An Overview of Accountable Care Organizations

April 10, 2012 — 1,133 views  
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The overall goal of the 2010 Patient Protection and Affordable Care Act was to lower healthcare costs in any way possible. However, a more pressing need for the federal government in particular was to use the law to enforce lowered Medicare operating costs. For years, that program had seen prices balloon because the incentives in place at the time emphasized care without enacting any cost controls.

Part of the Affordable Care Act calls for the formation of Accountable Care Organizations, or ACOs. An ACO is essentially a group of medical facilities, primary care physicians, healthcare specialists and other doctors who come together to provide services to Medicare benefit recipients. The groups are formed of the members' own accord, but one rule must be followed: keep costs low.

When Medicare patients are given care, the doctors and medical facilities that provide services are later reimbursed by the federal government. An ACO that is able to keep the costs of their operations low while meeting certain quality of care benchmarks will receive bonuses from the government with the reimbursements. An Accountable Care Organization needs to serve a minimum of 5,000 patients to be eligible to participate in this program, and the groups form for at least five years. As of early 2012, it is still unclear how successful these organizations will ultimately be since the beginning of that year marked the start of the program.