1. Graham, Margaret Clark PhD, FNP, PNP

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On March 31, 2011, the Department of Health and Human Services issued proposed guidelines for the establishment of Accountable Care Organizations (ACOs).1 ACOs are healthcare organizations consisting of primary care providers, specialists, and hospitals that will be held accountable for the cost and quality of healthcare delivered to a defined group of individuals. The premise behind ACOs is that providers, not insurance companies, are best equipped to determine the necessary changes in healthcare delivery to decrease cost and improve quality.2


Medicare ACOs are designed to create incentives for healthcare providers to improve coordination of care for individual patients with original Medicare, Medicare Part A, and Part B. ACOs create incentives for healthcare providers to improve care and cut costs through better coordination across settings including physician's offices, hospitals, and long-term-care facilities.3


The Medicare Shared Savings Program will reward ACOs that: put patients first, lower costs, and provide quality care.


The goal of an ACO is to reduce fragmented care. Better coordination of care will reduce duplication of services as well as costs. Participation in an ACO is voluntary for both the patient and the provider. If the ACO meets the quality standards and achieves savings, they will share the savings with Medicare.1 However, if the ACO does not reduce costs or provide eff-icient, effective care, then it will have to pay Medicare the difference.1


In order to participate in the Shared Savings Program, an ACO must serve at least 5,000 Medicare patients, agree to participate in the program for 3 years, and apply to the Centers for Medicare and Medicaid Services (CMS). Each participating ACO must establish a governing body that represents providers, suppliers, and Medicare beneficiaries. The CMS will develop a benchmark to determine if the ACO either qualifies for shared savings or will be held accountable for losses.


Quality of care will be measured using five key domains including:


1. Patient experience


2. Care coordination


3. Patient safety


4. Preventive health


5. At-risk population/frail older adult health



ACOs will report outcomes for more than 60 different quality measures.1 In addition, patients participating in ACOs will be surveyed annually regarding their experiences with providers.


In order to improve coordination of care and eliminate duplication, information sharing is encouraged. After notifying patients in writing, ACOs will be allowed to request claims information from CMS. Beneficiaries will have the option to opt out of having their claims information shared. ACOs cannot limit beneficiaries to certain providers, or require prior authorization for services.3


The proposed rules published in the Federal Register state, "The statute defines the term 'ACO professional' to include both physicians and non--physician practitioners such as advance practice nurses, physician assistants, and NPs. However, for purposes of beneficiary assignment to an ACO, the statute requires that only beneficiaries' utilization of primary care services provided by ACO professionals who are physicians be considered."4


All primary care providers, including NPs, must be included in beneficiary assignment for the Shared Savings Program for ACOs. Collecting data on the cost and quality of care provided by all ACO professionals, including NPs, will aid in establishing future models of healthcare delivery.




1. Department of Health and Human Services Centers for Medicare & Medicaid Services. What providers need to know: accountable care organizations fact sheet. 2011. [Context Link]


2. Devers K, Berenson R. 2009. Can accountable care organizations improve the value of health care by solving the cost and quality quandaries? Robert Woods Johnson Foundation. 2011. [Context Link]


3. Department of Health and Human Services Centers for Medicare & Medicaid Services. 2011. Medicare fact sheet: medicare shared savings program: a new proposal to foster better, patient-centered care. What patients need to know about accountable care organizations. 2011. [Context Link]


4. Department of Health and Human Services. Federal Register. 76(67):19562. 2011. [Context Link]