Vermont has been actively pursuing delivery system reform since its multi-payer Blueprint for Health medical homes program was codified in 2006 as part of health reform legislation. In 2008, Act 203 directed Vermont’s Health Care Reform Commission to “assess the feasibility of alternative designs for a pilot project to test using a system-wide budgeting initiative at the regional level within the state, including a design based on the accountable care organization (ACO) model.” The team conducting the feasibility study translated their findings into a design for a Vermont ACO pilot in a report published by The Commonwealth Fund in 2010. In 2009, Act 49 directed the reform commission to convene a dedicated workgroup to more aggressively work to launch an ACO pilot.


The passage of the Affordable Care Act gave Vermont new opportunities to re-orient its approach to launching an ACO pilot. Vermont was awarded a State Innovation Model grant by the CMS Innovation Center in February 2013. Under this grant, it will test three models of payment reform, one of which is a Medicaid shared savings ACO model. According to the state’s grant application, six of Vermont’s eight Federally Qualified Health Centers are organizing a multi-payer shared savings ACO, which will be invited by the state to participate in the program that will be launched under the SIM grant. In addition to covering Medicare Part A and B for Medicare beneficiaries and all costs for attributed commercial enrollees, Vermont’s  shared savings ACO model will cover all Medicaid costs for Medicaid beneficiaries (including children and CHIP enrollees) attributed to participating ACOs.


While the state has been exploring ACO models, private partners—including participants in the state’s multi-payer Blueprint—have formed ACOs under the Medicare Shared Savings Program: OneCare Vermont is a statewide ACO linking 13 of the state’s 14 hospitals, and the Accountable Care Coalition of the Green Mountains, LLC is an ACO linking 100 independent providers.


Last updated: November 2013.

Project Scope
Patient population: All Medicaid beneficiaries that fall into one of the following “super eligibility categories” are eligible for assignment to a Medicaid accountable care organization (ACO) under the Medicaid Shared Savings Program: aged, blind or disabled adults who are not eligible for Medicare; blind or disabled children who are not eligible for Medicare; general adult; new adult; general child; and SCHIP child.
Attribution: Claims for specified CPT codes are analyzed for Medicaid beneficiaries falling into one of the super eligibility categories identified above who were enrolled for the entire 12 month look back period (the most recent 12 months for which claims are available). Beneficiaries are assigned to the practice where he or she had the greatest number of qualifying claims. Beneficiaries without claims experience are assigned to the primary care provider they have selected or to whom they have been auto-assigned.
Covered services: Medicaid ACOs will be responsible for Medicaid-covered services. Unlike ACOs supported by other payers, Medicaid ACOs will be responsible for spending on prescription medications; dental benefits; transportation; waiver services; mental health and substance abuse services; and services administered through the state’s Department of Education.
While Vermont has authority under an existing 1115 Demonstration waiver to implement a shared savings ACO in Medicaid, the state intends to submit a Medicaid State Plan Amendment for its Shared Savings Program.
Governance standards for Vermont’s Medicaid Shared Savings Program (SSP) released in 2013 mirror the requirements of the federal Medicare Shared Savings Program. The state requires that accountable care organizations (ACOs) establish and maintain a governing body, separate and unique to the ACO (and not the governing body of any ACO participant) with adequate authority to execute the statutory functions of an ACO.
Participants in the governing body must be representative of practitioners participating in the ACO, include a Medicaid beneficiary served by the ACO, and 75 percent of the governing board must be chosen by ACO participants.
The SSP standards also require that ACOs have a leadership and management structure that includes clinical and administrative systems.
Criteria for Participation Medicaid-participating providers that form an organization meeting the governance standards may participate in the Medicaid Shared Savings Program. Following the lead of commercial accountable care organization (ACO) pilots in the state, Vermont’s Medicaid Shared Savings Program standards may require ACOs to develop a defined and coordinated strategy for care management.
Under Vermont’s Medicaid Shared Savings Program, ACOs will have a choice between two payment tracks.
Under Track 1, ACOs will not agree to downside risk and their upside shared savings will be smaller than under Track 2. Under Track 2, ACOs will have a downside risk component in which they are required to repay Medicaid for shared losses. ACO will assume the following downside risk in each pilot program year :
  • Year 1: risk limited to 5.0% of total benchmark expenditures
  • Year 2: risk limited to 7.5% of total benchmark expenditures
  • Year 3: risk limited to 10.0% of total benchmark expenditures
For both tracks, the state will identify members who would have been attributed to the ACO in 2010, 2011, and 2012. Total expenditures for all services for each attributed member within a calendar year are trended and risk-adjusted to produce a blended per member per month expenditure value for each eligibility super category. The average per member per month spending across all super categories, weighted by member volume, is then calculated to produce a single historical benchmark.
Actual spending will be calculated to determine if the ACO has achieved savings or losses—beyond a minimum savings rate and minimum loss rate, respectively—relative to the historical benchmark.
For losses in excess of the minimum loss rate, an ACO participating in Track 2 is responsible for paying back a share of the losses. For savings in excess of the minimum savings rate, ACOs in both tracks are eligible for savings if they meet a minimum threshold for performance on a defined set of common measures to be used by all pilot-participating ACOs.
The ACO is assigned points based on its level of quality performance. Greater point scores result in the ACO receiving a larger percentage of the total shared savings payment for which it is eligible.
Support for Infrastructure
Vermont’s State Innovation Model project narrative describes key elements of an integrated health data system in place in the state to support accountable care organizations:
  1. A multi-payer claims dataset (VHCURES) that contains claims from public and private payers and has been mapped to key measures of utilization, expenditures and quality tracked by the Blueprint for Health;
  2. A statewide health information exchange (VHIE) with capacity to produce care summaries and continuity of care documents (CCD), lab and other diagnostic reports, demographics related to admissions, discharges, and transfers and to query or pull clinical data from participating providers’ Electronic Health Record (EHR) systems;
  3. A “central registry” that captures a defined set of clinical data from Vermont health care practices;
  4. Trainers who work with individual provider sites to develop the data input capacity and quality controls necessary to produce reliable data sets for analysis and feedback.
Measurement and Evaluation
In 2013, an Accountable Care Organization (ACO) Measures Work Group in the state worked to select measures for the state’s ACO initiatives. The group relied on a number of criteria, including that measures be: representative of an array of services provided and beneficiaries served by ACO; focused on outcomes to the extent possible; and population-based. After creating a “crosswalk” of over 200 measures from a variety of measure sets, the group came up with two measure sets:
  • A Core Measure Set of measures for which ACOs have current or pending responsibility for collection,
  • A Monitoring and Evaluation Measure Set of measures that will be used for programmatic monitoring, evaluation, and planning (collection of these measures will not influence the distribution of shared savings).

Recommended reporting measures for Year 1 of the Medicaid Shared Savings Program include measures drawn from claims data, clinical data, and survey data.



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