How do Accountable Care Organizations get paid? Medicare has traditionally employed a fee-for-service payment system, where doctors are paid in accordance with the amount of tests and procedures they perform. Many believe this is what drives up costs.
ACOs don’t do away with the Medicare model per se, but they do create incentives by offering bonuses to doctors for keeping costs down and meeting a specific set of care benchmarks. In other words, ACOs ensure doctors are paid more to keep their patients out of the hospital.