What does ACO mean in insurance?
Asked by: Prof. Lois Kemmer | Last update: December 5, 2025Score: 5/5 (71 votes)
What is an ACO and how does it work?
Accountable Care Organization (ACO) – An entity comprised of physicians, hospitals, and/or other providers that improves health care quality, outcomes, and care experiences and can offer shared savings.
What is an ACO insurance plan?
An ACO is a group of health care providers who take responsibility for the total cost and quality of care for their patients, and in exchange they can receive a portion of the savings they achieve.
What is the difference between a PPO and an ACO?
With a PPO, patients see high premiums but can see specialists and out-of-network doctors without referrals. However, both systems create their networks of doctors and hospitals. “An ACO plan puts greater emphasis on quality care and long-term savings, making care more affordable for patients.”
Do patients know they are in an ACO?
If your doctor chooses to participate in an ACO, you will be notified, either in person or by letter. An ACO isn't the same as a Medicare Advantage Plan or Health Maintenance Organization (HMO). You're still in Original Medicare and your Medicare benefits, services, rights and protections won't change.
What is an Accountable Care Organization (ACO)?
What are negatives of an ACO?
However, ACOs also face challenges such as the complexity of implementation and management, potential misaligned incentives among providers, and difficulties in coordinating care for patients outside of the ACO network.
What are the requirements for ACO?
Have a minimum three-year contract; Have sufficient primary care physicians and providers to have at least 5,000 patients (Medicare fee-for-service beneficiaries) assigned; Have processes to promote evidence-based medicine, patient engagement, and coordination of care; and.
Do doctors prefer HMO or PPO?
HMO plans might involve more bureaucracy and can limit doctors' ability to practice medicine as they see fit due to stricter guidelines on treatment protocols. So just as with patients, providers who prefer a greater degree of flexibility tend to prefer PPO plans.
How are providers paid in an ACO?
Providers who are members of ACOs receive fee-for-service payments throughout the performance period (volume-based care rather than value-based care).
Why would a physician join an ACO?
The goal of an ACO is to ensure patients, especially those with chronic conditions, receive the right care, at the right time, at the right place – and they financially reward and incentivize providers to reduce hospitalizations, medical errors, and the duplication of tests and services.
Can you have two primary care doctors with Medicare?
If you have Original Medicare, you can have two PCPs if you feel it's necessary (e.g., you live in multiple states, or your work requires frequent/extended travel). Medicare doesn't limit the number of PCPs you can have. However, you can't consult them on the same calendar day.
What are the two ways beneficiaries can join ACO?
There are two common approaches that will be used to assign patients to ACOs: Beneficiaries can be automatically assigned to an ACO, or they can actively select an ACO. However, ACOs and insurers can design alternative approaches as well. Under this approach, beneficiaries do not select an ACO.
Is ACO a Medicaid?
A social ACO is funded by a value-based arrangement with a Medicaid health plan and works with existing Medicaid providers to facilitate access to care.
How do you use ACO?
For everyday cleaning, dilute 1 tablespoon of ACO All Purpose Cleaner in 500ml of water. For tough stains, dilute 2 tablespoons of ACO in 500ml of water.
What is an example of an ACO?
Prominent examples include Hill Physicians Medical Group, Monarch HealthCare, Brown and Toland Medical Group, Heritage Provider Network, Primecare, Sante Community Physicians, and Sharp Community Medical Group.
What is the ACO responsible for?
The administrative contracting officer (ACO) is solely responsible for initiating reviews of the contractor's purchasing systems, but other organizations may request that the ACO initiate such reviews.
What is the downside of ACO?
Cons: No way to opt out unless you change doctors: If your doctor is in an ACO, then so are you. You have no choice in the matter. Or, if your physician isn't in an ACO, but you really want to be, you'll have to switch doctors.
Can the member use any doctor or hospital that accepts Medicare under an ACO?
If your doctor or other provider is part of an ACO, you still have the right to visit any doctor, hospital, or other provider that takes Medicare at any time.
How do I know if my doctor is part of an ACO?
- You can always ask your doctor or the staff if they are in an ACO.
- There may be a notice in the office about the ACO.
- You may get a letter from your doctor or from Medicare (or your respective insurer) letting you know the doctor is part of an ACO.
What are the two most common health insurance plans?
Before choosing a health insurance policy for yourself, your family, or your employees, you must know what types are available. Some popular health insurance policy options are: Preferred provider organization (PPO) plans. Health maintenance organization (HMO) plans.
Is Blue Shield PPO better than HMO?
A PPO plan is more flexible than an HMO, as you do not need to have a PCP and you can visit any provider or specialist you want.
Why are out of pocket costs higher with PPO?
HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral.
How does an ACO get paid?
An upfront, variable payment: Each ACO received a payment based on the number of its historically-assigned beneficiaries. A monthly payment of varying amount depending on the size of the ACO: Each ACO received a monthly payment based on the number of its historically-assigned beneficiaries.
Do I qualify for ACO?
Eligibility. You are likely eligible if your household's income is below 200% of the Federal Poverty Line, or if you or someone you live with currently receives a government benefit like SNAP, Medicaid, SSI, WIC, Pell Grant, or Free and Reduced-Price Lunch.