CVS Health Exits ACO REACH Program, Sells MSSP Business to Wellvana Amid Cost-Cutting Efforts

CVS Health is making significant changes to its value-based care portfolio as part of a broader cost-cutting initiative. The healthcare giant has announced the termination of its Accountable Care Organization Realizing Equity, Access and Community Health (ACO REACH) contracts and the sale of its Medicare Shared Savings Program (MSSP) business to Wellvana, a value-based care company.

ACO REACH Program Termination and Workforce Impact

CVS Health will shut down its ACO REACH business by the end of March, affecting 183 employees nationwide. The company cited a routine portfolio review to ensure alignment with long-term strategic priorities as the reason for this decision. Despite this move, CVS Health maintains its commitment to value-based care through other parts of the company, including its healthcare delivery business and Oak Street Health, which will continue participating in the ACO REACH pilot program.

MSSP Business Acquisition by Wellvana

In a separate but related development, Wellvana has acquired CVS Health's Medicare Shared Savings Program business for an undisclosed sum. This acquisition expands Wellvana's reach to 40 states, serving over 1 million Medicare patients. Dr. Sree Chaguturu, president of healthcare delivery at CVS Health, stated that the decision was made to "further advance MSSP by partnering with a value-based care leader with the right strategic focus and investment commitment in this space."

Industry Context and Financial Pressures

These strategic moves come amid a challenging period for CVS Health. The company's stock has declined more than 11% year-over-year, and it recently announced plans to lay off 2,900 workers, primarily in corporate positions, to achieve $2 billion in savings. The healthcare sector has seen other major players, including Clover Health, Alignment Healthcare, and Centene, also distancing themselves from the ACO REACH program due to financial performance concerns.

Despite these challenges, both the ACO REACH and MSSP programs have shown positive results. ACO REACH participants earned nearly $700 million in net savings for CMS in 2023, while MSSP ACOs saved Medicare $2.1 billion in the same year, marking the largest yearly savings in the program's history.