Jan. 1 marked the launch of a new accountable care organization across five Southeastern states to improve population health and participate in Medicare’s Shared Savings Program.

The ACO encompasses nine rural hospitals owned and operated by Pioneer Health Services, based in Magee, Miss. The hospitals are located in Mississippi, Tennessee, Georgia, North Carolina and Virginia.

Pioneer Health Alliance, as the ACO is known, will join a growing number of rural ACOs to enhance population health and move away from traditional fee-for-service payment models. The Medicare Shared Savings program includes more than 330 ACOs in 47 states that provide care to nearly 5 million Medicare beneficiaries.

“We want to give the best possible care to our communities,” says Morgan Dunn, the ACO’s president and executive director.

The Pioneer Health Alliance is a culmination of three years’ concentration on quality programs specific to each hospital. The programs focused on improving reporting tools as well as baseline performance, she says.

The ACO is designed to have physician champions in each of the participating communities. Mostly primary care physicians, these doctors will lead the hospital-based quality management committee and will be in charge of analysis of quality of care, process flow, physician peer review, readmissions and care transitions. Additionally, they serve as the ACO point of contact for the hospital CEO and clinics. A community care coordinator will aid with care transitions for patients’ working with community resources, Dunn said.

The ACO board of directors includes the CEO from each participating hospital, as well as a designate from the three participating physician group practices. A Medicare beneficiary also serves on the board. Some 80 percent of Pioneer Health Services hospitals are hospital authorities, and the ACO board will report to each hospital board at least quarterly, Dunn says.

“We feel the ACO will help us keep our hospitals viable,” she says. “We don’t want to close our emergency departments. The Medicare Shared Savings Program gives us the opportunity to start an ACO without significant cash input.”

Pioneer Health Services is participating in the Shared Savings Program at the lowest risk category available, Dunn says, known as Track 1. Under Track 1, shared savings are calculated for each performance year during the term of the ACO agreement. The ACOs are not accountable for losses. Track 2 ACO participants can reap higher savings, but also must share losses.

On Dec. 1, the Centers for Medicare & Medicaid Services proposed changes to the Shared Savings Program, including adding a Track 3 that would have a higher rate of shared savings and prospective attribution of Medicare beneficiaries. CMS also proposed offering ACOs in Track 1 a longer time period to fine-tune their ACO before having to transition to Track 2 and thus take on any losses.

The Pioneer Health Alliance ACO is estimated to have 8,000 fee-for-service Medicare beneficiaries participating across the facilities, though final attribution numbers won’t be available until March, Dunn says.

Jim Lord, head of the Midwest health care practice of ECG Management Consultants, has assisted numerous rural hospitals in making the transition to affiliate or ACO models. He says that the move away from fee for service is a “multiyear transformation.”

CMS programs, including the Medicare Shared Savings Program and the ACO Investment Model, which creates financial incentives for participation in the Shared Savings Program, can help.

“One of the most exciting things happening is the CMS investment in rural health,” Lord says. “It’s a response to some who have stayed on the sidelines and others who are already doing the work.”

Dunn says the Pioneer Health Alliance is opening new doors to reorient rural providers toward prevention and build alliances with local schools and businesses on wellness.

“This will position us for the future,” she says.

For more on rural hospital ACOs and other partnerships, read the January cover story “Rural Alliances.”

Rebecca Vesely is a freelance writer in San Francis