Vermont all-payer ACO shows early success
A new Commonwealth Fund report found OneCare Vermont’s all-payer accountable care organization (ACO) model is finding success by pushing the state’s three largest payers — Medicare, Medicaid and Blue Cross and Blue Shield of Vermont — to speed up the move from fee-for-service to risk-based contracting.
Early results for the ACO show high-risk Medicaid beneficiaries in the program are using primary care, behavioral health and pharmacy benefits more when compared to other beneficiaries. The percentage of beneficiaries with early to late-stage disease who didn't have a primary care visit fell from 4% to 2%. Emergency department visits and hospitalizations also dropped during the first nine months of the contract.
Meanwhile, the federal government approved Maryland's request to expand its all-payer model. Beginning in January, across-the-board rates in the state will include hospital and non-hospital settings. This could include physician offices and nursing homes.
OneCare Vermont, which partnered payers, providers and community organizations “may offer lessons about the potential of care coordination to wring value out of a fragmented healthcare system,” according to the case study.
The Commonwealth Fund said Vermont’s small size helps the ACO because it “engenders trust and familiarity among health system leaders and policymakers.” There’s also a lack of private payer competition, which benefits the all-payer project.
OneCare Vermont signed up more than half of the state’s physicians and nearly all of its hospitals within its network, which increased the number of patients in risk-based contracts and provided financial support to coordinate care for high-risk patients.
The ACO looked to coordinate physical health, mental health and social services to help patients with the most complex needs. The program engaged patients with chronic diseases or behavioral health conditions who were at an additional risk. The contract also gave OneCare some of the state Medicaid program’s care management functions. OneCare is using care coordinators that are part of the state’s Blueprint for Health.
Similar to Medicare’s Next Generation ACO Model, Medicaid offered OneCare the ability to receive capitated payments. OneCare Vermont promised to take on downside financial risk for the hospitals. If expenditures fell below the budgeted amount, the ACO would keep the first 3% of savings. If expenditures exceed the budgeted amount, it would make up the first 3%.
This year, the ACO is covering 42,000 Medicaid beneficiaries and 72,000 beneficiaries in Medicare and members of Blue Cross and Blue Shield. Vermont hopes to have about 80% of its 624,000 residents in an ACO by 2022.
The Commonwealth Fund study warned that despite some successes, the ACO won’t likely see savings at the beginning of the Medicaid contract. The first year was expected to be 1.5% above budget, meaning OneCare would owe money back to the state. Also, savings enjoyed by four hospitals due to reduced hospitalizations were offset because some beneficiaries in the ACO got care outside of hospitals in the program. This led to fee-for-service charges from those facilities “that tipped the balance in the first year.”
Though the ACO has seen initial success, the case study found OneCare still faces “significant hurdles,” including needing to expand the program for “more extensive institutional reforms” and figuring out how to redistribute saved costs to the community.
However, if OneCare continues to find success, it could “accelerate investments like these not just in Vermont, but in other parts of the nation where leaders are seeking more evidence on effective ways to address the social determinants of poor health,” according to the report.
As for Maryland's all-payer program, the evidence on whether it has been a success is mixed. In March, the state Health Services Cost Review Commission for the Maryland Department of Health said the all-payer hospital model saved Medicare $586 million in hospital payments and $461 million in total care costs between 2014 and 2016.
However, a different study in Health Affairs by researchers from the University of Pittsburgh and Harvard Medical School a week later found Maryland's program didn't reduce rural hospital use or spending among rural acute hospitals between 2010 and 2013.