ACOs receive a prospective budget for serving a defined population and agree to achieve specified financial and quality outcomes. This structure, if correctly designed, creates incentives for the ACO to ensure that care is coordinated across sectors.

*Milestone details:

*Full name: Develop state policies for accountable care organizations.

*Relevance to the ACA:

The ACA does not require states to establish ACOs or develop ACO-related policies. However, the ACA does provide states with opportunities to establish and fund ACOs. In addition, states interested in promoting ACOs may help groups of providers organize themselves to take advantage of these initiatives and others (including the new Medicare ACO program created by the ACA).

§2706 – Medicaid and CHIP programs may establish ACOs with pediatric providers.

§3021, §10306 – States may be eligible for funding to test ACOs through the new Center for Medicare and Medicaid Innovation.