Scott administration moves forward with all-payer test case

MONTPELIER — Gov. Phil Scott is moving forward with a year-long pilot program that will serve as “a test session” for the all-payer model championed by former Democratic Gov. Peter Shumlin.

Scott, a Republican, announced the launch of a year-long pilot program that will include about 30,000 Medicaid patients in Vermont in an accountable care organization called OneCare Vermont. The agreement with OneCare will set a global budget of about $93 million for the 30,000 Medicaid patients who will receive care from a coalition of four hospitals, independent practices and other health care providers that are part of the ACO.

Agency of Human Services Secretary Al Gobeille and Gov. Peter Shumlin announce accountable care organization pilot program. (VPB/Neal Goswami)

Agency of Human Services Secretary Al Gobeille and Gov. Phil Scott announce a accountable care organization pilot program. (VPB/Neal Goswami)

“My administration is committed to making health care more affordable and accessible for all Vermonters,” Scott told reporters at a news conference Wednesday. “This agreement allows us to gauge the impacts of an all-payer model designed to reward value, meaning low cost and high-quality care, rather than volume under a one-year pilot program.”

An Accountable Care Organization is a group of doctors, hospitals and other health care providers that come together to provide coordinated care for a specific set of patients. The concept is intended to provide better information about a patient’s medical history among providers. An ACO operates under a global budget that offers payment to providers to keep patients healthy based on a per member per month cost determined by actuaries. Providers do not receive payments based on the health services or procedures they provide.

Former Democratic Gov. Peter Shumlin, who left office early last month, signed an agreement with the federal government to create a statewide ACO known as the all-payer model. The all-payer model negotiated under Shumlin, which will begin in 2018, includes private insurance as well as government programs like Medicaid and Medicare as payers. The agreement provides waivers available under the federal Affordable Care Act, or Obamacare, to allow it to include those government programs.

Scott said the pilot program his administration is moving forward with will allow the state to test the model of care before fully committing to it.

“We have the opportunity to evaluate whether this financial model will meet its goals and at the end of this pilot, if it’s effective, we’ll expand it. If it’s not meeting its goals and we cannot address operational concerns, we will not move forward,” the governor told reporters.

OneCare secured the contract with the state for the pilot project through a bid process conducted by the state last year.

Scott, who said he was skeptical of the all-payer model during the fall campaign, said Wednesday he is “optimistic about the benefits to the state and for Vermonters who will be served through this program.”

Under the pilot program, much like the all-payer model envisioned by Shumlin, doctors undertake some risk. They will no be compensated for care beyond the global budget they are given for the population in the program. Should they spend less on care for the group, the health care providers will share in the savings. If they provide care that costs more than the global budget, they will share that risk, too.

Dr. John Brumsted, president and chief executive officer of The University of Vermont Medical Center, said providers in the program understand the risks and rewards that are possible.

Dr. John Brumsted (Courtesy photo)

Dr. John Brumsted (Courtesy photo)

“It is real financial risk. We’re given a budget on the hospital side in this particular pilot. We’ll be prepaid based on the projections that the actuaries made and if more care is delivered to that attributed population there will be no more reimbursement for that,” Brumsted said.

He said the system will not incentivize providers to ration care as they attempt to provide care within the global budget.

“The Vermont providers that I’ve known and worked with for close to 40 years now are an incredibly altruistic breed and really, really, care about the people in our communities, so that would be antithetical to us out of the starting blocks. But, in this program, there is nothing that dilutes the ability for Medicaid beneficiaries to grieve up through the normal processes in (the Department of Vermont Health Access) the care that they’re receiving,” he said. “The last thing that you would ever want to do is withhold care, because that’s clearly going to end up down the road with an escalation of a process that’s going to be more damaging to that patient, and that’s always most important, but it’s also going to be more expensive. It’s actually, if you really think about the financial model here, it behooves everybody to get the care at the right time and the right place and the right provider.”

Dr. Fred Kniffin, CEO of Porter Medical Center in Middlebury, said the pilot program allows providers to offer better health outcomes for patients.

“A lot of health care in Vermont is provided at small hospitals and we jumped into this program to make sure it works for small hospitals. From an administrator’s point of view, we think this is going to be good for us. We think it’s going to be good for our community. Our mission is to care for our community and we want to move from treating our neighbors when they’re sick and injured to keeping them healthy, and this supports our mission in that respect,” he said.

Agency of Human Services Secretary Al Gobeille, who helped negotiate the all-payer model as the chairman of the Green Mountain Care Board during Shumlin’s tenure, said the Scott administration will monitor the pilot program throughout the year to see if it will work on a larger scale.

“We know that there’s going to be bumps along the way in terms of the way that we interface with information and the way that the payments work and all of that. We’ve got to do the work together because this is a public collaboration. We’ve got to do the work together to make sure we can do this at this scale before we move to the next,” Gobeille said.

The pilot program includes 12 quality measures that providers must meet in order to receive any shared savings. Seven of the quality measures are included in the all-payer model agreement with the federal government.

“If this works, eventually we’ll be saving money and people will be healthier as a result, so that’s our goal, and we’ll be able to make decisions during this test period, this time, to try this out, as to whether the all-payer waiver might have some substance, if it’s something we want to continue with or whether we want to change the all-payer waiver,” the governor said.

2 thoughts on “Scott administration moves forward with all-payer test case

  1. I’m lost. Why is this a big all payer deal? It sounds like a plain Jane closed panel managed Medicaid hmo. I’m confused what the fuss is.

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