Accountable Care Organizations (ACOs)

Overview of ACOs

An Accountable Care Organization (ACO) is a group of health care providers – including primary care physicians, specialists, hospitals and extended care facilities – that is held accountable for the cost and quality of care delivered to a defined subset of traditional Medicare program beneficiaries or other defined populations, such as commercial health plan subscribers.

Provider reimbursements are tied to achieving care quality goals and outcomes that produce cost savings. If the ACO’s cost of care is below the anticipated spend for the specific patient population, the Centers for Medicare & Medicaid Services (CMS), or sponsoring commercial payer, returns a portion of the savings to the ACO for distribution among the providers.   

The Accountable Care Organization model is intended to reward quality of care over the volume of care.  ACOs are important to family physicians because they provide accessible and effective health care for patients in an integrated, team-based care setting.  Primary care medicine is considered to be the foundation of an ACO, with the Patient Centered Medical Home as one possible, fundamental framework for coordinated care delivery.

The AAFP has been closely involved in the evolution of the ACO model, both with private sector payers and CMS. We have consistently advocated for the inclusion of a number of ACO elements and concepts, including: 

  • Physician leadership, effective clinical integration and true partnerships among all participants;
  • Voluntary participation by physicians and patients;
  • Nationally accepted, validated clinical measures focused on ambulatory and inpatient care to monitor performance and augment efficiency and patient experience metrics;
  • Integrated information systems that provide relevant information at the point of care and assist in coordination among clinicians across multiple transitions of care;
  • Clearly defined organizational relationships, spending and quality benchmarks, and payment distribution mechanisms;
  • Incremental implementation of ACO structures and payment systems;
  • Optional participation in multiple ACOs by primary care physicians and sub-specialists;
  • Effective incentives for patient engagement.

The ACO model will become increasingly important in shaping health care delivery in the years ahead. Because primary care is at the core of the ACO approach, the AAFP will closely track developments and continue to articulate the interests and concerns of family physicians.

Recent AAFP Communications

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