Helping hospitals make it work

The design of current Medicare accountable care programs has effectively shut out many smaller providers, particularly in rural areas, that don't have the size, reach or infrastructure to meet the requirements. But one not-for-profit organization is bringing those smaller providers together to achieve the accountable care goals of care coordination and transitioning from volume to value.

The National Rural ACO, a group started four years ago to help rural providers in California adopt electronic health records, has applied to be a pooled accountable care organization for 10 rural health systems across the country. It submitted its application in July to the CMS and will be part of a cohort announced in January.

“The way (the CMS) assigns beneficiaries is kind of prejudicial to rural providers,” says Lynn Barr, strategic adviser to the group. “There's no way for us to participate—it's very, very frustrating.”

The National Rural ACO will provide centralized services, such as building a data warehouse for participating providers. Participants will not undertake any capitation risk and will continue to be paid on a fee-for-service basis. They will, however, be eligible to share in any Medicare savings, but without penalty if costs exceed the budget targets.

Barr says rural health providers already coordinate care and provide social services for people in their communities. “The strength we have is our relationship with patients,” she says.

But resources are the limiting factor.

Terry Hill, executive director of the National Rural Health Resource Center, which has partnered with the National Rural ACO, says even more than the expense of purchasing an EHR system, rural providers struggle with a shortage of experienced HIT professionals they can bring on board. In addition, a small hospital can't get the discounts offered to large providers.

And that means rural hospitals need to pool their resources, either formally through a merger or informally through a looser alliance. In Minnesota, for instance, roughly 20 hospitals are tapping into the expertise of a cooperative of 70 IT professionals who work with providers throughout the state. “Collaboration is such a necessary component,” Hill says.

Barr concedes it may be a number of years before the National Rural ACO achieves any financial gain for participants. “If we're lucky, we're going to cover our costs,” she says, adding that the immediate benefit will be in creating the large data warehouse.

She also acknowledges that some providers have abandoned care-coordination programs because they were losing revenue by holding down utilization.

On the other hand, Barr says providers that can't succeed in the program will need to ask themselves how they plan to survive in the future, which likely will feature a broad shift from fee for service to alternative payment and delivery systems. “That's where the money is,” she says. “If we don't coordinate care for our patients, somebody else will.”

Follow Beth Kutscher on Twitter: @MHbkutscher