ACO - Accountable Care Organization

Definition: Affordable care organizations (ACOs) are a result of health reform, or the Patient Protection and Affordable Care Act (PPACA). The government definition of an accountable care organization 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." Basically, in plain language, what that means is that providers and facilities of all types will align with one another in ACOs, and their reimbursements will reflect the quality of care provided. As of January 1, 2012, ACOs will be able to take advantage of savings programs that will award them financially for high quality of care. As of March 2011, these standards of care have not been spelled out by the government, so it remains to be determined what quality benchmarks must be achieved in order for the ACO to be rewarded. The ACO will not be penalized if the quality goals are not met. The alignment will not be directly apparent to the patient population, nor will patients be required to obtain all care from a particular ACO at all times.