All About ACOs
Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and/or other health care providers that voluntarily come together to work collaboratively with the goal of providing better care at lower costs. ACO participants also agree to take on accountability for the total costs and quality of care for their patients. By taking on that accountability, providers are motivated to ensure patients have timely access to care, receive the right care in the right setting, and overall work to keep patients healthy, thereby reducing their costs and improving outcomes. ACOs that reduce the total cost of care for their patient populations can share in the savings with the payer. In certain models, they may also be liable to pay back losses if their costs exceed their spending benchmarks. If an ACO doesn’t meet quality standards, shared savings may be reduced, or the ACO may not get any savings at all. Importantly in Medicare, ACOs allow patients to maintain their choice of provider, and there are no network restrictions or use of prior authorization.
ACOs contract with one or more payers (such as Medicare, Medicaid, or commercial insurers) to take on responsibility for assigned patients. These contracts may vary between payers or specific programs but all ACOs agree to manage both the cost and quality of care for a defined patient population. ACO terminology and program elements can be confusing. This page includes helpful resources, definitions, and answers to frequently asked questions about ACOs.
Dr. Carrie Nelson, Advocate Aurora Health, shares how the ACO model enables providers to holistically care for patients and improve their quality of life.
Dr. Ashok Roy, Caravan Health (part of Signify Health), describes how the ACO model aligns incentives to eliminate barriers and ensure providers can do what’s best for their patients.
Dr. Yates Lennon, CHESS Health Solutions, explains how the ACO model helps providers connect transitions of care and support patients through their care journeys.
NAACOS Factsheets
Other NAACOS Resources
- ACO Drivers for Success
- ACO Beneficiary Representative Board Orientation Video
- Reimagining Beneficiary Engagement in Accountable Care Models
- Survey Results: ACO Patient Engagement Strategies
- Recruiting & Engaging Patient Representatives: Foundations & Best Practices for ACOs
- Medicare Shared Savings Program ACOs
- CMS Innovation Center Models
- ACOs and Health Equity
More on Medicare ACOs
The largest ACO model in operation is the Medicare Shared Savings Program (MSSP), which includes 483 ACOs with over 500,000 participating providers serving approximately 11 million Medicare beneficiaries in 2022. (2022 MSSP Fast Facts)
Medicare ACO Program Stats
MSSP is a permanent program for traditional Medicare beneficiaries and offers different participation options (tracks) that allow ACOs to assume various levels of risk. Other Medicare ACOs have been/are being operated by the Center for Medicare and Medicaid Innovation (CMS Innovation Center) to test different program design elements. These time bound models include:
- Pioneer ACO Model (Active 2012 – 2016) –Official webpage
- Advance Payment ACO Model (Active 2012 – 2015)—Official webpage
- ACO Investment Model (Active 2015 – 2018)—Official webpage
- Comprehensive ESRD Care Initiative (Active 2015 – 2021)—Official webpage
- Next Generation ACO Model (Active 2016 – 2021)—Official webpage
- Vermont All-Payer ACO Model (Active 2017 – 2022)—Official webpage
- Global and Professional Direct Contracting Model (Active 2021 – 2026*)—Official webpage
- ACO Realizing Equity, Access, and Community Health (REACH) Model (Active 2023 – 2026*)—Official webpage
*The Global and Professional Direct Contracting Model (GPDC) was redesigned into the ACO REACH Model, as announced by the Centers for Medicare and Medicaid Services (CMS) on February 24, 2022, with policy changes intended to improve the model for beneficiaries and address health equity. The model will continue through its original performance period (2021 – 2026) but will operate under the updated ACO REACH Model name and requirements from January 1, 2023 through December 31, 2026. More information is available from the NAACOS ACO REACH Coalition.