Medicare's value-based care pilot ACO REACH hit a new high, generating $988 million in net savings for the program in 2024 — up from $695 million the year before. This comes even as the model is set to sunset at year's end and be replaced by ACO LEAD in 2027. The results signal growing momentum for accountable care, despite uneven performance across individual organizations.
Medicare's value-based care experiment is going out on a high note. ACO REACH — the CMS-run pilot where accountable care organizations (ACOs) take on financial risk for patient outcomes — generated $2.5 billion in gross savings in 2024, with nearly $988 million flowing back to the Medicare program. That's a dramatic climb from just $70.4 million in savings back in 2021, and the program's best performance to date.
In 2024, 115 ACOs covering 2.5 million seniors participated, with 96 earning net savings and 19 reporting losses. Quality scores also ticked up, averaging 81.11% — reflecting improvements in areas like reducing hospital readmissions and timely follow-up care. Still, outcomes varied widely: North Carolina's Physicians Healthcare Collaborative led the pack with $183.2 million in net savings, while Vytalize Health posted the steepest loss at $99.7 million.
Despite the strong finish, ACO REACH is being replaced by ACO LEAD starting in 2027, a redesigned model with better benchmarks, prospective payments, and broader eligibility.
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Why it matters: ACO REACH's record savings underscore the potential of value-based care models to reduce Medicare spending while improving quality — a timely proof point as CMS transitions to the next-generation ACO LEAD program.
