There are a number of important similarities and differences between ACOs, HMOs (Health Maintenance Organizations), and PPOs (Preferred Clinician Organizations):

  • An ACO is generally based on a self-defined network of clinicians, whereas in most HMOs and PPOs, the network is defined by a health plan.
  • In the Medicare Shared Savings Program and most commercial ACOs that are part of PPO health plans, an ACO cannot limit a patient’s ability to use clinicians that are not part of the ACO, whereas the primary care clinicians in an HMO typically have the ability to limit which services a patient can receive and from which clinicians they can receive approved services.
  • In the Medicare Shared Savings Program, a Medicare beneficiary remains able to use any Medicare clinician, and in most commercial ACO programs, a commercially- insured patient can continue to use any clinician in the network of clinicians that is under contract to the payer.
  • In an ACO that is paid through shared saving programs, there is no change to the underlying fee-for-service payment structure for the clinicians in the ACO. In contrast, in many HMOs, a clinician group receives a capitation payment that it can use to pay its physicians and other clinicians in different ways.