Vermont officials unveil ‘all-payer’ health care proposal

MONTPELIER — Gov. Peter Shumlin and a team of health care officials last week announced they have a draft agreement with the federal government to overhaul Vermont’s health care payment system.
The payment reform being proposed is called an all-payer model, and Vermont would be the first state to set up the system. Under the model, Medicare, Medicaid and commercial insurance companies would pay doctors monthly fees for taking care of patients instead of pay for individual services.
Specifically, doctors would sign up to be part of one giant organization — called an accountable care organization — that would accept those payments from Medicare, Medicaid and commercial insurance companies. The accountable care organization may be OneCare Vermont or the Vermont Care Organization.
The accountable care organization would then pay doctors for the quality of their patient’s care, not the number of individual tests and procedures they perform for the patient. The Green Mountain Care Board, which currently approves hospital budgets and insurance prices, would be the primary regulator for the accountable care organization.
The step comes after nearly two years of negotiations involving the Agency of Administration, the Agency of Human Services, the Green Mountain Care Board, and the U.S. Centers for Medicare and Medicaid Services.
State officials have not signed the draft agreement, but they may sign it in the next three weeks.
The board plans to hold meetings on the issue and take public comment through its website. The administration will hold public hearings Oct. 6 in Chittenden County and Oct. 11 in Rutland County to discuss the plan.
“We have now a draft agreement from the federal government that will allow us to take on a challenge that I believe affects the pocketbooks of every single Vermonter,” Shumlin said at a news conference with Al Gobeille, the chair of the Green Mountain Care Board.
Shumlin said he had three main views about health care when he ran for office: that everyone should have insurance, that the state should have a single-payer model, and that the state needed to slow the rise of health care costs while improving patient outcomes.
Shumlin said the proposed all-payer model is a measure to address his third priority — bending the cost curve on health care while improving outcomes. He said if the proposal works it could save nearly $10 billion over the course of 10 years.
“I don’t think any reasonable person would look at these numbers and say, ‘Let’s just keep doing what we’re doing and hope for the best,’” Shumlin said.
Gobeille, the chair of the board, said a hypothetical family of four with a $60,000 annual income in 2015 could spend 38 percent of that income on a platinum health insurance plan. He projected that by 2025, that same family would make more money but spend 56 percent of their income on top-tier health insurance.
Gobeille said that while the projections are substantial, they don’t capture emotional pleas Vermonters make every year when they ask for lower health care prices.
The state of Vermont is proposing to make sure that certain health care costs paid by Medicare, Medicaid and commercial insurance companies grow by no more than 3.5 percent a year for five years, starting in 2018.
To do that, Medicare parts A and B, Vermont Medicaid and commercial insurance companies will need to make monthly payments to the accountable care organization to treat the patients. Those payments could go up by a weighted average of 3.5 percent each year.
The state will not take possession of money that comes through the federal Medicare program. That money would go straight to the accountable care organization, and the organization would only be able to accept payments on behalf of the patients its primary care doctors treat.
The all-payer model seeks to set up an integrated health care system across the state that allows doctors from different hospitals and offices to coordinate patient care. However, the model will not immediately encompass Vermont’s entire health care system.
The state is proposing that about 30 percent of primary care providers in Vermont be encompassed by this model by Jan. 1, 2018. Over a five-year period, the state proposes that that number increase to 80 percent.
Gobeille said if all of the primary care providers in OneCare — which represents Vermont’s largest hospitals — decide they want to participate in the all-payer model, the state would meet its initial goal of 30 percent.
Floyd Nease, a spokesman for OneCare, said the organization is just diving into what the terms of the proposed deal mean.
Over time, if primary care providers at Vermont’s community health centers choose to participate in the all-payer model, Gobeille said, the state might get to 50 percent participation. The community health centers are on track to merge into OneCare to set up the Vermont Care Organization.
Gobeille said any primary care providers who choose to stay outside of the all-payer model would continue using the traditional system that pays doctors for how many procedures they perform, called fee-for-service.
However, he said a federal law from 2015 called the Medicare Access and Children’s Health Insurance Program Reauthorization Act puts the federal Medicare program on track to pay doctors across the country for the quality of the care they provide, as opposed to the number of procedures they perform.
Gobeille predicted that as the federal Medicare program starts moving to the new payment method, Medicaid and commercial insurance companies will do the same. He said that means primary care providers might find it most beneficial to join Vermont’s all-payer model rather than wait for nationwide reform.
Shumlin said he thinks three weeks is enough time for public comments because the deal has been in the works for two years, and there is a provision in the agreement that would allow the incoming governor to exit the agreement with 180 days’ notice.
“Providers are going to get to vote with their feet as to whether or not they sign up for this,” Gobeille said.
He said additional details on the financial aspects of the deal will be discussed at the board meeting Oct. 5.
Primary care providers in Vermont could decide within the next week whether to endorse the state’s draft agreement with the federal government for an all-payer model of health care payment.
Todd Moore, who as CEO of Vermont’s largest doctor group is one of the most influential health care executives in the state, said he is asking his and two other groups to hold advisory votes on the deal.
The draft deal proposes to put almost all of Vermont’s doctors and hospitals into a giant organization. The state says this will allow doctors to coordinate patient care and lower growth in health care costs.
If any one of the three groups of doctors endorses the deal, the Green Mountain Care Board and the Shumlin administration will have support from enough doctors to sign the agreement.
Moore is the CEO of OneCare Vermont, the accountable care organization that represents about 30 percent of primary care providers in the state. His other title is senior vice president of accountable care for the University of Vermont Medical Center.
Moore said he wants the boards of directors for OneCare (which represents doctors working for hospitals), Community Health Accountable Care (which represents doctors at community health centers) and the new Vermont Care Organization (an administrative company created to bridge the other two) to vote on whether to endorse the deal.
Each entity has its own board of directors. Moore said he wants all three boards to vote before the Green Mountain Care Board decides whether to sign the agreement.
Doctors participating in the all-payer model’s accountable care organization would enjoy a series of waivers of federal Medicare laws. The waivers would not reduce coverage for Medicare beneficiaries, but doctors argue they would improve the quality of care while lowering costs.
One of those waivers addresses what is commonly called the three-day nursing home rule. Currently, if a Medicare patient spends the night at a hospital for a surgery or other illness, Medicare will not always pay for the patient to transfer to a nursing home.
Under Medicare rules, the federal insurer will pay for the patient to stay in a nursing home only if the person has already spent three nights in a hospital. That means some patients stay too long in the hospital before transferring to nursing homes, and some go to nursing homes and find out Medicare won’t pay the bill.
Another of the waivers to Medicare law would allow patients who stayed in a hospital to get treatment at home once they leave the hospital. Currently, Medicare has significant restrictions on when it will pay health care providers for home visits, according to Moore.
A third waiver would make it easier for doctors to make video calls to check on their Medicare patients. Medicare’s so-called telemedicine rule allows doctors to get paid for follow-ups via videoconference only if the patient lives in a very rural place and the doctor follows certain rules, Moore said.

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