What Is ACO Insurance? Discover all the details you need about it

By | October 24, 2022

The answer to what is ACO insurance is that it is not an insurance plan, but rather a voluntary association of medical providers that coordinates care for Medicare patients.

The full meaning of ACO is Accountable care organizations.

Accountable care organizations have been around for about 10 years, and the ACO model is quickly becoming one of the most sought-after healthcare models in America.

What Is An Accountable Care Organization (ACO)?

An accountable care organization (ACO) is a network of health care professionals and facilities that commits to giving coordinated, high-quality-and cost-effective healthcare to a defined population of Medicare beneficiaries.

ACOs also get incentives if they succeed in meeting these goals.

The aim of Accountable Care Organization is to increase the efficiency of health care.

The concept behind accountable care organizations is to shift more financial responsibility of health care payments to the medical providers who deliver services to patients.

How do accountable care organizations work?

Under an accountable care organization, Medicare beneficiaries receive coordinated and comprehensive health care from their primary doctor or hospital provider.

The focus is on avoiding hospital readmissions, managing chronic conditions such as diabetes and heart disease, and improving the quality of life for patients.

Fee-for-service medicine is a traditional method of payment in which doctors receive a fee for each procedure they perform on a patient or for each prescription they write.

Under fee-for-service medicine, doctors can also opt-out of participating in accountable care contracts because it does not allow them any responsibility for medical outcomes.

Accountable care organizations change all of that by tying physician payments to the total cost of patient treatment.

ACO participants are assigned a population of patients from a specific geographic area.

This could include individuals who are privately insured and those who are enrolled in Medicaid or Medicare.

The ACO then has responsibility for coordinating all aspects of services for these populations — including primary care, specialty clinics, imaging services, hospitals, and post-acute care — to promote better health outcomes while controlling costs.*

It’s important to note no single model exists for how an ACO might operate; each ACO is unique based on the needs of its population.

Another key component to an ACO is that its financial incentives are aligned with the quality and cost of the services delivered.

Those incentives rest on participant performance against certain benchmarks established by CMS.

ACO benefits for patients

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Below are a few of the benefits that patients can expect from ACOs

  • No coordination is required between patients and doctors
  • Communication among clinicians keeps patients from having to share information
  • A patient who is better educated spends less money and less time in the hospital
  • In the ACO, health care providers recommend specialists for patients to see, but patients can still choose their own health care provider who is not in the ACO

How do ACOs affect patients?

ACOs are intended to improve Medicare patients’ health care while reducing costs.

However, patients are experiencing uncoordinated treatment as an increasingly common problem today.

Having to schedule appointments, share test results with your clinicians, and get them to communicate with each other is already frustrating enough for the patient. Not to mention interpreting the various prescriptions doctors give you.

Frequently Asked Questions

Who can get care from an ACO?

  • Those who have Original Medicare are eligible to receive care from a provider in an ACO

How do I know if I am getting care from an ACO provider?

  • ACOs are not mandatory, but you can ask your doctor or the staff if they have signed up with one

Do I still have a choice of providers?

  • The answer to your question is yes, the ACO does not require you to choose only ACO providers; you can go to any doctor or hospital that accepts Original Medicare.

Can I opt-out of the ACO?

  • No, you are considered to be part of the ACO as long as you receive the vast majority of your care from a provider participating in the ACO.

How would I benefit from an ACO?

Doctors in an ACO can provide better care when they have access to your medical history and treatment plan.

Your health will be their priority and you won’t need to go to the hospital.

As a result, you’ll spend less out of pocket.