What is an ACO?

By Sophia Kroon


Born out of the Affordable Care Act of 2010, the concept of the Accountable Care Organization (ACO) is tied to the goal of providing better and more efficient, coordinated health care to more people at lower cost. The organizations themselves are composed of groups of physicians and other providers of Medicare-covered services, and venues where care is provided, connected by networks of individual practices or partnerships, joint ventures or hospital-employed ACO professionals.  Payment is tied to the achievement of health care quality goals, and the organization is expected to be patient-centered, with patients and providers working together toward optimum health care delivery.

To continue to qualify as an ACO, an organization has to meet certain criteria, including caring for at least 5000 Medicare beneficiaries for a period of three years.  It also must have a governing board that includes health care providers, suppliers and Medicare beneficiaries. (Disclaimer: though ACOs are often paired with Medicare, there are some ACO providers that utilize private insurance programs.)

When implemented and working properly, ACOs are eligible to share savings with Medicare or other payers, though they may also be held accountable for losses. The goal is to incentivize organizations to provide care for patients that is more efficient and better organized, and by having many providers under one proverbial “roof,” medical record sharing should be easier and care streamlined by more efficient communication.

Quality improvement standards to which ACOs are held accountable include:

  • Patient/caregiver experience of care
  • Care coordination
  • Patient safety
  • Preventive health
  • At-risk population/frail elderly health

What does the advent of this healthcare delivery model mean for a post-acute provider like Kindred? Well, it potentially shrinks the population of potential referrers by placing large groups of them under one referral roof; developing effective partnerships with these organizations will be key to ensuring ACO patients’ access to our full complement of post-acute services, especially in our integrated care markets, such as Dallas, which already has three ACOs up and running.

The three Dallas ACOs all have different personalities – one is interested in joint ventures with post-acute providers, a

What is an ACO?

nd Kindred has been successful in getting some of its transitional care hospitals and transitional care and rehabilitation centers on their referral list, all based on proximity.

One is a shared savings model whose philosophy is that they want to work with other providers who have skill sets they don’t, making a Kindred collaboration potentially realistic.

Finally, one is operating under the philosophy of owning everything they operate, which makes it a tougher challenge with potentially less room for collaboration.

ACOs are also operating in many of Kindred’s other integrated care markets, including Indianapolis, Las Vegas and Boston.

When and if ACOs become more prevalent, we can expect to see these unique issues become more prevalent. What do you think healthcare reform might mean for the post-acute world?

“Accountable Care Organizations: Improving Care Coordination for People with Medicare.” HealthCare.gov. U.S. Department of Health and Human Services. 12 March 2012.