Providers approved for the U.S. Centers for Medicare & Medicaid Services’ (CMS) new ACO REACH behavioral health program are seeing a unique opportunity to further integrate behavioral health into primary care. By combining accountable care principles, risk-sharing payment models, and a strong focus on underserved populations, the program could reshape the way Medicare patients access comprehensive care.
From Direct Contracting to ACO REACH
Earlier this year, CMS announced that it was phasing out direct contracting models and replacing them with the ACO REACH behavioral health model. The direct contracting program, introduced under the previous administration, faced significant criticism from healthcare stakeholders concerned about transparency, equity, and patient protections. In response, the Biden administration opted to scrap direct contracting in favor of a system designed to better support equity, access, and community-based care coordination.
Like other Accountable Care Organizations (ACOs), the REACH model ties reimbursement to performance on quality metrics. Providers are financially rewarded not for the volume of services rendered, but for improving patient health outcomes and reducing total healthcare costs. What sets ACO REACH behavioral health apart is its explicit emphasis on equity and access, allowing providers to better coordinate care, including preventive and behavioral health services.
CMS Encourages Behavioral Health Integration
CMS has highlighted that many participants under the previous direct-contracting programs offered preventive behavioral health services, particularly for underserved populations. With ACO REACH behavioral health, the agency is signaling that behavioral health integration should remain a priority, especially as a tool to improve health outcomes and reduce avoidable healthcare costs.
“Under the ACO REACH behavioral health model, healthcare providers can receive more predictable revenue and use those dollars more flexibly to meet their patients’ needs,” said Liz Fowler, CMS Deputy Administrator and Innovation Center Director. “The bottom line is that ACOs can improve healthcare quality and make people healthier, which can also lead to lower total costs of care.”
This approach aligns with a growing understanding that behavioral health is inextricably linked to physical health. Patients with untreated mental health conditions often experience worse outcomes for chronic physical illnesses, from diabetes to heart disease, and rely more heavily on high-cost services such as emergency care. Integrating behavioral health into primary care settings helps providers address both simultaneously.
Governance and Provider Control
ACO REACH also emphasizes provider-led governance, requiring that at least 75% of each ACO’s governing body be controlled by participating providers or their designated representatives. This ensures that clinical decision-making remains centered on patient care, rather than being dictated by external corporate or administrative entities.
This structure encourages innovation at the provider level, allowing organizations to tailor behavioral health initiatives to the specific needs of their patient populations. Whether that means embedding behavioral health specialists in primary care practices, incorporating health coaches, or designing outreach programs for high-needs patients, providers have the flexibility to innovate while remaining accountable for outcomes.
Risk-Sharing Models: Professional vs. Global
ACO REACH participants can select one of two risk-sharing models:
- Professional Option – A lower-risk option offering 50% shared savings or losses, paired with primary care capitation payments.
- Global Option – A full-risk model with 100% shared savings or losses, paired with either primary care or total cost-of-care capitation.
These models provide financial predictability and flexibility, giving providers the resources to implement multidisciplinary care teams, integrate behavioral health, and invest in preventive services.
As of August 25, 2023, CMS provisionally accepted 110 participants into the ACO REACH behavioral health program, while 142 organizations were not selected, representing a 47% acceptance rate. Over a dozen organizations withdrew, citing operational or strategic concerns.
Behavioral Health Takes Center Stage
Among approved organizations, One Medical and Upward Health stand out for their proactive approach to ACO REACH behavioral health integration. Both are participating under the global option, embracing the full-risk model to create comprehensive, patient-centered care pathways.
“Primary care doctors under the traditional fee-for-service system often can’t afford to have a behavioral health specialist on staff,” said Andrew Van Ostrand, head of government affairs at One Medical. “ACO REACH behavioral health allows us to innovate, integrate behavioral health, and deliver a more collaborative care experience.”
One Medical, through its Iora Health subsidiary, has long integrated health coaches and behavioral health providers into primary care. Under ACO REACH behavioral health, these teams can operate with capitated payments, giving providers financial flexibility to proactively address gaps in care and manage patient outcomes more effectively.
Upward Health is targeting a different but equally critical population: individuals with intellectual and developmental disabilities. CEO Glen Moller explained that these patients face significant barriers to accessing primary care. Upward Health meets patients wherever they are, providing mobile services and multidisciplinary support, including mental health care, social services, and primary care. “It’s not about bricks and mortar—it’s about meeting the patient where they are,” Moller said.
Economic Impact of Integrated Behavioral Health
Behavioral health integration is not just about better patient outcomes—it also reduces overall healthcare costs. Patients with untreated mental health conditions often use emergency departments as de facto primary care, leading to higher expenditures. Addressing behavioral health proactively can prevent costly hospitalizations, reduce emergency room visits, and improve management of chronic physical conditions.
Van Ostrand noted, “We don’t see these services as an added cost. Instead, we see opportunities to reduce higher costs elsewhere and improve care coordination.” Similarly, Upward Health reports that addressing behavioral health needs upfront prevents downstream medical complications, ultimately saving both providers and payers money.
Flexibility in Behavioral Health Implementation
ACO REACH behavioral health offers broad flexibility in how providers define and implement behavioral health services. Van Ostrand commented, “If you asked 10 people to define mental and behavioral health care, you’d get 10 different answers. That’s why REACH participants are crafting their own programs.”
This flexibility enables providers to experiment with collaborative care models, integrate social determinants of health into care planning, and implement innovative outreach programs. For example, Upward Health focuses on high-needs populations, while One Medical/Iora leverages hybrid primary care and behavioral health teams to fill gaps in care.
Addressing Criticism and Political Pushback
Despite its promise, ACO REACH behavioral health has faced criticism. Progressive lawmakers have expressed concerns that corporate entities could use the program to prioritize profits over patient care. The House Progressive Caucus has recommended phasing out ACO REACH, arguing that it allows third-party middlemen to manage care without full patient understanding or consent.
Providers counter that ending the program could stifle innovation. Van Ostrand stated, “If we stop innovating, the only alternative is to return to a medical system that has failed patients for decades.”
Future Opportunities: Partnerships and Non-Clinical Interventions
Experts see opportunities for ACO REACH behavioral health participants to expand care through partnerships. Eleanor Health, an addiction and mental health provider, advocates for more collaboration around non-clinical interventions, which often go unreimbursed but are crucial for vulnerable populations. CEO Corbin Petro noted that approximately 70% of their interventions are not fee-for-service reimbursable, yet they are pursued because they deliver superior outcomes.
By combining clinical care, behavioral health, and social services, ACO REACH participants can create a more holistic approach that addresses the root causes of poor health. This approach is particularly relevant for high-risk or underserved populations, who often face barriers to accessing consistent care.
Looking Ahead: A Four-Year Performance Window
The ACO REACH behavioral health program officially began on January 1, 2023, and spans four performance years, ending on December 31, 2026. During this time, providers have the opportunity to refine their behavioral health integration strategies, optimize care coordination, and explore innovative approaches to improve patient outcomes while controlling costs.
For One Medical and Upward Health, the program offers a platform to expand behavioral health offerings, experiment with flexible care delivery models, and demonstrate the financial viability of integrated care. For patients, it promises better access to mental health services, preventive care, and support for social determinants of health.
Conclusion
ACO REACH behavioral health represents a significant opportunity to reshape primary care by integrating behavioral health into mainstream Medicare services. Its focus on equity, provider-led governance, and flexible payment models enables organizations to innovate in ways that traditional fee-for-service models cannot.
Providers like One Medical and Upward Health are already demonstrating that behavioral health integration can improve outcomes, reduce costs, and meet the unique needs of underserved and high-needs populations. While political pushback remains, ACO REACH behavioral health shows that value-based care models with behavioral health at the core can deliver meaningful change.
As the program matures over the next several years, it will be crucial to monitor how ACO REACH behavioral health participants continue to innovate, collaborate, and expand access, potentially creating a blueprint for broader integration of behavioral health across the Medicare system.
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