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Accountable Care Organizations: The Future of Coordinated Care

By Robert Tagalicod, Director, Office of E-Health Standards and Services

About Accountable Care Organizations
An Accountable Care Organization (ACO) is a group of primary care doctors, specialists, hospitals, and other health care providers, who come together with a common goal of delivering high-quality coordinated care to their Medicare patients.

The Affordable Care Act (ACA) created ACOs based on a vision of a more connected and effective health care system. In ACOs, multiple providers share accountability for coordinating patient care and clinical processes.  The goal is to help slow the growth of health care costs and, most importantly, improve the quality of the nation’s health care.

Improving Care, Reducing Costs
ACOs incentivize health care providers to work together to improve care coordination and ensure that patients—especially those with chronic and complex conditions —get the right care at the right time.  This model of coordinated care can also prevent duplicate tests and services, reduce hospitalizations, and limit growth in health care costs.

Providers participating in an ACO agree to be accountable for the costs and quality of the care they provide. CMS established financial benchmarks, as well as quality standards for clinical outcomes and patient experience, which all ACOs are required to meet.  And when an ACO succeeds in both delivering high-quality care and reducing growth in costs – achieving savings for the Medicare program – the ACO shares in those savings.

ACO Participation Is on the Rise
Currently, ACOs serve over 3 million traditional fee-for-service Medicare beneficiaries and the program continues to grow.  Medicare plans to launch additional ACOs in January 2014 and annually thereafter.

These ACOs are as diverse as the patients they serve. Roughly half of all ACOs are physician-led organizations serve more than 10,000 beneficiaries, and about 20 percent of ACOs include community health centers, rural health centers and critical access hospitals that serve low-income and rural communities.  These organizations are helping to ensure that traditionally underserved populations have access to high quality health care services that put patients at the center of their care.


ACOs and eHealth
The ACO quality measures align with those used in other CMS quality programs, such as the Physician Quality Reporting System (PQRS) and Value-Based Payment Modifier program, the Electronic Health Record (EHR) Incentive Programs, and other e-Health initiatives. As part of the quality standards for the program, ACOs are measured annually on the percentage of primary care physicians who are meaningful users. This continues to facilitate health information technology adoption. Through care coordination, data exchange, and integrated health IT systems, these programs support ACO’s efforts to improve public health and reduce health disparities.

Together, these initiatives have the power to transform the future of health care, improving quality and creating a more coordinated and effective U.S. health care system.

Learn more about ACOs.