Auditor Releases Report On State Spending on OneCare and All-Payer Financial Performance

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Posted on June 29, 2022 in News

Last year my office released a new audit that analyzes State spending used to operate the All-Payer ACO Model, and the financial performance of the model through 2019.
Though managed behind the scenes, the “All-Payer ACO Model” is the central component of Vermont’s health care reform efforts. It represents a five-year contract between the State and the federal Centers for Medicare and Medicaid Services. The model is in its fourth year. (To learn more about how this is intended to work, read this explanatory report my office completed last year.)
Every Vermonter knows that health care costs are too high, and that they are growing too quickly. Those watching closely will have heard this often – ‘we need to move away from fee-for-service health care that rewards health professionals for the number of procedures they perform and toward value-based care that pays them to keep us healthy.’ That’s what the All-Payer Model is about. But even the best initiatives are only as good as their implementation. It must save Vermonters money and make them healthier.
The report looks at the Model’s financial performance to date. I would have liked to audit both the financial and the health performance, but there just isn’t the data on the health side at this time.
The key finding of the audit is that OneCare, the Accountable Care Organization at the heart of the model, missed its Medicaid financial targets for 2017 through 2019 by a combined $11.1 million. During those same years the State also paid $14.5 million of OneCare’s operating costs. When including the operating costs, OneCare’s estimated net Medicaid financial performance for those years collectively is
-$25.6 million. Put simply, at this time the financial costs to run the model significantly exceed any Medicaid savings attributed to it. 

As anticipated, the people implementing the All-Payer Model said the scale and complexity of the reform initiative merit patience before reaching conclusions, and that is reasonable…to a point.

In the coming months state officials will be proposing to the federal government that the All-Payer Agreement be extended for an additional five years, even though the federal government will not complete a full evaluation of the model until spring 2024! This guarantees Vermont would be entering into a new agreement without any evidence that the current implementation plan is working.

I hope the information in the report is used by policymakers, administrators, and regulators to make the All-Payer ACO Model more accountable to the people of Vermont.


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