In August 2012, the Massachusetts legislature passed Chapter 224 of the Acts of 2012: An Act Improving the Quality of Health Care and Reducing Costs Through Increased Transparency, Efficiency, and Innovation, a wide-ranging health reform bill. Among other things, the law established an Independent Health Policy Commission with an 11-member board that is charged with setting health care cost growth goals for the state, enhancing the transparency of provider organizations, monitoring the development of accountable care organizations (ACOs) and medical homes, fostering innovative payment and delivery models, and monitoring and reviewing the impact of changes in the health care system.

In allowing the Health Policy Commission to certify voluntary ACOs, the legislation identified a number of goals for ACOs in Massachusetts, including: reducing health status adjusted total medical expenses over time, improving the quality of health services provided, and promoting alternative payment methodologies. More details about the functioning of these ACOs will be contained in regulations that will be developed by the Health Policy Commission

Last updated November 2013.

Project Scope Scope of Services: Accountable care organizations (ACOs) are required by statute to provide medically necessary services across the care continuum, including both physical and behavioral health services. ACOs will need to ensure access to a range of services specified in the legislation, including preventive and primary care services; emergency services; hospitalization services; ambulatory patient services; mental health, substance use disorder and behavioral health services; specialty care; pediatric services; and clinical laboratory and pathology services.

Medically necessary services not internally available must be provided to patients outside the ACO. More detailed regulations on the scope of services offered by ACOs are forthcoming.

Eligible Provider Population: Provider organizations that meet the criteria for participation set in the statute (and supplemented by forthcoming regulations) may apply to become an ACO. The legislation specifies that provider organizations include any corporation, partnership, business trust, association or organized group of persons, that is in the business of health care delivery or management and represents one or more health care providers in contracting with insurers for the payments of heath care services. This includes physician organizations, physician-hospital organizations, independent practice associations, and other provider networks.

Eligible Patient Population: Participating patient populations are not addressed in the legislation.

Attribution: Attribution of patients to ACOs is not described in the legislation.
Authority Chapter 224 of the Acts of 2012 establish a new state agency—known as the Health Policy Commission—in the Massachusetts Executive Office of Administration & Finance. The Commission is an independent public entity not subject to supervision or control by other executive offices or departments in Massachusetts. This Commission is granted authority to certify accountable care organizations (ACOs) and responsibility for oversight and monitoring of the ACOs.
Governance Accountable care organizations (ACOs) are required by the Chapter 224 of the Acts of 2012 to have a governance structure that includes an administrative officer, a medical officer, and patient or consumer representation. They must be organized as a separate legal entity from the ACO participants.
Criteria for Participation The independent Health Policy Commission established by Chapter 224 of the Acts of 2012 is charged with developing certification standards for accountable care organizations (ACOs). While granting the Commission latitude to establish additional standards, the statute establishes twenty criteria for certification, including that certified ACOs must:

  • Have functional capabilities to coordinate care financial payments among providers
  • Have significant implementation of interoperable health information technology for the purposes of care delivery coordination and population management
  • Provide medically necessary services across the care continuum including physical and behavioral health services
  • Engage patients in shared decision-making, including on palliative and long-term care services and supports.

Provider organizations will use a common application form to apply to become ACOs and can be certified for a renewable term of up to 2 years.

The legislation established that the “purpose of the ACO certification process shall be to encourage the adoption of integrated delivery care systems in the Commonwealth for the purpose of cost containment, quality improvement and patient protection.”
The Commission is directed to incorporate models and practices that are funded by the state’s Healthcare Payment Reform Fund and found to be successful into the ACO certification standards it develops.


Certified accountable care organizations (ACOs) will be required to receive reimbursements or compensation from alternative payment methodologies—defined as methods of payment not solely based on fee-for-service reimbursements—and they must be capable of coordinating financial payments among their providers. These alternative payment methodologies must be consistent with the adoption of payment incentives that improve quality and care coordination. The legislation specifies that these alternative payment methodologies may include, but are not limited to, shared savings arrangements, bundled payments, and global payments.

Standards for the alternative payment methodologies used to reimburse ACOs will be described in forthcoming regulations from the Health Policy Commission.

Support for Infrastructure The independent Health Policy Commission will help accountable care organizations (ACOs) to identify best practices by creating a designation process for model ACOs. This designation will be granted to ACOs that meet standards of excellence for quality improvement, cost containment and patient protections.

The Commission will administer the state’s Healthcare Payment Reform Fund, which will allow health care entities to participate in a competitive process for incentives, grants, technical assistance, and evaluation assistance or partnerships to develop, implement, and evaluate promising models of health care payment and service delivery.
Measurement and Evaluation The quality of health services provided by accountable care organizations (ACOs) in Massachusetts will be measured by a Statewide Quality Measure Set being developed in Massachusetts. The Health Policy Commission may also identify additional measures for evaluating ACOs.