Accountable Care Organizations (ACOs) consist of groups of doctors, hospitals, and other healthcare providers who collaborate and coordinate care for groups of patients. Through performance-based payment models, ACOs share in the savings they attain with the primary goal of improving healthcare quality while reducing costs.
Typically, ACOs share characteristics such as:
ACO ownership tends to be categorized in two ways. The first organizes ACOs into three types:
The second organizes ACOs into five types:
This model focuses less on size and more on who is leading the ACO or if it is for-profit, nonprofit, or rural.
Most ACOs participate in government programs offered by the Centers for Medicare and Medicaid Services (CMS). While several ACO payment models have been tested, as of 2025, four ACO payment models are active for Medicare beneficiaries, including:
Medicare Shared Savings Program (MSSP): Established in 2012, MSSP is a permanent program that encourages ACOs to reduce healthcare costs while maintaining or improving quality. In January 2024, MSSP included 480 ACOs serving 10.8 million beneficiaries.
As the largest ACO payment program, MSSP features two tracks:
ACO Realizing Equity, Access, and Community Health (REACH) model: Launched in January 2023, the ACO REACH model focuses on promoting health equity and access. In 2025, 103 ACOs continue to participate in this model.
The ACO REACH model requires participating providers or their designated representatives to hold at least 75% control of each ACO's governing body.
ACO REACH offers two risk-sharing options:
ACO Primary Care Flex (PC Flex) model: As the newest MSSP option, PC Flex launched in 2025 as a five-year voluntary model. It aims to enhance primary care delivery by providing prospective payments and increased funding to low-revenue ACOs. These are typically physician-led and may include small or rural hospitals.
Kidney Care Choices (KCC) model: This model includes 78 kidney contracting entities and 15 Kidney Care First Practices continuing participation in 2025. It focuses on improving care for patients with chronic kidney disease.
The table below summarizes which payment type may be preferred by different types of ACOs and why their structure may align better with those models.
Research suggests that ACOs have maintained or improved quality while generating modest savings. But how has their ownership type impacted performance?
Analysis of a national survey of ACOs compared MSSP performance of three ACO types mentioned earlier (physician-led, integrated, and hybrid) across three domains (quality, spending, and potential for savings).
The research found that the types of ACO ownership had less of an impact on performance. Researchers uncovered greater heterogeneity within ACO types than between ACO types. In fact, ACO type accounts for only up to a five percent variance in performance.
The factors that were most influential on performance included:
These factors had more impact on performance differences than ownership type.
Other studies highlighted additional characteristics that improved outcomes, including:
Analysis based on ACO value scores uncovered additional factors that were associated with high-value ACOs, including:
ACOs that implement care coordination and care management programs have been shown to perform better.
Additionally, the type of ACO ownership can influence the structure, investment, and types of care management and care coordination strategies implemented. Different kinds of ACOs have varying levels of financial resources, infrastructure, and strategic priorities, leading to various approaches to managing patient care.
In general, physician-led ACOs prioritize personalized primary care-based coordination but may lack funding for large-scale programs. Hospital-led ACOs leverage their existing infrastructure for hospital-to-home transitions but may be less aggressive in reducing inpatient utilization.
For-profit ACOs focus on technology-driven, data-based care coordination, maximizing efficiency but sometimes at the expense of comprehensive care. Nonprofit and FQHC-led ACOs emphasize community-based and preventive care, integrating social determinants of health but facing financial limitations.
The table below suggests potential strengths, challenges, and care management focuses for each type of ACO.
Each type of ACO ownership demonstrates particular strengths and focus within a beneficiary population.
Research shows that various aspects within each ACO have a more significant impact on care quality and performance outcomes. This includes team-based care, care coordination, chronic disease management, and improved care transitions.
ThoroughCare helps Accountable Care Organizations coordinate care efficiently for improved outcomes and greater efficiency. We offer a comprehensive software and analytics platform, clinical advisory expertise, and tailored assistance to achieve your organization’s goals.
Our platform supports ACOs with:
Depending on the source, there are two main ways that ACOs are categorized by ownership type.
The first organizes ACOs into three types:
The second organizes ACOs into five types:
Research has shown that quality and performance were quite similar across ACO ownership types. There are factors within the ACO type that associate with higher performance metrics, including: