The “accountable care organization” (ACO) is a major topic of discussion in American health policy. While the ACO label has been around since 2006, it was mentioned in numerous healthcare reform bills proposed in 2009 and was ultimately included in Section 3022 of the Patient Protection and Affordable Care Act (ACA) as the Medicare Shared Savings Program. The ACA’s ACO provision covers Medicare ACOs.
It is important to note that prior to the passage of the ACA, there had been a number of private-sector efforts to form ACOs, initiated by physician-led health systems, integrated delivery systems, commercial payers and other types of organizations.
Commercial ACOs, which have been described in a variety of ways, are distinct from Medicare ACOs in that a commercial payer, rather than Medicare, is the entity providing the financial incentives for quality and cost performance to the provider organizations.
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