Is an ACO an Alternative Payment Model?

Yes, an Accountable Care Organization (ACO) is a type of Alternative Payment Model (APM). ACOs bring together doctors, hospitals, and other healthcare providers to coordinate care for their patients. Instead of being paid for each service separately, providers in an ACO are rewarded for keeping patients healthy and lowering overall healthcare costs.

How Does an ACO Fit into Alternative Payment Models?

ACOs are one of the most widely used value-based care models under Medicare. Traditional healthcare pays providers based on how many services they deliver. Alternative Payment Models (APMs)—like ACOs—flip that model by paying providers for quality and outcomes instead of volume.

If an ACO can demonstrate that it kept patients healthier, avoided unnecessary hospitalizations, and reduced costs, it can share in the savings it helped create. This makes ACOs a cornerstone of Medicare’s transition to value-based care.

Examples of ACO Payment Programs

Medicare offers several ACO models under the APM umbrella, including:

• Medicare Shared Savings Program (MSSP): The largest and most common ACO program. Providers earn shared savings if they improve care quality while keeping spending below benchmarks.

• ACO REACH Model: Focuses on advancing equity, access, and outcomes for underserved populations.

• Advance Payment ACO Model: Provides upfront funding for smaller or rural ACOs to build infrastructure for care coordination and data integration.

These models illustrate how ACOs drive better care, more efficiency, and smarter spending—the core goals of any APM.

Why are ACOs Important for Medicare?

ACOs help solve two of healthcare’s biggest challenges: high costs and fragmented care. In an ACO model:

• Patients receive more coordinated, connected care across providers.

• Providers reduce duplication of services and medical errors.

• The entire care team is incentivized to keep people well rather than only treating illness.

In short, ACOs are leading the shift from fee-for-service to value-based, patient-centered care.

How Medisolv Helps

Our APP Reporting Package is designed specifically for ACOs participating in value-based programs like MSSP and ACO REACH. It helps you:

• Automate complex reporting workflows across multiple data sources.

• Monitor quality and cost performance in real time.

• Simplify APP submission and compliance so your team can focus on patient care.

Want to Dive Deeper? Explore more Medisolv resources:

• eCQMs vs. Medicare CQMs: Which Is Better for ACOs?

• How Do I Know if I Need to Participate in MIPS?
• APM Performance Pathway (APP) Reporting Package