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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 an arrangement between Vermont and the federal government that allows Medicare to join Medicaid and commercial insurers to pay differently for health care. The APM was originally a five-year agreement (2018-2022); in late 2022, Vermont and CMMI agreed to an extension of the APM Agreement for one year (2023) with an additional transition year at the option of the State (2024). The APM allows Medicare to join Vermont’s Medicaid agency and commercial insurers to pay for health care in a different way. The goal of the APM is to shift payments from a fee-for-service system that rewards the delivery of high-volume high-cost services, to a payment system based on value, high quality care and good health outcomes at a lower cost.
Vermont’s All-Payer Model Agreement has set ambitious targets and benchmarks that will be measured over the duration of the model. 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:
- Cost Growth Target. The key objective of the APM is to align health care cost growth with the growth of the Vermont economy. In accordance with the APM, health care spending will be tracked over the full term of the agreement, with the goal of keeping the average increase in costs to 3.5% – and no more than 4.3% – over that time period. The GMCB evaluates the state’s progress annually relative to the model’s goal, expecting 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. Another one of the APM’s ambitious goals 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 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.
Vermont All-Payer Model Agreement (signed October 2016)
Vermont All-Payer Model Agreement Extension (signed December 2022)
Vermont All-Payer ACO Model (Centers for Medicare & Medicaid Services)
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 currently the only multi-payer ACO operating in Vermont, though the APM does not preclude more than one ACO from operating in the state.
Vermont law requires the GMCB to oversee ACOs through two key ACO regulatory processes:
- 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.
- 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.
GMCB ACO Oversight Summary
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. This change in incentives helps Vermonters connect to the right care, at the right place, at the right time, and 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. 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.
The 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.
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. The APM involves long-term investments in improving health; researchers are just beginning to assess the impact of the APM on population health outcomes.
How do we know if the All-Payer Model is working?
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 sets ambitious goals and benchmarks that will be measured over the life of the model. The outcomes the APM sets out to achieve require significant upfront investment, effective management, robust engagement, ongoing tracking, and possible model adjustments and improvements along the way.
The GMCB is primarily responsible for monitoring and reporting on progress toward achieving the APM goals. 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 receive and analyze health care claims data, we are analyzing data for Year 4 (2021), though we are in Year 6 (2023) of the APM. Early data gives us a starting point from which to build as we collect and average data from the full duration of the APM.
All-Payer Model Agreement Targets and Reporting. The Agreement requires Vermont to report regularly to CMMI on performance against the APM targets, 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:
- APM Reports to CMMI on scale, quality, and cost (described above, posted to the GMCB website)
- Payer-specific evaluations (e.g., 2021 ACO financial and quality results presented to GMCB in November 2022)
- Qualitative stakeholder input (e.g., a 2019 provider survey to identify barriers to APM participation)
The most robust evaluation of the APM’s impact is the third-party review being performed by Vermont’s federal APM partners. This evaluation focuses on Medicare’s participation and Medicare beneficiaries. To date, two reports have been released; the first evaluation report (summary) covers the first two years of the model (2018-2019) while the second evaluation report (summary) analyzes performance through the third year (2018-2020). Findings included reduced Medicare spending in Vermont compared to other states. though statewide results tended to be more favorable than ACO results. In addition, evaluators saw promising performance on health care quality, especially given that the second report overlaps with the COVID-19 Public Health Emergency.
The evaluators found that the APM is supporting collaboration across the health care system around shared goals and saw positive effects for the full Vermont population because many of the model’s population health initiatives serve Vermonters regardless of insurance or ACO participation. The reports also highlight Vermont’s long history of investment in primary care and population health, culture of reform, and strong hospital and ACO regulation. The report also identifies areas for improvement, many of which echo AHS’s fall 2020 APM Implementation Improvement Plan.