The Roles of Accountable Care Organizations

Accountable Care Organizations – Overview

An accountable Care Organization (ACO) is formed when medical professionals, hospitals, and other healthcare providers collaborate voluntarily. An ACO is formed to care for a designated group of patients. ACOs aim to provide high-quality, coordinated care to Medicare beneficiaries and may also work with private insurers, but their primary focus is on Medicare patients to improve care and reduce costs.

This method of coordinated care means that patients, especially the chronically ill, receive the right care at the right time. An ACO helps patients avoid unnecessary duplication of services and prevents medical errors.

Medicare ACOs aim to provide high-quality healthcare at a lower cost by focusing on coordinated care. Any savings achieved are shared between the providers and the Medicare program. According to studies by the American Hospital Association (AHA), most hospitals and health systems in the US have adopted alternative payment and delivery models, such as ACOs.

The specific percentages of patients benefiting from ACOs under Medicare or commercial insurance are not typically quantified in this way. Participation and benefit levels can vary widely based on geography, specific ACO performance, and patient demographics. Additionally, nearly 53% of patients receive ACO benefits under Medicare Advantage, while the figure for Medicaid beneficiaries with ACOs is around 30%.

How Do Accountable Care Organizations (ACOs) Work

An ACO provider receives certain benefits for collaborating on a patient’s treatment, irrespective of the type of care, whether in hospitals, clinics, or long-term care facilities. An ACO aims to ensure that every patient receives the best care, especially if they suffer from chronic conditions like diabetes or heart disorders.

ACOs ensure that every healthcare provider collaborates with other providers on your care team.

ACOs are incredibly beneficial for healthcare providers and patients alike. For instance, an ACO ensures better communication between your primary healthcare provider and specialists, streamlines healthcare between doctors, hospitals, and long-term care providers, and ensures smoother operations of healthcare providers and local care services, such as Meals on Wheels.

As ACOs ensure that patients receive optimal care, it brings down the overall cost of treatment, which helps Medicare save a significant amount of money. The healthcare providers involved in ACOs receive a share of these additional savings.

What Are the Benefits of ACOs for Patients

Here are the top benefits of ACOs for patients:

1. Improved Healthcare at a Lower Cost

The incredible collaboration between healthcare providers in an ACO makes sharing your medical history and streamlining treatment easier. In turn, ACO doctors can provide efficient and cost-effective healthcare services.

The ACO team aims to provide the patient with the highest-quality care and discharge the patient as quickly as possible, lowering out-of-pocket expenses for patients.

2. Better Coordination for the Best Care

Chronically ill patients usually need to be evaluated by different specialists. Normally, the two specialists are unaware of the other’s recommendations and treatment plans. This might result in you, the patient, having to undergo the same tests twice, which will likely drive up the overall cost of your treatment. However, with ACOs, this is less likely to happen.

Additionally, ACOs prepare a specific treatment plan for chronic diseases and disorders. This service is usually handled by a “care coordinator,” usually a social worker or nurse, to ensure that every patient receives the correct care at the right time.

3. Enhances Accountability of Healthcare Providers

ACOs are also meant to keep doctors accountable for the quality of their care. The medical professionals who are part of an ACO are paid higher if they prove the improvement in the patient’s health. For instance, an ACO needs to prove that a team of healthcare providers is involved in a patient’s care, besides proving that the patient is receiving preventive services, such as flu shots, etc. The ACO is mainly judged by the insurance provider on 33 different parameters.

How to Become an ACO Patient

While you do not enroll in an ACO as you would with health insurance, being a part of an ACO affects how your healthcare is coordinated if your healthcare provider participates in one. Your doctor will decide to create a team for patient care in adherence to the insurance provider’s guidelines and regulations.

If your healthcare provider is part of an ACO and provides you care under it, then you will be assigned to your provider’s ACO. The ACO will also explain the type and extent of care you, the patient, will receive from them.

Patients don’t need to become part of an ACO, as it is the doctor’s prerogative. However, if your doctor is part of an ACO, you will benefit from the group’s streamlined and coordinated care. Each member of an ACO team dedicated to your care has easy access to your medical history, conditions, and prescriptions, which makes it possible to offer the best-suited and most effective treatment.

Top Accountable Care Organizations (ACO)

Here is a list of the top-ranking ACOs in the US:

1 – Palm Beach Accountable Care Organization

Specific earnings of ACOs can fluctuate yearly and should be verified with the latest CMS reports or ACO performance data for accuracy. This physician-owned and operated organization has an extensive membership, with 275 primary care providers and 175 medical specialists. The PBACO cares for over 79,000 Medicare patients in New York State and Florida.

In addition, PBACO earned a 100 percent quality score for the second year in a row, maintaining its top position from the previous year.

2 – Baylor Scott & White Quality Alliance

The Baylor Scott & White Quality Alliance improved its performance between 2020 and 2021 by earning around USD 14 million. The Texas-based ACO also earned around USD 61 million to be distributed across its 50 member hospitals and more than 95 acute care facilities in the United States.

This ACO scored 98.48 percent quality in caring for over 125,000 Medicare patients, the 5th highest number of all ACOs.

3 – Privia Quality Network (Virginia, Maryland, Washington D.C.)

The Privia Quality Network of Virginia, Maryland, and DC earned around USD 41.6 million in performance payments in 2021. This ACO also expanded its service network by including members of Florida, Tennessee, and Maryland.

4 – Caravan Health Collaborative ACO

The Caravan Health Collaborative ACO, or Caravan Health for short, recently ranked on the top ACO list and earned around USD 35.35 million in performance payments. Signify Health bought Caravan for USD 250 million at the beginning of 2022 and has successfully expanded it into a renowned ACO that focuses on risk sharing and low fees.

Medicare data shows that Caravan Health served more than 220,000 patients in 2021, the highest number of US ACOs beneficiaries.

5 – Steward National Care Network

The Steward National Care Network is a subsidiary of Steward Health Care and earned around USD 34.49 million in performance payments from Medicare in 2021. This resulted in the company scoring 88.79 percent in quality score and establishing it as one of the more extensive ACO networks with over 161,000 Medicare beneficiary’s services in 2021.


An ACO is a collaboration between different healthcare providers, including clinicians, specialists, and healthcare service providers, such as hospitals and long-term care facilities. Patients receive optimal quality health care and prompt relief through ACOs, which are, in turn, rewarded by Medicare or other types of health insurance providers that the ACO members are part of.

See Also

What is a Contingent Beneficiary

What is Roe vs Wade

What is a National Provider Identifier

What is a Medical Credit Card

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