ACOs are payment models similar to health maintenance organizations but with more financial incentive to improve quality and outcomes while containing costs, avoiding service duplication and preventing errors.
Deeper dive
ACOs are part of the Affordable Care Act’s effort to shift from the current fee-for-service treatment structure. The “organization” part of ACO encompasses groups of practitioners, specialists and a hospital or acute care facility serving at least 5,000 patients annually. Other members may include skilled nursing, allied health or home health care companies. ACOs may help health care providers better coordinate patient care, according to the Centers for Medicare and Medicaid Services (CMS). They communicate with each other and partner with patients in making health care decisions. Coordinated care seeks to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors, according to the American Hospital Association. Under Medicare, when an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.
CMS offers several different ACO programs:
● Medicare Shared Savings Program
● ACO Investment Model
● Next Generation ACO Model
● Vermont All-payer ACO Model
● Medicare-Medicaid ACO Model
Only traditional Medicare fee-for-service providers can participate in Medicare ACOs and are eligible for shared savings financial incentives.