Monday, 07 November 2016 20:56

Vermont Leaps to Forefront of VBP Push with Unveiling of New ACO Model

Written by Mark Spivey

The Green Mountain State just took a mountain-sized leap to the forefront of the nation’s healthcare system’s massive shift toward value-based care.

The Centers for Medicare & Medicaid Services (CMS) and the state of Vermont last week jointly unveiled the Vermont All-Payer Accountable Care Organization (ACO) Model, a new initiative aimed at accelerating delivery system reform for residents of the state.

Through the model, CMS noted in a press release, the most significant payors active in Vermont – a list that includes Medicare, Medicaid, and commercial payors – will “incentivize healthcare value and quality, with a focus on health outcomes, under the same payment structure for the majority of providers throughout the state’s care delivery system.” CMS also announced that it had approved a five-year extension of Vermont’s section 1115(a) Medicaid demonstration, which, in addition to extending the state’s comprehensive demonstration, includes the authorities needed to make Medicaid a full partner in the new statewide Model. 

CMS and Vermont said they are aiming for broad ACO participation throughout the state to “make redesigning the entire care delivery system a rational business strategy for Vermont payors and providers, and to deliver meaningful improvements in the health of and health care for Vermonters.”

“This model is historic in terms of its scope, aiming to include almost all providers and people throughout the state in an all-payor ACO model to drive improved quality, better care coordination, healthier people, and smarter spending,” said Patrick Conway, M.D., CMS principal deputy administrator and chief medical officer. “This model may also allow eligible physicians and other clinicians in Vermont to qualify for Advanced Alternative Payment Model bonus payments from the Quality Payment Program, given their commitment to be accountable and improve care for patients.”

CMS labeled the announcement an “exciting advancement” in the agency’s partnerships with states to accelerate delivery system reform; CMS has been partnering with Maryland for the past three years as part of the Maryland All-Payer Model to shift hospital payments to global budgets that reward value over volume. The Vermont All-Payer Model builds on the Maryland All-Payer Model, the agency explained, by expanding statewide healthcare transformation beyond the hospital, a move intended to “provide valuable insight for other state-driven all-payor payment and care delivery transformation efforts.”

The new Model offers ACOs in Vermont the opportunity to participate in a Medicare ACO initiative tailored to the state via a startup funding boost of $9.5 million, intended to assist medical providers with care coordination and to bolster their collaboration with community-based providers. Additionally, the section 1115(a) Medicaid demonstration extension enables Medicaid, a critical healthcare payor under the new Model, to enter into ACO arrangements that align with that of other payors.

“CMS is excited about the promise of the Vermont All-Payer ACO Model to improve healthcare value and quality,” the agency’s press release read. “In addition, CMS seeks public input on additional opportunities to partner with states on payment and care delivery reform.”

On Sept. 8, 2016, CMS had released a request for information on concepts related to state-based payment and delivery system reform initiatives.

“The (Patient Protection and) Affordable Care Act, through the creation of the Center for Medicare and Medicaid Innovation, allows for the testing of innovative payment and service delivery models, such as the Vermont All-Payer ACO Model, to move our healthcare system toward one that rewards clinicians based on the quality, not quantity, of care they give patients,” CMS stated. “Today’s announcement is part of the Administration’s broader strategy to improve the healthcare system by paying providers for what works, unlocking health care data, and finding new ways to coordinate and integrate care to improve quality.”

In March 2016, the Obama Administration estimated that it had met the ambitious goal – 11 months ahead of schedule – of tying 30 percent of Medicare payments to quality and value through alternative payment models by 2016. The federal system’s next goal is tying 50 percent of Medicare payments to alternative payment models by 2018.

Modern Healthcare noted that Vermont’s move is unprecedented in its scope.

“We will become the first state in America to fundamentally transform our entire healthcare system so it is geared towards keeping people healthy, not making money,” the publication quoted Vermont Gov. Peter Shumlin as saying, further noting that the governor earlier this year traveled to Washington, D.C. to negotiate a deal with U.S. Health and Human Services Secretary Sylvia Mathews Burwell.

The Model will be considered an advanced alternative payment model under the new Medicare reimbursement program, Modern Healthcare noted, making participants eligible for a performance bonus.

“Vermont will limit annual per capita expenditure growth for major payors to 3.5 percent and Medicare growth to at least .1 to .2 percentage points below projected national growth,” the article read. “State officials have also said they are looking to improve access to primary care and treatment for substance abuse, mental health and chronic disease.”

The publication also noted that an issue brief from the Vermont Legislative Joint Fiscal Office found several potential benefits of the model, including better care and an improved economy for the state, but it also found possible risks, such as uncertainty that the federal funding will cover transition costs and a question of whether all providers will be adequately represented.

FierceHealthcare reported last week that acting CMS Administrator Andy Slavitt tweeted a message of support for the plan, but the news outlet also noted that the shift to the new Model will be a “gradual transformation.” Robin Lunge, director of healthcare reform for Shumlin, told the Associated Press the state expects to reach 36 percent of care services by the second year, and ramp up to 70 percent by year six.

For more information on the Vermont All-Payer ACO Model and the section 1115(a) Medicaid demonstration extension, please go online to read:

Vermont All-Payer ACO Model:

Vermont’s Green Mountain Care Board:

Vermont All-Payer ACO Model Fact Sheet:

Mark Spivey is a national correspondent for He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.. 

Last modified on Tuesday, 08 November 2016 00:44