An Accountable Care Organization (ACO) is a voluntary association of healthcare providers that bases physician reimbursement on performance quality and outcomes in order to lower overall costs. This method incentivizes physicians to deliver higher-quality care at an affordable cost, and is replacing the traditional fee-for-service model that has dominated healthcare in the past.
The Medicare Shared Savings Program (MSSP) is the primary Medicare ACO program, originally introduced by the Centers for Medicare and Medicaid Services (CMS) in 2012. This program has continued to shift over the years, impacting ACOs participating in the initiative.
Before 2019, CMS enacted “Track 1, Track 1+, Track 2, and Track 3 MSSP models,” which involved increasing amounts of risk. In 2019, this shifted into two tracks for organizations hoping to join the Medicare Shared Savings Program (MSSP):
1. Basic: a glide path for eligible ACOs, which often begins under a one-sided model and progresses through incremental levels of increasing risk and potential reward
2. Enhanced: the highest level of risk and potential reward
In 2020, CMS is starting to think about how to potentially align the MSSP quality performance scoring methodology more closely with the Merit-based Incentive Payment System (MIPS) quality performance scoring methodology in an effort to reduce burden and allow ACOs to more effectively target their resources toward improving care.
Top 10 Medicare Next Generation ACOs by Expenditures
|ACO Name||Total MSSP Benchmark Expenditures (M)||ACO Start Date|
|UT Southwestern Accountable Care Network||$1,015 (B)||2014 Q1|
|Iowa Health Accountable Care LC||$814||2012 Q3|
|Indiana University Health ACO||$528||2012 Q3|
|Doctors Connected||$446||2013 Q1|
|Pioneer Valley Accountable Care||$372||2016 Q1|
|Triad Healthcare Network ACO||$316||2016 Q1|
|St Luke’s Clinic Coordinated Care||$253||2013 Q1|
|Deaconess Care Integration||$198||2016 Q1|
|ProHealth Solutions||$160||2012 Q3|
|Accountable Care Options||$152||2012 Q3|
Fig 1 Data from Definitive Healthcare’s Connected Care platform. Includes up-to-date financial and quality metrics for ACOs participating in the CMS Next Generation ACO Model.
Under the Coordinated Care Reward program, patients receiving care from Next Generation ACOs were eligible for payments of up to $25 by going to an annual wellness visit. Unfortunately, this Coordinated Care Reward was only applicable for 2017 and 2018, and is no longer available to beneficiaries for annual wellness visits in 2019 or 2020.
Some experts believe that ACO-funded payments could be a barrier to participation. However, by selecting a primary care physician from within an ACO, beneficiaries could see enhanced care coordination and improved care outcomes. ACOs participating in the Beneficiary Incentive Program will also be able to better understand their patient populations before the performance year begins—offering greater opportunities to engage with beneficiaries on various wellness and prevention programs.
Initiatives like the Beneficiary Incentive Program could also benefit independent physicians participating in an ACO. According to the American Medical Association (AMA), only 47.1 percent of physicians practice independently—the first time in U.S. history that less than half of doctors are independent. This trend is primarily attributed to the rising costs associated with independent practices, particularly surrounding technology implementation and maintenance, as well as other resources that comply with quality payment programs.
Participation in an ACO allows independent physicians to benefit from value-based initiatives like those outlined in the Medicare Access and CHIP Reauthorization Act (MACRA). ACOs heavily invest in new and efficient technologies, compile performance and quality data, and complete CMS reporting requirements on behalf of participants, which reduces the workload of independent physicians.
Top 10 Medicare ACOs by Number of Physicians
|ACO Name||Number of Physicians||ACO Start Date|
|Ascension Care Management (FKA MissionPoint Health Partners ACO)||7,900||2012 Q3|
|Physician Organization of Michigan ACO||5,700||2013 Q1|
|Advocate Physician Partners Accountable Care||3,900||2012 Q3|
|Baylor Scott & White Quality Alliance||3,800||2015 Q1|
|Cleveland Clinic Medicare ACO||2,800||2015 Q1|
|Steward Integrated Care Network||2,800||2016 Q1|
|Mount Sinai Care||2,249||2012 Q3|
|Beth Israel Deaconess Physician Organization||2,100||2012 Q1|
|Indiana University Health ACO||1,837||2012 Q3|
|University Hospitals Coordinated Care Organization||1,770||2012 Q3|
Fig 2 Data from Definitive Healthcare’s Connected Care platform. Includes up-to-date financial and quality metrics for all Medicare models including End Stage Renal Disease (ESRD), Next Generation, Pioneer, and Shared Savings ACOs.
Health systems also benefit when independent physicians participate in an ACO. Hospitals and health systems are able to expand their patient populations without directly employing physicians, which saves money. Independent physicians are able to refer patients to local hospitals and other facilities within a health system because they’re in the same network. Because all these providers participate in the same ACO, they are able to partner rather than directly employ or be employed—benefiting both parties. According to CMS, approximately 52.5 percent of Medicare ACOs in 2019 include both physicians and hospitals.