostering coordinated collaboration among groups of physicians, hospitals, and other providers, ACOs present substantial opportunities for achieving better outcomes and cost savings. It also brings forth challenges for ACOs in keeping pace with rapid changes and developments. At the recent 2024 Spring Conference hosted by the National Association of ACOs (NAACOS), we delved into the top priorities that are shaping ACOs’ future.

Next steps with CMS REACH

Last year, the Centers for Medicare and Medicaid Services (CMS) announced updates to the ACO Realizing Equity, Access, and Community Health (REACH) model for 2024. These changes were made in response to stakeholder feedback and aim to enhance the test model by introducing predictability, stability, and advancements for health equity.1

The future of the ACO REACH program, however, is currently uncertain. With the program scheduled to run through 2026, CMS has not yet announced whether the program will be extended or if a replacement is in the works. If a new program is on the horizon, it remains unclear how it will overlap with existing models in specific geographic areas. In addition, there is speculation that CMS may consider offering a full-risk Medicare Shared Savings Program (MSSP) model. As a result, healthcare professionals and stakeholders are eagerly awaiting clarification in the coming months.

Fraudulent Medicare activity

Earlier this year, NAACOS raised concerns about seven durable medical equipment (DME) companies that cost the Medicare system $2 billion in payments. The association’s allegations are based on a review of Medicare claims data, specifically focusing on urinary catheter payments to beneficiaries. The payments increased from $153 million in 2021 to $2.1 billion in 2023, with a 15.5% rise in false claims filed nationwide.2

The financial impact of these payments could affect ACOs, potentially reducing their savings and influencing benchmarking calculations for future years. However, the extent of the problem for ACOs remains uncertain.

This raises concerns about how to effectively prevent Medicare fraud in the future. Some observers question how smaller ACOs, lacking the necessary infrastructure and actuarial expertise, can effectively combat fraudulent activities. These organizations may be particularly vulnerable to financial losses resulting from instances of fraud. One suggestion is for ACOs to seek assistance from vendors who can help identify and address fraudulent claims. Another option is to analyze utilization and cost for each CPT code, comparing it to year-over-year variability, to detect potentially fraudulent activities.

Maximizing opportunities: staying ahead of trends through analytics

It is crucial that ACOs stay informed about the latest industry developments and challenges as they continue down the path to value-based care. This will enable ACOs to position themselves for success and continue to deliver high-quality care to their patients.

ACOs that leverage analytics like the Milliman MedInsight Value-based Care (VBC) Platform can gain additional insights needed to stay on track with their goals. The VBC Platform includes industry-leading methodologies, such as:

  • Milliman HCG Grouper
  • Milliman Medicare FFS Benchmarks
  • Milliman DRG Benchmarks
  • Post-Acute Care Benchmarks (NY developed using Medicare 100% data)
  • Potentially Preventable Preference Sensitive Admissions (NY developed)
  • NYU Potentially Preventable ED Visits Algorithm
  • CMS-HCC Risk Adjustment Model
  • CMS Chronic Condition Warehouse (CCW)
  • AHRQ Prevention Quality Indicators (PQI) Software (for ACSAs)

By analyzing utilization patterns, ACOs can also leverage the VBC Platform to detect anomalies that may indicate fraudulent activities. Tracking provider behavior, such as prescribing patterns and patient referrals, can also help identify suspicious patterns. Implementing real-time monitoring systems can further enhance fraud detection efforts by providing alerts when irregular activities occur. Additionally, educating providers about fraud prevention measures and fostering a culture of integrity within the ACO can help deter fraudulent practices.

Gain insights on how to navigate the VBC momentum

Learn more about the VBC landscape ad hear best practice to achieve success by watching our webinar “Surviving and Thriving under the Persistent Movement to Value-Based Care Arrangements.” Hear from industry experts about the evolution of value-based payment arrangements, growth projections and VBC outcomes.


1. ACO REACH Model Performance Year 2024 (PY2024) Model Update – Quick Reference | CMS

2. ‘A giant unknown’: Dissecting the catheter fraud scheme for ACOs (

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