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A 7 minute read
February 21, 2018

*Updated August 2019

An Accountable Care Organization (ACO) is a voluntary association of healthcare providers that bases physician reimbursement on performance quality and outcomes in order to lower overall costs. This method incentivizes physicians to deliver higher-quality care at an affordable cost, and is replacing the traditional fee-for-service model that has dominated healthcare in the past.

The Medicare Shared Savings Program (MSSP) is the primary Medicare ACO program, originally introduced by the Centers for Medicare and Medicaid Services (CMS) in 2012. This program has continued to shift over the years, impacting ACOs participating in the initiative.

Before 2019, CMS enacted "Track 1, Track 1+, Track 2, and Track 3 MSSP models," which involved increasing amounts of risk. In 2019, this shifted into two tracks for organizations hoping to join the Medicare Shared Savings Program (MSSP):

1. Basic: a glide path for eligible ACOs, which often begins under a one-sided model and progresses through incremental levels of increasing risk and potential reward

2. Enhanced: the highest level of risk and potential reward

In 2020, CMS is starting to think about how to potentially align the MSSP quality performance scoring methodology more closely with the Merit-based Incentive Payment System (MIPS) quality performance scoring methodology in an effort to reduce burden and allow ACOs to more effectively target their resources toward improving care.

Top 10 Medicare Next Generation ACOs by Expenditures

ACO Name

Total MSSP Benchmark Expenditures (M)

ACO Start Date

UT Southwestern Accountable Care Network

$1,015 (B)

2014 Q1

Iowa Health Accountable Care LC 


2012 Q3

Indiana University Health ACO


2012 Q3

Doctors Connected


2013 Q1

Pioneer Valley Accountable Care


2016 Q1

Triad Healthcare Network ACO


2016 Q1

St Luke's Clinic Coordinated Care 


2013 Q1

Deaconess Care Integration 


2016 Q1

ProHealth Solutions


2012 Q3

Accountable Care Options


2012 Q3

Fig 1 Data from Definitive Healthcare’s Connected Care platform. Includes up-to-date financial and quality metrics for ACOs participating in the CMS Next Generation ACO Model.

Under the Coordinated Care Reward program, patients receiving care from Next Generation ACOs were eligible for payments of up to $25 by going to an annual wellness visit. Unfortunately, this Coordinated Care Reward was only applicable for 2017 and 2018, and is no longer available to beneficiaries for annual wellness visits in 2019 or 2020.

Some experts believe that ACO-funded payments could be a barrier to participation. However, by selecting a primary care physician from within an ACO, beneficiaries could see enhanced care coordination and improved care outcomes. ACOs participating in the Beneficiary Incentive Program will also be able to better understand their patient populations before the performance year begins—offering greater opportunities to engage with beneficiaries on various wellness and prevention programs.

Initiatives like the Beneficiary Incentive Program could also benefit independent physicians participating in an ACO. According to the American Medical Association (AMA), only 47.1 percent of physicians practice independently—the first time in U.S. history that less than half of doctors are independent. This trend is primarily attributed to the rising costs associated with independent practices, particularly surrounding technology implementation and maintenance, as well as other resources that comply with quality payment programs.

Participation in an ACO allows independent physicians to benefit from value-based initiatives like those outlined in the Medicare Access and CHIP Reauthorization Act (MACRA). ACOs heavily invest in new and efficient technologies, compile performance and quality data, and complete CMS reporting requirements on behalf of participants, which reduces the workload of independent physicians.

Top 10 Medicare ACOs by Number of Physicians

ACO Name

Number of Physicians

ACO Start Date

Ascension Care Management (FKA MissionPoint Health Partners ACO)


2012 Q3

Physician Organization of Michigan ACO


2013 Q1

Advocate Physician Partners Accountable Care


2012 Q3

Baylor Scott & White Quality Alliance


2015 Q1

Cleveland Clinic Medicare ACO


2015 Q1

Steward Integrated Care Network


2016 Q1

Mount Sinai Care


2012 Q3

Beth Israel Deaconess Physician Organization


2012 Q1

Indiana University Health ACO


2012 Q3

University Hospitals Coordinated Care Organization


2012 Q3

Fig 2 Data from Definitive Healthcare’s Connected Care platform. Includes up-to-date financial and quality metrics for all Medicare models including End Stage Renal Disease (ESRD), Next Generation, Pioneer, and Shared Savings ACOs.

Health systems also benefit when independent physicians participate in an ACO. Hospitals and health systems are able to expand their patient populations without directly employing physicians, which saves money. Independent physicians are able to refer patients to local hospitals and other facilities within a health system because they’re in the same network. Because all these providers participate in the same ACO, they are able to partner rather than directly employ or be employed—benefiting both parties. According to CMS, approximately 52.5 percent of Medicare ACOs in 2019 include both physicians and hospitals.

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Do you feel well-equipped to thrive in today's Value-Based Care environment?

In 2019, only 56 percent of hospitals participating in Value-Based Purchasing received a positive adjustment. Many providers are not fully prepared to effectively benchmark hospital performance, understand payor mix, and lack comprehension of their competitors in the wider market.

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  • The current state, growth trajectory, and impact of Value-Based Care
  • Provider benefits such as increased collaborations and incentive opportunities
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  • Predictions of the future of Value-Based Care and how to capitalize on rising opportunities such as implementing health IT systems to handle population health initiatives
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Alanna Moriarty

Alanna Moriarty

Alanna Moriarty is a healthcare industry writer and content strategist. As the Content Marketing Manager for Definitive Healthcare, she most enjoys connecting the dots between data and care delivery. ...

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