An ACO is a group of physicians, hospitals and other health care providers that voluntarily come together to deliver coordinated, high-quality care to a defined population. The goal is to improve outcomes, reduce duplication and lower overall health care costs. When these goals are met, ACOs may share in the cost savings they achieve.

Yes. ACOs vary depending on their sponsor, contract terms, risk-sharing model and regulatory framework.

Medicare ACOs operate through programs administered by, such as the Medicare Shared Savings Program (MSSP). ACOs in MSSP typically sign five-year agreements and must meet requirements related to quality performance and patient population size.

Learn more about the Center for Medicare and Medicaid Innovation Primary Care Models

Commercial ACOs are offered by private insurers. While they mirror Medicare ACO goals, they differ in contract length, risk levels and performance metrics.

The Patient Protection and Affordable Care Act laid the foundation for new care delivery models. The Medicare Access and CHIP Reauthorization Act (MACRA), signed into law in 2015, further accelerated this shift by replacing the sustainable growth rate formula and introducing payment systems that reward quality over volume.

MACRA supports ACO participation through models like the Medicare Advanced Alternative Payment Model (AAPM) and the Merit-based Incentive Payment System Alternative Payment Model (MIPS APMs). These tracks offer payment bonuses or performance adjustments for physicians who successfully engage in value-based care models such as ACOs.

Success in an ACO, or any aligned delivery model, requires monitoring and managing quality and cost performance.

ACOs improve care by supporting several advanced primary care functions, including:

• Increased access to care
• Continuity across providers
• Coordination across the medical neighborhood
• Risk-stratified care management
• Patient and caregiver engagement
• Planned care for chronic conditions and preventive services

These functions are designed to reduce unnecessary services, improve communication and deliver more personalized, proactive care.

Find tips, CME and tools to help you identify and transition to well-designed programs that promote outcome-focused care, prioritize continuity and drive revenue to grow your practice.

Attribution is the process of assigning a patient to a specific physician or other clinician based on claims history or patient selection. It’s a foundational part of ACOs because it defines the population for which the ACO is responsible and whose outcomes and costs will be tracked.

Yes. CMS and commercial payers use several approaches:

• Retrospective attribution, also called performance year attribution, assigns patients at the end of the year based on where they received most of their care during that period.
• Prospective attribution assigns patients at the beginning of the performance year using historical claims data, allowing the ACO to know in advance which patients it will be accountable for.
• Preliminary prospective with retrospective reconciliation provides a list of beneficiaries based on voluntary alignment and claims before the performance year. CMS updates this list quarterly.
• Voluntary alignment lets Medicare beneficiaries choose their primary clinician through medicare.gov/my. This method takes precedence over all other attribution models.

Yes. Each method has tradeoffs:

• Retrospective attribution may limit your ability to proactively manage patients since you won’t know your assigned panel until after the year ends.
• Prospective attribution gives you a known population upfront, but that list may include patients who later seek care outside your ACO, creating cost leakage.
• Even with voluntary alignment, patient churn and attribution shifts can complicate population management.

ACOs offer shared systems, care management tools and protocols that help practices:

• Reduce hospital readmissions
• Improve follow-up care
• Coordinate between primary care and specialists
• Support team-based care and referrals across the medical neighborhood

This infrastructure strengthens the role of the family physician as the hub of patient care.

Shared savings models reward ACOs that lower health care costs while meeting quality benchmarks. If total spending for an ACO’s attributed population is below a set benchmark and quality targets are achieved, those savings are shared with participating providers.

A benchmark is a predefined level of cost or quality used to determine performance. ACOs must stay below a spending benchmark while meeting quality thresholds to qualify for shared savings or avoid financial penalties.

There are two primary options:

• One-sided risk allows the ACO to share in savings but not losses. It’s often used by new ACOs or those seeking a lower-risk entry point.
• Two-sided risk includes both upside potential and downside responsibility. ACOs in these models share in savings if they perform well but must repay a portion of any losses if they exceed benchmarks. These models may offer higher reward potential and eligibility for additional payment incentives.

Learn more about payment and risk

An IPA is a group of independent physician practices that come together under a contractual agreement to coordinate care and participate in value-based care models. These groups often serve as the organizational foundation for physician-led ACOs, offering shared infrastructure, data systems and management services.

A CIN is a formal network—often organized as a separate legal entity—designed to facilitate collaboration among independent providers. Usually sponsored by an IPA or hospital, these networks offer the resources needed to manage care effectively, measure performance and support quality improvement across a defined patient population.

ACOs depend on data to drive care decisions and measure outcomes. Physicians can access:

• Dashboards and analytics for population health
• Attribution and claims reports
• Quality performance tracking
• Patient risk stratification and care gap alerts

This information helps providers improve clinical outcomes, meet quality goals and stay aligned with contract benchmarks.