Rural Health Systems Establish ACO Organization

Nine rural communities have joined forces to qualify the National Rural ACO (NRACO) for the Medicare Shared Savings Program. The NRACO includes a diverse cross-section of health care providers across the country, including rural and critical access hospitals, rural health clinics, federally qualified health centers, and independent physician practices.

Accountable care organizations (ACOs) are required to have at least 5,000 Medicare beneficiaries and meet rigorous program requirements. The number of beneficiaries attributed to each NRACO member community ranged from 252 to 3,507, well shy of the 5,000 beneficiaries required to participate in the program. CMS estimates an average start-up cost and first-year operating expense of $1.7 million for an ACO, which is unaffordable for small rural community health systems. By themselves, none of the NRACO's member communities could have qualified or afforded to become ACOs.

According to the NRACO's founder, Lynn Barr, the organization was formed to overcome these barriers and make the program accessible to small community health systems: "Rural communities can join the NRACO at a fraction of the cost of setting up their own program, and reap the benefits for their communities and patients." The NRACO helps its members set up advanced care coordination programs to provide additional services to its most vulnerable patients, promote population health and wellness, and achieve the highest levels of quality, customer service, and patient satisfaction. It partners with Stratis Health, a nonprofit quality improvement organization, and Inland Empire Health Information Exchange to facilitate coordination of care, data exchange, and quality improvement.

"Rural health systems provide about 70% of all care to their community. This program will help them coordinate the care provided outside their community and act as advocates for their patients," according to NRACO Board Chair Timothy Putnam, CEO of Margaret Mary Community Hospital. "Forming the NRACO allowed us to do what is right for our patients and fulfill the mission of serving the health needs of our community, while at the same time blazing a trail for other rural communities to follow."

The vision of the NRACO is to be the national leader of the transformation of rural health care systems from fee-based to value-based care by creating an affordable, replicable framework that results in the best possible health for rural communities, at the lowest possible cost, and strengthens and preserves the rural health safety net.

The founders of the NRACO include Margaret Mary Community Hospital in Batesville, Indiana; Memorial Hospital in Logansport, Indiana; Alcona Health Centers in Lincoln, Michigan; McKenzie Health System in Sandusky, Michigan; Mammoth Hospital in Mammoth Lakes, California; Northern Inyo Hospital in Bishop, California; Southern Inyo Healthcare District in Lone Pine, California; Ridgecrest Regional Hospital in Ridgecrest, California; and John C. Fremont Healthcare District in Mariposa, California. These health systems include clinics, home health services, and skilled nursing facilities.

The next application deadline for organizations interested in participating in the 2015 Medicare Shared Savings Program will be in summer 2014. More than 60 rural communities have expressed interest in joining NRACO in 2015. "We anticipate forming multiple regional and national rural ACOs to accommodate up to 100 additional rural communities next year to meet the demand," says Barr. The NRACO is particularly interested in working with existing networks with a history of collaboration, but can also accommodate single, unaffiliated communities. The deadline for letters of intent for the NRACO 2015 application cycle is April 1, 2014.

Sample letters of intent and more information can be found at www.ruralACO.com.

More information about the Shared Savings Program is available at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/

Source: National Rural ACO