Accountable Care Organizations

DescriptionIn accountable care organizations, unrelated providers across the continuum of care agree to work together to achieve quality of care, health outcomes, and efficiency targets for a defined population. Payers assign beneficiaries to ACOs. However, in most instances, beneficiaries are not limited to seeing providers affiliated with the ACO. The ACO is held accountable for the cost, quality, and outcomes for beneficiaries whether or not they see only ACO-affiliated providers. Therefore, ACOs have strong incentives to engage patients in their care and encourage them to use ACO-affiliated providers.In order to meet performance targets, ACOs generally require that providers within their network follow standardized care protocols, be able to share data electronically, and meet minimum quality and cost thresholds.
Patient PopulationAll, although some ACOs may specialize in certain populations
Typical LeadIntegrated Delivery Systems, Hospitals, Physician Groups  
Role of Home HealthHome health providers generally work with ACOs to provide a subset of services, including traditional post-acute care services. In a Medicare context, ACOs may contract with home health agencies for other services, such as risk assessments and care coordination. Services outside of the traditional Medicare home health benefit are paid for by the ACO. 
Reimbursement ModelPayers set a spending target for services provided to beneficiaries assigned to an ACO. Providers are directly reimbursed by the payer on a fee-for-service or pay-for-performance basis and total costs are reconciled at the end of a performance period (typically one year). If the cost for providing services is lower than the target, the ACO may share in a portion of the savings with the payer. ACOs are only eligible to share in savings if they meet quality and health outcome standards. If costs are higher than the target, the ACO may be responsible for refunding the payer a portion of the costs. ACOs are not reimbursed on a capitated basis. ACOs also do not generally pay network providers for services that are reimbursed directly by the payer. ACOs do typically pay directly for some services, including care coordination, risk assessments, and some social services. ACOs may choose to share in savings and losses with network providers
Minimum Infrastructure RequirementsData sharing across providers, including clinical, cost and quality dataData analytics to identify high risk patients for specialized care coordination servicesAdoption of standardized care protocols to minimize quality and cost variation
VariationsACOs may vary based on payer (Medicare, Medicaid, commercial); level of risk (sharing in savings only, sharing in both savings and losses, sharing in higher amounts of savings and losses);  organizational structure; or waivers obtained from Medicare,among other things..
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