Vt., Feds Agree on All-Payer

Valley News Staff Writer
Monday, October 03, 2016

Montpelier — Vermont officials said on Wednesday they had agreed with the federal agency that oversees Medicare on terms for an “all-payer model” that would pay more health care providers a set amount for each of their patients.

This system — sometimes called capitation — is touted by some analysts as a key to phasing out the existing fee-for-service system, which critics say results in perverse incentives to boost revenue by providing more services to patients. Those incentives work against efforts to cut the growth in health care spending, critics say.

The proposed agreement, which has not yet been signed, would include a goal of limiting the annual increase in aggregate health care costs to 3.5 percent, according to information posted on the website of the Green Mountain Care Board, a state panel that oversees hospital spending and insurance premiums.

The all-payer deal aims to increase the economic impact of capitation by prompting more primary care doctors to participate in accountable care organizations. It would aim to use capitation to pay for the care of more patients covered by Medicaid and commercial insurance.

Many Vermonters are currently covered by OneCare Vermont, an accountable care organization that encompasses 124 providers ranging in size from giants like Dartmouth-Hitchcock and the University of Vermont Medical Center to individual primary care doctors.

OneCare Vermont already reimburses participating providers using capitation instead of fee for service. OneCare covered the payment arrangement for 42,000 of the state’s 118,000 Medicare recipients, D-H disclosed in a tax return made public in May. Altogether, providers collect payments under OneCare for about 95,000 Vermonters covered by Medicare, Medicaid and commercial insurance, according to the OneCare website.

Initial reactions to the all-payer model were guarded.

Jeff Tieman, the CEO of the Vermont Association of Hospitals and Health Systems, issued a release noting “many important but unanswered questions” about the deal. “For an all-payer model to work, Medicaid must be a reliable and adequately funded partner,” he said. “We must have a plan for containing Medicare cost growth that accounts for our state’s aging population; and we must make sure that the contractual structure of the model is sensible and workable.”

Cory Gustafson, a spokesman for Blue Cross Blue Shield of Vermont, the state’s largest commercial health insurer, said the company had talked with the administration about the new deal in the works but had not been directly involved in negotiations with federal officials.

“We’re going to take a look at it,” Gustafson said. “We just don’t have a comment until we (learn more about) what the details are.”

At a health care policy forum last Friday, the gubernatorial candidates of the two major parties were noncommittal about the anticipated all-payer deal.

Democratic candidate Sue Minter said she wanted “to understand the system of governance for decision making, who and how decisions on budgeting will get made” before endorsing the plan. She said she also would “want to know there will be ways to get out of this program if we do not want to be in it” and for providers to opt in or opt out of the new system.

Lt. Gov. Phil Scott, the Republican candidate, also expressed skepticism.

“I get the concept, but at the same time the devil is in the details,” he said. “What is it going to mean to each of us and how much is it going to cost and what are we going to get out of it?”

OneCare offers participants the chance to share a portion of the savings that result from the program. So far, no such shared savings have been reported on its website.

The all-payer deal would be tied to revised version of accountable care, which Medicare has dubbed Next Generation. That program provides greater rewards when savings are achieved but requires providers to take on more risk, in part by paying the costs if expenditures on patients’ care exceeds the revenue from the capitated payments.

Agreed-upon quality-of-care measures covered by the new all-payer program will include substance abuse deaths, suicides, access to primary care doctors and the rates of diabetes, hypertension and chronic obstructive pulmonary disease.

Rick Jurgens can be reached at rjurgens@vnews.com.