Accountable care organizations (ACOs) are groups of doctors, hospitals and other health care providers who join together to coordinate care for patients. The purpose of an ACO is to reduce the cost of care by eliminating duplication of efforts and increasing the quality of services.
The term “accountable care organization” was first used in 2006 by two doctors at a meeting of the Medicare Payment Advisory Committee.It was codified into law in the Patient Protection and Affordable Care Act of 2010 (ACA). In that legislation, Congress authorized the Centers for Medicare and Medicaid Services (CMS) to contract with ACOs for groups of 5,000 or more patients. Those contracts essentially assign Medicare patients to an ACO, which then provides all necessary medical care while reporting quality measures back to Medicare.