How to Choose the Best ACO for Your Practice

Arwin Soetano // ACO


August 23  


Choosing an accountable care organization (ACO) is a major decision that can change the trajectory of your practice. ACOs are designed to improve quality and reduce costs by sharing responsibility for Medicare patients' health with a set amount of money per patient. To do this, they usually collect data on each patient's needs and coordinate their care with other providers such as hospitals and home health agencies.

Learn about the ACO's model

The first step in choosing an ACO is learning about the structure and model of the ACO. This will help you understand how it operates and what its priorities are, which can help inform your decision. Here are some things to ask:

  • How is it funded? Some organizations may be relying on grants or other third-party funding sources, while others are looking for organizations that will pay a flat monthly fee per patient or percentage of profits. You'll want to know how they're structured before signing on with them so you know what kind of commitment they're making to your practice.
  • How is it governed? While every single organization will have slightly different governance structures, there are some general trends across all models. For example, most ACOs employ physicians at some level as part of their leadership structure (including medical directors). Additionally, many use nurses as well for specific roles within the organization (like care coordinators). By understanding these attributes ahead of time and comparing multiple options against one another before making a decision about which program best meets your needs should be something new providers consider when evaluating this option during their search process

Ask about start-up costs and required investments.

If you're interested in joining an ACO, ask about the costs and investments required. For example:

  • Ask how much it will cost to join the ACO. You should also request a copy of their agreement so that you can carefully review all of its terms before signing on.
  • Find out if there are any financial risks associated with joining the ACO. For example, if your practice is not eligible for certain reimbursement rates or incentives because of factors like patient demographics or referrals from other providers (such as hospitals), this could be a negative for your practice's bottom line.

Ask about projected savings and revenue under each scenario (if applicable). Then talk about which scenario fits best with your goals and objectives as well as what kind of timeline will work best for you and your practice's needs—for instance, if there is anything preventing immediate implementation such as updates needed to equipment/software systems that would need funding beyond just annual dues paid quarterly into an account at headquarters location prior starting up programmatic activities)

Ask about the type of savings (shared or upside) the ACO is offering.

When you're evaluating ACO contracts, it's a good idea to ask about the type of savings (shared or upside) the ACO is offering. Shared savings are based on a percentage of the difference between your actual costs and Medicare benchmarks. Uplift is also known as “upside,” and this amount is calculated as a percentage of your spending that exceeds an established benchmark (typically cost).

ACOs can offer both shared and upside savings, but some might only be willing to share in cost reductions while others are willing to share in any excess reductions. In general, if an ACO has lots of physicians who want their patients referred to them then they'll have more leverage over fee schedules because there will be plenty of demand for care within their network that can help keep costs down for everyone involved

Review downside risk policies.

You will also want to make sure that your ACO is willing to cover the downside risk for any patient who does not meet targets. This means if a patient who was in good health dies from an illness or injury, then you don’t have to pay out of pocket for the cost of care. This is important because it protects providers from having their profits tied up in patients with very high medical expenses who may never fully recover.

Downside risk can be calculated as either:

  • Provider level (the provider pays),
  • Patient level (the patient pays), or
  • Network-wide (the provider maintains a reserve fund).

Choosing an accountable care organization (ACO) is challenging, with many variables to consider. But when you do, it can help reduce costs, improve quality of care and increase revenue for your practice.

Choosing the right accountable care organization (ACO) is challenging, with many variables to consider. But when you do, it can help reduce costs, improve quality of care and increase revenue for your practice.

The first step in choosing an ACO is to determine whether they’re right for your practice type. If you're a solo practitioner or small group, you may be better served with a smaller integrated delivery system or physician-led ACO. On the other hand, if you're part of a large multi-specialty group or hospital system that has significant EHR capabilities and strong relationships with payers and vendors, then a larger regional/national network could be more beneficial.


The right ACO is one that aligns with your practice's values and goals. It's important that you find an ACO with a model that makes sense for your needs, as well as one willing to work with you through the start-up process.

About the Author

Arwin Soetano