Types and Benefits of ACO’s (Accountable Care Organizations)

An ACO is a group of physicians and other healthcare providers that join together to provide coordinated high quality patient care. The additional benefit of ACOs is that they are expected to lower health care costs.

As such, most ACO’s generally replace or supplant fee-for-service payment structures with payments based on outcomes, total cost or other factors.

ACO’s may be either private (offered by private insurers) or public (Medicare or Medicaid).


ACO’s are either hospital led or physician led. Hospitals generally have more resources to run the ACO. However, physician led ACOs give the participating providers more autonomy and perhaps even bargaining power that could extend to insurance and other contract negotiations. An interesting dichotomy is that the greatest savings are often realized by preventing and limiting hospital admissions.

Low Risk/High Reward:

Some ACO models may have no downside and plenty of upside. Under the one-sided option of the current Medicare Shared Savings Model, if your ACO’s patients have higher medical cost growth than the benchmark your ACO does not share in the loss. However, if your ACO’s patients have lower medical cost growth you will share in the savings.

Leverage Existing Reporting:

The Medicare EHR Program and PQRS require practices to run standard Quality Measure reports, which should be available from their EHR system. These same reports can often be used for membership in an ACO and to monitor individual patient, provider and practice measures. EHRs may also provide additional tools and reporting, such as lab and vital signs monitoring, which can aid providers with cost-saving patient care.

Better Patient Care:

The ACO model encourages low cost preventative care that keeps patients out of the hospital. One of the most successful Medicare ACO’s to-date in the Rio Grande Valley of Texas was able to increase Diabetes control from 36.5 to 43.8 percent, a 20% improvement.

Sevocity is pleased to support our customers via specialized interfacing with their ACO’s. If you are a Sevocity customer and would like an interface with your ACO please contact your Sevocity Account Manager or the Sevocity Support Team.

More Reading:

CMS ACO Web Page: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html

Medicare Shared Savings Plan Specifications: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/Shared-Savings-Losses-Assignment-Spec-v2.pdf

Modern Medicine Article on Physician led ACOs: http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/accountable-care-organization/look-physician-led-acos-whats-driving-t?page=full

CMS Blog on 90 new ACO’s: http://blog.cms.gov/2014/12/22/acos-moving-ahead/

How an ACO led by Doctors Helped Cut The Cost of Care in Texas Town: http://medcitynews.com/2014/09/how-an-aco-led-by-doctors-helped-cut-the-cost-of-care-in-texas-town/