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October 27, 2016

CMS Approves All-Payer ACOs and a New Take on Medicaid Delivery System Reform Investment in Vermont

Oct. 24, 2016: CMS has approved Vermont’s Medicaid 1115 demonstration program, an important component of the state’s all-payer Accountable Care Organization (ACO) model. The initiative, which also has received funding from the CMS Center for Medicare and Medicaid Innovation, seeks to transform the state’s delivery system by aligning the state’s major payers (Medicare, Medicaid and commercial insurance) under a unified payment structure. The 1115 waiver allows the state to make up to $700 million in “investments” in start-up costs for the ACOs and to support efforts to integrate with community-based providers. The investments are centered on a menu of delivery system reform projects with associated metrics, similar to those funded through waiver-based Delivery System Reform Incentive Payment (DSRIP) programs. But unlike the DSRIPs, the release of investment funding in Vermont’s waiver is not contingent upon meeting the metrics. Compare the Vermont program with other DSRIPs by checking out our DSRIP resource page. For more information on the operation of the ACO model, see the model agreement between the ACO, CMS and the state.