MONTPELIER, Vt. — Gov. Phil Scott announced Wednesday that he is taking the next step toward pursuing Vermont’s all-payer health care model.
Standing alongside Agency of Human Services Secretary Al Gobeille, Scott said the state will launch a “next generation” Medicaid pilot program that tests an advance-payment Accountable Care Organization (ACO) financial model.
The one-year pilot will include 30,000 Medicaid patients, who will receive care from providers operating under a global budget to encourage better care and health at lower costs for Vermonters. The pilot is run through OneCare Vermont, an ACO which represents a coalition of hospitals, independent practices and other providers.
Last year, OneCare negotiated a Next Generation Medicaid contract with Centers for Medicare and Medicaid Services to transition providers to a global budget in 2017. At the federal level, CMS is pushing toward global budgets and the Next Generation ACO Model.
The pilot, which will cost $93 million in state and federal-matched funds, will operate through OneCare’s 2,000 providers and include hospital-affiliated primary care, emergency and specialist providers. Under the plan, providers will be responsible for up to 3 percent of expenses that go over their allotted budget; they also are eligible for a 3 percent reward for underspending.
Prior authorization, a burdensome process in which physicians need authorization from an insurer before providing care, is eliminated in the trial. The change is expected to save administrative costs and allow for faster treatment.
“If at the end of the trial the program has met our goals, we’ll expand it. If not, we will not move forward,” Scott said during the announcement.
The program, part of the all-payer health care legacy of former Gov. Peter Shumlin, aims to address rising health care costs by allotting a set amount of funds to providers at the beginning of each fiscal year. Shumlin argued that the model rewards overall population health instead of incentivizing providers to offer redundant or unnecessary medical procedures for profit.
The new payment method raises questions about how doctors might behave to avoid going over budget or to receive bonuses.
“Vermont providers are an altruistic breed; they care about people in the community,” said Dr. John Brumsted, chief executive officer of the University of Vermont Medical Center. He added that patients will still have the same avenues for grievance if they feel their care has been restricted.
Brumsted also noted that he is not concerned about a 3 percent risk or reward because OneCare has a budget of over $1.5 billion. However, such financial risk would likely have a significant impact on independent and private practices, which operate on tighter budgets.
Rewarding physicians for overall population health holds other risks. The model assumes that doctors are responsible for the health outcomes of their patients. However, in cases of chronic illness like diabetes or heart disease, lifestyle changes are necessary. This preventive medicine approach includes habit changes in diet, exercise levels and substance abuse.
Still, patents largely ignore preventive care, doctors have told Watchdog, which has led some doctors to be concerned they will be held financially responsible those outcomes. Moreover, preventive care requires increased face-time with primary care physicians, and Vermont has a drastic shortage of those providers.
Dr. Fred Kniffin, a representative from Porter Medical Center, said that the solution is to get personal.
“We’ve been identifying patients within our community that are at greatest risk [of ignoring preventative medicine],” Kniffin said. “We need to find out who do they listen to. Who do they talk with? What are their goals? We need to leverage those things.”
As part of Shumlin’s all-payer model, CMS will have access to personally identifiable health information and even allow the government to create personalized lifestyle plans, including follow-up meetings with patients to see if they are following the plan.