Which statement accurately describes Accountable Care Organizations (ACOs)?

• A. Groups of providers who agree to take on responsibility for costs and quality of a large group of patients (5,000 up to 250,000)
• B. ACOs operate without any collaboration
• C. They rely solely on capitation
• D. They are hospital-only arrangements

Answer: (A)

ACOs bring together different providers to take joint responsibility for both the costs and the quality of care for a defined patient population. The aim is to coordinate care across settings—primary care, specialists, hospitals, and other professionals—so that care is more efficient, outcomes improve, and unnecessary spending is reduced. Financial incentives are tied to meeting agreed-upon cost and quality targets, with potential shared savings if those targets are met. Payment models aren’t limited to one method; while capitation can be used, many ACOs rely on blended arrangements that mix shared savings or performance-based payments with other risk-sharing approaches. They are not hospital-only and do involve collaboration across the care team.