State Actions to Promote and Restrain Commercial Accountable Care Organizations

Accountable Care Organizations (ACOs), originally developed as part of the Affordable Care Act (ACA), are growing—and serve both public and private sector payers. They have the potential to improve health care quality and patient outcomes while achieving cost savings. However, they may also present risks—including those related to solvency, consumer protection, and anti-competitive pricing—to providers, patients, and payers.

How can state policymakers respond to their development? What is in the public interest? What are the lessons from commercial health insurance and managed care regulatory frameworks? State policymakers are looking for evidence and experience to help them answer these and other questions.

A new report, “State Actions to Promote and Restrain Commercial Accountable Care Organizations,” written by researchers at the Nicholas C. Petris Center on Health Care Markets and Consumer Welfare, School of Public Health, University of California, Berkeley, draws on evidence from the literature and four case studies to outline tools that state governments can use to promote the potential benefits of ACOs while mitigating their potential risks. The Milbank Memorial Fund provided support for this report by assisting with its review and dissemination.