Medicare's Direct Contracting Care Model Saved 988 Million Dollars in 2024 as It Prepares to Wind Down

The Centers for Medicare and Medicaid Services released 2024 performance results for the ACO REACH model on July 9, 2026, showing that 115 participating accountable care organizations covered approximately 2.5 million Medicare beneficiaries and generated 988 million dollars in net savings for the Medicare program, up from 694.6 million dollars in 2023.

ACO REACH, which stands for Realizing Equity, Access, and Community Health, uses direct contracting arrangements that place financial responsibility on participating organizations to keep total spending below established benchmarks. Organizations that spend less than their targets share in the savings; those that spend more must repay a portion of the excess.

The model is scheduled to sunset at the end of 2026. CMS has already launched its successor: the Long-term Enhanced ACO Design, known as LEAD, which begins January 1, 2027, and is set to run for 10 years, making it the longest accountable care model CMS has tested. LEAD locks in each participating organization's spending baseline for the full decade, rather than resetting it periodically, a design intended to attract smaller and rural practices that have historically been reluctant to take on financial risk under shorter models.

For Medicare beneficiaries whose primary care providers participate in ACO REACH, the transition means their care organizations may join LEAD, move to the traditional Shared Savings Program, or exit risk-based contracting entirely. CMS has said it is working with participants to support continuity of care during the changeover. The LEAD model also includes a Medicare and Medicaid integration pilot in two states, which could eventually benefit dual-eligible beneficiaries enrolled in both programs.