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Insights InHealth


Health Equity Requirements: Coming to a Payment Model Near You

Updated: Sep 26, 2023

In her keynote remarks at the AHIP National Conference on Health Policy and Government Health Programs on March 17, 2022, Dr. Elizabeth Fowler, the Deputy Administrator and Director of the Center for Medicare and Medicaid Innovation (CMMI) addressed the future of CMMI value-based care payment models. Specifically, Dr. Fowler noted: “You can expect future innovation center models to have features like ACO REACH like requirements for [a] health equity plan.” These comments provided the first definitive indication from CMS that the novel health equity components included in the ACO REACH model could become mainstays of future payment models. As such, even those healthcare providers who are not participating in the ACO REACH model must begin planning to meet these future requirements. This Insight InHealth summarizes the health equity features of the new ACO REACH model and highlights helpful resources healthcare organizations can review to develop impactful health equity plans.

Summary of ACO REACH: 3 Key Health Equity Features

The REACH model incorporates a number of new requirements aimed at promoting health equity and advancing the benefits of accountable care to underserved communities. Those requirements include:

Health Equity Plans

REACH ACOs must develop a Health Equity Plan (HEP) that identifies health disparities and priority populations amongst their beneficiaries. The HEP will be used to define strategies that are expected to reduce these identified health disparities. CMS plans to offer an HEP template based on the CMS Disparities Impact Statement used by the CMS Office of Minority Health.

Benchmark Adjustments

Recognizing that historical spending on underserved communities may significantly understate the cost to provide equitable care to these communities, CMS will adjust the expenditure benchmark of ACOs that serve a higher proportion of underserved beneficiaries using a “composite measure that incorporates a combination of the Area Deprivation Index and Dual Medicaid Status...” As covered in a recent CMS webinar, ACOs will receive an additional $30 per beneficiary per month for beneficiaries in the top decile of underservice, while $6 per beneficiary per month will be deducted for beneficiaries in the bottom five deciles of underservice.

Collection of New Data

Participants in the ACO REACH model will collect new information from beneficiaries aimed at monitoring and improving health equity. Specifically, ACOs participating in the REACH model will be required to request certain demographic and social needs data from their enrolled beneficiaries.

For additional information on the ACO REACH model, please see our recently published Insight InHealth that detailed the features of the new model.

Preparing for Future Payment Models: 4 Helpful Resources

The CMS Office of Minority Health has developed many useful resources for healthcare organizations to help identify and address health inequities in their communities. These resources can help healthcare providers develop strategies to address these disparities and, simultaneously, prepare for the requirements of future payment models. Below, we highlight a few of these resources.

Summary of Health Equity Challenges and Resources

In this infographic, CMS highlights numerous barriers to health equity that it has identified and highlights available resources from CMS that organizations can utilize to help overcome these challenges.

Quality Improvements and Interventions

On this web page, CMS provides numerous resources and tools related to evidence-based interventions that can contribute to reducing health disparities and lowering costs.

Health Equity Data Resources

In this document, CMS provides a table of data sources can be utilized to complete the CMS Disparities Impact Statement. Additionally, refer to our Insight InHealth on Social Determinants of Health for a deeper dive into existing data, their shortcomings, and tools for effective use of such data.

Toolkit for Building an Organizational Response to Health Disparities

In this collection of tips and resources, CMS lays out a strategy to identify health disparities and to implement solutions to promote health equity.

Health Equity Requirements - Coming to a Payment Model Near You
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