State officials are requiring that the company in charge of Vermont’s health care reform efforts become a nonprofit.
Secretary of the Agency of Human Services Mike Smith told lawmakers Wednesday that he would give OneCare Vermont $5.7 million on the condition that the for-profit company seek nonprofit status and become more accountable to the public.
“We’re connecting those investments to transparency,” Smith told the House Human Services Committee. “I believe that there needs to be more transparency in OneCare.”
OneCare, an accountable care organization, is implementing the state’s all-payer health care system in an effort to save money and keep Vermonters healthier. OneCare was created and is run by the University of Vermont Medical Center and Dartmouth-Hitchcock Medical Center.
The change in status would require that OneCare disclose financial and salary information, detail revenues and expenses, and be subject to some public records requests, Smith said.
If OneCare cannot become a nonprofit, Smith said he would require that the organization adhere to the same accountability requirements in order to receive state funding.
The change would also improve the public perception of OneCare, which operates largely out of the public eye. Smith made the move after his uncle told him at a family gathering that he didn’t like OneCare because it was for-profit. Chair of the House Human Services Committee Ann Pugh, D-South Burlington, echoed that sentiment and said she approved of Smith’s decision.
“We shouldn’t be making money off of health care,” she said. “I’m not saying OneCare was, but it’s a for-profit business so people wonder.”
In exchange for agreeing to those conditions, OneCare will receive a total of $5.7 million in cash to invest in primary care, mental health and health care coordination work. The Legislature must approve that money, which is included in an adjustment of the state budget partway through the fiscal year.
OneCare has agreed to the changes and is “actively exploring” 501(c)(3) status, according to CEO Vicki Loner. “To our knowledge, if the application were granted, OneCare would be the first ACO in the country to gain 501(c)(3) status, but we believe that status most accurately reflects the purpose and operations of the organization and its non-profit members,” she said in a statement.
OneCare representatives have previously said that it’s not possible for the organization to move to nonprofit status.
Under state law, no more than half of board members can have a financial interest in the work of the nonprofit. The majority of the OneCare board are hospital leaders, whose organizations stand to benefit from the success of health care reform. Smith said they could ask the IRS for an exemption.
The company has come under fire for its lack of transparency. It has not shared detailed salaries of its top earners or financial information. Last year, it fought a bill that would have given the state auditor increased access to its finances. In December, the regulatory Green Mountain Care Board also asked it to become more transparent as a condition of the budget approval.
OneCare spokesperson Amy Bodette said the accountable care organization already operates “in the spirit of a nonprofit.” But she added that OneCare stands to benefit from the change. “We want to be seen as a transparent organization,” she said.
Last year, a whistleblower accused OneCare of fraud in a case that the U.S. Attorney’s office declined to pursue. The whistleblower, Robert Hoffman, a former manager of the analytics team for OneCare, has since decided to drop his case.
Kevin Mullin, chair of the Green Mountain Care Board has said that the company’s poor public image is an existential threat to the survival of the reform program and has suggested that the company needs to launch a media relations campaign. The public needs to be on board, Mullin said, because there is “no Plan B” for reining in health care spending in Vermont.
VTDigger, which has reported extensively on OneCare, requested financial and other documents from Bodette in November. Thus far, the company has not provided information on how it’s spending its money on community projects, and how much each hospital is receiving in cash.