“Medicare has been experimenting with new payment models to bring down health care costs, improve health care quality and promote healthy communities. One payment model launched in 2013 is a ‘shared-saving program’ that involves ‘Accountable Care Organizations.’ What are Accountable Care Organizations (ACOs)?
“ACOs are groups of doctors and/or hospitals, home health agencies and nursing homes that have contracted with the Centers for Medicare and Medicaid Services (CMS) to coordinate patient care in ways that reduce health care spending and promote quality. If they succeed at lowering costs, they increase their revenues; they share in the savings. ACOs respond to the belief that hospitals and doctors need better incentives to keep patients healthy, improve care quality and reduce costs.
“People enrolled in traditional Medicare can also be enrolled in ACOs. According to the HHS Office of the Inspector General (OIG), those enrolled in an ACO tend to be older and have more health risk factors than the typical person with Medicare.”