State Reports Scale Target Performance for Year 3 (2020) of All-Payer Model
by Timothy McQuiston, Vermont Business Magazine Today, the Green Mountain Care Board (GMCB), in consultation with Vermont’s Agency of Human Services, submitted the Annual ACO Scale Target and Alignment Report for Performance Year 3 (2020), as required by the Vermont All-Payer Accountable Care Organization Model (“All-Payer ACO Model” or “APM”) Agreement with the federal Center for Medicare and Medicaid Innovation (CMMI).
OneCare Vermont, based in Colchester, is the only ACO operating in Vermont.
The 2020 (PY3) scale report demonstrates that Vermont, despite falling short of APM Agreement scale targets, has made major strides toward increasing Model scale:
- All-payer participation grew by over 67,000 lives compared to 2019 (PY2), an increase of over 40%.
- The number of Medicaid beneficiaries attributed under the Vermont Medicaid Next Generation ACO Program (114,000 in 2020) has grown by 45% since 2020, and by nearly 300% since the program launched in 2017.
- Commercial participation more than doubled in 2020, from 30,000 in PY2 to 62,500 in PY3.
- The number of participating Medicare beneficiaries remained static from 2019 to 2020.
Vermont State Auditor Doug Hoffer issued a report reviewing the All-Payer model last week, on June 21, 2021.
The key finding of the report was that OneCare, the Accountable Care Organization at the heart of the model, missed its Medicaid financial targets for 2017 through 2019 by a combined $11.1 million. During those same years the state also paid for $14.5 million of OneCare’s operating costs. When including the operating costs, OneCare’s estimated net Medicaid financial performance for those years collectively was that -$25.6 million.
However, in the performance report released by the GMCB today, the state expects continued improvement in 2021 (PY4; data is preliminary), with the addition of an estimated 40,000 lives, including approximately 8,000 Medicare beneficiaries. SEE RECOMMENDATIONS BELOW.
Despite significant and increasing growth in scale year-over-year, it is no surprise that Vermont remains shy of the scale targets set forth in the APM agreement.
The Medicare scale targets included in the Agreement are unattainable because some beneficiaries are ineligible to participate, or receive the majority of their care out-of-state.
All-Payer scale represents a significant stretch goal, and includes populations for which the state has no data or regulatory leverage, for example, self-funded groups that do not report data to the state and Medicare Advantage plans.
In addition to reporting on Vermont’s scale performance, the 2020 (PY3) report offers additional measures of scale to provide a fuller picture of the Model’s statewide scope and adoption.
Vermont’s Agency of Human Services laid out strategies for improving scale in the Agency’s APM Implementation Improvement Plan published in November 2020. SEE EXECUTIVE SUMMARY BELOW
Vermont’s All-Payer Accountable Care Organization Model Agreement (APM Agreement) is a five-year (2018-2022) arrangement between Vermont and the federal government that allows Medicare to join Medicaid and commercial insurers to pay differently for health care, with the goal of keeping the state’s health care spending in check and improving the health of Vermonters. The APM is shifting payments from a fee-for-service system that rewards the delivery of high-volume high-cost services, to a value-based payment system that is more stable and predictable, striving for high quality care and good health outcomes at a lower cost.
APM Implementation Improvement Plan Executive Summary
The State of Vermont is committed to moving away from fee-for-service reimbursement for health care services and to the health care system transforming to deliver value-based care. Instead of paying for every service regardless of the result, participating health care payers in the state have started rewarding high quality care and better health outcomes. Through a federal/state agreement, Vermont is a national leader in aligning Medicare, Medicaid, and commercial payers in a consistent model that aims to curb health care cost growth and increase quality of care and population health outcomes for Vermonters.
Over three performance years (PYs), Vermont has observed promise in paying providers differently, particularly in its Medicaid program where progress is most advanced. Aligned quality measures in the All-Payer Accountable Care Organization (ACO) Model are intended to address areas where Vermont’s system has underperformed and to balance the focus on quality with the administrative burden that it places on provider organizations. In addition, predictable payments from the Medicaid program in particular have added stability for Vermont’s system of care.
While there are clear indications that value-based and fixed payment programs are demonstrating some promise over traditional fee-for-service, the state will not realize the potential of health care payment and delivery system transformation unless we strengthen the weak points in both the model itself and its implementation through provider operational change.
There are three performance domains in the Vermont All-Payer ACO Model Agreement (Agreement) with the federal Centers for Medicare and Medicaid Services (CMS):
1. Scale Targets
2. Financial Targets
3. Quality and Health Outcomes Targets
Numerous issues can impede the potential for greater success in the Agreement. These issues, detailed in the body of this report, inform four primary findings with respect to Vermont’s progress on health care reform as well as recommendations for improvement:
Vermont and the CMS can build on their partnership to accelerate payment and delivery system reform. Vermont is the only state in the nation that has agreed to, and is making significant progress, moving away from fee-for-service reimbursement on a statewide basis. The theory behind Vermont’s Agreement, that incentives need to be aligned across as many patients and payers as possible for the health care system to change, is evidenced by provider reports that they do not have enough value-based revenue to promote delivery change. The state risks being in limbo in payment and delivery reform if it cannot transition more dollars to true fixed prospective payments. Vermont, through its Agreement, must continue its innovative work with CMS to design and implement prospective payments from Medicare that are no longer reconciled to the fee-for-service payment system.
Health care reform activities in the Agency of Human Services (AHS) are not clearly organized for success in the Agreement’s performance domains. Health care reform activities across AHS are critical to success in payment and delivery system reform yet they are not overtly governed by the Agreement or its performance rubric. Key activities such as integrating clinical and claims data through the Health Information Exchange and the alignment of care coordination activities spanning patient centered medical homes and community-based health and social services are happening throughout Agency departments without a central organizing influence. Furthermore, AHS can do more to leverage the success of its Vermont Medicaid Next Generation (VMNG) ACO program as evidence of the progress that can be achieved through payment and delivery system reform. Specifically, AHS should share its positive experience as an example to commercially insured and self-funded groups.
Vermont’s regulatory framework for curbing health care cost growth, while improving quality, continues to evolve. The Green Mountain Care Board’s (GMCB) health care regulatory approaches, defined in statute, focus on cost containment and were developed in response to unchecked growth in the fee-for-service health care system. Despite their origins, many of these regulatory approaches are in fact agnostic to reimbursement methodology but have not been optimized for value-based care. For example, GMCB’s hospital budget review assesses health care cost growth across both fee-for-service as well as fixed prospective payments. As the shift to fixed prospective payments continues, net patient revenue (NPR) may become less important relative to a hospital’s total budget but is unlikely to disappear entirely as care will continue to be delivered to patients from out of state, who will not be associated with a fixed prospective payment. And while Board members often consider quality performance in their decisions, quality could become a more central tenant of the regulatory framework. The Board and its staff continue to evaluate opportunities for regulatory alignment and how best to evolve their processes with Vermont’s goal of value-based care in mind. Because of the model’s voluntary nature, the success of Vermont’s health reform efforts and its underlying regulatory framework rely on (1) the state’s ability to signal to providers and payers that value-based care is not only the right thing to do, but inevitable, and (2) a preparedness for regulating a more integrated system at scale. A bold shift to value-based payment and delivery system reform over fee-for-service is necessary at this pivotal moment when more reimbursement needs to become value-based.
The leadership strategy at OneCare Vermont (also called OneCare), the only ACO in the state, must prioritize support for providers in transition to value-based payments and delivery system transformation. Provider participants across the state are unclear about how participation in OneCare Vermont is improving care delivery. Providers are also dubious about the information and tools OneCare provides in support of value-based care. Some resistance to change is to be expected, however widespread critique of the most basic tools to facilitate value-based payment suggests that OneCare has not responded quickly enough to address participant feedback. Since the start of the Agreement performance period, OneCare Vermont has identified and engaged in a wide variety of activities to promote health and wellness and to facilitate value-based care. While well intended, this strategy appears to have resulted in a diluted effort to create value for providers through the core tools of value-based contracting, data, and analysis to support delivery system transformation.
Recommendations
Recommendations are described throughout this report in response to detailed findings in each of the primary areas specified above and recommendations from Section I are included in a summary chart in Appendix A. Recommendations in Section I and II include:
- Leveraging the federal/state partnership to address limitations in the federal/state Agreement and to promote further innovation.
- Increasing participation among self-funded groups, including State of Vermont employees.
- Accelerating the transition to fixed prospective payments across all payers.
- Organizing health care reform activities in the Agency of Human Services to uniformly drive towards the performance domains in the state/federal Agreement.
- Offering increased opportunities for stakeholder and patient engagement.
- Advancing a new leadership strategy at OneCare Vermont to demonstrate the value of Accountable Care Organization membership.
Note: This report was developed in consultation with Green Mountain Care Board staff.
Source: Green Mountain Care Board 6.30.2021 Montpelier, Vermont