On October 20, 2011, the Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health & Human Services (HHS) issued final rules under the Affordable Care Act to help physicians, hospitals, and other health care providers to better coordinate care for Medicare patients through Accountable Care Organizations (ACOs).  

An ACO is a group of physicians and other health care providers, such as, hospitals, and others involved in patient care, who have agreed to work together to coordinate care for the Fee-For-Service or original Medicare patients they serve.  The goal of the ACO is to support its participating providers to work together more closely to deliver seamless, high-quality coordinated care for Medicare beneficiaries.  

To become a Medicare ACO, an ACO must submit an application, meet all eligibility and program requirements, and enter into a 3-year agreement with Medicare.  The Medicare ACO will take responsibility in improving care delivery, improving health, and reducing growth in costs through improvements for Medicare beneficiaries.  In return, there would the opportunity to share in savings realized through high-quality, well-coordinated care.