Key Issues Impacting Two-Sided Risk Accountable Care Organizations

Medicare accountable care organizations (ACOs) operating under two-sided financial risk arrangements save the federal healthcare program more than one-sided risk organizations. But policymakers must address financial incentives, benchmarks, and other issues to ensure two-sided risk ACOs continue to generate savings, the Medicare Payment Advisory Commission (MedPAC) recently reported.

“Medicare ACOs were created to help moderate the growth in Medicare spending and improve quality of care for beneficiaries by giving providers greater responsibility for costs and quality. ACOs have grown rapidly (about a third of Medicare FFS [fee-for-service] beneficiaries are now in ACOs), and several new initiatives have been designed to expand ACOs,” MedPAC wrote to Congress in its June 2018 report.

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