It’s official. Regulators at the Green Mountain Care Board are no longer pulling punches in their oversight of the state’s largest accountable care organization, OneCare Vermont.
The board issued a subpoena on OneCare Chief Executive Officer Abe Berman yesterday requesting a range of information about the nonprofit’s executive compensation practices, which was served this morning.
The move follows a letter sent Wednesday in which the board’s chair, Owen Foster, warned Berman that “given your recalcitrance” in providing requested details, the board would be using the full breadth of its regulatory powers to obtain them.
OneCare has publicly described its policy of benchmarking executive compensation against what is earned by executives at comparable ACOs nationwide. The subpoena asks for documents that relate to how the benchmark is established and that detail the specific dollar amount allocated to the organization’s CEO, vice presidents and directors, as well as how bonuses were awarded in 2022.
The subpoena was a direct response to a letter Berman sent to the care board Monday, which made clear that the organization would not be providing the “requested individual employee information” voluntarily without further review of the “legality and wisdom” of the care board’s focus on specific OneCare spending decisions.
In his letter in response, Foster wrote that the accountable care organization’s attempt “to block transparency and regulatory review of how it utilizes Vermont taxpayer and insurance ratepayer funds to compensate its executives is unacceptable.”
The Green Mountain Care Board began regulating accountable care organizations in 2016. This is the first time it has used its subpoena power in that context, staff members told VTDigger. The board’s executive director, Susan Barrett, said the board has not issued subpoenas in any of its other roles — which include regulating hospitals, healthcare facilities and insurance rates — since she began working there in late 2013.
OneCare is Vermont’s only “all-payer” accountable care organization, or ACO, which means it contracts on behalf of its associated health care providers for health care services with both private commercial insurance companies and the publicly funded Medicaid and Medicare insurance programs. As such, the organization has been the primary vehicle that state policymakers have turned to in efforts to change how health care payments are structured.
For more than a decade, legislators and health care administrators have been trying to shift payments away from reimbursements for tests, procedures and appointments. Instead, it has moved toward per-person monthly fees to primary care providers that support increasing preventive and behavioral health care
The state’s current contract with the federal Centers for Medicare and Medicaid Services, which will enter its seventh year in 2024, puts an “all-payer” ACO at the center of that strategy. The details of a new program are still being developed at both the federal and state level.
In this context, Foster, appointed by Gov. Phil Scott in 2022, and two other newer members on the five-person board have been pushing OneCare — a subsidiary of The University of Vermont Health Network — to provide greater transparency into how it operates, and to show that its work provides value to Vermonters by promoting higher quality care and reducing health care costs.
But it was Jessica Holmes, a board member since 2014, who requested the information that resulted in the current face-off during a public meeting on June 21.
Following a decision the previous week to cap executive compensation in the ACO’s current 2023 budget, board staff proposed new guidelines for the 2024 fiscal year’s budget that included the same cap. (The ACO fiscal year follows the calendar year.) The draft guidance also would ask that at least 40% of any executive bonuses be tied to “specific and measurable goals related to performance in (health) cost and quality metrics.”
Holmes said she wanted a fuller understanding of “the pros and cons of this approach.”
“If we’re going to impose caps on salaries or tie it to a particular benchmark, I think we should understand what that benchmark actually is,” Holmes said. She asked board staff for “just a deeper understanding of intended and unintended consequences of going into a new land here, so to speak, for regulatory action.”
But when care board staff sought more specific details about OneCare’s compensation-setting process to address Holmes’ request, the response came in the form of Berman’s Monday letter. In it, he wrote that the organization does not think this information is relevant to “the Board’s task of setting budget guidance for Accountable Care Organizations.”
“Nor do we believe that it is properly within the Board’s statutorily defined purview to cap individual expenditures by an ACO as part of the budget setting process,” Berman went on, describing that role as “reserved exclusively to an ACO’s governing body.”
Instead, Berman offered generalized statements about executive compensation, confirming that the salaries and bonuses awarded to OneCare leadership “closely conforms to the objective benchmarks,” which the ACO’s own board of managers sets internally.
The care board regulates all types of ACOs. It sets budget guidelines, and has a more lengthy process, for those that are “all-payer” and separate guidelines for those that only contract with the federal Medicare program. The latter guidelines were approved at yesterday’s meeting.
However, the delay in receiving the requested information from OneCare led the Green Mountain Care Board to push its vote on the “all-payer” guidance documents for 2024 from yesterday’s meeting to its next meeting in mid-July, Foster said in an interview. The subpoenas will require that compensation details be provided prior to then, he said.
The state law that created the Green Mountain Care Board gave it broad powers to “issue subpoenas, examine persons, administer oaths and require production of papers and records.” The recipient has six business days to comply, after which fines of $2,000 per day begin to accrue, and the board “may recommend” that the person or organization’s license to do business be suspended for up to six months.
The most recent exchange follows earlier jabs back and forth between the two bodies over the care board’s regulatory reach into ACO operations. Berman forcefully pushed back on the care board’s draft budget guidance more broadly in a letter last week.
In it, he requested that eight of nine budget targets be removed because of the “potential for incongruity between the proposed targets and the Board’s strategic direction for OneCare.” The guidelines “implicate the strategic direction of OneCare,” which is the purview of its board of managers only, he said.
But Foster’s letter alerting OneCare to the coming subpoenas suggests that recent developments have led at least some members of the board to believe greater intervention on the board’s part is now required.
The care board’s letter lists several of its recent concerns with the ACO’s past performance. Among them: the loss of Blue Cross and Blue Shield of Vermont as a participating insurer; OneCare’s slowness to continue with primary care provider payments in the wake of that loss; its recent revelation that it did not track how hospitals used money allocated for the support of affiliated primary care practices; and a study showing poor healthcare access measures compared to other ACOs nationwide on some measures and declining performance in others.
“Despite these glaring deficiencies and deteriorating performance, last year OneCare awarded its CEO and each and every VP and Director 100% of potential variable pay,” Foster wrote.
He called the information the board is requesting “critically important” in order “to ensure not only that Vermonters’ scarce healthcare dollars are appropriately deployed, but to promote good governance by ensuring executive compensation is structured to achieve specific and measurable goals that support the ACO’s efforts to reduce cost growth and achieve its mission.”
