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Accountable Care Organizations (ACO)

What does ACO stand for in healthcare compliance?

In healthcare compliance, ACO is an acronym that stands for Accountable Care Organizations. 


What are Accountable Care Organizations?

Before explaining what accountable care organizations are, it’s important that you understand exactly how and why they came about. In 2010, President Barack Obama signed the Affordable Care Act into law. The Affordable Care Act sought to cover more adults under the Medicaid program whose income was below a certain standard, to allow more people access to healthcare that they could afford, and finally to support new healthcare methods that were less costly. Due to the need to implement new healthcare methods that were less costly, the Affordable Care Act supported the creation of accountable care organizations, which are assembled groups of doctors, hospitals, and healthcare providers that work together to provide quality care to their patients. Over the years, there has been a steady increase in the number of accountable care organizations. 


The coordinated care provided by accountable care organizations offers patients efficient and high-quality care while also reducing the cost of healthcare. Accountable care organizations are designed to work for the patients. To ensure patients receive efficient and high-quality care, doctors or hospitals will often refer patients to specialists within their accountable care organization. However, patients do have a choice in this matter. They can choose their own doctor if they wish, or they can stick with the recommended doctor. To safeguard that healthcare costs are reduced, accountable care organizations receive bonuses when healthcare providers maintain low-cost healthcare services. This added incentive motivates accountable care organizations to use fewer unnecessary medical services that are costly to both the patient and the hospital. 


There are a variety of accountable care organization programs. For example, some of the accountable care organization programs offered by Medicare are:


    • ACO Investment Model

    • Advance Payment ACO Model

    • Comprehensive ESRD Care Initiative

    • Medicare-Medicaid ACO Model

    • Medicare Shared Savings Program

    • Next Generation ACO Model

    • Pioneer ACO Model

    • Vermont All-Payer ACO Model


Accountable care organizations have proven to be very useful in the healthcare field. There are many benefits to accountable care organizations, such as:


    • Reduced spending

    • Shared savings

    • Financial incentive

    • Physician leadership

    • Better communication

    • Improved population health

    • Improved quality of care

    • Less waste in the medical system


However, while there are many pros to accountable care organizations, there are also some cons, which can include:


    • Capitation

    • Hard to implement

    • Requirements

    • Cost of IT

    • Data security challenges

    • Increased number of patients

    • Time shortages

    • Consolidation


Taking all things into consideration, accountable care organizations are vital because they ultimately seek to provide better healthcare for all patients while saving time and money for the patients as well as the healthcare providers. 


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