In January, Vermont will become the first state in the nation to move to a voluntary, all-payer accountable care organization model. The program is modeled after a similar one from Maryland that covers only hospitals. The Vermont ACO will cover Medicare, Medicaid and commercial payers, requiring those who participate to pay similar rates for all services.
The CMS is giving Vermont $9.5 million in startup funding to support the transition. The demonstration, funded through an 1115 waiver, will last five years.
“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,” CMS Chief Medical Officer Dr. Patrick Conway said in a statement.
Vermont Gov. Peter Shumlin earlier this year traveled to Washington to negotiate a deal with HHS Secretary Sylvia Mathews Burwell.
The state aims to have 70% of its insured residents covered by an ACO by 2022. The model will be considered an advanced alternative payment model under the new Medicare reimbursement program, making participants eligible for a performance bonus.