Advancing value-based payments, which pay for Medicaid-covered services in a new way by linking payment to quality, is one of DVHA’s top strategic priorities. This priority to migrate away from historical fee-for-service payment methodologies which pay providers solely for the number of services they deliver (e.g., for each test, office visit, hospital stay, and procedure), towards paying in more flexible and predictable ways is shared on the national stage as well as in Vermont. The Health Care Payment Learning & Action Network, (HCPLAN) has partnered with Centers for Medicaid & Medicare Services (CMS) to conduct a national effort to assess the adoption of APMs over time and track progress towards the HCPLAN’s goals. The APM framework establishes a common vocabulary and pathway for measuring successful payment models by classifying Alternative Payment Models (APMs) in four categories and eight subcategories: 

1. Category 1: Fee-for-service – no link to quality & value

2. Category 2: Fee-for-service – link to quality and value 

a. Category 2(a): Foundational payments for infrastructure & operations (e.g. care coordination fees and payments for HIT investments)

b. Category 2(b): Pay for reporting (e.g. bonuses for reporting data or penalties for not reporting data.)

c. Category 2(c): Pay for performance (e.g. bonuses for quality performance) 

3. Category 3: APMs built on fee-for-service architecture 

a. Category 3(a): APMs with shared savings (e.g. share savings with upside risk only) 

b. Category 3(b): APMs with shared savings and downside risk (e.g. episode-based payments for procedures and comprehensive payments with upside and downside risk) 

c. Category 3(N): Risk based payments NOT linked to quality

4. Category 4: Population-based payments 

a. Category 4(a): condition specific population-based payments (e.g. per member per month payments, payments for specialty services, such as oncology or mental health) 

b. Category 4(b): Comprehensive population-based payments (e.g. global budgets or full/percent of premium payments) 

c. Category 4(c): Integrated finance & delivery system (e.g. global budgets or full/percent of premium payments in integrated systems) 

d. Category 4(n): capitated payments NOT linked to quality 

Vermont was an early adopter of the annual APM measurement effort, participating for the first time in the 2018 cycle (reporting on CY 2017 data). Since that time as more state Medicaid programs have joined in the effort, HCPLAN has set goals for national Medicaid payments tied to quality and value. Notably, Vermont has consistently surpassed these goals and is already well beyond the 2030 goal of 50%. In the most recent reporting cycle finalized in fall of 2024 (based on CY2023 data) Vermont continued to perform, noting a 5% increase from last year with 76.3% of payments tied to quality and value. 

Narrative last updated: 10/14/2024
 

• Blueprint
• DVHA Business Office
• Catalyst for Payment Reform
• Centers for Medicaid & Medicare Services (CMS)
• Healthcare Performance Learning & Action Network (HCPLAN)

DVHA will continue to move away from fee for service (FFS) and towards models tied to quality and value through the adoption of two-sided risk alternative payment models. The scorecard reflects the advancement made by Vermont Medicaid to achieve these goals.