An accountable care organization (ACO) is a group of health care professionals (including hospitals, primary care physicians, specialists and nurses) that work together as one team to coordinate care for a set group of patients across all settings of care.

What is an ACO? ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients. A key component of the ACO payment structure is financial risk. ACOs take value-based reimbursement to a new level by not only tying payments to quality, but also holding providers financially accountable for the care costs of their patient population. Financial risk in ACO contracts can be “upside” or “downside.”