Accountable Care Organizations

Curated by Sarah E. Baumann, J.D.
Writer and Analyst

Accountable Care Organizations or ACOs were established by section 3022 of the Affordable Care Act (ACA) as part of the Medicare Shared Savings Program. An ACO is a group of providers or suppliers or a network of groups, often affiliated with a hospital, that are jointly responsible for the cost and quality of health care provided to Medicare beneficiaries. Because ACOs receive bonuses when they provide exceptional or low-cost care and are penalized for low-quality or high-cost care, it is expected that they will give coordinated care and chronic disease management, thereby improving the quality of care patients receive.