[I]t’s a week into the Legislature’s 2016 session, and lawmakers are waiting for the Green Mountain Care Board’s draft deal with the federal government to overhaul Vermont’s health care business.
The deal was expected in 2015, and then it was pushed back to the first half of this month. Now, lawmakers who must scrutinize the agreement as part of their oversight responsibility are candid about how little they know about the draft deal.
Al Gobeille, the chairman of the regulatory board that is working out the so-called all-payer waiver agreement with the federal government, testified on the issue Wednesday before a joint hearing of the House Committees on Health Care and Human Services.
Gobeille said the Green Mountain Care Board is still “very close” to a deal with the U.S. Centers for Medicare and Medicaid Services to set up an all-payer system. In December, he had planned to present a “terms sheet” or agreement describing the deal in the first two weeks of this month.
The goal of the all-payer deal (often called a Medicare waiver) has been to set up a giant organization of health care providers and try to get every doctor and hospital in the state to sign up for it. The Green Mountain Care Board would then regulate that organization, called an accountable care organization, or ACO.
Smaller versions of the organizations have been in Vermont’s health care system since 2014. Doctors have voluntarily signed up for the ACOs, which serve as intermediaries between insurers and providers and offer doctors incentives if they can lower health care costs.
Gobeille is now working with regulators to model a new payment model for the ACO after a similar version that Medicare has been using for years. He wants to use incentives to get doctors and hospitals to sign up for the ACO rather than penalize providers that don’t.
The model is called all-payer because the ACO has the potential to absorb all the payments made for health care in Vermont, depending on who joins it. The ACO would receive payments from insurance companies and government programs — including Blue Cross Blue Shield, Medicare and Medicaid — in a uniform, integrated system.
State regulators continue to negotiate with the federal government over what that uniform, integrated system would look like. Under the deal, the federal government would allow Vermont to change some of the payment procedures for Medicare, which is currently solely controlled by the federal government.
The regulators want the ACO to use a payment structure that encourages keeping people healthy, rather than a fee-for-service system that ties payment to the amount of procedures doctors and hospitals provide rather than those procedures’ effectiveness. It remains unclear whether the state or the ACO would eventually set the rates that doctors and hospitals are paid.
By November, the state of Vermont and the Centers for Medicare and Medicaid Services had agreed on the first term for the deal: that Vermont should limit health care spending growth to 3.5 percent per year for non-Medicare patients. On a cumulative basis, that means such spending would grow by about 36 percent over the next 10 years; without that kind of cap, Gobeille said, health care costs are likely to double.
The Green Mountain Care Board has been working with the administration of Gov. Peter Shumlin to get the deal done by the end of 2015 and to have the all-payer model set up by Jan. 1, 2017. However, at the joint hearing Wednesday, the terms of the agreement had not been released.
“It’s really close. It’s just a matter of some pieces,” Gobeille said in an interview. “I think it certainly could be (ready for Jan. 1, 2017), but we have to get it out pretty soon here.”
The terms of the agreement will be in six main categories: time period of the contract; health care revenue regulation; setting of financial targets; establishment of a quality framework for judging providers; getting federal waivers regarding billing details; and getting federal waivers protecting doctors in the ACO from being accused of trying to establish monopoly power.
Rep. Bill Lippert, D-Hinesburg, the chairman of the House Health Care Committee, said in an interview that his priority is understanding “the construct of the all-payer model” in light of all the information the Green Mountain Care Board has been presenting over the previous months.
“We need to be more knowledgeable, we as a Legislature, in order to be thoughtful about our participation in moving forward,” Lippert said. “Is January 2017 — how firm is that? What is that tied to? … I don’t believe I understand that fully yet.”
Rep. Chris Pearson, P-Burlington, said the all-payer model is generally moving in the right direction. He said he doesn’t have concerns about the deal but continues to watch how things move forward.
“My understanding is it’s an iterative process where there’s a lot of back-and-forth with the feds,” Pearson said of the all-payer deal. “I expect it’s under development. I anticipate we’ll see it while we’re still in session.”
“A lot of these things have come online pretty quickly, and we have been having these kinds of discussions for many years, so I think at the provider level people are anticipating a change and even eager for it,” he said.
The House Health Care and Human Services committees will hold another joint hearing Thursday, January 14 at 9 a.m. in Room 10 of the Statehouse.
