Information on Accountable Care Organizations

What is an Accountable Care Organization?

Accountable Care Organizations, or ACOs, are groups of doctors, hospitals, and other health care providers who work together to care for people.

If you are not cared for by an ACO, you usually get your health care separately—you go to your primary care doctor, then you go to a separate specialist (like a heart doctor), then you go to a separate drug store for medication. In an ACO, health care providers work together and share information to make sure you are receiving the best care. By working together, ACOs are also less likely to make mistakes, and are better able to keep health care costs low.

Doctors in ACOs are also rewarded when they keep patients healthy and out of the hospital. Some people think this encourages doctors to focus on preventive care. Other people say that this helps keep doctors accountable for the health of their patients.

How do ACOs Work?

For an ACO to work, health care providers must share information. To encourage health care providers to work together, insurance companies reward ACOs when they cooperate and save money. ACOs that save money and also provide good, quality health care get to keep some of the money that they helped save.

How are Doctors in an ACO Paid?

Usually, doctors and hospitals are paid when they do a test or a procedure. This is called “fee-for-service” payment. Some people say that this increases the cost of health care because it encourages doctors to order tests that might be unnecessary.

In ACOs, doctors and hospitals are paid bonuses if they keep patients healthy and out of the hospital. If doctors keep their patients healthy, they do not have to order as many tests or procedures. This decreases the overall cost of health care. By focusing on keeping their patients healthy, doctors also emphasize prevention.

How does the Affordable Care Act affect ACOs?

The ACA allows Medicare to reward ACOs. This encourages doctors and hospitals to start ACOs. Under the ACA, each ACO has to take care of at least 5,000 people with Medicare for three years or more. People hope that ACOs will save Medicare millions of dollars.

The ACA has also helped to make ACOs popular. Although the ACA only focuses on Medicare, other insurance companies are learning about ACOs and are starting them.

How do ACOs Affect Me?

If you see a doctor who is part of an ACO, your doctor will probably refer you to other doctors and hospitals that are a part of their ACO network. However, you do not have to stay within the ACO network. You can to go to health care providers outside of the ACO network without paying more.

Doctors and other health care providers within an ACO “talk” to each other and share information. Doing this helps your doctors give you the best care. It also helps keep health care costs low, and makes it less likely that your doctors will make mistakes.

How do ACOs Share Information?

Doctors, hospitals, and other health care providers in an ACO can read your medical records to help give you the best care. They can also get information from Medicare to help them to know your medical history, including your medical conditions, prescriptions, and visits to the doctor.

The privacy and security of your medical information is protected by law. ACOs can only share information to help give you good health care.

Is an ACO the Same as an HMO?

ACOs sound a lot like HMOs. However, there are two major differences:

  1. Doctors in ACOs are rewarded to keep people healthy
    Usually, doctors and hospitals are paid when they do a test or procedure. In an ACO, doctors are rewarded when they keep patients healthy and out of the hospital. Some people say this keeps doctors accountable for the health of their patients.

  2. People do not have to stay in their ACO network
    In an HMO, you need to see doctors in your network to avoid paying more. In an ACO, you do not have to stay in the network. You can see any doctor you want, even doctors who are not part of an ACO.

Where Can I Find More Information?

A short video describing ACOs developed by the Centers for Medicare and Medicaid Services:
http://innovation.cms.gov/initiatives/aco/

A brief description of ACOs by the Centers for Medicare and Medicaid Services:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect=/aco/

A list of frequently asked questions by Kaiser Health News:
http://kaiserhealthnews.org/news/aco-accountable-care-organization-faq/