Which statement best describes Accountable Care Organizations (ACOs)?

Which statement best describes Accountable Care Organizations (ACOs)?

• A. Not an insurer, an ACO is a contract with public and private payers
• B. They are insurers
• C. They pay providers
• D. They only work with private payers

Answer: (A)

An Accountable Care Organization is primarily an arrangement of providers that comes together to coordinate care and manage the overall cost and quality of care for a defined patient population. It is not an insurance entity; the ACO is a contract-based organization that partners with payers to take on financial risk and to share in savings if quality and cost targets are met. Because ACOs can contract with both public and private payers, they are not limited to private payers, and they don’t function as the insurer themselves. Payment flows from the payer through the contract to the providers within the ACO, rather than the ACO issuing insurance or acting as the payer. This combination of care coordination, shared financial risk, and multi-payer contracting is what makes the description describing an ACO as a contract with public and private payers the best fit.

An Accountable Care Organization is primarily an arrangement of providers that comes together to coordinate care and manage the overall cost and quality of care for a defined patient population. It is not an insurance entity; the ACO is a contract-based organization that partners with payers to take on financial risk and to share in savings if quality and cost targets are met. Because ACOs can contract with both public and private payers, they are not limited to private payers, and they don’t function as the insurer themselves. Payment flows from the payer through the contract to the providers within the ACO, rather than the ACO issuing insurance or acting as the payer. This combination of care coordination, shared financial risk, and multi-payer contracting is what makes the description describing an ACO as a contract with public and private payers the best fit.