Paying for Health Care Reform: Single Payer vs

Vermont Health Care Reform Update
Healthfirst Annual Meeting
November 2, 2013
Paul Harrington, EVP, VMS
Patient Protection and Affordable Care Act (ACA)
H.R. 3590, 3/23/10
• Individual Mandate
– Requires all U.S. adult residents to obtain and maintain “ acceptable
coverage” for themselves and their children beginning in 2014 (phased-in tax
penalty for those without insurance)
• Insurance Market Reforms
– Require all health insurers to offer basic plans that are guaranteed issue, with
no health status underwriting, with no pre-existing condition exclusions and
maximum rating bands of 3:1.
• Subsidies to purchase insurance available through exchanges to low-income
– Up to 400% of Federal Poverty Level ($44K individual, $60K couple & $92K
family of four in 2012)
• Health Insurance Exchanges
– Exchanges available in 2014 to give individuals the ability to choose from a
variety of private plans and receive subsidies. State can set insurance
company participation and set conditions for participation.
“Meaningful use of Certified EHR Technology”
$44K Medicare/$64K Medicaid bonus, Penalties 2015-2019 (1-5%)
• EHR meets established standards and includes:
– patient demographics and clinical data
– medical history and problem lists
– clinical decision support
– physician order entry
– capture/query quality health care data
• Use e-prescribing; electronic exchange of patient information;
integration with other systems; and, EHR reporting of clinical
quality data
• Increased coding complexity due to need to be HIPAA 5010
compliant by Jan. 1, 2012 (enforcement June 1, 2012) and the
change from ICD-9 to ICD-10 by Medicare on Oct. 1, 2014.
ICD-9 has 15,000 codes while ICD-10 has 68,000 codes.
• Stage 2 of Meaningful Use starts on January 1, 2014
2011 Health Care Reform Bill
H.202 - Act 48
• Green Mountain Care Board: 5 person established to
oversee cost containment strategies
• Vermont Health Connect: Benefit Exchange created
in Medicaid Dept. to help achieve universal insurance
coverage, as required under the federal Patient
Protection and Accountable Care Act (ACA).
• Green Mountain Care: Anticipates the evolution of
the Health Benefit Exchange into Green Mountain
Care: the state’s publicly financed single-payer health
care system for all Vermonters beginning in 2017. 4
Vermont’s Fragile Health Care System
14 Hospitals and Approx. 1,833 physicians
Due to expanded insurance coverage, State estimates the current
shortage of 25 primary care physicians will increase to 63 in 2015.
Primary Care = 35% (634)
• Family Practice = 15% (279)
• General Internal
Medicine = 10% (175)
• OB/GYN = 4% (75)
• Pediatric = 6% (105)
Specialty Care = 65% (1,199)
• Anesthesiology = 5% (97)
• Emergency Medicine = 6% (108)
• Spec.Internal Medicine = 12% (217)
• Psychiatry = 9% (172)
• Radiology = 7% (129)
• Surgery = 9% (162)
• Other = 17% (314)
Act 171: 2012 Health Care Reform Bill
Established Vermont Health Connect
Exclusive Health Benefit Exchange
• Beginning on Jan. 1, 2014, the exchange will help provide
qualified health benefit plans to eligible individuals and
small businesses with 50 or fewer employees and
employers with 100 employees or fewer in 2016.
• DHVA/Medicaid Dept will contract with BCBSVT and MVP.
• Federal premium subsidies will be available to individuals
who enroll in exchange plans (at silver plan level) –
provided that their income is above 133 % of FPL and no
more than 400 % of FPL.
• Estimated enrollment in 2014 = 115,000 (626,000 total)
• Medicaid will cover individuals and families up to 133%6 FPL
Vermont Health Connect
Enrollment Begins on October 1, 2013
• Individuals can enroll in the system from October 1,
2013 through March 31, 2014.
• Small businesses will have an open enrollment
period beginning on October 1, 2013 and ending on
December 15, 2013
• Insurance payments will be to the State of Vermont
and the state will forward premium payments to
Catamount & VHAP Sunset Under
Vermont Health Connect
• Both VHAP and Catamount will end on
• Vermonters in these programs will transition
based on their income to either Medicaid or a
private plan under Vermont Health Connect
The four levels of insurance coverage - bronze, silver, gold and
platinum - are based on actuarial value, a measure of the level
of financial protection a health insurance policy offers
Federal Subsides Available Only Through Vermont
Health Connect
• Under the ACA, individuals who purchase insurance
after January 1, 2014 through an Exchange will be
eligible for subsidies for health insurance premiums
and cost-sharing if their income is less than 400
percent of the federal poverty level (FPL).
• The subsidy is based on the premium for a
benchmark plan (the second lowest cost silver plan
available in an Exchange).
• A subsidy calculator can be found at:
Green Mountain Care: Vermont Single-Payer
• Occurs after Affordable Care Act waiver (Jan. 1, 2017 under
current law) and other requirements are met
– Section 1332 provides waiver for state innovation
allowing states to opt-out of specific provisions of ACA
– Collect all federal funding for exchange ($267 million).
– Coordination with Vermont’s Global Commitment
Medicaid section 1115 waiver.
• All Vermonters covered by virtue of residency
• Minimum benefits set by Green Mountain Care Board
• Overall health care budget set by GMC board subject to
legislative appropriations
Financing Green Mountain Care
Debate to take place during 2015 legislative session
• Section 9 of Act 48 requires that the administration bring to the
legislature 2 financing plans
One plan shall recommend the amounts and necessary mechanisms to finance any
initiatives which in order to provide coverage to all Vermonters in the absence of a waiver
from ACA Section 1332
The second plan shall recommend the amounts and necessary mechanisms to finance
Green Mountain Care and any systems improvements needed to achieve a public-private
universal health care system.
• Financing must maximize federal funds and spread costs fairly
• Many issues to be resolved, including
What will the overall costs/savings be?
How much federal funding will Vermont receive?
How does the state deal with border issues?
How are public and private coverage integrated?
How do does Vermont incorporate ERISA plans?
UMass and Wakely Consultants, 1/24/13
Vermont Health Care Reform Financing Plan
• Total GMC Base Costs = $3.498 billion
– GMC Savings in 2017 = $35 million (1.0%) with Provider
reimbursement $155 million lower
• $1.61 billion of GMC costs needs to be raised by new financing plan.
– Top 5 State Revenue Streams = $1.28 Billion (Personal Income =
$624.6, Sales &Use =$349.2, Meals &Rooms = $132.2, Corporate
Income = $94.1, Purchase and Use = $83.7).
• Key Assumptions:
– GMC as primary pays health care providers 105 percent of Medicare
– Assumes administrative costs of 7 percent that may be difficult to
achieve due to Medicare, out-of-state patients and large ERISA
employers offering insurance.
• Financing Plan to be presented on 1/15/15 to Legislature
Partners for Health Care Reform (PHCR)
• PHCR is a group made up of health care providers, employers, and a
health plan provider interested in providing essential information based
on factual data and research-based analyses to shape the smart and
effective reform of Vermont’s health care system.
• Group Members:
– Fletcher Allen Health Care
– Vermont Chamber of Commerce
– Vermont Assembly of Home Health and Hospice Agencies, Inc.
– Blue Cross Blue Shield of Vermont
– Vermont Association of Hospitals and Health System
– Vermont Medical Society
– Vermont Business Roundtable
• Contacted with Avalere Health for an independent Evaluation of the
1/24/13 Vermont Health Care Reform Financing Plan. Report will be
presented to the Health Care Oversight Committee on November 14
State Roles in Payment and Delivery
System Reform
• Green Mountain Care Board:
– Regulator and Policy Maker
– Payment and Delivery System Reform including pilots
– Payer and provider payment policy
• DVHA: Payer
– Medicaid payment
• SIM Project:
– Opportunity to test multi-payer payment reform models
and coordinate efforts among many stakeholders. Publicprivate initiative to guide acceleration and expansion of
payment and delivery system reforms
Vermont’s State Health Care Innovation Plan
(SIM grant request for $45 million, 4/13-12/16)
VT payers (Medicaid and Commercial) will test three existing
Medicare models: the Shared Savings Accountable Care
Organization, Bundled Payments and Pay-for-Performance.
The three models have four aims:
1. Increase both organizational coordination and financial alignment
between advanced medical home primary care practices and specialty
2. Implement and evaluate the impact of value-based payment
3. Coordinate a financing and delivery model for 22,000 Vermonters duallyeligible for Medicare and Medicaid; and
4. Accelerate development of a Learning Health System infrastructure
SIM Project Structure
AHS Health Services Enterprise Project Management
Office (includes Global Commitment Waiver )
SIM Core Team
SIM Government
Project Director
SIM Steering Committee
Quality &
Models &
Care Mgmt
VT Medicare Shared Savings Plan ACO Models
For 3 Years with no “downside risk”
50% of saving retained by CMS with 50% to ACO
Reporting on 33 quality measures
Accountable Care Coalition of the Green Mountains: An IPAcentric ACO consisting of 100 physicians statewide received
designation as a CMS SSP-ACO beginning July 1, 2012.
OneCare: A Hospital-centric ACO: Fletcher Allen and DartmouthHitchcock, 13 of Vermont's Community Hospitals,3 FQHCs and
a number of independent physicians have collaborated to
become an ACO under the CMS SSP beginning Jan. 1, 2013.
FQHCs: Six of the State’s eight Federally Qualified Health Centers
(FQHCs) have formed Community Health Accountable Care
(CHAC), Proposed for January 1, 2014
VT Commercial and Medicaid Shared Savings Plan ACOs
Reporting on an Additional 21 Measures
• For 3 Years with no “downside risk” for Medicaid and for 3 Years
with “downside risk” in year 3 for Commercial
• 75% to 40% of saving retained by Payers with 25% to 60% to ACO
• Potential pool is all Vermont Health Connect enrollees and the
Medicaid population
• Participating payers include BCBSVT, MVP Health Care and
• Potential ACOs include OneCare, Accountable Care Coalition of the
Green Mountains, and Community Health Accountable Care
• Goal is to begin the Commercial and Medicaid Shared Savings
Plans on January 1, 2014
Medicare, Commercial and Medicaid
ACO Measures for 2014
• Under the Medicare MSSP ACO, there are a total of 33 quality measures: 26
clinical measures and 7 patient satisfaction measures. Of the 26 clinical
measures, 19 will be used to help determine the level of any shared savings.
• For the proposed BCBSVT and MVP commercial plan ACOs and the Medicaid
ACOs, in addition to the 33 Medicare MSSP measures, the workgroup has
added 21 additional measures: 12 clinical measures and 9 patient satisfaction
• The addition of 21 new measures, on top of the 33 existing Medicare
measures, would create a total of 54 ACO accountability measures.
• With the implementation of ICD-10 on October 1, 2014; the implementation
of Stage II of Meaningful Use on January 1, 2014 and the implementation of
Medicare’s Value-Based Modifier on October 15, 2013 for physician groups
over 100, the upcoming year is going to be especially challenging for
• Additional measures could be added in 2015 and 2016 from the 22 pending
quality measures and the 23 monitoring and evaluation measures.
Act 75: Prescription Drug Abuse
• Effective October 1, 2013: Specific requirements for “replacement
prescriptions” for controlled substances
• Effective November 15, 2013:
– Prescribers must register with VPMS and Prescribers must query the
VPMS in the following four circumstances:
– “At least annually for patients who are receiving ongoing treatment
with an opioid Schedule II, III, or IV controlled substance;”
– “When starting a patient on a Schedule II, III, or IV controlled
substance for nonpalliative long-term pain therapy of 90 days or
– “The first time the provider prescribes an opioid Schedule II, III, or IV
controlled substance written to treat chronic pain;” and
– “Prior to writing a replacement prescription for a Schedule II, III, or
IV controlled substance. “
VMS Education and Research Foundation Activities
Cyrus Jordan, MD, Director
• Physicians Foundation Awards 2nd Leadership Grant - $75,000
– Two Scholarships to VT Physicians to Maine’s Leadership Curriculum
– Two Communities of Practices – Hospitalists and Rural Physicians
– VMS Annual Meeting Session on Physician Leadership
• Vermont Department of Health - $12,000
– Conference - Improving Access and Quality of services to Children
and Families, January 25th, 2014 Montpelier
• Green Mountain Care Board - $80,000
– Two White Papers: Allocation of health service resources across the
state; Effective and efficient measurement. State and federal
payment pilots
• Vermont Department of Health - $25,000
– Antibiotic Stewardship
– CDC and Association of State and Territorial Health Officers funding
VMS 200th Annual Meeting
October 18 and 19, Basin Harbor Club
• Adoption of New Policies
Resolution 1:
Resolution 2:
Resolution 3:
Resolution 4:
Resolution 5:
Resolution 6:
Improving Transition of Care
Population Health
Burden of Quality Reporting
Electronic Medical Records
Physician Leadership
Investigation Standards for the VBMP
• Drafting new policy to reduce delays in obtaining
commitment and involuntary medication orders
Paul Harrington, EVP
Vermont Medical Society
[email protected]

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