What is an ACO?

An Accountable Care Organization, also known as an “ACO,” is a group of providers and other health care professionals who come together to give coordinated high-quality care to their patients.

The goal under the Affordable Care Act (ACA) was to improve the healthcare delivery system in order to enhance quality, improve beneficiary outcomes, and increase value of care.

Accountable Care Organizations facilitate coordination and cooperation among providers to improve quality care while reducing unnecessary costs.

For more information about ACOs:

Talk to your doctor.

Call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.

Visit Medicare.gov.

Contact VBLTC ACO at info@vbltc.com

How ACOs Work

Accountable care organizations (ACOs) are aggregations of multiple providers committed to improving the quality and cost-effectiveness of a patient population.  ACOs share the benefits of improved care with payers and their member practices.


Medicare uses a fairly complicated method to determine if and how much each ACO has impacted the cost of care for patients assigned to it. Each ACO is assigned a “benchmark price” for its patients. That price reflects a risk-adjusted average cost per patient assigned to ACO practices during a baseline period (2019-2021 in our case).

That cost is trended forward to each “performance year” during the ACO’s contract. If the actual costs for the ACO’s patients are sufficiently below the benchmark, the ACO receives a portion of the difference in savings.

The amount that an ACO receives is adjusted by its scores on a set of quality measures. Many of those measures are based on a patient experience of care survey. Some are based on claims data, such as hospital readmission rate, while others are based on registry data.

Patient Assignment (Attribution)

But which patients is the ACO responsible for?  Patients are assigned to the ACO when ACO providers bill for a plurality of primary care visit costs.  (There needs to also be at least one primary care physician claim from an ACO member physician for the patient to be assigned to the ACO.)

Why Join an ACO?

There are lots of reasons why providers join ACOs, but all of them are about ACOs being good business.  Some providers join ACOs for the shared savings.  Others join ACOs in order to enhance relationships with other providers.  Some join ACOs because their missions align with the guiding principles of accountable care.

For long-term care practices, we see two main reasons for joining an ACO.  Shared savings can amount to hundreds of dollars per patient with minimal additional operating costs.  The money flows directly to your practice’s bottom line.  Other practices join ACOs as a way to partner with facility owners and strengthen their relationships.

Value Based Long Term Care emphasizes the importance of utilizing a democratic leadership style that includes and emphasizes the voices of our ACO participants. Our physicians participate in a model that works towards achieving better healthcare and quality outcomes for long-term care residents.

Physicians work diligently and directly with residents and other professionals to ensure that all records are up to date and correct, to further improve quality of care. Through the hard work of the participating physicians, there is a sense of community, where all voices are heard and validated.

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