The Centers for Medicare and Medicaid Services issued a warning notice to the state this week for failing to meet targets for the all-payer model, the state’s health care reform initiative.
For two years in a row (2018 and 2019), the reform model has fallen woefully below goals for participation in the all-payer system.
The all-payer model is an experiment that combines money from Medicare, Medicaid and commercial insurance to fund health care services on a per-patient basis, rather than a fee for services rendered. The objective is to incentivize preventive care and to lower the growth of health care spending. OneCare Vermont, a pass-through, for-profit hospital and provider group, manages the all-payer system.
In just two more years, 526,000 Vermonters are supposed to be in the program. OneCare has not met step targets toward that goal. So far, only about 30% of that target has been met. About 160,000 Vermonters are part of OneCare.
By this time, Vermont was supposed to have reached a participation level of 50%, or 263,000 patients.
The all-payer model has also not significantly increased primary care treatment nor has it reduced the rate of spending. The Green Mountain Care Board, the regulatory body that both promotes and oversees the all-payer system, is a signatory on the contract with the Centers for Medicare and Medicaid Services.
Susan Barrett, the director of the Green Mountain Care Board, said in an interview that the system needs to be tweaked to help the state meet targets. Small hospitals with small patient populations have had to take on more financial risk to join the Medicare component of OneCare, she said. That has been a barrier to entry for providers and Medicare participation that the care board is working to address. That change alone, she said, could help the state meet targets.
She also partially blamed Covid for the failure to meet targets, even though the pandemic didn’t start until March — three months after the end of the calendar year in which the data was collected for 2019.
Barrett said there has been growth this year in the preliminary numbers of OneCare participants.
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Vicki Loner, CEO of OneCare, says that all-payer is “trending in the right direction, however, we have much work to do to meet the All Payer Model scale targets.”
“We are committed to doing our part to meet these goals,” Loner said.
Barrett said the scale targets the care board agreed to meet under the federal agreement set the bar very high. “It was recognized during negotiations that these were very aggressive,” she said. “The purpose of the model is to test these programs and see what is working and what isn’t working.”
Mike Smith, secretary of the Agency of Human Services, said the all-payer system needs an overhaul. The Scott administration, he said, takes the warning letter “very seriously.” He plans to take the what’s working and what isn’t approach to the next level.
“The results are simply unacceptable,” he said.
In a letter sent Sept. 14, the Centers for Medicare and Medicaid Services has given the state 90 days to respond. If the state regulatory body — the Green Mountain Care Board, which is a signatory on the all-payer model — is unable to provide a satisfactory response to the federal government, the feds will draw up a corrective action plan for the state.
Smith has asked a team, including officials from the Department of Vermont Health Access and Ena Backus, the state’s director of health care reform, to develop a “complete plan for rebooting the all-payer model” in 45 days.
While the all-payer model has been recognized as a laudable goal for state-based health care reform, he said the state needs to ensure that theoretical goals are achievable operationally.
“To me, we need course correction,” Smith said.
His team will look at the value OneCare offers and examine how to expand provider membership and participation through Medicare and Medicaid.
“Nothing is off the table as we look,” Smith said. “I’m concerned about the issue of spending and making sure that the delivery system is changing to the point where it is mitigating costs in the system, and I think that’s something we’ve really got to take a look at.”
Smith believes that the all-payer holds promise but needs to be focused on operational goals.
“I have seen the success of the all-payer model during Covid — we were able to move money in a way that shored up and stabilized the health care system when they weren’t getting revenue,” Smith said.”I’ve seen the benefits, but operationally we need to do a much better.”
Smith says he will ask his team to look at the entire all-payer model — what is working and what isn’t working and how the state can make it work.”
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“We’re midway through this, and this is the time to correct this right now,” Smith said.
Editor’s note: This story was updated with a quote from Vicki Loner at 8:23 a.m. Saturday. In addition, the first name of Ena Backus was corrected, following an editing error.
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