The UCHealth Internal Medicine Clinic (UCHIMC) in Colorado Springs, part of the statewide UCHealth network, has informed its patients that the clinic is participating in an “Accountable Care Organization” (ACO).  One reason, the clinic tells patients, is “to better meet your needs” with an approach in which the clinic’s doctors and other health care providers will work together “to ensure that you get the right care at the right time and avoid getting the same services repeated unnecessarily.” Assurance is given that the clinic’s participation in an ACO does not limit the patient’s choice of health care providers, and Medicare benefits won’t change.

So what exactly is an Accountable Care Organization? Why do they exist? What do they mean for patients?

The American Hospital Association (AHA) says ACOs are groups of clinicians, hospitals and other health care providers who come together voluntarily to give coordinated high-quality care to a designated group of patients. Referring specifically to Medicare-related ACOs, the Association says, “Coordinated care seeks to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.” The AHA adds that when an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.

UCHIMC clarifies further, explaining that in an ACO “Your health care providers can see the same test results, treatments and prescriptions [and] more coordination helps prevent medical errors and drug interactions.” The clinic adds that such coordination can save patients time, money, and frustration by avoiding unneeded repeat tests and appointments. This coordination can also help protect against Medicare fraud and waste.

About ACOs and Colorado Medicare beneficiaries

The ACO model was initially included in national health care reform legislation as one of several demonstration programs to be administered by the Centers for Medicare & Medicaid Services (CMS). Participating ACOs assume accountability for improving the quality and cost of care for a defined patient population of Medicare and/or Medicaid beneficiaries. These ACOs in turn receive part of any savings generated from care coordination as long as quality is also maintained.

CMS points out that an ACO won’t limit your choice of health care providers. “It isn’t a Medicare Advantage Plan, HMO plan, or an insurance plan of any kind,” CMS states. Only people with Original Medicare can be assigned to a Medicare ACO. CMS says, “If your doctor or other provider is part of an ACO, you still have the right to visit any doctor, hospital, or other provider that accepts Medicare at any time, and your Original Medicare benefits won’t change.”

CMS also notes that if your primary care provider participates in an ACO, you may have access to additional tools or services that other people in Original Medicare don’t get. For example, in some ACOs, your provider can offer expanded telehealth services. This means you’d be able to get certain health care services no matter where you’re located, and do so from your home using technology such as your phone or a computer to communicate in real time with your health care provider.

You may also be able to get other benefits that aren’t available to people outside an ACO. CMS mentions that a doctor or other provider who is part of an ACO may be approved to send you for skilled nursing facility or rehabilitation care even if you haven’t stayed in a hospital for 3 days first, which is usually a requirement in Medicare. For you to qualify for this benefit, your doctor or other provider has to decide that you need skilled nursing facility care and meet certain other eligibility requirements.

Colorado’s ACOs are part of a national array of models

One statistical analysis done by the AHA reported that two-thirds of Colorado’s 64 community hospitals participate in ACOs, with urban hospitals more likely to do so than rural facilities. Participation rates also rise based on hospital size, ranging from roughly a 50% participation rate for hospitals with up to 100 beds to a 74% participation rate for hospitals with 500+ beds. Major teaching hospitals participate at a 72% rate while non-teaching hospitals have a 47% participation rate.  

The National Library of Medicine (NLM) at the National Institutes of Health notes that one of the primary goals of the 2010 Affordable Care Act was “the creation of value for patients,” and one means of doing that is “incentivizing doctors, hospitals, and healthcare providers to coordinate clinically efficient patient care.” This is what an ACO does. NLM says healthcare providers become eligible for various financial and/or other occupationally-based bonuses when clinical care is delivered effectively with quality outcomes.

“Hospitals and physicians must meet specific quality benchmarks,” NLM states, “which focus on disease prevention, carefully managing patients with chronic diseases, and keeping patients healthy.” The NLM goes on to note that core principles of ACOs include having payments for providers linked to improvement in quality and reduced costs and having reliable and increasingly sophisticated measurement of performance to support improvement in care.

“Accountable Care Organizations place financial responsibility on providers,” says the NLM, “in hopes of improving patient management and decreasing unnecessary expenditures while providing patients with the freedom to select medical service providers. The [ACO] model promotes clinical excellence while simultaneously controlling costs. This cost-control depends on the ACO’s ability to incentivize hospitals, physicians, post-acute care facilities, and other providers to form partnerships and promote better coordination of care delivery.”

The NLM identifies what it calls “stakeholders” in the ACO approach. These are:

Healthcare providers

ACOs are composed mostly of hospitals and healthcare professionals. Providers may include health departments, social security departments, safety net clinics, and home care services. The providers within an ACO work to coordinate care, align incentives, and lower costs. This is different from Health Maintenance Organizations (HMOs) in that providers have more freedom in developing the infrastructure.

Payors (insurance companies, third-party organizations)

Medicare is the ACO’s principal payer. Other payers include private insurance and employer-purchased insurance. Payers play several roles in the ACO to help achieve higher quality care and lower costs. Payers may collaborate to align incentives for ACOs and create financial incentives for providers to improve healthcare quality.


ACO patient populations consist of primarily Medicare beneficiaries. (In larger and more integrated ACOs, the patient population includes uninsured patients.) Patients may play a role in the healthcare they receive by participating in the decision-making processes. The success of each ACO is determined by approximately 30 quality measures organized into four domains. These domains include patient experience, care coordination, safety, and preventive health in at-risk populations. The higher the quality of care providers deliver, the more savings that get shared.

JAMA Internal Medicine looks at the Colorado model

The AMA journal JAMA Internal Medicinehas observed that there is strong bipartisan support for market-based approaches to improving health system performance, so it’s good to learn about the effects ACOs have on clinical care and challenges that have been identified. JAMA says ACOs attract a diverse array of providers with differing legal and governance structures and mixed capabilities. The journal has reported on research which finds that “On average, ACO patients are spending modestly less on health care services and are associated with improved patient satisfaction and other patient-reported measures.” But JAMA adds that there are variations in performance and cost savings, including differences in measures of care quality.

The research presented in JAMA provided insights from three different ACO payment models, one being Colorado’s Accountable Care Collaborative, a Medicaid-associated ACO. Researchers found improvements in quality and cost performance in Colorado’s ACO model. They concluded, “The Colorado model improved value through supporting providers with coaching, connecting members with nonmedical services, and providing feedback on costs, utilization, and outcomes.”

In the big picture, however, JAMA summed up by saying there is still much to learn about Accountable Care Organizations through a growing body of evidence on overall performance, several dimensions of quality, and spending. The journal said that on a broad basis not enough is known yet about the effects of ACOs on patients’ health and quality of life. “A long-term commitment to alternative payment model evaluation is necessary to ensure effective, sustainable payment and delivery system reform,” JAMA concluded.

Guidance for Coloradans interested in ACOs

For patients who are personally interested in ACOs and their potential, Fair Health Consumer (FHC) offers some general guidance. FHC, an independent, national nonprofit organization, embraces a mission of helping consumers understand healthcare costs and health coverage by bringing transparency to such costs.

“Your doctor or insurer may invite you to join an ACO,” FHC says. “You also may ask your plan whether you are already in an ACO, and if you are not, whether you can join one.” (Note: The notice given to patients from the UCHealth Internal Medicine Clinic said the clinic was “required” to notify patients of its participation in an ACO.)

FHC goes on to say that patients in an ACO may be able to visit providers outside the organization for care, but if they are in a private plan, there may be higher costs for going outside this “network within a network.” If you are in a Medicare ACO, you can still see any doctor who accepts Medicare without paying more. FHC says to be sure to check with your plan about coverage for out-of-ACO and out-of-network care first. In either case, there should be no extra charge simply for being in an ACO, and you should still have the same premium, copayments, and deductibles that you pay for your health plan.

“If you are in an ACO.” FHC advises, “talk to your primary care physician about your care and understand who is in your ACO network, and ask your plan if you will pay more to visit doctors outside the ACO, even if they are in your plan’s broader network.”

Other steps you can take regarding Colorado ACOs

Keep in mind that there are many different types of ACOs. Medicare has been testing ACOs for a few years, and many private insurers are developing their own ACOs. Your doctor or insurer may reach out to you about joining an ACO that they have started.

Remember that “coordinating care” means everyone involved in your care knows your medical history and treatment plan. FHC says in some cases, your medical information will be stored in a personal electronic health record that you, your doctors and other healthcare professionals can share so that everyone has a complete picture of your health. Also though, in some cases, you may be able to opt out of having your protected health information shared among those managing your care within the ACO.

The up side of coordinating care and sharing health information is that your providers will know what tests and services you’ve had. “That way,” notes FHC, “you won’t get the same screening twice, or have a bad reaction to a drug because a doctor doesn’t know about other medications you are taking. Your providers will also know if you are getting the preventive care you need, like vaccines and screenings. You may also have a care manager, like a nurse or social worker, who regularly stays in touch with you to keep track of your conditions and to help you take care of your health.”

FHC also notes that at first, patients were not able to join an ACO on their own, but that is changing. “Some ACOs may allow you to enroll directly,” FHC says. “If your doctor is not already part of an ACO, you can ask if there is an ACO option available to you. You can also view lists of Medicare ACOs on the Centers for Medicare and Medicaid Services website.” That site is at