CMS has announced the health care organizations that have been selected to participate in the ACA Bundled Payments for Care Improvement Initiative. Under this initiative, participating organizations will focus on improving care coordination for Medicare beneficiaries who are hospitalized and, in certain cases, when they leave the hospital. Very broadly, applicants will offer a discount to Medicare compared to usual Medicare spending for one of 48 “episodes of care”; the applicant will be paid the Medicare savings beyond the discount level, but will (eventually) assume risk for Medicare expenditures above an established dollar threshold. CMS is testing four approaches to bundled payments, which vary depending on whether they offer prospective or retrospective payment, and the scope of services included. Model 1 is a retrospective payment model for the acute inpatient hospital stay only; CMS has announced 32 awardees under this model. CMS also announced that 100 participants partnering with over 400 provider organizations have been selected for Phase 1 of Models 2, 3, and 4. Phase 1 (which will take place from January through July 2013) is a “no risk” preparation period. Participants in Phase 1 that are approved by CMS and chose to move forward with implementation may begin Phase 2, the risk-bearing implementation period, which is expected to begin in July 2013. Additional details, including participating organizations and specific DRGs included in each episode of care, are on the CMS website.