A partnership between the Redwood Community Health Coalition and three of Sonoma County's largest health centers has been approved by the federal government as an accountable care organization for 7,000 Medicare patients in Sonoma and Napa counties.

The newly formed ACO will work toward coordinating better care for patients and reducing health care costs, said Steven Ramsland, CEO of Redwood Community Health Coalition and the newly formed entity.

The ACO, which will be called the Redwood Community Care Organization, is only the second in the nation to be affiliated with federally qualified health centers.

The Redwood Community Health Coalition is a consortium of 16 health centers in Napa, Sonoma, Marin and Yolo counties. Of the various ACO models that are now being approved by the federal Centers for Medicare & Medicaid Services, the local entity has been set up as a shared savings ACO for Medicare patients.

The ACO will coordinate care for some 7,000 Medicare patients in Sonoma and Napa counties. The organization will be rewarded by the federal government if it can meet certain quality and cost criteria, with cost savings being split 50-50 between the ACO and the government.

"This is a mechanism with which to reduce the fragmentation in the current health care delivery system and to identify the people with the greatest needs and essentially wrap services around those people so they can lead healthier lives," said Ramsland.

The ACO is affiliated with the local coalition but is a separate entity that was founded by the coalition, Petaluma Health Center, Santa Rosa Community Health Centers and West County Health Centers. The coalition's other clinics will be participating providers.

ACO staff will attempt to track patients, particularly those with chronic health conditions, to ensure they receive the care and medication they need. Electronic health records, which are used at all the coalition's health centers, will be used to track a patient's care, regardless of which health center the patient visits.

Staff will also conduct frequent data mining to come up with population health analysis for the 7,000 Medicare patients.

Naomi Fuchs, CEO of Santa Rosa Community Health Centers, said the ACO will use several proven health care programs for cutting costs and improving care, including care coordination and complex care management models.

She said the Santa Rosa health centers recently conducted a pilot program to test the effectiveness of these programs.

"We've been doing this now with Medi-Cal patients in a pilot project and we improved health outcomes, patient experience and lowered the cost of care for 50 patients, saving half a million dollars in six months," Fuchs said.

Ramsland has spent 10 years working in the managed care businesses and 15 years as CEO of community mental health organizations. Mary Maddux-Gonzalez, the chief medical officer of the Redwood Community Health Coalition, will also serve as chief medical officer for the ACO.