RMC to apply for federal grant to help reduce Medicare patients

July 06--The Regional Medical Center is seeking a federal grant that will aim to reduce the hospital's cost for caring for Medicare patients through the provision of more efficient care.

The hospital's Board of Trustees voted Monday to apply for a federal Centers for Medicare & Medicaid Services grant that will enable the hospital to participate in the National Rural Accountable Care Organization (ACO) for the Medicare Shared Savings Program. The program is a part of the Affordable Care Act.

The NRACO grant will enable the hospital to participate in the program "largely risk free," RMC president Tom Dandridge said.

"These ACOs are very complicated and very expensive to get started," RMC president Tom Dandridge said. "The appeal to our board was that we can get into the business with very little money invested on our part."

The hospital will put in about $25,000 for the application which will be reimbursed if the hospital qualifies to participate in the program. The cost to participate a year is as low as $120,000.

Under the NRACO, the federal government through CMS will provide grant monies. Currently, there is about $114 million potentially available in grant monies.

"If you save money, these savings go back to help pay back the grants," Dandridge said. "If you don't save money, there is no penalty."

How much the exact grant is will not be known until it is received though there is about $114 million in available monies.

Under the NRACO model, the RMC will be able to set up an advanced care coordination programs to provide additional services to its most vulnerable patients and to promote population health and wellness.

ACOs create incentives for health care providers to work together to treat an individual patient across care settings -- including doctor's offices, hospitals, and long-term care facilities.

Dandridge said an example of such services could include 24-hour nurse service to help with medical needs or a care coordinator to follow-up with patients to ensure they are receiving the care they need.

Under an NRACO, RMC patients will be able to have a single point of contact for all questions concerning care, a centralized network of doctors for patients, fewer medical tests due to better communications between doctors of different specialties.

The program will enable the hospital to receive an entire claims history on their Medicare patients, allowing the hospital to better identify patients with special needs in determining where to best send the patient.

Dandridge said under the grant, the hospital will participate in the program for three years and, if at the end of three years, the program is not reaping the savings desired, the hospital can opt out without penalty. If the hospital does not participate for three years it will have to pay back the grants it receives.

"This is not really a money maker for us but it is our ability to learn how to manage help and learn it with fairly little risk," Dandridge said.

The grant monies will specifically go toward helping to fund personnel needed for the ACO such as its executive director, secretary, compliance officers and other staff.

"It is a legal entity," Dandridge said.

Typically, ACOs are required to have at least 10,000 Medicare beneficiaries and meet a number of program requirements to participate but the RMC, like most rural hospitals, fall shy of the number required to participate.

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 like the RMC.

Entry into the ACO for the RMC comes just months after President Barack Obama signed into law the repeal of the sustainable growth formula related to Medicare reimbursements to hospitals.

The SGR was a formula developed to determine provider payments to Medicare providers.

Provider payments were to be based on the volume of the services provided. There was no consideration of quality of services and provider payments; only volume of services provided. As a result of the bill, Medicare payments are going to be more based on cost and quality.

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