You spend money to make money. Likewise, you need to save money to maintain a genuine profit. As a healthcare professional, you want your money’s worth with all the services you provide and the prescriptions you sell.

Accountable care organizations embody this idea. Overspending is common in all fields of business and healthcare, and ACOs are a direct response to this.

Learn how ACOs work and how you and your pharmacy software system can reduce spending within the industry.

What is an ACO?

The Centers for Medicare and Medicaid Services define ACOs as “groups of doctors, hospitals, and other healthcare providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients.”

The main types of ACOs are:

  • Medicare Shared Savings Program
  • Medicaid ACOs
  • Commercial ACOs

In short, your insurance plan’s ACO will be a commercial plan if you have commercial insurance. The same applies to Medicare and Medicaid patients.

The primary goal of ACOs is to ensure patients get the proper care when they need it without spending an unnecessary amount of money. They strive to ensure patients get the best possible value for their Medicare expenses.

A 2019 JAMA study found that approximately 30% of healthcare spending can be considered wasteful. That’s approximately $760 billion to $935 billion worth of wasted spending.  

It’s a startling statistic, though not surprising, as the U.S. spends more money on healthcare than any other country in the world.

With that in mind, ACOs work to make healthcare spending more efficient and meaningful.

Healthcare services can be costly — even if you have insurance — so some careful consideration when it comes to spending can alleviate financial pressures for both the patient and the healthcare professional.

The Top 5 ACOs (by patient population) are:

  • TMA PracticeEdge (Texas Medical Association - Blue Cross and Blue Shield of Texas ACO) (5,000,000 patients)
  • Aetna - Childrens Hospital of Philadelphia (1,400,000 patients)
  • Aetna - Carilion Clinic ACO (1,000,000 patients)
  • Capital BlueCross - Heritage Medical Group ACO (700,000 patients)
  • Anthem Blue Cross of California - Healthcare Partners ACO (675,000 patients)

How Do ACOs Affect Independent Pharmacies?

After reading the definition of an ACO, you might have the following thoughts:

  1. This sounds like the medical equivalent of counteracting pharmacy benefit managers (PBMs)
  2. ACOs seem to be medical-centered entities (doctors, hospitals, etc.). How do pharmacies play into all this?

Both thoughts are warranted. ACOs may remind you of PBMs based on the latter’s notoriety in the healthcare industry.

Their influence on prescription drug prices, prescription copays, and even the content of patient formularies are more than well documented — so much so that they inspired the creation of pharmacy services administrative organizations (PSAOs).

Read our “What You Need to Know About Pharmacy Benefit Managers” blog to learn more about PBMs.

PBMs are a proven example of healthcare spending to the max for the sake of profit and — arguably — greed. It’s only natural that doctors and hospitals experience a similar plight when it comes to overspending.

ACOs’ influence on the pharmacy industry isn’t so clear-cut. However, they play a subtle but important role in the industry.

A study by the National Library of Medicine found that 45% of all ACOs (including Medicare, Medicaid, and commercial contracts) report at least one contract that includes prescription drug spending.

The study also found that nearly half of ACOs have a formal relationship with a pharmacy and 26% of ACOs include a pharmacy within itself. This likely includes pharmacies contracted with a mutual parent company (Aetna, CVS Caremark, etc.)

How to Promote Better Spending

The main purpose of ACO is to save the industry money. It primarily focuses on the commerce side of the industry, which is where independent pharmacies reside.

In order to balance the business side with exceptional healthcare services, you and your independent pharmacy staff will require even greater attention to detail.

Ensure that you’re correctly processing your patient’s prescriptions. This will let ACOs see the correct amount of money their company needs to spend to adequately cover a given prescription.

This goes beyond processing their primary insurance plans.

If your patient takes a name-brand medication that requires a manufacturer's coupon, submit the claim with the insurance, coupon, and correct submission code.

Granted, there are a ton of moving parts to this: the patient’s deductible, how much the insurance is willing to pay, and the cash price of the medication itself.

Where ACOs Go From Here

In the previously mentioned National Library of Medicine study, the researchers predicted — in 2015 — that ACOs will “broaden the role of pharmacists, integrating pharmacists into patient care.”

About eight years later, that prediction has turned into reality. The pharmacy industry heavily focuses on more patient-centric and clinical services. Independent pharmacies are practically expected to provide a wide range of vaccines and testing services.

Though they’re commonplace today, services like blood testing and flu testing previously belonged in doctor’s offices or hospitals.

Now, pharmacies offer a greater array of services that benefit the health of their patients. It’s not only more convenient for patients, but this multitude of services makes the jobs of ACOs a bit easier.

If a patient can fill a prescription, get a flu shot, and get their A1C testing done in a single trip, ACOs are able to monitor the cost of all these services at a single time. It makes healthcare more efficient and streamlined, especially in a financial aspect.


Accountable Care Organizations are ultimately a force of good within the pharmacy industry. An independent pharmacy’s finances are an extremely important part of its success.

Efficiency is the name of the game here, and ACOs strive to make the industry less wasteful in its spending. As an independent pharmacist, you can ensure that you’re doing your part by properly processing prescriptions — particularly the ones that require submission codes and secondary insurance.

Whether you’re working with a Medicare, Medicaid, or commercial patient, go the extra mile to ensure your patients aren’t spending more than they need to. It will benefit your independent pharmacy and your patients in the long run.