Which statement best describes Accountable Care Organizations (ACOs)?

• A. ACOs are government-owned entities that reimburse services on a fee-for-service basis.
• B. ACOs are provider-led organizations that focus on shared savings and shared risk with broad patient choice.
• C. ACOs operate primarily as private insurers with narrow networks and no risk-sharing.
• D. ACOs are nonprofit organizations focusing only on disease prevention.

Answer: (B)

Accountable Care Organizations are groups of providers who come together to coordinate care for a defined patient population, with financial incentives tied to quality and cost. They are typically provider-led and operate under payment models that reward shared savings if they meet performance and cost targets, with some arrangements also sharing in downside risk if costs exceed expectations. This setup emphasizes coordinated, efficient care across the patient’s health needs while preserving broad patient choice within the network, rather than limiting care to a narrow set of providers.

They’re not government-owned entities that reimburse purely on a fee-for-service basis, nor are they private insurers with narrow networks and no risk-sharing, and they aren’t nonprofit groups focused only on disease prevention. The emphasis on interdisciplinary collaboration, shared financial risk/reward, and maintaining broad access captures what ACOs are designed to do.