By
Kenneth Yood and Vanessa Lam
on September 30, 2016
Posted
in Affordable Care Act (ACA), Centers for Medicare and Medicaid Services
("CMS")
As recently reported by Modern
Healthcare and other major healthcare news outlets, the Obama
administration has granted tentative approval for Vermont to establish an
all-payer reimbursement system. If granted final approval, the Vermont All
Payer Accountable Care Organization Model (Model) would be effective for five
years from January 1, 2017 to December 31, 2022. The Model would be the first
in the nation to cover all healthcare providers. By way of contrast, Maryland’s
well-known all-payer system only covers hospitals.
The Model is based on Medicare accountable care
organizations. If approved, all healthcare providers in Vermont would be paid
global rates based upon quality and total cost of care expenditures, rather
than the traditional fee-for-service payment methodology. The Model and
its quality-based payment methodology would create a path for providers to get
to Merit-based Incentive Payments or Alternative Payment Model payments being
mandated under the Medicare Access and CHIP Reauthorization Act, known as
MACRA. Finally, the Model would allow Vermont providers to participate in
the Medicare Shared Savings Program ACO model, Next Generation ACOs, or full
capitation under the prepaid model.
In its development of
the Model, the state considered a single-payer model similar to the one
proposed by Senator Bernie Sanders. However, the single-payer model was
abandoned after estimates found that it would cost Vermont an additional $2
billion in its first year.
Finally, before the
Model becomes law, there will be a public process in Vermont. The draft Model
agreement as tentatively approved by the Obama administration remains under
final legal review by Vermont and CMS. If the Model survives the final
legal review process, the final Model agreement will need to be signed by the
Vermont governor and health administrators.
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