(Updated with additional content at 2:45 p.m. ET.)
The CMS designated 27 healthcare entities in 18 states (PDF) as the first Medicare Shared Savings Program accountable care organizations, which are one of the healthcare law's most anticipated payment and delivery reforms.
The entities aim to create financial incentives for physicians, hospitals, and other healthcare providers to better coordinate care and improve the health of Medicare beneficiaries while lowering their costs.
The first ACOs will include more than 10,000 physicians, 10 hospitals, and 13 smaller physician-led entities and serve an estimated 375,000 beneficiaries. The announcement follows the January launch of the modified Pioneer Model ACOs with 32 healthcare groups and six Physician Group Practice Transition Demonstration organizations.
The mix of organization types—just over half are physician-led—was touted by CMS officials.
“There were some people who feared that the only entities that would participate would be hospital-dominated systems,” Jonathan Blum, director of the Center for Medicare at the CMS, said in a call with reporters. “That has not happened.”
Blum added that he expected the new ACOs to have more success controlling healthcare costs than similar payment and delivery reform pilot projects previously authorized within Medicare that were studied by the Congressional Budget Office. A January CBO report on 10 such major care coordination and disease management initiatives found insufficient savings to offset their cost.
Blum said the CMS “very carefully studied” the results of those initiatives and designed the new ACOs to perform better.