Vermont approves all-payer, ACO-like system

The state of Vermont is moving ahead with its first-in-the-nation all-payer model for emphasizing value-based care.

The state’s healthcare regulatory agency, the Green Mountain Care Board, signed off on the agreement. The new system plans to be dubbed the Vermont All Payer Accountable Care Organization Model. Set up like an accountable care organization, physicians will be paid on a monthly basis for serving Medicare, Medicaid and commercially insured patients, with the focus on patient outcomes rather than fee-for-service payment.

Vermont Gov. Peter Shumlin has previously said the proposal could save $10 billion in healthcare costs over 10 years, and he applauded the board’s approval of the model.

“By shifting the focus away from the current fee-for-service system to one that rewards primary care and prevention, we will help Vermonters lead healthier lives and more effectively manage chronic diseases, allow doctors to better treat their patients and identify health issues before they become severe, and reduce costs in a health care system that, if left unchecked, will bankrupt our state and Vermont families,” Shumlin said in a statement.

The state had received tentative approval from the federal government for the plan in September. In CMS’s press release after the state board’s approval, it announced it would provide $9.5 million for Vermont providers to help with care coordination and collaboration.

The model will be tested for six years. In the “zero year,” beginning on Jan. 1, 2017, the focus will be on funding opportunities. In the real performance years from 2018 through 2022, the Vermont All-Payer ACO model will be judged on the following targets:

  • ACO Scale Targets: Payers and providers will be encouraged to participate with the goal that by 2022, 70 percent of all Vermont insured residents, including 90 percent of Vermont Medicare beneficiaries, will be attributed to an ACO. Payer-specific benchmark and financial settlement calculations will continue, but the design of quality measures, risk arrangement, payment mechanisms, and beneficiary alignment methodology “will be closely aligned across payers.
  • All-Payer and Medicare Financial Targets: Annualized per capita health care expenditure growth for all major payers will be capped at 3.5 percent. Medicare per capita health care expenditure growth for Vermont Medicare beneficiaries will be limited to at least 0.1-0.2 percentage points below that of projected national Medicare growth.
  • Health Outcomes and Quality of Care Targets: Vermont has designated four priority areas (substance use disorder, suicides, chronic conditions, and access to care) with three measures for each priority area (population-level health outcomes, delivery system measures and process milestones).

Providers wouldn’t be required to join, according to Green Mountain Care Board Chair Al Gobielle. While they could stick with fee-for-service payment, some may be compelled to join with the changes to Medicare reimbursement from the Medicare Access and CHIP Reauthorization Act, which Gobielle predicted will encourage Medicaid and commercial payers to move to a similar value-based care system. 

John Gregory, Senior Writer

John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.

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