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ACO to take over Medicare management

August 5, 2013

Both Northern Inyo (above) and Southern Inyo Hospital entered into agreements with an accountable care organization to manage local Medicare patients’ healthcare. The contracts go into effect in late 2013 or early 2014. Photo by Marilyn Blake Philip

Recently, both Northern and Southern Inyo hospitals took the big step toward Patient Protection and Affordable Care Act compliance by signing with an accountable care organization to manage Medicare patient healthcare.
This trend will eventually affect all patients – ACOs will start with Medicare but they will eventually work with private payers (insurance companies) and state payers like Medi-Cal, said Georgia Green, executive director of the Nevada City-based National Rural ACO Corporation.
Signing a three-year Shared Saving Participation Agreement with NRACO was “an initial response to ensure that all of NIH’s Medicare patients will receive care at a facility that is Patient Protection and Affordable Care Act-compliant” by the act’s effective date of Jan. 1, 2014, Board President Dr. John Ungersma said. Both NIH Administrator John Halfen and SIH Administrator Lee Barron said the contracts will probably go into effect late this year or early in 2014.
NRACO’s growing clientele includes hospitals throughout the U.S., Green said. “We are very excited that Northern and Southern Inyo hospitals are participating in our program, which is designed to bolster the quality and economic sustainability of California’s rural healthcare delivery system and strengthen rural communities like Bishop.”
NRACO Director of Operations Lynn Barr said, “The goal of an ACO is the triple aim – improved individual and population health; increased quality of care and reduced costs. The National Rural ACO is helping providers in Bishop implement state-of-the-art healthcare processes, rewarding physicians for ‘high value’ practices, and guaranteeing that patients receive the best possible care at the lowest possible cost.”
NIH made an “upfront” payment of $5,000 when it signed the contract. Monthly payments will be $5,000-$10,000, depending on the range of ACO services provided, Halfen said. NRACO services include care coordination programs for chronically-ill patients; an application that enables patients to use smartphones or the Internet to securely communicate with doctors and access electronic health records; and programs that improve quality of care and increase patient satisfaction. “Patients will continue to have the freedom to go to any health care provider that they choose,” Green explained.
According to NRACO site,, “Unlike HMOs, managed care or some insurance plans, an ACO can’t tell you which health care providers to see and can’t change your Medicare benefits.” Another advantage is less repetition of forms and medical tests because all of the patient’s providers will be able to share resources and information about the patient. Providers will also partner with patients on care decisions and patients have the right to choose any Medicare providers, at any time, even if providers are not with an ACO.
To surf the site, Green directed people to click the “Resources” tab, then “Shared Files” and “For Healthcare Providers.” There, people can get answers, in plain English, to Frequently Asked Questions in a document entitled “Provider FAQs” which has a large patient section in “FAQs about NRACO.”
Barron said she anticipates that over the long run, ACOs will provide an improved model of coordinated, quality care. “The initial cost of providing those services is high but in theory cost levels off as Medicare beneficiaries continue to receive better preventive (and overall) care.” Kaiser Permanente, Mayo and Geisinger Health System are examples of successful long-term ACOs, Halfen said.
Although managed care has been around for 25 years, Halfen added, this time ACOs are focusing only on Medicare patients. “Ninety-five percent of all healthcare costs are currently generated by 5 percent of the population – patients who are elderly and who have multiple, chronic, long-term illnesses.
These patients often don’t have the caregivers or the money to ensure that they have the means to grocery shop, get medications refilled, take medications properly and establish healthy lifestyle practices, Halfen said. Barron added that through case management by an RN or mid-level practitioner, fewer patients “will fall through the cracks” because case management involves things like scheduling follow-up appointments, coordinating care with the patient’s other providers and calling and visiting patients at home. “Better management of healthcare will bring the 95 percent down,” especially if these patients see their primary physician first, not a surgeon or Emergency Department doctor, Halfen added.
In short, the care coordination services provided by the NRACO have the potential to “greatly reduce healthcare costs,” Green said. Furthermore, over time, Medicare patients should receive better healthcare at facilities like NIH and SIH because of ACO provider information-sharing and “and patients will have access to new programs, like local care coordination teams and the online application that lets patients communicate with their doctors more easily.”

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