Accountable Care Organizations (ACO)
What is an ACO?
ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients who are assigned by CMS. ACO models dictate how care coordination is provided and reimbursement received. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. Within the Medicare program, when an ACO succeeds in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings it achieves. There are other payer ACO models as well, but this page will focus on
Medicare ACOs.
Where can I learn more about ACOs?
CMS offers different learning opportunities for providers and organizations interested in learning more about ACOs. To learn about the latest opportunities, visit CMS Innovation Center and Medicare Shared Savings Program.
What is the CMS ACO REACH Model (formerly the Global and Professional Direct Contracting Model)?
The goals of the redesigned ACO Realizing Equity, Access, and Community Health (REACH) Model are to improve quality of care and care coordination for patients in Traditional Medicare, especially for patients in underserved communities. The ACO REACH Model provides tools and resources to empower doctors and other health care providers to achieve these goals. This approach affords patients greater individualized attention to their specific health care needs while preserving choice of providers and all other services and flexibilities in Traditional Medicare. Patients in a REACH ACO get help navigating the health system and managing their conditions. They may have greater access to enhanced benefits, such as telehealth visits, home care after leaving the hospital, and help with co-pays. The ACO REACH Model encourages health care providers — including primary and specialty care doctors, hospitals, and others — to come together to form an Accountable Care Organization, or ACO. The model uses an innovative payment approach to better support care delivery and coordination for people in underserved communities. The application period for this model closed in 2023 and will not be accepting new applications for the remaining model duration.
What is the Medicare Shared Savings Program (MSSP)?
The
MSSP allows ACOs to share savings and risk with the Medicare Program and will reward ACOs that lower their growth in health care costs while meeting performance standards on quality of care and putting patients first. ACOs may participate in the Shared Savings Program for agreement periods of at least five years, under one of
two participation tracks - the BASIC track (which includes a glide path for eligible ACOs), or the ENHANCED track, which offers the highest level of risk and potential reward. The different tracks correspond to the potential level of risk and shared savings an ACO may receive. As this potential for sharing in savings due to increased efficiencies and improved outcomes increases (“shared savings”), MSSP tracks also require that ACOs maintain a certain level of financial responsibility for when costs increase (“shared losses”) beyond a determined cost benchmark. More information can be found in the
Physicians Advocacy Institute’s presentation (note: This resource has not been updated since 2023 but the general details remain relevant). Medicare will continue to pay individual ACO providers and suppliers for covered items and services as it currently does under the Medicare Fee-For-Service payment systems. However, as discussed above, ACOs will be eligible to receive shared savings, or be responsible for shared losses, based on their performance compared to their established benchmarks. View the
2025 Shared Savings Program Fast Facts resource for performance data on the program. Review the
Program Guidance & Specifications web page for more information.
Additional Resources