Maryland, Vermont Apply for CMS’ State-Level Total Cost of Care Model

April 19, 2024
Both states applying to participate in CMS’ AHEAD model have experience with healthcare payment and delivery system reform

Both Maryland and Vermont have applied to participate in the Centers for Medicare and Medicaid Services’ States Advancing All-Payer Health Equity Approaches and Development (AHEAD) model.

AHEAD is a state-level total cost of care (TCOC) model that seeks to drive state and regional healthcare transformation and multi-payer alignment. 

The model would be in place for up to nine performance years, through 2034. The intent is to allow adequate time for changes in care delivery to be designed and implemented and for those changes to impact outcomes for the state’s residents.  

Under a TCOC approach, a participating state uses its authority to assume responsibility for managing healthcare quality and costs across all payers, including Medicare, Medicaid, and private coverage. States also assume responsibility for ensuring health providers in their state deliver high-quality care, improve population health, offer greater care coordination, and advance health equity by supporting underserved patients. The AHEAD Model will provide participating states with funding and other tools to address rising health care costs and support health equity. But the model also holds states accountable for state-specific Medicare and all-payer cost growth and primary care investment targets, and for population health and health equity outcomes.

Maryland has long experience with healthcare payment and delivery system reform. It has had a unique hospital payment system since the 1970s, with increased focus on delivery system reform in Maryland’s All-Payer Model (2014-2018) and the Total Cost of Care Model (2019-today). 

Maryland health officials said they would leverage the model’s tools to promote health equity, ensure high-value care, and improve access to care in order to achieve high value, equitable, and excellence in the health delivery system. Infrastructure investments will support the actions needed to achieve Maryland’s vision, including investments in workforce; administrative simplification for health care providers; and health information technology, data, and analytics.

“The model benefits Maryland as the pathway to continue the state’s long-term commitment to improving statewide healthcare quality, health outcomes, and health equity — all while controlling cost growth,” said Maryland Department of Health Secretary  Laura Herrera Scott, M.D., in a statement. “This opportunity allows Maryland to bridge the healthcare, population health, and social sectors as well as the public and private sectors to implement the solutions Marylanders need, as identified by community members themselves.” 

This model “is the pathway to continue Maryland’s all-payer hospital rate setting authority,” said Maryland Health Services Cost Review Commission Executive Director Jon Kromm, in a statement. “The model offers tools for primary care transformation, healthcare cost containment, and population health improvement.”


Under the new model, Maryland will develop a State Health Equity Plan to elevate community voices in defining a shared commitment to health; integrate and align resources across clinical and population health needs; and work to overcome systemic and structural racial and ethnic health inequities. The state’s Health Equity Plan will be the foundation for all actions and investments under the model. 

Maryland’s application includes a request for funding for investments in health equity and health-related social needs. This includes funding for:
• Five regional community-based population health hubs to support community-level population health investment and efforts to address health-related social needs;

• Community grants to address population health and health-related social needs; and

• Technology for statewide coordinated health-related social needs screening and referral.

Maryland anticipates that CMS plans to make decisions on Maryland’s application to the model this summer. 

The state envisions that additional policy development and decision-making for the model will begin in July 2024 and continue through the July 2025 execution of a contractual agreement between Maryland and CMS. Implementation is expected to begin in 2026.

Vermont’s AHEAD application

Vermont, which has been working on an all-payer ACO model for several years, sees the AHEAD model as a way to collaborate with the federal government to impact how Medicare, the insurer for 21 percent of Vermonters, pays hospitals, supports primary care, improves health equity, and allows flexibility in how care is delivered. 

“This application offers Vermont an opportunity to continue our long-standing partnership with the federal government, with the potential to advance promising payment and care delivery approaches for hospitals, make critical investments in primary care, and sustain important Medicare resources for Vermonters with Medicare,” said Jenney Samuelson, secretary of the Agency of Human Services, in a statement. “Vermont’s most recent negotiation with Medicaid, the jointly funded federal and state program that covers 24 percent of Vermonters, ended in an excellent agreement – investing millions into Vermont’s systems of care including public health, primary care, long-term services and supports, and mental health and substance use disorder treatment. If we are selected for the AHEAD Model, we will push for favorable Medicare terms that support our rural healthcare needs, and result in affordable, accessible and high-quality care for Vermonters.” 

The model requires the participation of providers and payers. Vermont added letters of support from the Legislature, and letters of interest from the UVM Health Network, Rutland Regional Medical Center, and BlueCross BlueShield of Vermont, to its application.

“As we look to the end of the All-Payer ACO Model in Vermont, we must continue the momentum toward meaningful payment reform to address longstanding obstacles to the care our patients’ need, better manage healthcare costs for patients and hospitals, and to support our population health goals of providing patients and their families the care they need when and where they need it,” said Sunny Eappen, M.D., M.B.A., president and CEO of University of Vermont Health Network, in a statement.

“Vermont has been on a continued journey towards meaningful payment reform for many years and leads the nation in these initiatives. It is vital that Vermont hospitals are financially stable, sustainable, and have an opportunity to grow to meet the increasing healthcare needs of Vermonters,” said Judi K. Fox, President and CEO of Rutland Regional Medical Center, in a statement. “We believe that the AHEAD model has the potential to be a significant step forward to important payment and care delivery reforms. We appreciate the opportunity to partner with and support the State to explore pathways that will better serve our patients, our communities, our region, and Vermonters”.  

If Vermont is selected by CMMI to move forward with AHEAD, negotiations will commence in June or July of 2024. If CMMI and the state agree on terms, a final agreement would have to be in place by July 2025, in advance of the start of the first performance year on Jan. 1, 2026.

 

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