State to try “bundled” health care payment pilot program

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As Vermont moves toward a single-payer health care system, a crucial step in changing the way we pay for services is through small-scale trial programs.

The State of Vermont and the Vermont Association of Hospitals and Health Systems recently submitted a letter of intent to the Center for Medicare and Medicaid Innovation to try different pilot programs that involve “bundling” payments. All hospitals throughout the state are involved in this measure in some way or another, although the specifics of which hospital will do which type of program are still up in the air.

The state and hospital association applied to operate programs that would include bundled payments rather than a traditional fee-for-service payment where patients pay for each operation, test or visit individually. Through bundling, a patient could, for example, make one prospective payment for all services received during an inpatient stay.

This pilot program is one of many different initiatives that states are tackling as a means to implement health care reform at the federal level.

The federal Affordable Care Act, which was signed into law in 2010, created the Center for Medicare and Medicaid Innovation. The federal law gave the center $10 billion in funding for fiscal year 2011 to 2019. One of the things the center works on is studying pilot programs like the ones Vermont wants to try to determine which ones make sense.

At a special meeting of the Green Mountain Care Board Friday, Jim Hester, acting director for the Population Health Models Group for the center, presented different options for programs the state can apply to participate in.

Hester said payment reform at a national and state level requires drastic shifts in the way we pay for health care along with large enough pilot programs so that the center can really study how effective they are at reducing costs.

“To really deal with the issues requires a transformational change in the system,” Hester said.

One of the pilots the center has focused on involves what are called accountable care organizations. The idea is that a group of health care providers takes responsibility for the quality, cost and overall care of patients. In turn, the group shares in savings that in theory emerge from a reduced rate of growth in health care spending.

The center is currently working with 30 groups around the country to develop another level of program that includes a population-based payment system — moving close to a single-payer system and paying a single price for all of the health care services needed by a group of people for a fixed period of time.

Testing out these pilot programs will provide the state with more information to determine what is the best way to reform how people pay for health care. Under Act 48, Vermont’s health care reform law, the Green Mountain Care Board is charged with setting the overall policy goals for pilot projects.

The state is already participating in one payment reform model, the Blueprint for Health, which is one of eight advanced primary care practice models throughout the country. The idea is to focus a group of caregivers around one patient. Practices are paid on a per-member basis rather than on a fee-for-service for each visit or other service.

One of the proposals the state may try, says Green Mountain Care Board Chair Anya Rader Wallack, is expanding the existing Blueprint projects to include specialists in the group of health care providers that care for a patient and therefore receives the payment.

Michael Del Trecco, vice president of finance for the Vermont Association of Hospitals and Health Systems, said every hospital in the state is currently working with Richard Slusky, Director of Payment Reform for the Department of Vermont Health Access on varying degrees of payment reform.

Del Trecco said he could not say at this point what specific hospitals would be taking which measures.

“We are all actively at the table trying to figure out the best way to meet the health care goals in Vermont as well as hospitals meeting their goals of providing care in their communities,” he said.

While pilot reform projects could be in the works next year, a comprehensive overhaul of Vermont’s health care system is still years away. In 2014, the state is required under federal law to implement a health benefit exchange that will assist residents in choosing insurance plans from those that qualify under federal standards. In 2017, the state can receive a waiver from the federal government to operate its own single-payer system.

Alan Panebaker

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  • David Schoales

    This is really good news. Richard Slusky was an effective and well-respected hospital administrator here for many years, and the hospital leaders seem truly interested in working with him to find the best way for Vermont to pay for health care.

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