Vermont All-Payer ACO Model joins growing state-based efforts
to deliver better health care, reduce costs
The Centers for Medicare & Medicaid Services (CMS) and the state of Vermont jointly announced today the Vermont All-Payer Accountable Care Organization (ACO) Model, a new initiative aimed at accelerating delivery system reform for Vermont residents. The Vermont All-Payer ACO Model aims to transform health care for the entire state and its population. Through the model, the most significant payers throughout the state – Medicare, Medicaid, and commercial health care payers – will incentivize health care value and quality, with a focus on health outcomes, under the same payment structure for the majority of providers throughout the state’s care delivery system. Today, CMS also approved a five-year extension of Vermont’s section 1115(a) Medicaid demonstration, which, in addition to extending the state’s comprehensive demonstration, includes the authorities needed to make Medicaid a full partner in the Vermont All-Payer ACO Model.
CMS and Vermont aim for broad ACO participation throughout the state -- across all the significant payers and the majority of the care delivery system -- to make redesigning the entire care delivery system a rational business strategy for Vermont payers and providers, and to deliver meaningful improvements in the health of and health care for Vermonters.
“This model is historic in terms of its scope, aiming to include almost all providers and people throughout the state in an all-payer ACO model to drive improved quality, better care coordination, healthier people, and smarter spending,” said Patrick Conway, M.D., CMS principal deputy administrator and chief medical officer. “This model may also allow eligible physicians and other clinicians in Vermont to qualify for Advanced Alternative Payment Model bonus payments from the Quality Payment Program given their commitment to be accountable and improve care for patients.”
The Vermont All-Payer ACO Model is an exciting advancement in CMS’ partnerships with states to accelerate delivery system reform. CMS has been partnering with Maryland for the past three years as part of the Maryland All-Payer Model to shift hospital payments to global budgets that reward value over volume. The Vermont All-Payer Model builds on the Maryland All-Payer Model by expanding statewide health care transformation beyond the hospital and will provide valuable insight for other state-driven all-payer payment and care delivery transformation efforts.
The Vermont All-Payer ACO Model offers ACOs in Vermont the opportunity to participate in a Medicare ACO initiative tailored to the state and will provide Vermont start-up funding of $9.5 million to assist medical providers with care coordination and bolster their collaboration with community-based providers. Additionally, the section 1115(a) Medicaid demonstration extension enables Medicaid, a critical health care payer in the Vermont All-Payer ACO Model, to enter into ACO arrangements that align with that of other health care payers in support of the Vermont All-Payer ACO Model. Under the Vermont All-Payer ACO Model, the state commits to achieving statewide health outcomes, financial, and ACO scale targets across all significant health care payers.
CMS is excited about the promise of the Vermont All-Payer ACO Model to improve health care value and quality. In addition, CMS seeks public input on additional opportunities to partner with states on payment and care delivery reform. On September 8, 2016, CMS released a request for information on concepts related to state-based payment and delivery system reform initiatives.
The Affordable Care Act, through the creation of the Center for Medicare and Medicaid Innovation, allows for the testing of innovative payment and service delivery models, such as the Vermont All-Payer ACO Model, to move our health care system toward one that rewards clinicians based on the quality, not quantity, of care they give patients. Today’s announcement is part of the Administration’s broader strategy to improve the health care system by paying providers for what works, unlocking health care data, and finding new ways to coordinate and integrate care to improve quality.
In March 2016, the Administration estimates that it met the ambitious goal – eleven months ahead of schedule – of tying 30 percent of Medicare payments to quality and value through alternative payment models by 2016. The Administration’s next goal is tying 50 percent of Medicare payments to alternative payment models by 2018. The Health Care Payment Learning and Action Network established in 2015 continues to align efforts between government, private sector payers, employers, providers, and consumers to broadly scale these efforts to achieve better care, smarter spending, and healthier people.
For more information on the Vermont All-Payer ACO Model and the section 1115(a) Medicaid demonstration extension, please visit:
- Vermont All-Payer ACO Model: https://innovation.cms.gov/initiatives/vermont-all-payer-aco-model/
- Vermont section 1115(a) demonstration extension: Fact Sheet and CMS Approval Letter
- Vermont’s Green Mountain Care Board: http://gmcboard.vermont.gov/payment-reform/APM