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OneCare to fall under UVM Health Network, giving Dartmouth-Hitchcock less control

Published: 9/24/2021 10:09:29 PM
Modified: 9/24/2021 10:09:36 PM

BURLINGTON — A nonprofit that oversees health care spending for more than one-third of Vermonters will become part of the University of Vermont Health Network, the largest provider in the state, health care executives announced this week.

As of Oct. 1, the UVM Health Network will become the parent company of OneCare Vermont, an accountable care organization that funnels hundreds of millions of Medicare and Medicaid payments to providers statewide. The network is already the umbrella to several hospitals, clinics and elder care facilities.

The structural change in OneCare’s governance will allow the two organizations to combine services that are now being duplicated, according to OneCare CEO Victoria Loner. For example, the UVM Health Network will absorb accounting and data collection for OneCare.

The move is the latest in the UVM Health Network’s consolidation of power in Vermont’s health care sector — and is sure to draw criticism from those who believe the sprawling nonprofit has too much control over health care spending and delivery in the state.

Loner said the network’s expanded role won’t affect OneCare’s commitment to improving medical care for Vermonters.

“OneCare is, in its current form, a very stable organization growing astronomically over the last couple of years,” she said. “And to be able to continue that growth would require some additional resources in the organization.”

Dartmouth-Hitchcock Health, a co-founder of OneCare with UVM Health Network, will retain a seat on the board of the nonprofit.

“This is really just a structural change aimed at improving the sustainability of OneCare,” said Steve LeBlanc, chief strategy officer of Dartmouth-Hitchcock Health. “Dartmouth-Hitchcock Health is totally committed to remain a participant.”

UVM Health Network president and CEO John Brumsted said these changes could technically take place under OneCare’s current governance structure, but since Dartmouth-Hitchcock cares for fewer Vermonters compared with UVM, the structural change was prudent.

“It makes the most sense for that integration to have that happen with the component of the delivery system that is servicing the most of the patient population,” he added.

The integration of OneCare into the UVM Health Network was not a unilateral decision, LeBlanc said. It “was made as part of a strict, strategic planning process that was undertaken at OneCare,” he said at a news conference Thursday.

“We all agree that it made sense to improve the efficiencies and sustainability at OneCare through some tighter connections, and the ability to share resources with the UVM Health Network,” he said.

Brumsted said, “It’s a way to align incentives and align the way we deliver care. So that is higher value, higher quality and lower cost.”

While OneCare would be a subsidiary under the UVM Health Network umbrella, Brumsted said the network would not have outsize influence over decisions that have an impact on all providers in the all-payer system. The OneCare board would stay intact and policy decisions that affect Vermont’s health care market would be made at the board level, he said.

The UVM Health Network runs three hospitals in Vermont and three facilities in New York and has been a dominant presence on the board of OneCare. The Vermont hospitals — UVM Medical Center in Burlington, Central Vermont Medical Center in Barre and Porter Medical Center in Middlebury — are projected to collect $1.8 billion in revenue from patients in fiscal year 2022, making up roughly two-thirds of health care spending in Vermont. With about 700 beds in Vermont, the network is the largest provider in the state.

Key leadership positions on the OneCare board are held by network executives. Brumsted is chair of the OneCare board. Rick Vincent, chief financial officer at UVM Medical Center, chairs the board’s finance committee.

Loner stressed that the network’s oversight of OneCare’s operations won’t constitute a conflict of interest.

“OneCare remains an independent 501(c)(3),” a nonprofit organization, Loner said. “This is about changing the parent organization — our membership status — which will enable us to streamline and have those efficiencies with one parent organization rather than two.”

As part of the new organizational structure, the balance of power on OneCare’s 21-member board will also shift.

Dartmouth-Hitchcock is dropping two of its three seats and UVM Health Network is picking up an additional seat, bringing its representation to four. Providers from other parts of the health care system, including community hospitals, mental health organizations and independent practices fill the remaining 15 seats. A community representative will be named to the last remaining seat left vacant by D-H.

In 2016, the Centers for Medicare and Medicaid Services issued a five-year waiver to the state of Vermont to embark on a new health care reform project that would allow a new accountable care organization to distribute federal funds to the state’s hospitals and other providers.

The contract with the federal government runs out this year. The state was poised to ask the Centers for Medicare and Medicaid Services for a five-year extension. Instead, it is now asking for one year.

Ena Backus, the state’s director of health care reform said in a public hearing Thursday that the shift was necessary because of “anomalies with the COVID-19 public health emergency.” The state is also hoping to have more time to work with providers, payers and the public before seeking a longer term extension from the U.S. Centers for Medicare and Medicaid Services.

OneCare Vermont was formed as a joint venture of the University of Vermont Health Network and Dartmouth-Hitchcock Health to implement the all-payer system.

The operations of the OneCare pilot project have been supported by UVM, D-H and 10 other member hospitals from around the state.

OneCare was originally a for-profit entity. Last year, the company became a nonprofit in the wake of VTDigger’s reporting on a lack of salary transparency, pressure from the Agency of Human Services and the Legislature, and a lawsuit filed by the state auditor over compensation data.

Over the past five years, OneCare has changed the way health care is paid for in Vermont. The company takes in hundreds of millions of dollars from Medicaid, Medicare and commercial insurance and distributes the money to hospitals and doctors based on the population served by those providers. Instead of reimbursing health care companies for every blood test or doctor’s appointment, OneCare pays a flat per-patient fee.

Under the system, smaller hospitals, such as Springfield and Brattleboro Memorial hospitals, have received less federal funding, while UVM Medical Center in Burlington has seen increases.

Overall, OneCare’s implementation of the all-payer system is supposed to lower the cost of care and improve the quality of patient care. But after five years, OneCare has not demonstrated the promised level of savings or a dramatic improvement in patient care, according to a recent state auditor’s report.

OneCare has also not met population targets. By now, the accountable care organization was supposed to distribute payments to providers across the state for nearly all Vermonters, including those who are part of the commercial insurance system. As of July 2020, about 228,000 Vermonters participated in OneCare, more than double the 100,000 figure in July 2018, Green Mountain Care Board filings show.

Thursday’s public hearing on extending the all-payer waiver for another year became a referendum on the network’s takeover of the experimental payment system.

Patrick Flood, the former deputy secretary of the Agency of Human Services, which manages the Medicaid program in Vermont, told regulators that allowing the UVM Health Network to become the parent company for OneCare “is a gross conflict of interest.”

“I can’t even imagine the circumstances under which that could be managed equitably and fairly and transparently,” Flood said. “So at this point I understand that it’s clear to me that we’re not going to get into that discussion ... and you’re not prepared to give any direct answers to the questions coming up around that so just take it as a comment.”

Julie Wasserman, a health policy consultant who has worked as director of Vermont’s Dual Eligible Initiative, for elderly people who qualify for Medicaid and Medicare, said at the hearing Thursday that there is potential “for a significant conflict of interest with UVM Health Network, controlling Medicare, Medicaid, and its in-house accountable care organization since OneCare receives the money from the payers (Medicaid, Medicare and insurance companies) and then pays the providers, which includes UVM Medical Center, which is owned by the UVM Health Network.

“UVM Health Network will in essence be paying itself via its ACO,” she said. “So my question for you is how can the state let the UVM Health Network pay itself?”

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