An Accountable Care Organization (ACO) is a voluntary coalition of healthcare providers characterized by a care delivery and reimbursement model tying provider payments to quality metrics and patient care outcomes. The goal of the ACO model is to reduce total care costs for a specific patient population. Each ACO has a defined patient population for which it is held accountable in terms of care cost and quality. Patient populations are primarily comprised of Medicare beneficiaries.
All but one of the top 10 ACOs with the largest patient populations are commercial ACOs–the exception is one Medicare Next Generation ACO. Commercial ACOs are reimbursed by commercial payers or self-insured employers and do not have public reporting requirements, unlike those associated with the Centers for Medicare and Medicaid Services (CMS). A Leavitt Partners analysis found that commercial ACOs covered more than 17 million lives as of April 2016, more than twice that covered by Medicare and Medicaid ACOs. Many Commercial ACOs emulate the Medicare Shared Savings Program (MSSP) model, reimbursing provider services and comparing the total costs to a benchmark every year.