Accountable Care Organizations and Medicare Shared Savings Program

Written by: PeopleKeep Team
Originally published on January 11, 2013. Last updated April 26, 2022.

Yesterday, The Centers for Medicare & Medicaid Services (CMS) announced the latest group of Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program. Specifically, 106 new organizations have been selected to participate in the program. This is the third group since the Medicare Shared Savings program was launched over a year ago.Accountable Care Organization and Medicare 

What is the Medicare Shared Savings Program?

The Medicare Shared Savings Program was established to facilitate coordination and cooperation among providers to improve the quality of care for Medicare Fee-For-Service beneficiaries and reduce unnecessary costs. Eligible providers, hospitals, and suppliers may participate in the Medicare Shared Savings Program by creating or participating in an Accountable Care Organization (ACO).

The Shared Savings Program is designed to improve beneficiary outcomes and increases value of care by:

  • Promoting accountability for the care of Medicare FFS beneficiaries

  • Requiring coordinated care for all services provided under Medicare FFS

  • Encouraging investment in infrastructure and redesigned care processes

The Shared Savings Program will reward Accountable Care Organizations that lower their growth in health care costs while meeting performance standards on quality of care and putting patients first. 

What are Accountable Care Organizations?

Accountable Care Organizations are groups of doctors and other health care providers that have agreed to work together to treat individual patients across care settings. They share—with Medicare—any savings generated from lowering health care costs while meeting standards for quality of care and providing patient-centered care.

Accountable Care Organizations and the Medicare Shared Savings Program

ACOs are one Affordable Care Act (ACA) provision. Regulators beleive that it will improve Medicare.  In a blog post, Jonathan Blum, Acting Principal Deputy Administrator and Director, Center for Medicare, gave the following example: when you go home from the hospital, you’ll get the care you need to reduce the risk of going back to the hospital. All of these are designed to increase the value of health care services and they were all put in place by the Affordable Care Act. 

Roughly half of all Medicare Shared Savings ACOs are physician-led organizations that serve fewer than 10,000 beneficiaries. Approximately 20 percent of ACOs include community health centers, rural health centers and critical access hospitals that serve low-income, and rural communities. Fifteen of the new ACOs qualified to be “Advance Payment ACOs,” an innovative model designed especially for entities such as small doctors’ practices or hospitals and doctors that work in remote rural areas.

Announcements Regarding Accountable Care Organizations and the Medicare Shared Savings Program

Topics: Medicare
Originally published on January 11, 2013. Last updated April 26, 2022.


Additional Resources

View All Resources