ACOs must reduce claims and increase quality to be successful. Track ACO performance, see how ACOs compare here.
ACOs earn part of the savings of caring for patients if certain conditions are met. The specific conditions depend on the reporting year. In a Track 1 ACO, ACOs' earning potential is reduced as they only have upside risk to start. In Track 2, if the ACO spends more money than in previous years, they will owe Medicare what was lost. This also leaves Track 2 ACOs with more upside if they do well.
ACOs must report quality scores to receive payment of earned savings. In the first year, ACOs must just successfully report these quality scores. In years two and three, the ACO will earn savings based on the value of the quality scores. Lower quality scores will result in the ACO only earning a fraction of what it could have earned.
CMS is constantly refining the ACO model. In early 2015, CMS announced a follow on to the Shared Savings model. The Next Generation ACO model added several new options for sharing risks among other changes. Only ACOs that first participated in MSSP can apply for the Next Generation model.