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Medisolv Blog Is ACO the same as HMO?

Is ACO the same as HMO?

Is ACO the same as HMO?

 

No, an Accountable Care Organization (ACO) is not the same as a Health Maintenance Organization (HMO). While both models aim to improve care coordination and reduce costs, they differ fundamentally in structure, purpose, and payment design.

ACOs are networks of healthcare providers that focus on improving care quality and reducing costs through coordination, while HMOs are insurance plans that manage care by limiting patient access to a defined network of providers.

ACO vs HMO: Key Differences 

Here’s how ACOs and HMOs differ in structure, goals, and patient experience:

Category

Accountable Care Organization (ACO)

Health Maintenance Organization (HMO)

Leadership & Purpose

Led by providers (hospitals, physician groups, and clinics) who voluntarily coordinate care and are accountable for quality and cost outcomes.

Managed by insurance companies that contract with providers to deliver care within a fixed-cost structure.

Patient Choice

Patients (often Medicare beneficiaries) can see any provider that accepts Medicare, even those outside the ACO.

Patients must choose from within the plan’s provider network and usually need referrals to see specialists.

Payment Model

Providers share in savings when they meet quality and cost targets. Payment is based on performance, not a fixed capitation rate.

Providers are paid a set amount per member (capitation), creating financial incentives to limit services.

Philosophy of Care

Focuses on preventive care, data-driven coordination, and long-term outcomes.

Focuses on cost control through insurance restrictions and network management.

Why the Distinction Matters

Understanding the difference helps patients and providers make informed decisions and navigate the shift toward value-based care.

  • ACOs emphasize quality improvement, flexibility, and data transparency—especially within Medicare and MSSP programs.

  • HMOs function primarily as insurance products, controlling costs through plan rules and limited networks.HMOs,

In short, an ACO is a care-delivery model, while an HMO is a type of insurance plan.

How Medisolv Helps ACOs Succeed

Medisolv helps ACOs simplify quality management and achieve success under CMS’s Alternative Payment Models (APMs) by:

  • Aggregating and standardizing data across practices and EHR systems
  • Validating data with automated checks and patient deduplication
  • Monitoring performance at the provider, practice, and ACO level for accurate submissions

Our solutions streamline CMS reporting, reduce administrative burden, and give ACOs confidence in their quality performance data.

For more ACO quality reporting under value-based care, check out these Medisolv resources to help your organization succeed in CMS’s value-based care programs:

Make ACO Quality Reporting Simple

Get the tools and guidance your ACO needs to meet CMS requirements with confidence. Medisolv’s APM Performance Pathway (APP) Reporting Package streamlines data aggregation, validation, and submission,  so you can focus on improving care, not managing spreadsheets.

Explore the APP Package →

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