The field of play for the state’s new consolidated hospital funding program has been revealed – and the stakes are high.

The Delivery System Reform Incentive Payment program, which received applications from 25 “performing provider” regions earlier this month, will move toward a public hearing process in late February to decide how to distribute a $6.42 billion pool of funding over a five-year period. Funding will then be announced in March, and the first year of the five-year program will run from April 1 through Dec. 31.

By encouraging hospitals to consolidate services, the main goal of the DSRIP program is to reduce avoidable hospital use – such as preventable readmissions and emergency room visits – by 25 percent over five years, according to the state Department of Health. Under the program, payouts will be made to hospitals based on their performance in three broad categories: system transformation, clinical management and population health. The state will launch the program using an $8 billion rebate from the federal government, which was generated from savings the state has made by reforming its Medicaid system.

In the eastern half of northern New York, Adirondack Medical Center in Saranac Lake and Lake Placid, Hudson Headwaters Health Network and Glens Falls Hospital will form the management structure for a region that stretches from Malone to Gloversville. Geographically, it is one of the largest proposed networks in the state and will touch, among other hospitals, Nathan Littauer Hospital in Gloversville, Glens Falls Hospital, Saratoga Hospital, Alice Hyde Medical Center in Malone, Canton-Potsdam Hospital, Champlain Valley Physicians Hospital in Plattsburgh and AMC.

Samaritan Medical Center in Watertown has submitted a application for a performing provider system, or PPS, that includes eight hospitals across Jefferson, Lewis and St. Lawrence counties.

Two hospitals from the North Country joined applications submitted by other regions, according to Denise K. Young, executive director of the Fort Drum Regional Health Planning Organization. Lewis County General Hospital is affiliated with an application for the Central New York PPS co-submitted by Upstate University Hospital, St. Joseph’s Hospital Health Center, Auburn Community Hospital and Faxton St. Luke’s Health Care, which includes a maximum of 17 hospitals. Canton-Potsdam Hospital, meanwhile, is affiliated with an application for the Adirondack Health Institute PPS, which includes a maximum of 14 hospitals.

In addition to Samaritan, other hospitals in the North Country’s PPS are Carthage Area Hospital, River Hospital, Clifton-Fine Memorial Hospital, Claxton-Hepburn Medical Center, Massena Memorial Hospital and St. Lawrence Psychiatric Center, Young said. The North Country Family Health Clinic is also part of the mix.

Young said the North Country Initiative spent the past two years developing its DSRIP plan, which aims to improve patient care across the entire region. She said that about 235 health entites are part of the plan, which includes hospitals, physicians, community organizations and public health agencies.

“They’re all joining together to be better prepared to serve all patients in our region,” she said, adding that the new program is focused more on the quality of care than the number of services provided. “Right now the payment structure is based on services we provide people, but we’re moving to a system so we’re paid as a PPS for when people maintain health. It’s a good step forward for the system.”

An oversight panel with 18 experts hand-picked by the state will meet at the Empire State Plaza in Albany over a four-day period, from Feb. 17 to 20, to decide on how much DSRIP funding each region will get, according to Dr. John Rugge, CEO of Hudson Headwaters Health Network. He said that new funding program is designed to encourage each region to address its unique challenges collectively. He said he doesn’t expect some hospitals to get significantly more money than others under the new framework,

“I think the DSRIP program and process is much less about how much funding is going to go to any one institution for a project as it is to prepare all of us to work more closely together,” Rugge said. “This is encouraging providers across different types of communities to became part of a larger system that they are integral to … To succeed, everyone is going to have a defined role within that larger system for caring for their community and which services they’re going to provide. No one hospital is going to be king of the hill.”

But Rugge added that some hospitals are going to need to be “more flexible” about what services they provide within their districts.

In some cases, that could mean some providers will lose services.

Though some hospitals, like Canton-Potsdam, had to choose to between two districts to join, they will still continue to collaborate with hospitals from other regions, Rugge said. He said that while the funding mechanism for Canton-Potsdam will change, it will continue to work with hospitals outside of the Adirondack PPS.

“You have to put your marker down and know how you’re making choices, but there’s a lot of communication and joint communication going on among the districts,” he said. “The intent is to have them collaborate.”

The launch of the DSRIP program comes after a $500 million portion of the $8 billion pool of state funding was awarded last year to help cash-strapped hospitals that faced the risk of closure before the consolidation program was launched. In the North Country, that funding from the Interim Access Assurance Fund provided aid to Carthage Area Hospital, Massena Memorial Hospital and Lewis County General Hospital.