|Accountable Care Organizations
An accountable care organization (ACO) is a type of payment and delivery reform model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated health care providers form an ACO, which then provides care to a group of patients. The ACO may use a range of different payment models (capitation, fee-for-service with asymmetric or symmetric shared savings, etc.). The ACO is accountable to the patients and the third-party payer for the quality, appropriateness, and efficiency of the health care provided. According to the Centers for Medicare and Medicaid Services (CMS), an ACO is "an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it."
While the ACO model is designed to be flexible, Dr. Mark McClellan, Dr. Elliott Fisher and others defined three core principles for all ACOs: 1) Provider-led organizations with a strong base of primary care that are collectively accountable for quality and total per capita costs across the full continuum of care for a population of patients; 2) Payments linked to quality improvements that also reduce overall costs; and, 3) Reliable and progressively more sophisticated performance measurement, to support improvement and provide confidence that savings are achieved through improvements in care.
The ACO-model builds on the Medicare Physician Group Practice Demonstration and the Medicare Health Care Quality Demonstration, established by the 2003 Medicare Prescription Drug, Improvement, and Modernization Act. Kaiser Permanente and HealthCare Partners Medical Group are two notable examples of successful ACOs.
While ACOs have become increasingly more common in the last few years, a recent study by the Medical Group Management Association (MGMA) has shown that the implementation of ACOs is one of the toughest challenges facing the MGMA members today.
Section 3022 of the Patient Protection and Affordable Care Act (ACA) creates the Medicare Shared Savings program, allowing ACOs to contract with Medicare by January 2012. According to the ACA, the Medicare Shared Savings program, "promotes accountability for a patient population and coordinates items and services under part A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery". Section 3022 outlines the following requirements for ACOs:
- The ACO shall be willing to become accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it
- The ACO shall enter into an agreement with the Secretary to participate in the program for not less than a 3-year period
- The ACO shall have a formal legal structure that would allow the organization to receive and distribute payments for shared savings to participating providers of services and suppliers
- The ACO shall include primary care ACO professionals that are sufficient for the number of Medicare fee-for-service beneficiaries assigned to the ACO under subsection
- At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it in order to be eligible to participate in the ACO program
- The ACO shall provide the Secretary with such information regarding ACO professionals participating in the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements under paragraph (3), and the determination of payments for shared savings under subsection (d)(2)
- The ACO shall have in place a leadership and management structure that includes clinical and administrative systems
- The ACO shall define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies
- The ACO shall demonstrate to the Secretary that it meets patient-centeredness criteria specified by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans
- The ACO participant cannot participate in other Medicare shared savings programs 
- The ACO entity is responsible for distributing savings to participating entities
- The ACO must have a process for evaluating the health needs of the population it serves
CMS' Notice of Proposed Rule was released March 31, 2011 for the Medicare Shared Savings program and the Comment period closed June 6, 2011. 
^ a b "Medicare "Accountable Care Organizations" Shared Savings Program - New Section 1899 of Title XVIII, Preliminary Questions & Answers". Centers for Medicare and Medicaid Services. https://www.cms.gov/OfficeofLegislation/Downloads/AccountableCareOrganization.pdf. Retrieved January 10, 2010.
^ McClellan M, McKethan AN, Lewis JL, Roski J, Fisher ES (2010). A National Strategy to Put Accountable Care Into Practice. 29. pp. 982=990. doi:10.1377/hlthaff.2010.0194. PMID 20439895.
^ Fisher ES, Shortell SM (2010). "Accountable Care Organizations: Accountable for What, to Whom, and How". JAMA 304 (15): 1715–1716. doi:10.1001/jama.2010.1513. PMID 20959584.
^ "Overview Shared Savings Program". CMS. https://www.cms.gov/sharedsavingsprogram/.