by Morgan True vtdigger.org Governor Peter Shumlin said Vermont is still leading the nation on health care reform, but without a dedicated funding source, he acknowledged the state is struggling to afford an expanded Medicaid program under the Affordable Care Act. The Legislature did not implement the governor’s proposed health care payroll tax which would have increased Medicaid payments to medical providers. The $90 million tax would have also supported an increase in caseload and utilization costs. Shumlin told Vermont Public Radio that the failure of the initiative is the “biggest disappointment” of this legislative session.
Lawmakers are “kicking the can down the road,” Shumlin said, because Medicaid is expected to be at least $40 million in the red when the second half of the biennium starts in January.
Most of the payroll tax revenues were slated for reducing the Medicaid cost-shift. The program pays 60 percent of the actual cost of medical treatments for low-income patients. Under Shumlin’s plan, the state would have boosted reimbursements to 80 percent (the equivalent of Medicare). The underpayments lead providers to charge private insurance plans more to make up the difference.
That, too, is a problem the Legislature punted on, Shumlin said, and one that will eventually need to be addressed.
One area where lawmakers didn’t punt was on school entry vaccines.
Following a measles outbreak that spread to 19 states this year, Sen. Kevin Mullin, R-Rutland, renewed efforts to remove the state’s philosophical vaccination exemption. After much heated debate, the legislation gained traction, and legislation that would eliminate the exemption now awaits Shumlin’s signature. The governor has said he’s “inclined” to sign it.
Single payer out, problems with Vermont Health Connect persist
Shumlin ran on a single-payer platform in all three of his gubernatorial campaigns, but he told VPR that lawmakers and the public shouldn’t have been surprised that he didn’t move forward with a proposal this legislative session.
“I pulled the plug on that before the session started, so if anyone’s surprised about that they just weren’t listening,” Shumlin said.
Left-leaning lawmakers and single-payer advocates have said Act 48, the law ostensibly putting Vermont on a path to universal publicly financed health care, doesn’t allow the governor to unilaterally change course. Many have expressed bewilderment that the program dropped off the governor’s agenda.
Some observers have speculated that ongoing problems with the Vermont Health Connect exchange has undermined public faith in the state’s ability to implement health reforms.
Contingencies for what happens if the exchange isn’t remediated this summer were written into the budget. Those measures set out a process for legislative oversight of a potential transition to some version of the federal exchange.
A provision in the health care bill would allow individuals not receiving subsidies to enroll directly with carriers, though administration officials have raised questions about whether the feds will allow that.
Despite setbacks, Shumlin says, “big picture,” Vermont is doing more than most states on health care reform. That’s largely due to its planned move away from fee-for-service medicine, where providers are paid based on the volume of services, to a system that pays based on quality outcomes for patients.
The centerpiece of those efforts is the state’s plan to apply for a so-called “all-payer waiver” from the federal government. That will allow Vermont to incorporate Medicare into quality and outcome-based payment reforms already underway with Medicaid and private insurance.
Medicare accounts for roughly 22 percent of the state’s more than $5 billion in health care spending. Al Gobeille, chair of the regulatory Green Mountain Care Board, once compared reshaping payment models without Medicare to floating down a river with a foot in two different canoes.
Small steps in health care bill
Vermont’s all-payer ambitions got a boost in S.139, the omnibus health care bill legislators eked across the finish line. The bill includes $340,000 in state and federal money for the board to add three positions. The new positions will help the board pursue the all-payer waiver as well as with its expanded rate-setting authority.
S.139 transfers greater regulatory authority from the Department of Financial Regulation to the board, an ongoing process since the board was created. The board will also take on oversight responsibility of Vermont Information Technology Leaders, a largely publicly funded nonprofit that operates a platform for providers to share information across disparate electronic medical records systems.
The rest of S.139’s $6.3 million in combined state and federal spending will go toward level-funding exchange subsidies that lower out-of-pocket costs for middle- and low-income policyholders, and increase Medicaid payments for primary care and select other providers — mostly those offering mental health, disability and substance abuse services.
The Medicaid primary care bump partially restores enhanced federal payments that sunset at the start of this year. The federal payments were part of the Affordable Care Act and brought Medicaid payments to Medicare levels. The restored funding in the health care bill will bring Medicaid primary care payments to 82 percent of Medicare rates.
The bill increases payments to providers in the Blueprint for Health managed care program by $2.45 million. Participating providers hadn’t seen an increase since 2008.
The rest of the $710,000 in S.139 will support a loan repayment program for health care professionals and restores funding for Legal Aid’s Office of the Health Care Advocate.
S.139 also requires Medicaid to cover primary care telemedicine, which some hope will reduce costs through fewer in-person doctor’s appointments and potentially reduced hospital admissions.
In addition, the legislation enhances regulation of pharmacy benefit management companies, and requires hospitals to notify patients who are placed on observation status about whether Medicare covers the service — a practice that has resulted in unexpected costs for beneficiaries.
Medicaid to pay for substance abuse
Another health care bill, H.20, will allow licensed substance abuse counselors in private practice to bill Medicaid. The change is expected to increase the availability of substance abuse services to beneficiaries. There are roughly 475 licensed counselors in private practice across the state, according to state officials.
One area of health care that saw virtually no progress was oral health.
Despite having the second lowest uninsured rate in the U.S., more than half of Vermont residents don’t have dental insurance, and while that’s not out of line with national statistics, Vermont’s covered population isn’t getting adequate oral health coverage, according to a recent report.
Few dentists in the state are willing to take new Medicaid patients because of the low reimbursement rates.
Advocacy efforts to license a mid-level dental provider cleared the Senate this year, but stalled out in the House. Proponents argue the new provider class, often compared to physician’s assistants, would allow dental practices to see more patients, particularly in underserved areas.
Dentists have resisted the idea and instead would like to see their Medicaid rates increased. They also want to renew dentist recruitment efforts in Vermont.