What’s the difference between an ACO, IPA and MSO?

Decoding health care delivery models

Delivering health care efficiently requires choosing the right care delivery model. Accountable care organizations (ACOs), independent physician associations (IPAs) and management service organizations (MSOs) offer distinct approaches to enhancing patient care. 

Accountable care organizations

Over the years, ACOs have expanded beyond basic care coordination and delivery to more advanced models that focus on providing better care at lower costs. But what is an ACO exactly, and how does it work? 

ACOs are teams of clinicians working together to provide high-quality, coordinated care for patients. At its core, an ACO’s goal is to ensure that patients receive the right care at the right time, while avoiding unnecessary services and costs.

ACO overview

In an ACO, participating clinicians — from primary care doctors to specialists and hospitals — share responsibility for the health outcomes of a specific group of patients. They use data-driven tools to track patient care and identify opportunities for improvement with preventive care, chronic disease management and better communication between clinicians. 

ACO payment model

In ACOs, financial outcomes are linked to meeting quality goals. For example, when an ACO shows it has improved care and reduced expected costs for a patient group, it may share in the savings for Medicare or other health plans. This model implements value-based care which focuses on value over volume, and helps reduce waste by being proactive instead of reactive. 

Physicians in an ACO may also choose to take on downside risk, which offers higher shared savings rates for meeting quality and financial goals, but could also require the primary care organization be responsible for any unexpected expenses that went over the initial forecasted cost. Health organizations with timely information and resources are better suited to take on downside risk. 

Independent physician association

An IPA is a group of independent doctors who collaborate and contract with health plans. It allows individual organizations to remain independent, but has access to shared resources and improved negotiating power, with the goal of providing more efficient and coordinated care.

An IPA allows participating physicians to voice their opinions and recommendations to their peers within the IPA. IPAs employ a payment model that generally focuses on contract negotiations with health plans, allowing the participating physicians within these associations to retain their independence while benefiting from shared resources and improved negotiating power.

IPA vs ACO: How are they connected?

IPAs and ACOs are different model types, but they can work together. An IPA ACO is an independent physician association that can form an ACO to take part in value-based care programs like the Medicare Shared Savings Program (MSSP). This allows IPAs to manage patient populations using ACO structures while still keeping their independent practice model.

Physicians retain their full independence in the decision; however, the IPA may open up ACO opportunities that could lead to significant benefits for participants. If the majority of physicians in the IPA are working in tandem to achieve results, it could be a good choice.

Management services organizations

Where an ACO and an IPA focus on data systems that directly impact patient care, an MSO offers administrative support to help health care organizations run more smoothly. This support allows clinicians to focus on patient care while improving business operation workflows. To join an MSO, physicians usually sign a contract for services like billing and staffing. This model typically involves a contract-based financial structure.

The differences between an ACO and MSO

While both ACOs and MSOs aim to improve health care delivery and control costs, their approaches are different. ACOs are clinician-led and focus on improving quality through comprehensive care and reducing health care spending. MSOs may partner with ACOs, but are business entities that focus on the administrative and operational support for a health care organization.

Transform your organization with Aledade

Aledade ACOs help health care clinicians deliver high-quality, comprehensive care, while reducing costs for patients and health plans. Focusing on quality over quantity, Aledade supports primary care organizations with comprehensive insights and patient engagement strategies that improve outcomes. Together, we can transform health care — one patient at a time. 

Learn more about Aledade’s physician-led ACOs.