Healthmonix ACO Blog

What is an ACO and how does it work?

Posted by Lauren Patrick on Mar 17, 2022 3:49:33 PM

Innovative approaches to healthcare payments and healthcare delivery are on the rise, with stakeholders shifting focus from volume to low cost / high value care. Over the past ten years, several value-based healthcare models have emerged. Most of these models are attributed to the Affordable Care Act (ACA),the mother of all innovative efforts to bring quality, affordable healthcare to all Americans.” Thanks to the ACA, accountable care organizations (ACOs) are the most popular and most successful strategies to date.


So, what exactly is an ACO? An ACO is a network of different healthcare providers, including primary care physicians and specialists who work together to offer coordinated high-quality care to the patients assigned to them. Think of it as buying the luxurious Airbus A380 superjumbo. Airbus contracts different suppliers to build various structural sections of the A380 and assemble them together. Like Airbus does for the A380, ACOs bring on board different “components” of patient care – hospitals, specialists, physicians – and ensure that all of the components work harmoniously together. Wait, that’s it? 

How does it REALLY work? Under an ACO, the traditional method of paying providers for the healthcare services they provide – known as fee-for-service – remains the primary way of payment. However, the providers under an ACO are further incentivized for reducing unnecessary healthcare utilization.

ACOs place a particular focus on care coordination activities, such as following-up with patients immediately upon discharge from inpatient hospitalization, reaching out to frequent emergency room visitors, engaging patients with the highest comorbidities, and sometimes by simply being there when it matters most. These are some of the strategies that have been proven to reduce unnecessary healthcare utilization.

However, successful care coordination strategies require deep understanding of the patient’s care journey and communication between various health care settings. We all know how well health systems communicate with each other, right?

Independent clinicians find themselves at a disadvantage simply because there is no easy way for them to coordinate care between their patients and other healthcare institutions. For example, they are often unable to receive notification of recent inpatient discharges, or frequent ER visits by patients whose cost is fully attributed to them under value-based payment programs. This is a problem since CMS has announced that they would like all clinicians to be part of an ACO by 2030! To meet this challenge, the Healthmonix ACO was created to provide independent providers with a no-risk, no-cost pathway into successful ACO participation.

CMS rewards ACO participants who master care coordination and reduce unnecessary healthcare utilization by sharing a portion of the savings that are achieved as a group. CMS recognizes that better care coordination strategies will lead to better patient outcomes and reduced spend, so they strive to incentivize clinicians for their efforts.

Coordinated care plays a big role within ACOs to enable better patient outcomes and achieve shared savings. Today, there are over 400 ACOs serving about 32.7 million patients across the country. The number is expected to grow in the coming years as ACOs continue to enter the market. Without a doubt, ACOs remain the most successful programs to support the ACA’s triple objective of improving America’s healthcare, enhancing the overall patient experience, and reducing healthcare costs. 

If your practice is considering joining an ACO, Healthmonix is currently recruiting primary care clinicians for 2023. Contact us to start your pathway towards successful ACO participation with no risk, while maintaining your independent practice!

Topics: ACO, VBC, Value-Based Care, Accountable Care Organization, Primary care clinicians

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