Accountable Care Organizations (ACOs) are best described as:

• A. Government agencies that directly own hospitals.
• B. Insurance plans that cover only prescription drugs.
• C. A type of hospital credentialing program.
• D. Groups of providers working together to coordinate care and share savings from improved quality and lower costs.

Answer: (D)

Accountable Care Organizations are groups of health-care providers who come together to coordinate care for a defined patient population and to be accountable for the quality and total cost of that care. By coordinating across primary care, specialists, hospitals, and post-acute services, they aim to reduce unnecessary tests, prevent complications, and manage chronic conditions more efficiently. If they meet agreed-upon quality and spending targets, they share the savings with the payer, aligning incentives toward high-value care rather than volume.

The other options don’t fit because they describe entities that aren’t about coordinated care with shared savings: government agencies that own hospitals are a state or federal ownership model, not an integrated care and payment arrangement; an insurance plan that covers only prescription drugs is a specific product, not a care‑coordination group; and a hospital credentialing program deals with verifying qualifications, not organizing care or sharing savings.