OBJECTIVES: In 2010, Medicare spent over $117 billion in hospital-related expenses. The new Accountable Care Organization (ACO) model promises to reduce some of these costs by allowing providers to financially benefit from any savings they can deliver while also maintaining strong quality with an eye towards prevention of costly hospitalizations.  In the short-term, specifically the 3-year trial period, ACOs will need to prioritize their initiatives and target areas where they can be most successful and expedient in reducing costs. We aim to understand whether the CMS-mandated quality benchmarking has the potential to drive a reduction in common and costly hospitalizations through increased diagnostic tests, better care coordination, and management of patients with chronic diseases in the short-term.  METHODS: This research examines the alignment between 1) the CMS-mandated ACO quality metrics, and 2) the most utilized and costly DRG codes (2010 MedPAR data). We also examine the evidence to support the possibility that a reduction in hospitalizations within these top DRG categories can be achieved.   RESULTS: Analyses indicate that quality metrics are aligned and can drive reductions in 60% of the top 20 DRG claim categories. These costly DRGs include those for the treatment of chronic obstructive pulmonary disease, renal failure, heart failure, septicemia or severe sepsis, psychoses, and rehabilitation days after hospitalization. Together, these DRG claims cost Medicare over $21 billion in hospital-related expenses in 2010. CONCLUSIONS: If ACOs diligently work to achieve their quality benchmarks, they have the potential to deliver savings to CMS by reducing costs through better outpatient care and hospitalization prevention strategies within the top 20 DRG claim categories. However, it remains unclear as to what degree savings can be achieved.