Everything You Need to Know About Accountable Care Organizations

Here's how accountable care organizations (ACOs) work and what they do for you.

One of the main intents of the Patient Protection and Affordable Care Act, commonly referred to as “Obamacare,” was to find ways in which to reduce health care costs while increasing the care that individuals receive. One of the largest source of health care costs is the population covered by Medicare. To address the growing costs of this population, Medicare was required to create Accountable Care Organizations (ACOs) for those receiving Medicare services. Below is information that is important for individuals who may have the opportunity to be a participant in an ACO to know.

What are ACOs?

An ACO is a network of healthcare providers that work together in order to coordinate your care. Lead by your primary care physician, the goal of an ACO is to eliminate repetitive and unnecessary health care spending, while increasing the level of care you receive. ACOs will include your primary care physician, hospitals, specialists, and all other healthcare providers that you visit. Information and records will be shared among your providers, eliminating the need for you to be the main communicator of information between your doctors. It also allows for health care providers to work together and provide better care.

For example, in an ACO, if you have uncontrolled diabetes, your primary care physician may recommend you see a hematologist for increased care. If your primary care physician and hematologist are in the same network, your information from the visit with the hematologist would be available to your primary care physician, including laboratory work done and prescriptions given, if any. Your primary care physician can then provide follow-up care to you, armed with all of the information from your visit with the hematologist without any need for you to provide that information.

ACOs seem to be just like HMOs. Are they the same?

From the outside, Accountable Care Organizations (ACOs) and  Health Maintenance Organizations (HMOs) appear to be very similar. Both are programs that incentivize healthcare providers to keep health care costs down. However, there are key differences between the two programs. Here's a quick comparison.

ACOs v. HMOs: Key Differences



Run by providers

Run by insurers

Voluntary program that individuals can leave at any time

Individuals cannot leave the network without changing health care plans

Individuals are not tied to the network and are not penalized for going outside of the network

Only a percentage of costs, if any, are covered if care provided outside of the network

Physicians and health care professionals are all working together

Though costs are tied, health care professionals need not work together or share information

No “gatekeeping” -- no need for referrals or primary care physician approval before seeing a specialist

Referrals may be necessary before seeing a specialist

Must meet quality benchmarks in order to remain an ACO

Quality benchmarks not tied to participation in an HMO

Do I have to participate in an ACO? How do I sign up?

Participation in ACOs is completely voluntary. You cannot be forced to participate in an ACO and, if you chose to participate in an ACO, you can leave at any time.

In order to participate in an ACO, your primary care physician must be part of an ACO. There is no action needed on your part; you will be notified that your primary care physician is part of an ACO and you will be automatically enrolled in the ACO.

If you do NOT want to participate in the ACO at all, you can choose to go to another primary care physician who is not part of an ACO.

I am deciding whether or not to participate in an ACO. What changes will it mean for me if I join?

If you do chose to participate in an ACO, the key element of participation is the ability for your health care providers to share information among themselves. Because enrollment in ACOs is automatic, your health care providers will automatically be able to share information among themselves within 30 days of your being notified that your primary care physician is part of an ACO. However, you have the option of declining to have your information shared within the ACO. Declining to have information shared does not remove you from the ACO.

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