ACO movement gains steam as more providers, organizations join up

With a number of new providers participating in accountable care organization (ACO) initiatives, this care model is now available in 49 states, plus the District of Columbia. CMS has announced 121 new participants in these programs, which allow providers to offer better quality, coordinated care to reduce costs and burdens on patients. The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) emphasized quality and a patient-centered view of care, offering various tools like Medicare ACOs to move the health care system away from traditional fee-for-service payment arrangements.

Types of ACOs

The Medicare Shared Savings Program (MSSP), created by section 3022 of the ACA, allows providers to work together and reduce redundancy in patient care. Instead of being paid more for ordering more tests, providers are rewarded for quality of care and are able to share in the savings generated by the program. On January 1, 2016, 100 new ACOs and 150 renewing ACOs were participating in the MSSP, serving 7.7 beneficiaries. Some MSSP ACOs are participating in the ACO investment model (AIM), which provides pre-paid shared savings. CMS hopes that this model will encourage more ACO formation in underserved areas.

The Pioneer ACO model is for providers already experienced in care coordination, allowing them to shift toward a population-based payment model. This model involves a higher level of risk along with a generally higher level of shared savings than the MSSP. The Next Generation model was born from the prior models and includes strong patient protections and financial incentives for providers.


HHS announced last January that it intended to move 30 percent of traditional fee-for-service payments to alternative models by 2016. At the time, ACOs had already saved the Medicare program $417 million. CMS noted that those participating in ACOs in 2013 and 2014 also improved on 27 quality measures.