Medicare ACOs Add 106

Federal officials have estimated that ACOs could generate about $940 million in savings over the next four years. However, Blum says more time is needed to assess the programs' effectiveness.

"These are programs that started just in 2012 and it's too early to talk about results. But we are very optimistic that the program will reduce overall costs, particularly the fact that we have so many more physicians coming into the program," he says.

Blum says he believes ACOs will demonstrate their worth by squeezing savings out of an inefficient healthcare delivery system. "There is clearly wide variation in healthcare spending across the country. There are clearly ways to improve care," he says.

"The opportunity that's presented by the ACO program is not to provide care in the same way at lower payment rates but to fundamentally change care, to improve the care coordination, to avoid unnecessary care, to reduce rehospitalizations, to improve post-acute care, to ensure that pharmacy benefits are aligned with traditional medical benefits."

Of the more than 250 ACOs in the shared-savings program, only eight have chosen the so-called "risk track" that provides greater earning potential if metrics and savings are met, but also leaves providers on the hook if those savings don't materialize.

In addition to the 106 new ACOs, Blum says an additional 60 ACO applications were rejected.