Accountable Care Organizations

What Are Accountable Care Organizations (ACOs)?

Accountable Care Organizations are groups of clinicians, hospitals and other health care providers who come together voluntarily to give coordinated high-quality care a designated group of patients. While some private plans have contracted with ACOs, this page refers mainly to Medicare ACOs.

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. 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.

The ACO model was included in national health care reform legislation as one of several demonstration programs to be administered by the Centers for Medicare & Medicaid Services (CMS). Participating ACOs assume accountability for improving the quality and cost of care for a defined patient population of Medicare beneficiaries. ACOs in turn receive part of any savings generated from care coordination as long as quality was also maintained.

Medicare offers several different types of ACO programs:

Medicare Shared Savings Program (MSSP)

This permanent program supports fee-for-service beneficiaries. It is one of the largest value-based payment programs with over 480 ACOs that include over 10.8 million beneficiaries. MSSP ACOs are aligned against BASIC (Levels A-E) or ENHANCED tracks depending on the degree of risk assumed.
Vermont All-payer ACO Model (VTAPM)

VTAPM was initiated in 2019 as a voluntary all-payer model administered through the Green Mountain Care Board and state agency of human services. The VTAPM leverages Vermont’s sole ACO, OneCare, to accelerate care transformation in the state. Payer payments filter through the ACO to participating hospitals for attributed patients.
ACO Realizing Equity, Access, and Community Health (REACH)

Launched in 2023, this model replaces the Global and Professional Direct Contracting (GPDC) Model and specifically supports ACOs in developing health equity plans and reducing health disparities. Organizations can elect to participate in either professional risk sharing (50% shared savings/losses with a capitated primary care payment) or global risk sharing (100% shared savings/losses with either primary care capitation or total care capitation to include specialty care). As of 2024, there are 122 ACOs participating.
ACO Primary Care Flex Model (ACO PC Flex)

This model is anticipated to begin in January 2025, and focuses on low-revenue MSSP ACOs. The ACO Primary Care Flex Model will provide a one-time advanced shared savings payment and monthly prospective primary care payments and incentivize team-based care approaches to medical and social needs. CMS expects to release a request for applications in 2024 and will select about 130 ACOs to participate.

Key Resources

CMS Reports record participation in ACOs this year — A record 480 accountable care organizations will participate in the Medicare Shared Savings Program in 2024, including 19 thatwill participate in the new permanent payment option, the Centers for Medicare & Medicaid Services announced Jan. 29.

ACO REACH Modifications — The Centers for Medicare & Medicaid Services Aug. 14 announced changes to its Accountable Care Organization Realizing Equity, Access, and Community Health Model starting in performance year 2024 to advance health equity and make the model more predictable for participants and more consistent with other CMS programs and models.

Medicare to launch primary care model for low-revenue ACOs — The Centers for Medicare & Medicaid Services expects to launch a voluntary primary care model in January 2025 for low-revenue accountable care organizations that participate in the Medicare Shared Savings Program.

Share Your Experience

We want to hear about your experience implementing ACO programs in your organization as part of our efforts to gather AHA member input on models, as well as collect and share best practices.

Please do not send us any protected health information, such as patient-specific information like names, photographic images, or other identifiers. Similarly, please do not send us any information or data that cannot be made public.

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Latest Resources

CMMI announces transition of Direct Contracting Model into new ACO REACH Model

Medicare Physician Fee Schedule: Final Rule for CY 2022

MSSP Final Rule Resources

Jan. 16: AHA Regulatory Advisory

Jan. 11: Members-Only Webinar