Last week, Vermont officials sent in an application to participate in a new federal health care program.
The state is seeking approval from the Centers for Medicare & Medicaid Services to operate the AHEAD model, a federal health care reform program that could change how Vermont pays for and accesses medical care in the coming years.
Proponents say that, if Vermont is chosen, the program could help bring down costs, improve health care outcomes, and make much-needed investments in primary care, mental health and substance use disorder treatment.
“If implemented, the AHEAD model would change how we pay for care with a focus on quality, affordability, investment in primary care, and collaboration between providers,” the Agency of Human Services said in a press release last week. “That means access to more affordable and well-coordinated care, with a focus on primary care and supports that keep Vermonters and their families healthy.”
Others, though, are skeptical that the program will do much good.
“The state’s latest health care reform efforts, once again, do not appear to address the most urgent problems Vermonters now face — access and affordability,” a number of prominent Vermont unions and advocates said in an open letter earlier this month. “Rather, they represent a doubling down on the failed approaches of the past eight years.”
What is the AHEAD model?
The world of health care has no shortage of technical jargon, and the AHEAD model — short for the States Advancing All-Payer Health Equity Approaches and Development Model — is no exception.
It’s not exactly clear how the program would function in Vermont, if the state is selected, as those details are still being developed. But the AHEAD model aims to reform several aspects of how care is delivered and paid for.
One of the main goals is to shift to a “global budget” system for participating hospitals. That means hospitals would receive fixed sums of money for a given year for certain programs or groups of patients — say, all Medicare patients — instead of receiving a separate payment for each procedure.
The intent is to incentivize hospitals to cut down on unnecessary and costly procedures and hospital stays, with the ultimate goal of improving the general health of the population.
The model also seeks to boost the funding available to primary care practices, and aims to cut down on health care disparities across Vermont. Selected states would be required to create “statewide health equity plans” for improving population health and reducing health inequities.
A key benefit of the program, officials say, would be allowing Vermont to negotiate more favorable payment terms with Medicare, the federal insurance program for older Americans and Americans with disabilities.
Medicare is the primary source of insurance coverage for roughly 21% of Vermont residents, according to 2021 Vermont Department of Health data.
The state already has a high degree of autonomy in how it uses funds for Medicaid, which provides insurance to low-income Americans and covers between a quarter and a third of all Vermonters. But Medicare dollars are much more tightly regulated by the feds — and the AHEAD model could bring greater flexibility.
“There aren’t a lot of opportunities to get Medicare to come to the table and pay differently,” said Wendy Trafton, deputy director of health care reform at the Agency of Human Services, said in an interview.
The timeline
Vermont is among an unknown number of states that have applied to the federal government to operate the AHEAD model.
Federal officials will select up to eight states to participate. If chosen, Vermont would be notified in May or June, Trafton said. Selected states would spend the next roughly year and a half preparing to implement the model and negotiating the exact terms with the federal government. States would receive federal funding — up to $12 million each, according to the federal government — to implement the program.
Currently, officials expect the program to begin in January 2026 in the first cohort of participating states, after which it could continue for a total of nine years.
Vermont currently has a separate and unique agreement with the federal government allowing it to operate a state-specific attempt at health care reform, the All-Payer Accountable Care Organization Model.
That model, which is largely facilitated by OneCare Vermont, also aims to provide hospitals and primary care providers with regular payments, rather than funds on a per-procedure basis.
The All-Payer ACO Model is currently scheduled to expire at the end of 2024, although state officials are looking to extend it for another year. That would then allow the AHEAD model to begin just at the sunset of the state’s current agreement.
But officials say the two systems are significantly different, even if the specifics of AHEAD are not yet worked out.
“They both seek to provide fixed prospective payments to hospitals, so they’re seeking to impact both affordability, the total cost of care (and) the way we pay hospitals,” Trafton said. “But there will be changes.”
‘Failed approaches’
Some in Vermont, however, have expressed skepticism that AHEAD is the best path forward.
In an open letter sent March 7, leaders from a number of prominent Vermont unions and advocacy groups called on lawmakers to pump the brakes on the application process.
The AHEAD model’s reforms “represent a doubling down on the failed approaches of the past eight years,” the letter reads, referencing the tenure of Vermont’s All-Payer Model. “It is critical that legislators block these efforts until clear descriptions and measurable goals are provided on how this proposed initiative will solve the very real and worsening problems we are experiencing.”
Signatories of the letter, titled “Say ‘No’ To AHEAD,” include the leaders of the Vermont State Employees Association, the teachers union, and unions representing health care workers at the University of Vermont Medical Center, as well as the nonprofit Vermont Workers Center and the League of Women Voters, along with a number of former state officials.
Those criticisms reflect broader, longstanding concerns that the state’s previous efforts at health care reform have failed to measurably improve access or bring down health care costs.
Other health care entities welcomed the state’s application, with varying degrees of enthusiasm.
In a Monday letter to community members, BlueCross BlueShield of Vermont president and CEO Don George — who signed onto the state’s application earlier this month — gave a measured endorsement of the model.
“Application to the federal AHEAD model is one possible avenue to achieve our goals, but we must be diligent in focusing on what residents of our state need most,” George said.
Asked if he supported the state’s application, Abe Berman, the CEO of OneCare Vermont, said that AHEAD has “a lot of really positive attributes.”
“There’s a lot going for it,” he said in an interview. “We’ll have to see whether the state’s application is approved and where things go from there. But I think there’s a lot of positives to consider.”
State officials acknowledge that the model will not be a panacea.
“This is not going to be everything for everyone and fix all of our stated goals and objectives,” Shayla Livingston, policy director at the Agency of Human Services, said in an interview.
But officials underscored the rare opportunity to negotiate a more favorable payment system with Medicare. And, they said, it would be only one piece of a larger reform effort — one that includes other programs to improve access to primary care, substance abuse disorder treatment, and Medicaid funding for long-term care facilities.
“It is incumbent on us to negotiate the best possible outcome for Vermont, and then evaluate if it is a good choice for Vermonters,” Jenney Samuelson, the Secretary of the Agency of Human Services, said in an emailed statement. “Stopping now, before we know the terms, is premature.”
Editor’s note: Agency of Human Services policy director Shayla Livingston is married to VTDigger editor-in-chief Paul Heintz. Heintz was not involved in the reporting, editing or publication of this story.