Accountable Care Organizations

Under the health reform law, Medicare will be able to contract with these to provide care to enrollees. What are they and how will they work? 

The Patient Protection and Affordable Care Act authorizes Medicare to contract with accountable care organizations (ACOs), networks of physicians and other providers that would work together to improve quality of health care services and reduce costs for patients. But what is an ACO, exactly?

There is no standard answer, but in simplest terms an ACO is a network of doctors and hospitals who are together responsible for providing high-quality care to patients. A new policy brief from Health Affairs and the Robert Wood Johnson Foundation describes the ACO concept as set forth in the new legislation. It also explains how ACOs might evolve over time and reviews the challenges and opportunities facing health systems, physicians, administrators and policy-makers as ACOs take shape.

The authors note that because the ACO concept is a new one, whatever model it ends up taking can be expected to evolve, as payers and providers learn which models work best.

This brief describes the ACO concept as set forth in the new legislation and how ACOs might evolve over time, and was published online on July 27, 2010 in Health Affairs.