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What is Vermont’s All-Payer Accountable Care Organization Model Agreement?

Vermont’s All-Payer Model (APM) is changing the way health care is delivered and paid for, with the goal of keeping the state’s health care spending in check and improving the quality of care Vermonters receive.

The All-Payer Accountable Care Organization Model Agreement (sometimes referred to as the All-Payer Model, APM, or the “Agreement”) is a five-year (2018-2022) agreement between Vermont and the federal government that allows Medicare to join Vermont’s Medicaid agency and commercial insurers to pay for health care in a different way. New payment models change incentives to reward improved provider communication and patient outcomes to improve the lives of Vermonters, by paying for value in health care rather than volume. The goal of the APM is to shift from a fee-for-service system to a population-based payments system while improving population health outcomes for Vermonters and limiting the health care cost growth to state economic growth.

Vermont’s All-Payer Model Agreement aims to align health care cost growth with the growth of the Vermont economy and to improve the health of Vermonters over time. It has set ambitious goals and benchmarks that will be measured over 5 years and beyond. The outcomes we are trying to achieve require significant upfront investment, effective management, robust engagement, ongoing tracking, and adjustments and improvements along the way.

The APM Agreement identified three types of targets for the State:

  1. 5-Year Growth Target. The driving objective of the APM is to align health care cost growth with the growth of the Vermont economy. The APM will track health care spending across 5 years, with the goal of keeping the average increase in costs to 3.5% – and no more than 4.3% – between 2018 and 2022. We will continue evaluating our goal over the course of the 5-year agreement as we expect health care utilization and costs to fluctuate year-to-year, especially during uncertain times like the COVID-19 public health emergency.
  2. Improving Health Care Quality and the Health of Vermonters. One of the most ambitious goals of the APM is to improve the health of Vermonters over time. Specifically, the APM aims to increase access to primary care, reduce deaths from suicide and drug overdose, and lower prevalence of chronic disease, knowing that moving the needle on population health is a long-term effort.
  3. Participation (Scale). For the APM to succeed, the majority of Vermonters must be included, which means we must have the majority of providers and insurers be part of the effort. As the Model grows, participating providers should see a greater proportion of their business tied to value, rather than volume, which will help ensure that health care delivery in Vermont is aligned with improving health outcomes.

What is an Accountable Care Organization? What is OneCare Vermont’s role in the APM?

An Accountable Care Organization (ACO) is a voluntary network of health care providers that agree to be accountable for the care and cost of a defined population of patients. The Affordable Care Act (ACA) included incentives for creating Medicare ACOs because the ACO model was identified as a promising way to reduce the ever-rising cost of health care nationwide. For a brief article explaining ACOs, see Kaiser Health News, “Accountable Care Organizations, Explained.”

Vermont’s APM was designed to change health care payment models, curb health care cost growth, maintain quality of care, and improve the health of Vermonters, using the ACO model as a chassis. OneCare Vermont (OneCare) is the only ACO operating in Vermont, though the APM does not preclude more than one ACO operating in the state.

Vermont law requires the GMCB to oversee ACOs through two key ACO regulatory processes:

  1. Certification. Certification ensures that ACOs seeking to receive payments from Vermont Medicaid and commercial payers have the systems in place to do the work required of an ACO.
  2. Budget Review. The annual ACO budget review process provides an opportunity to assess the ACO’s programs, which are expected to facilitate Vermont’s shift toward value-based care, as well as the cost of administering these programs.

What does the All-Payer Model do for Vermonters?

Vermont’s All-Payer Model (APM) is changing the way health care is delivered and paid for, with the goal of keeping the state’s health care spending in check and improving the health of Vermonters. The APM gives health care providers the flexibility to deliver services like telehealth, group visits, and coordination with fellow providers that were previously not billable. And it holds insurers and providers jointly accountable for the quality and cost of care they provide to Vermonters.

The Vermont All-Payer Accountable Care Organization Model Agreement (APM Agreement) allows Medicare to join Medicaid and commercial insurers to pay for health care more efficiently. The goal of the APM is to shift payments from a fee-for-service system that rewards volume to a payment system based on value while improving the health of Vermonters and limiting health care cost growth.

This change in incentives helps Vermonters connect to the right care, at the right place, at the right time. By shifting the focus to preventive care, the APM urges providers to catch and treat small health problems before they turn into big issues. The APM also encourages increased communication and coordination between health care and social service providers, especially those who are caring for the sickest or highest-risk patients, to drive better health outcomes and enhance the quality of care. By working with providers and payers to align quality measures, models of delivery, payments, and more, we can help improve care for all Vermonters.

Because of the APM’s flexible payments, population health investments, and incentive structure, hospitals and surrounding communities are shifting resources toward activities known to improve overall health, including primary care, lifestyle medicine, health education and prevention, mental health counseling, and nutrition. The APM is changing incentives to push toward to increased access to primary care and social services and increased efficiency across the system. Under the APM, Vermonters continue to receive their health insurance coverage and benefits; neither the APM nor the ACO limit the benefits or provider choice available under patients’ insurance plans. Payer and provider participation in the APM through the ACO may enhance the benefits of insurance plans in some cases. As population health initiatives are funded by the ACO, Vermonters receive greater access to programs they can benefit from, such as care coordination and telehealth. Vermonters should see an increase in services known to improve overall health, such as preventive care, and services that address social determinants of health.

It is important to remember that improvements in population health take time and are not simple to measure. Improvements will also need scale, meaning more patients included in the APM. Providers are more likely to alter investments and change behavior when the majority of their reimbursements are driven by value, not volume. It will take time to add more patients to the APM and to shift more payments away from fee-for-service. The APM involves long term investments in improving health and it will take years before researchers can assess the impact of the APM on population health outcomes in any statistically meaningful way.

How do we know if the All-Payer Model is working?

The All-Payer Model aims to control the cost of care so that it does not outpace growth in Vermont’s economy and to improve the health of Vermonters over time. It sets ambitious goals and benchmarks that will be measured over 5 years and beyond. The outcomes Vermont is trying to achieve require significant upfront investment, effective management, robust engagement, ongoing tracking, and may require adjustments to the model along the way.

Tracking quality and cost growth is at the heart of the APM – and will help us determine if the state is heading in the right direction. Because of the time it takes to procure, scrub, and analyze claims data, which are essential to analyzing progress in a model as ambitious and far-reaching as this, we are currently analyzing data for Year 2 (2019), though we are in Year 4 of the APM. This early data gives us a starting point from which to build as we collect and average the full five years of data from the APM.

All-Payer Model Agreement Targets and Reporting. The Agreement requires Vermont to report regularly to CMMI on performance against the APM targets (see Question 1), and other topics. All of GMCB’s reports to CMMI are available to the public once they’re finalized, posted to the APM Reports page of GMCB’s website.

Evaluation and Monitoring. The GMCB is continually assessing APM successes and challenges generally, through:

In addition, a formal independent evaluation of the APM is required by federal law and will include an analysis of the state’s five-year performance on APM total cost of care, quality, and scale. To conduct this evaluation, the Center for Medicare and Medicaid Innovation (CMMI) is contracting with the non-partisan research organization NORC at the University of Chicago. Unfortunately, due to data availability, the final results of this evaluation will not be available in time to inform further implementation of the APM nor the development of a potential subsequent agreement (“APM 2.0”); final results are expected in Spring 2023. GMCB intends to leverage any relevant findings from reports on the APM’s early performance years (e.g., 2018 and 2019 which are expected to be available in Q1 of 2021) to inform APM 2.0, if possible. There is no formal state-funded evaluation of the APM of this caliber, but if one were to be initiated, it would suffer from the same data lag as the federal evaluation.

Though the complete federal APM evaluation results will not be available for some time, there are some promising signs of delivery system reform: hospitals are increasing their investments in primary prevention and the social determinants of health; traditionally siloed providers are finding new ways to coordinate care and reduce duplication of services across the care continuum; and advances in data analytics are helping to reduce unnecessary spending and identify high risk patients who would benefit most from early intervention and complex care coordination. While delivery system reform is by no means complete, we recognize that major transformation requires both time and patience, and the reallocation of resources towards population health is reassuring.

Early data suggest positive shifts related to appropriate network utilization among lives attributed to the APM through OneCare. For example, in its 2021 budget submission, OneCare noted a 26% reduction in inpatient admissions and a 20% reduction in emergency room utilization among participants in its Longitudinal Care Program. OneCare reported making significant progress in reducing emergency department utilization and inpatient admissions for high and very high-risk individuals in 2018 and 2019 across all payers. Though overall, more work is needed in addressing ambulatory sensitive conditions including COPD, CHF, and asthma, performing A1C checks among Medicare and commercial patients with diabetes, and increasing well-care visits among Medicare patients and Medicaid and commercial adolescents.

GMCB will continue to monitor APM and ACO performance as data become available, and once trend data are established, and populations become more stable, will be able to dig into results to perform more robust analyses.