Skip to main content

Vermont All-Payer ACO Aims High

Analysis  |  By Christopher Cheney  
   November 28, 2016

Taking a page from Maryland's all-payer model, the Green Mountain State sets its sights on value-based transformation for all healthcare providers in the state.

The state of Vermont has received the regulatory green light from the Centers for Medicare & Medicaid Services (CMS) and state officials for its unprecedented Vermont All-Payer ACO Model.

With that go-ahead, the state will design and implement an all-payer accountable care organization that will serve the vast majority of residents in the Green Mountain State and include nearly every healthcare provider statewide.


All-Payer ACO Set to Begin in Vermont


With six performance years set to start January 1, the statewide initiative has lofty goals. The CMS webpage for the Vermont All-Payer ACO Model states:

  • By 2022, the "ACO scale targets" for the initiative are 70% of all insured residents in Vermont and 90% of all Medicare beneficiaries in the state receiving medical services through an ACO.
  • Under the initiative, annual per capita healthcare spending growth in Vermont is not supposed to exceed 3.5% for all major payers. For Medicare beneficiaries, spending growth is supposed to be held to 0.1% to 0.2% below the level of national Medicare spending growth.
  • The initiative is designed to take a leap forward from the Maryland All-Payer Model, which since 2014 has focused on shifting hospitals to a value-based care model. "[The Vermont model] will provide valuable insight for other opportunities for CMS to participate in state-driven all-payer payment and care delivery transformation efforts," the CMS webpage for the Vermont initiative states.

How Population Health is Making Strides in Maryland


"[The Vermont model] will provide valuable insight for other opportunities for CMS to participate in state-driven all-payer payment and care delivery transformation efforts," the CMS webpage for the Vermont initiative states.

The Vermont Care Organization (VCO) will take the leading role in implementing the initiative.

In an op-ed piece that The Barre Montpelier Times Argus published Nov. 16, VCO Chair of the Board Thomas Huebner set the bar high for the Vermont All-Payer ACO Model:

"The speed at which things have moved reflects the commitment of CMS and the medical community to change [the] way healthcare is provided," he wrote. "The Vermont Care Organization (VCO) has been created to be… an ACO. In fact, we hope to be the single Accountable Care Organization for Vermont."

"As we talk with folks, we are being asked for some very basic information, often starting with the key question: Who are you guys? Who's really running your organization?

"The answer is—we are, your local healthcare providers. Our statewide network—in every Vermont county—is comprised of: doctors, nurses, primary care clinics, hospitals; agencies working in home health, mental healthcare and substance use treatment, and rehabilitation; plus community-based human service organizations and much more."


High Stakes Payment Reform Comes with High Hopes


In addition to his VCO role, Huebner is president and CEO of Rutland Regional Medical Center, a 126-bed acute-care hospital based in Rutland, VT.

For physician practices, a potentially crucial element of the Vermont All-Payer ACO is that participation in the initiative qualifies physicians for a Medicare financial bonus under the Advanced Alternative Payment Model provision of MACRA, which is set for full implementation in 2018.

The timeline for implementation of the Vermont All-Payer ACO is similar to the MACRA implementation timeline.

Next year, the primary focus of MACRA implementation is prodding physicians to adopt the reporting requirements of Medicare's new payment system, which is replacing the widely reviled Sustainable Growth Rate formula.

For the Vermont All-Payer ACO model, 2017 has been designated "Performance Year 0" of the initiative, the CMS webpage says.

Performance Year 0 features $9.5 million in "start-up investment" from CMS to help the state's healthcare providers boost care coordination and collaboration, according to the webpage.

Next year's start-up funding will help physicians achieve "practice transformation in order to help Vermont achieve the statewide health outcomes, financial, and ACO scale targets" from Performance Year 1 through Performance Year 5, the CMS webpage states.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

Tagged Under:


Get the latest on healthcare leadership in your inbox.