The Green Mountain Care Board approved an amended 2023 budget for OneCare Vermont this week, alongside two parallel orders that put increased pressure on the state’s only “all-payer” accountable care organization to perform.
The actions suggest that the heightened scrutiny brought by newly appointed board members during initial budget hearings late last year for the accountable care organization, or ACO, is here to stay.
New board chair Owen Foster and member David Murman each explained their votes for greater regulatory engagement at Wednesday’s meeting, expressing views about the reach of state oversight that appear to differ fundamentally from those of longer-serving members on the five-person board. They said regulators can and should step in to set parameters around the ACO’s budget, even midyear if new information arises.
“We’ve seen that a lot of important things we’ve been trying to solve for are going the wrong way,” Foster said.
“It’s Vermonters’ money. They pay a lot for health care,” he said. “It’s entrusted to the hospitals and the ACO and for us to regulate it, so I think that it’s important that we allocate where we think it’s best suited.”
One order required OneCare to track hospitals’ use of money intended for affiliated primary care practices, while the other put a ceiling on executive salaries for the current fiscal year, and required that the money saved be spent on supporting primary care practices.
Murman called the size of executives’ potential bonuses “inappropriately high, given the complicated finances of health care at this time.” Intervening now to redirect the money is defensible because of “the all-hands-on-deck situation we have of trying to figure out how to use every dollar the best we can to deliver health care for Vermonters,” he said.
Foster, Murman and Thom Walsh, a 2021 appointee, all supported the order to cap OneCare executive compensation for 2023 at the 50th percentile of the comparison group of companies the nonprofit ACO uses to set salaries.
But Robin Lunge, a member of the board since 2016, described the cap as “regulatory overreach.” She and Jessica Holmes, first appointed in 2014, voted against it.
The order effectively would reduce the potential earnings for the dozen people at the top of the company collectively by around $370,000.
“It seems to me the right thing to do is to take that money and use it to support primary care, access and transformation, over executive salaries,” said Murman, who introduced the idea.
Walsh and Foster both pointed to the decision by Vermont’s largest health care insurance provider, BlueCross and BlueShield of Vermont, to pull out of the ACO this year as a factor in their votes.
In public comments, new OneCare CEO Abe Berman defended the executive pay structure, saying it was set by the organization’s board of managers “with the market in mind.”
However, he went on to add that “none of us are here for the money. We are all here for the mission and what we want to accomplish in this role.” For his part, Berman said, “I want to see better outcomes for Vermonters. I want to see a sustainable delivery system and costs that we can all afford to pay.”
While the board was split on executive pay, it unanimously supported the primary care order, which touches on what both supporters and critics view as OneCare’s most successful program — monthly “population health management” payments that go out to shore up the work of the primary care providers who have signed up to work with the ACO, around 80% of the total number practicing statewide.
Of the participating practitioners, around 57% are affiliated with hospitals. The rest are with independent practices or are part of “federally qualified health centers” or FQHCs, a specific federal designation.
In a hearing last month on the revised 2023 budget, OneCare’s vice president of finance, Tom Borys, testified that support payments are made directly to all affiliate organizations with instructions for their purpose, but no reporting is required on how the money is spent. While both the independent practices and FQHCs focus exclusively or almost entirely on providing primary care, the 14 ACO-affiliated hospitals have large and diverse operations.
The amount of money in question is substantial.
OneCare’s revised 2023 budget allocates around $21 million to these primary care provider payments. Additional funding this year is being sent directly to providers by Blue Cross and Blue Shield of Vermont as well as the Department of Vermont Health Access. In last year’s budget presentation, the organization reported that between 2018 and 2022, it spent around $102 million supporting primary care in this way.
The board’s order this week requires that OneCare produce sworn statements and accounting from its hospital membership that show where the organizations are using the money that is supposed to be allocated to affiliated primary care practices, and how it was used in the past.
“We need to see if these funds represent an additional investment in primary care above and beyond what otherwise would have been allocated to support these practices,” Holmes said.
The focus on rooting out where hospitals have been spending the primary care money was unanimous, though board member Lunge warned that hospital accounting is complex and funds may be used to support primary care providers through additional administrative support, even if the money was not directly applied to the accounts of a specific practice.
“There is a lot of complexity under the hood here potentially,” she said.
Of the five board members, Walsh was the most critical during this week’s meeting, calling OneCare “an underperforming ACO” and, later, “a declining organization with an uncertain future.”
Walsh backed up that assessment by pointing to a third-party comparison of OneCare’s performance to that of other accountable care organizations nationwide. The results, issued publicly in March, found that spending on behalf of patients seen by OneCare-affiliated providers between 2019 and 2021 was in general lower than other ACOs. But by 2021, emergency room use and costs were more than one-third higher than peers and visits to primary care providers were 13% lower.
As an “all-payer” ACO, OneCare has contracts with both private commercial payers, particularly now MVP Health Care, and with the publicly funded Medicaid and Medicare programs. As such, regulators have historically facilitated OneCare’s growth, seeing it as the best available vehicle for changing how payment for health care in Vermont is structured.
The goal is to harness more health care dollars to per-person monthly fees for preventive and behavioral health care and to reward healthy outcomes, rather than pay providers only for tests, procedures or appointments. However, the state’s contract with the federal Centers for Medicare and Medicaid Services, which allows an “all-payer” ACO to use a portion of federal dollars in that way, will be closed out next year, and a replacement is still being negotiated.
During the transition, advocates are pushing administrators and legislators to rethink the central role of OneCare, which is part of the University of Vermont Health Network. For them, even the board’s new, more aggressive posture may not be enough.
“When is this hospital-centric ACO going to implement initiatives to reduce the ever-growing hospital costs?” asked Julie Wasserman, a former policy analyst for the Vermont Agency of Human Services who is now an independent consultant, in public comments. “In my view, there is far too little accountability for this accountable care organization.”
