Vermont Becomes First State to Experiment With All-Payer ACO Model

In conjunction with the state of Vermont, CMS announced the Vermont All-Payer Accountable Care Organization (ACO) Model on Wednesday. The new model is the first of its kind and represents an advancement in the goal of redesigning the healthcare delivery system with an emphasis on high-value care and improved health outcomes.

A key mission of the All-Payer ACO Model is to increase participation in ACO programs, with the goal that 70% of all insured Vermont residents will be included in an ACO by 2022. Participation by payers and providers is voluntary, but CMS and Vermont will encourage all to join the Medicare and Medicaid ACO Initiatives tailored to the state. In 2017, CMS will designate $9.5 million as “start-up funding” to support Vermont providers as they improve care coordination, build connections with community-based care providers, and enact practice transformation efforts.

“This model is historic in terms of its scope, aiming to include almost all providers and people throughout the state in an all-payer ACO model to drive improved quality, better care coordination, healthier people, and smarter spending,” Patrick Conway, MD, CMS principal deputy administrator and chief medical officer, said in a press release.

The Vermont Medicare ACO Initiative qualifies as an Advanced Alternative Payment Model (APM) under the CMS Quality Payment Program (QPP). As early as 2018, participating providers could be eligible to receive the Advanced APM bonus payments. According to a QPP fact sheet, Advanced APMs are encouraged because they incentivize high-quality care by having providers take on financial risk based on patient outcomes.

Vermont Governor Peter Shumlin announced in a press release that “by shifting the focus away from the current fee-for-service system to one that rewards primary care and prevention,” the agreement made Vermont the first state “to fundamentally transform our entire healthcare system so it is geared towards keeping people healthy, not making money.”

The All-Payer ACO Model also incentivizes collaboration between delivery and public health systems. Vermont has identified 4 areas they see as priorities in achieving Healthcare Outcomes and Quality of Care targets: substance use disorder, suicide, chronic conditions to care. The achievement of these targets will be the basis of the Population-level Health Outcomes measure category, which joins Healthcare Delivery System Measures and Process Milestones as the categories of metrics by which Vermont’s success will be evaluated.

The terms of the All-Payer ACO Model were approved by the Green Mountain Care Board (GMCB), the independent organization that since 2011 has been responsible for developing and implementing healthcare payment and delivery system reforms in the state of Vermont. In Wednesday’s announcement, CMS said that GMCB would be “a key partner in administering the Vermont All-Payer ACO Model.”