AJMC Takes an Early Glimpse Into ACO Contracts

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Accountable care organizations (ACOs) are still a new creature in the world of managed care, and not all are alike. As the authors of a new comparative analysis in The American Journal of Managed Care outline, Medicare contracts dominate the ACO landscape, with only half of these entities having a contract with a private payer.

AJMC Takes an Early Glimpse Into ACO Contracts


PLAINSBORO, N.J.—Less than a decade after healthcare’s first experiments with “accountable care organizations,” the ACO has gained a foothold through its inclusion in the Affordable Care Act (ACA). Yet not all ACOs are created equal, as the authors of a new article in The American Journal of Managed Care showed in a comparative analysis published this month. A full copy of the analysis can be found here.

Led by Valerie A. Lewis, PhD, this analysis used data from the National Survey of Accountable Care Organizations, and included ACOs that had been established by August 2012—and had information that was publicly available. “Our data provide the first comprehensive, systematic picture of the commercial ACO contract landscape,” the authors note. “Our results illuminate how commercial ACO contracts compare with public ACO contracts, as well as what types of provider organizations are pursuing each type of contract.”


Among the findings:

  • Most entities had only one ACO contract (57 percent).
  • About half had a contract with a private payer; the single most common private-payer ACO contract was an upside-only shared savings model (41 percent.
  • The majority of private contracts include some form of downside risk (56 percent).
  • A sizable majority (79 percent) connect shared savings to quality performance, and feature bonus payments for quality (39 percent).

Commercial contracts with more complex risk features and upfront payments are still less common, but where they exist, these arrangements are more sophisticated and collaborative. Private ACO contracts were more likely to have these features (compared with public contracts):

  • An integrated delivery system (69 percent vs. 36 percent).
  • A hospital (72 percent vs 53 percent).
  • Higher care management capabilities (38 percent vs 28 percent).

Organizations with private ACO contracts were more likely to have experience with pay-for-performance plans, such as patient centered medical homes, public reporting, and risk-based contracting. These entities also employed more full-time physicians.

About the Journals

The American Journal of Managed Care, now in its 20th year of publication, is the leading peer-reviewed journal dedicated to issues in managed care. The American Journal of Pharmacy Benefits, provides pharmacy and formulary decision-makers with information to improve the efficiency and health outcomes in managing pharmaceutical care. In December 2013, AJMC introduced The American Journal of Accountable Care, which publishes research and commentary devoted to understanding changes to the healthcare system due to the 2010 Affordable Care Act. AJMC’s news publications, the Evidence-Based series, bring together stakeholder views from payers, providers, policymakers and pharmaceutical leaders in oncology and diabetes management. To order reprints of articles appearing in AJMC publications, please call (609) 716-7777, x 131.

CONTACT: Mary Caffrey (609) 716-7777 x 144