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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 APM is working to ensure the cost of care does not outpace growth in Vermont’s 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 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.

The APM Agreement identified three types of targets for the State (for more information and results to date, see Q8):

  • 5-Year Growth Target. The driving objective of the APM is to ensure the cost of care does not outpace growth in Vermont’s 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.
  • 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.
  • 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 we continue to grow, we will help ensure that health care delivery in Vermont is aligned with improving health outcomes and not with the number of services provided.

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

An Accountable Care Organization (ACO) is a group 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 Accountable Care Organization (OneCare) is the only ACO currently operating in Vermont. OneCare is a voluntary network of health care and social services providers that have joined together to be accountable for the health of a population and work toward the goals of the APM. The OneCare provider network works together to improve the health of Vermonters by providing the right care, at the right place, at the right time. OneCare is also the mechanism through which predictable payments are made to providers in exchange for caring for a population of Vermonters.

As described in past budget submissions, OneCare works to improve care and reduce cost through:

  • Care coordination. OneCare supports improved communication among health care and social service providers who are caring for the sickest or most at-risk patients. Care coordination is shown to improve patient outcomes for the highest risk patients.
  • Information. OneCare provides data analytics on care delivery patterns and patient outcomes. OneCare shares data with health care providers who then use the information to improve care and invest in population health programs to address patient and community needs.
  • Innovation. OneCare supports innovative pilot projects that are developed in communities and can be scaled more broadly if shown to be successful.
  • Investment dollars. Hospital participation fees and state funding make up the investment dollars that support the programs available to participating providers. Investment dollars, which are focused on primary care, care coordination, and prevention, are distributed to providers within the network to best care for patients. This results in a shift of dollars from hospitals to community providers.

What does the All-Payer Model do for Vermonters?

The All-Payer Model gives health care providers the flexibility to provide 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 APM pays for care based on value not volume, with the hopes of driving improved outcomes and enhancing the quality of care. It encourages increased communication and coordination between health care providers, especially those who are caring for the sickest or highest-risk patients. It helps ensure Vermonters are connected to the right care, at the right place, at the right time. And by shifting the focus to preventive care, the APM helps patients catch and treat small health problems before they turn into chronic issues.

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 benefits Vermonters by providing incentives to increase access to primary care and social services, improve access to services not always covered by insurance, and promote 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.

The APM seeks to limit the rate of growth in health care costs (measured over the 5-year Agreement from 2018-2022), as well as increase access to services that address primary and preventive care. The most vulnerable and high-needs populations should see increased care coordination and better access to social services. Vermonters should see an increase in services known to improve overall health, such as preventive care, and services that address social determinants of health.

The APM is built on Vermont’s existing health care delivery foundation and its success depends on collaboration among the full delivery system to achieve the statewide population health goals, not just ACO efforts alone. The ACO works with state agencies, the Blueprint for Health, hospitals, primary care and specialty providers, community and social service providers, mental health, home health, housing, and others to achieve the goals of the APM.

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 is working to ensure the cost of care doesn’t outpace growth in Vermont’s 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’re trying to achieve require significant upfront investment, effective management, robust engagement, ongoing tracking, and adjustments and improvements along the way.

Tracking quality and cost growth is at the heart of the APM – and will help us determine if we’re heading in the right direction. But it takes time to coordinate quality data collection in a model as ambitious and far-reaching as this. That means that although we are in Year 3 of the APM, we are currently analyzing data for Year 1 (2018). 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. We’re tracking performance by:

All-Payer Model Agreement Targets and Reporting. The Agreement requires Vermont to report regularly to CMMI on performance against the APM targets (see Q1), 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 late 2020) 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 that the APM cohort (lives attributed to OneCare under the APM) has exhibited positive shifts related to appropriate network utilization. For example, in its 2020 budget hearing, OneCare noted that it has seen a 33% reduction in emergency department (ED) utilization among care managed Medicare patients and a 13% reduction in ED utilization among care managed Medicaid patients.

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.