More than 120 new Medicare accountable care organizations (ACOs) were established at the beginning of the 2016 program year, the Centers for Medicare & Medicaid Services (CMS) announced this week.

ACOs promote collaboration among providers, including hospitals, with the goal of coordinating care and basing payment on the quality of patient health outcomes rather than the volume of services provided. Along with renewing ACOs, the new organizations bring to 477 the total number of ACOs nationally in 2016. They will care for almost 8.9 million Medicare beneficiaries.

By providing high-quality, patient-centered care, these ACOs are able to share cost savings with the Medicare program. In 2014, 333 participating ACOs saved Medicare $411 million.

Beginning this year, 64 ACOs across the four models in use nationally will participate in risk-bearing tracks, making them subject to penalties for negative patient outcomes, but eligible for greater rewards for positive outcomes.

Medicare ACOs are one example of initiatives used to advance the U.S. Department of Health and Human Services’ goal of tying 30 percent of Medicare payments to quality- and value-based alternative payment models by 2016 and 50 percent by 2018.

Contact Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.