ACO Basics

An Accountable Care Organization (ACO) is a new model of health care delivery where providers share responsibility for providing good quality care to Medicare beneficiaries. The financial risks and rewards are also shared among the providers in network together. They operate under a theory of shared accountability with financial incentives to provide high quality low cost care. So where do beneficiaries sign up? Simple, they don’t.  Hospitals, physicians and insurance companies are the participating partners.  The process of organizing and aligning partnerships began earlier this year. Providers are obligated to notify patients that they are part of an ACO and patients may choose not to be included by opting to keep their records outside of the ACO system.
Estimates of cost saving to the Medicare program is upwards of $900 million over the first four years. How exactly are Accountable Care Organizations expected to decrease costs of care without rationing health care? By better communication among the providers to avoid duplicate or unnecessary tests and procedures and generally working together to keep patients healthy and out of the hospital. Controlling costs will not be the only measureable outcome but certain quality measures will be monitored as well, like hospital readmission rates and ER visits. ACOs may hire care transition staff and educators, and use technology to assist in attaining these positive outcomes.
This team approach to care and cost management is not exactly new. In fact, it is very similar to Health Maintenance Organizations, (HMOs). However, there are some differences, one of the more desirable differences is that patients are not required to stay in network, much like traditional Medicare.  To find more information about ACOs visit or  
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