Featured Health Business Daily Story, Feb. 11, 2014 - AISHealth

ACOs Gain Wide Traction in Vermont as State Eyes Move to Single-Payer in 2017

Reprinted from ACO BUSINESS NEWS, a hard-hitting monthly newsletter on the latest industry actions to design and create ACOs, for hospitals, physicians, health plans and their advisers.

Vermont is pushing full speed ahead on accountable care initiatives in both public and private health insurance markets as it experiments with cost-control measures to prepare for a shift to a single-payer system planned for just three years from now.

The state is in the final stages of contracting with two ACOs — OneCare Vermont, an ACO formed as a collaboration of Fletcher Allen Health Care and Dartmouth-Hitchcock, and Community Health Accountable Care LLC, a coalition of federally qualified health centers — to participate in a new Medicaid ACO program, says Kara Suter, director of payment reform for the Department of Vermont Health Access.

At the same time, a parallel effort is underway in Vermont’s commercial insurance exchange, known as Vermont Health Connect, which serves the state’s individual and small-group markets. The state is working with the two commercial payers active in the exchange, Blue Cross Blue Shield of Vermont and MVP Health Care, to implement ACO-based shared savings contracts with providers.

Finally, Vermont now has three ACOs active in the Medicare Shared Savings Program (MSSP): Accountable Care Coalition of the Green Mountains, which started in July 2012; OneCare, which started in January 2013; and Community Health Accountable Care LLC, starting in 2014.

Vermont Has Three ACO Models

Ultimately, these three ACO shared savings projects could come together as the state considers whether to implement a Canadian-style single payer health care system. Gov. Pete Shumlin (D) signed legislation in 2011 calling for Vermont to move to such a system by 2017, but many details — including financing — still need to be worked out.

Options for financing the full-scale single-payer program, which could cost an estimated $1.6 billion, include a payroll tax and other new taxes. In addition, the state would need to apply to CMS for a waiver in order to roll Medicare and Medicaid into the overall program.

The ACOs, while just one of a variety of ongoing health reform projects, are an important part of this overall process, Suter says. “In general, we believe the shared savings ACO programs will allow us to meet some very key goals: improving the quality of care, improving patient experience, and reducing the rate of [cost] growth.”

Medicaid ACO Program Is Modeled on MSSP

The Medicaid ACO project is the result of almost a year’s worth of planning, says Suter. It uses MSSP as a framework, and the final result looks an awful lot like MSSP, although the state has substituted quality measures aimed at pediatrics and women’s health for some of the more geriatric quality metrics in the Medicare program, she says.

“We also adopted a lot of the other Medicare program standards — the minimum shared savings rate, a similar calculation of shared savings,” Suter says.

Although the state offered two tracks — one of which would have provided greater upside shared savings potential in exchange for the ACO accepting downside risk — both OneCare Vermont and Community Health Accountable Care chose the one-sided risk option, Suter says.

Vermont employed an extensive consensus approach with about 300 people on a committee that included representatives of provider groups and the ACOs themselves, along with payers and patient groups, to choose quality metrics, Suter says. The consensus committee started with a “universe” of 250 potential metrics and whittled it down to between 30 and 35 final measures, she says. “We’re trying to keep it in the same ballpark as MSSP.”

The Medicaid ACO contracts are expected to run for three years, with the first program year starting Jan. 1, 2014, Suter says. Approximately 35,000 to 40,000 Medicaid beneficiaries — out of a total population of 100,000 Medicaid members — should be attributed to the two ACOs, she says.

The state is starting with beneficiaries who have Medicaid as their primary coverage, notes Georgia Maheraf, project director for the Vermont Health Care Innovation Project. About 20,000 to 25,000 of Vermont’s Medicaid beneficiaries are dually eligible for Medicaid and Medicare, and they should be attributed to the MSSP ACOs, Suter adds.

Therefore, “we’re talking about 40% to 50% of the overall population,” Suter says. The two Medicare/Medicaid ACO sites are geographically distributed so that they can serve most or all of the state, she says, which should make it simpler to bring in additional Medicaid beneficiaries.

Also, the state hopes to expand the services the program provides, Suter says. “We expect in subsequent years — two to three years — we’ll expand the program to include additional items,” such as non-emergent transportation and dental coverage, she says.

Commercial ACOs Will Enter Exchange

On the commercial side, it made sense for the state to start implementing ACOs in the Vermont insurance exchange, since those policies include common benefits and risk adjustment mechanisms, along with “transparent premiums,” Suter says.

The Vermont Blues plan and MVP each offer nine identical plans on Vermont Health Connect. The goal is to have those two insurers contract with the three ACOs — OneCare Vermont, Community Health Accountable Care LLC, and the Accountable Care Coalition of the Green Mountains — to implement shared savings programs that use the same measures as the Medicaid program.

About 60,000 to 80,000 Vermont residents are expected to purchase health insurance through Vermont Health Connect, but it’s not clear how many of those will be attributed to the ACOs, Maheraf says, adding that “the hope is this will be invisible to beneficiaries.”

Like the Medicaid shared savings program, the commercial ACO program is scheduled to take effect in 2014. Suter says the parties involved are “in the final stages of contract negotiations.”

Single-Payer Is ‘900-Pound Gorilla’

Todd Moore, CEO of OneCare Vermont, says Dartmouth-Hitchcock and Fletcher Allen became involved in the shared savings projects because they “wanted to be in the lead on this.” The two health systems also hope to gain experience with accountable care and share in some of the savings, Moore tells ABN.

Vermont’s Green Mountain Care Board, the quasi-government board formed by the 2011 legislation to explore new payment methodologies, is working very collaboratively with ACOs, and OneCare has a strong voice in those discussions, Moore says. “Our broad base of providers has given us a seat at the table.”

OneCare counts all 14 Vermont hospitals and more than 2,000 physicians (including 350 primary care physicians — about half of all primary care doctors in Vermont) among its providers, and currently has 42,000 attributed Medicare beneficiaries.

The state’s drive to move to a single-payer system in 2017 represents “the 900-pound gorilla in the room” as all this experimentation proceeds, Moore says. But “as an ACO, we’re sort of agnostic” over whether and how that transition should occur. Still, “we want to make sure whatever model is in place aligns with the ACO’s vision of collaborative care,” he says.

Regardless of how that situation shakes out, the transition to accountable care continues to move quickly, he says. With the addition of Community Health Accountable Care LLC to MSSP this year, more than 80% of Vermont’s Medicare population — some 50,000 to 60,000 beneficiaries — now are enrolled in ACOs, he says. Medicaid ACO enrollment should grow rapidly, as well.

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