Every month, Jon Asselin, the chief financial officer of Primary Care Health Partners, divvies up a substantial payment to each of his association’s five primary care practices, located in the Burlington area, St. Albans, Bennington and Brattleboro.
The funds come from OneCare Vermont, the state’s only “all-payer” accountable care organization, through two different payment programs. The amount depends on the number of patients signed up with each practice’s providers and on what type of insurance those patients carry.
Last year, patients with Medicaid, Medicare and BlueCross BlueShield of Vermont all counted. For this year, the anticipated amount changed suddenly with the private insurer’s announcement in late December that it would not participate in the ACO in 2023.
“I think everyone’s head is definitely still a bit spinning in terms of ‘how bad is it?’” said Asselin, who in early February was still trying to figure out the answer to that for his practices.
Despite public entreaties from state officials, BlueCross has stuck to its decision. The insurance company’s reasons included general concerns about the ACO’s ability to rein in costs or improve health outcomes for its members — and a specific concern about the decision by OneCare to contract with the University of Vermont Health Network for its data management and analysis, according to statements then and since.
At Primary Care Health Partners, the physician managers at every practice who oversee its budget and operations are anxious. “Every one of them is saying, ‘What does this mean for me, for the programs, for my staffing?” said Asselin, who also serves on the finance committee for OneCare Vermont.
(The non-profit ACO is part of the UVM Health Network but is overseen by a board made up of representatives from the health network, other hospitals, designated agencies, consumers and health clinics, such as Primary Care Health Partners.)
Vermont HealthFirst, another association of independent providers, put it more formally in a January public statement to the Green Mountain Care Board about the BlueCross exit. “These payment reductions and uncertainties are destabilizing to primary care practices and contrary to the goal of strengthening primary care,” wrote executive director Susan Ridzon.
Of Vermont HealthFirst’s 26 primary care practices, 15 participate in a broader ACO’s program for primary care providers, while seven take part in the payment reform program for independents, according to the organization’s public comments in December.
For providers at Primary Care Health Partners, all of whom participate in what OneCare calls “comprehensive payment reform” or CPR, the size and predictability of the monthly payments has made them a lifeline.
Primary care reimbursements from traditional insurance programs, public and private, have long lagged behind the cost of actually providing care. Most independent providers — those not affiliated with a hospital network or a federally qualified health clinic — generally operate with thin margins. As a result, cash flow can be constrained quickly by rising inflation or long waits for reimbursements.
“From a financial stability perspective, (CPR has) basically given primary care an opportunity to regain its foothold,” Asselin said.
In its 2023 budget, which the Green Mountain Care Board approved last year, OneCare anticipated sending $11 million to 19 practices participating in payment reform. Those per patient payments take the place of most of the fees that insurers might normally pay for a visit or a test.
A revised budget submitted on Jan. 30, which accounts for the loss of BlueCross, suggests that around $770,000 of those monthly payments will revert to traditional reimbursements. Also, supplemental funds provided by OneCare to participating providers totalling $179,000 will disappear.
In addition, OneCare runs another program that is open to primary care providers affiliated with hospitals or federally qualified health centers, as well as independents, which in the original budget would have spread almost $13.2 million among 54 practices around the state.
That funding, which comes from Medicaid and private insurers as well as hospital membership dues paid to OneCare, is intended to increase providers’ ability to allocate staff time toward coordinating patient care between providers and toward wellness programming that is not reimbursed by traditional insurance.
BlueCross BlueShield paid around $2.5 million into this program in 2021, according to OneCare’s audited financial statements. The amount for 2023 had been expected to be more, but was redacted from public budgets.
BlueCross will continue to make payments of $3.25 per patient per month through at least June 30, Sara Teachout, BlueCross’ primary spokesperson and director of government relations, told the state Senate Committee on Finance on Jan. 24. The amounts should be comparable to 2022, but the payments would go directly to providers instead of through OneCare.
“It is not the intention of BlueCross to pull the rug out from under primary care practices,” Teachout said. For the second half of the year, the providers may be enrolled in a payment program the insurer itself is developing, she said.
Primary care providers are already concerned about how that might work, but it is not only that. The contract between BlueCross and OneCare made primary care practices with BlueCross patients eligible for additional funds that went beyond the company’s own money.
OneCare utilizes hospital membership fees to add almost 50% onto the insurance company’s per-patient monthly payment. With bonuses based on health outcomes, providers could have potentially almost doubled the BlueCross payment. Those additional funds amount to a bit under $2 million lost, according to an estimate by the Vermont Medical Society.
BlueCross, for its part, has objected to the criticism that the company’s decision has been destabilizing.
In a letter to the Green Mountain Care Board, Teachout wrote that BlueCross cannot control how OneCare chooses to allocate its membership funds. “These payments have always been at the discretion of (OneCare) and there is nothing prohibiting (OneCare) and its affiliated entities from continuing these payments,” the letter said.
But according to OneCare, that is not true. ACOs operate their programs under federal regulations that allow them to make payments to unaffiliated providers without triggering antitrust or anti-kickback provisions.
Not having a contract with BCBS “ends our ability to do that,” said OneCare CEO Vicki Loner in an interview. Without it, there is no legal framework for transferring payments from hospitals to primary care providers. “From a legal and contractual standpoint,” she said, “you need to make sure that the payment sources are linked to ACO activities.”
OneCare now has a 2023 contract with MVP Health Care that will allow its patients to be counted under the payment reform and population health management programs, Loner said. That should allow the ACO to restore a portion of the additional OneCare funding that would have gone to primary care providers in the payment reform program under the BlueCross contract, perhaps up to as much as 60% of the original amount.
How the change will reverberate at different practices will depend on the mix of insurance types held by patients, which is why the extent of the impact is difficult to estimate.
If a practice primarily sees Medicaid patients, there may be little change in its monthly revenue, according to Asselin. Other practices with more private patients could see significant disruptions, depending on whether the proportion of MVP patients is comparable to BlueCross patients, he said.
Ridzon of HealthFirst Vermont wrote in her January comments that the sheer complexity of the OneCare model makes it more unstable. The organization wants to see a simpler system “that will not subject our fragile healthcare delivery system to disruptions like this and is without added administrative burdens,” Ridzon wrote.
Despite BlueCross’ departure, the ACO’s revised administrative budget dropped by less than $100,000, remaining upward of $15 million for 2023.
This frustrates many OneCare critics. Vermont HealthFirst’s December comments to the Green Mountain Care Board noted that there did not appear to be any clear patient health benefits to their provider’s participation in OneCare programs. Ridzon and colleague Rick Dooley wrote, “If health care dollars are to be used to support the ACO as a middle entity, there should be demonstrable benefits above what could be achieved by merely funneling those dollars directly to the primary care practices.”
On behalf of his providers, Asselin said he wishes that were possible. Across the health care system, there is widespread awareness that a strong network of primary care providers is key to reducing overall costs. But in the United States right now, he knows of no other mechanism through which a hospital can pay an unaffiliated primary care provider to help that practice survive, even if the provider’s practice benefits the hospital’s bottom line.
“I hear the criticism, and my answer is, ‘If we don’t like it, what’s the alternative?’” Asselin said. “This has been the only thing that has been happening since 2018. Before that there was nothing.”