Which statement best describes a purpose of ACOs?

• A. To insure providers
• B. To align financial incentives around quality and cost outcomes
• C. To replace CMS
• D. To eliminate private payers

Answer: (B)

ACOs are designed to align how providers get paid with the value they deliver: better quality and lower overall costs for a defined group of patients. They operate on shared expectations and performance in which providers are rewarded when they meet quality standards and keep expenditures under a set benchmark, with savings shared among the participating clinicians. This linking of payment to both quality outcomes and cost efficiency is the core idea, which is why this statement best describes the purpose of ACOs.

ACOs don’t insure providers, so that part isn’t their function. They also don’t replace the central role of CMS; rather, they participate in CMS programs (and other payers) as part of ongoing value-based reforms. And they aren’t aimed at eliminating private payers; they often work within contracts with both public and private payers to promote coordinated, cost-efficient care.