Accountable Care Organizations (ACO)

The ACO models and how care is provided and reimbursement received.

What is an ACO?
ACO Models
Learn More
Medicare Shared Savings Program
ACOs in Harris County
Medicare ACO Database

What is an ACO?

ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients who are assigned by CMS. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. Within the Medicare program, when an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings it achieves. There are other payer ACO models as well, but this page will focus on Medicare ACOs.

Where can I learn more about ACOs?

CMS offers different learning opportunities for providers and organizations interested in learning more about ACOs. To learn about the latest opportunities, visit CMS Innovation Center and Medicare Shared Savings Program.

What is the CMS ACO Reach Model (formerly the Global and Professional Direct Contracting Model)?

CMS has redesigned the Global and Professional Direct Contracting Model (GPDC) Model in response to stakeholder feedback and participant experience. The goals of the redesigned ACO REACH Model are to improve quality of care and care coordination for patients in Traditional Medicare, especially for patients in underserved communities.  The ACO REACH Model provides tools and resources to empower doctors and other health care providers to achieve these goals.  This approach affords patients greater individualized attention to their specific health care needs while preserving choice of providers and all other services and flexibilities in Traditional Medicare.

What is the Medicare Shared Savings Program (MSSP)?

The MSSP allows ACOs to share savings and risk with the Medicare Program and will reward ACOs that lower their growth in health care costs while meeting performance standards on quality of care and putting patients first. Originally, the MSSP had four different “Tracks:” 1, 1+, 2, and 3. Notably, as finalized in 2019, Tracks 1, 1+, 2, and 3 have been replaced by two new tracks: the BASIC and ENHANCED tracks. CMS is allowing ACOs currently participating in a three-year agreement period (with a start date of January 1, 2019 and earlier) under Tracks 1, 2, 3, or Track 1+ to complete the remainder of these agreement periods. The different tracks correspond to the potential level of risk and shared savings an ACO may receive. As this potential for sharing in savings due to increased efficiencies and improved outcomes increases (“shared savings”), MSSP Tracks also require that ACOs also maintain a certain level of financial responsibility for when costs increase (“shared losses”) beyond a determined cost benchmark. More information can be found in the Physicians Advocacy Institute’s presentation.

Medicare will continue to pay individual ACO providers and suppliers for covered items and services as it currently does under the Medicare Fee-For-Service payment systems. However, as discussed above, ACOs will be eligible to receive shared savings, or be responsible for shared losses, based on their performance compared to their established benchmarks. 

In order for participating providers to form an ACO, they must serve a plurality of evaluation and management (E&M) services to at least 5,000 Medicare fee-for-service (FFS) beneficiaries and participate in the program for at least three years. A provider participating in MSSP is defined as “…an entity identified by a Medicare-enrolled billing TIN through which one or more ACO providers/suppliers bill Medicare, that alone or together with one or more other ACO participants compose an ACO, and that is included on the list of ACO participants.”

Additional Resources