U.S. Health Care System Terminology

Accountable Care Organization (ACO): A group of doctors, hospitals or other providers that is responsible for the quality and cost of overall care for patients assigned or attributed to it.

Advanced Alternative Payment Model (APM): A Centers for Medicare & Medicaid Services (CMS) defined term that is granted to certain types of payment models that include the provider taking more than nominal financial risk for the quality and cost of patient care.

Bundled Payment: A single comprehensive payment made to health care providers for a group of related services, based on the expected costs for a clinically-defined episode of care.

Episode of Care: All services provided to a patient with a medical problem within a specific period of time across a continuum of care.

Medicare Shared Savings Program (MSSP): Rewards ACOs that lower their growth in health care costs for original Medicare fee-for-service (FFS) beneficiaries while meeting performance standards on quality of care and putting patients first. Participation in MSSP is purely voluntary. There are three different financial tracks from which to choose to participate, with Tracks 2 and  3 including not only rewards, but also potential financial penalties.

Next Generation ACO: The newest Medicare voluntary ACO arrangement. The goal of the model is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for original Medicare FFS beneficiaries.

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