Health Care

Advocates seek antitrust review of ACO regulation

Two advocates have asked lawmakers to consider antitrust issues as they charge health care regulators with oversight of accountable care organizations.

The advocates made their case earlier this month at a meeting of the Legislative Committee on Administrative Rules.

In 2016, the Legislature charged the board with creating a budget oversight and certification process for accountable care organizations, or ACOs, health reform companies that are the basis for the all-payer model that former Gov. Peter Shumlin spearheaded.

The all-payer model originally sought to have a single ACO accept payments from Medicare, Medicaid and commercial insurers and then pass those payments on to doctors and other providers based on the quality of care they provide instead of the number of procedures they perform.

To that end, staff for the Green Mountain Care Board spent nearly two years holding meetings trying to merge what were then three ACOs into one company. As part of those negotiations, one accountable care organization representing independent doctors dissolved and the other two accountable care organizations created a new umbrella company to share management.

Vermont now has just two accountable care organizations — OneCare Vermont, which is jointly owned by the University of Vermont Medical Center and Dartmouth-Hitchcock Medical Center, and Community Health Accountable Care, which is owned by community health centers in Vermont.

OneCare represents doctors and other health care providers from the state’s biggest hospitals. Community Health Accountable Care represents doctors and health care providers from the state’s community health centers, which largely serve Medicaid patients.

OneCare has already entered into a contract with the state to receive monthly payments based on what it costs to keep 30,000 Medicaid patients healthy, instead of fees for each procedure.

Community Health Accountable Care, however, has had trouble getting a health reform contract with the state’s Medicaid program.

As part of a test run of the regulatory process being developed, OneCare has submitted a $779 million budget for fiscal year 2018 to the Green Mountain Care Board. Community Health Accountable Care has submitted an incomplete budget to the board because the group is not sure whether it will be able to contract with the state’s Medicaid program.

At a recent meeting of the Legislative Committee on Administrative Rules, which must approve or deny the Green Mountain Care Board’s proposed regulatory rules, the chief health care advocate for Vermont Legal Aid and an advocate for a disability group both said some type of antitrust review needs to be part of the rule-setting process.

“Generally people who are in competition with each other, businesses that might be in competition with each other, aren’t allowed to communicate behind the scenes to coordinate things like pricing and such,” Mike Fisher, from Vermont Legal Aid, said in an interview.

Mike Fisher
Mike Fisher, the chief health care advocate for Vermont Legal Aid, testifies in front of the Legislature in 2017. Photo by Erin Mansfield/VTDigger

“An ACO is a coordination of many health care providers, and the federal law and Vermont law allows for that, but with sufficient oversight to assure that it’s in the public interest,” Fisher said.

The rub is making sure there is proper oversight, he said.

“We did not feel like we had sufficient expertise to evaluate whether the rule supplied sufficient antitrust oversight and feel strongly that we should know that it does,” Fisher said. “Someone with antitrust expertise should review the rule to make sure that it satisfies the requirement.”

Susan Aranoff, the senior planner and policy analyst for the Vermont Developmental Disabilities Council, wrote in prepared testimony that the Green Mountain Care Board should require the ACOs to undergo an antitrust review before the board certifies an ACO.

Aranoff said the disabilities council has an interest in the subject because a significant number of the people the council represents use Medicaid for health insurance.

The U.S. Department of Justice and Federal Trade Commission allow ACOs to get free, voluntary, expedited antitrust reviews, Aranoff said. The board could simply require each ACO to be reviewed, she said.

“Texas is requiring ACOs at their own expense to conduct a study of the market impact” of their ACO, Aranoff said in an interview. “They have to have that study done in order to get certified to operate as an ACO in the state of Texas.”

Aranoff said Vermont is moving toward a single ACO, OneCare, and that makes Vermont unique. “No other health care market that I know of has a single ACO,” she said. “It could be bad or it could be good, but no one knows.”

“Some people seem to think competition drives prices up,” she said. “I am agnostic, but someone’s gotta study it, is my point. The state can’t say, on one hand, it’s taking over this federal duty to protect us (while at the same time) not doing anything.”

Todd Moore, the CEO of OneCare and the senior vice president of strategic revenue for the UVM Medical Center, said he supports strong regulation from the Green Mountain Care Board, but opposes the anti-trust review.

“I don’t think that that’s a necessary step,” Moore said. “I think that the rule as written clearly creates a level of direct state oversight and approval that is designed to prevent the FTC ever having an issue with what we’re trying to do here.”

Moore said the draft rule, which OneCare helped write, is designed to give regulatory oversight of ACOs to the state. “If the Green Mountain Care Board thinks that they need that (antitrust review), I think that that’s fine. But, me personally, I think the rule as written is a significant rule with direct state oversight.”

OneCare supports regulation because it helps force transparency, Moore said. For example, OneCare submitted its budget to the board this year even though it will not be legally required to do so until the rule goes into effect next year.

Moore does not have an opinion on whether there should be only one ACO in the state. However, the success and predictability of reforms under OneCare is contingent on putting the majority of the state’s health care providers under one ACO and “rowing in the same direction.”

Kevin Mullin, the chair of the Green Mountain Care Board, said he “definitely” would like to see more than one ACO in Vermont. “I think it builds more trust in people so that people aren’t trying to say that this is just another UVM (Medical Center) takeover of the system,” he said.

Some health care providers might be wary of the ACO system since the Vermont Care Organization — an umbrella company that was designed to bridge OneCare and Community Health Accountable Care — suspended most of its operations earlier this year.

Mullin said about half of Vermont’s 14 hospitals will not participate in OneCare programs this year. The fear of being part of the UVM Medical Center is “probably the biggest reason why half the hospitals aren’t participating this year.”

The Green Mountain Care Board and the Legislative Committee on Administrative Rules have both canceled previously scheduled meetings on Wednesday and Thursday, respectively, on the proposed ACO rule.

At a meeting in the near future, the board will discuss Fisher’s and Aranoff’s concerns.

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Erin Mansfield

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