Back in December of 2011 the U.S. Department of Health and Human Services chose 32 organizations to participate in the Pioneer Model test initiative that stated on January 1, 2012. On July 9th, HHS announced 89 new ACOs that will serve 1.2 million people with Medicare in 40 states and Washington, D.C. The program overall now includes 154 ACOs that are providing care to 2.4 million people.

ACOs consist of doctors, hospitals and other health care providers that work together to deliver high-quality health care and reduce costs. Participation in this shared savings program under the ACA is voluntary, and providers are incentivized by the opportunity to share in the savings they help create. ACOs must meet 33 quality measures to insure that the savings generated result from improving the coordination and quality of care.

Not all ACOs are large organizations. Nearly half are physician-driven with less than 10,000 beneficiaries. The program is estimated to save the federal government up to $940 million over four years.

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