Vermont moves on 'all-payer' system; Kentucky gets OK to end Kynect

Vermont Gov. Peter Shumlin has reached a milestone in his goal to move the state toward on an "all-payer" model, which he sees as a way to combat rising healthcare costs.

Shumlin and the Centers for Medicare & Medicaid Services have reached a draft agreement for a provider payment model that builds off the concept of accountable care organizations, the Rutland Herald reports.

While healthcare costs are expected to rise 6.6 percent over the next 10 years, the draft agreement will save Vermont residents approximately $10 billion over that same timeframe by holding the rise in healthcare costs at 3.5 percent, Shumlin told reporters last week. 

In 2014, Vermont abandoned its plan to implement a single-payer system due to anticipated funding shortfalls from Medicaid and the Affordable Care Act.

The all-payer model will align payments to providers from all types of payers--Medicare, Medicaid and private insurers--to make capitated payments to providers and then hold providers accountable for the quality of treatment delivered. Provider groups that participate in the model will be eligible for a shared savings program offering providers financial incentives to limit spending growth, according to the Rutland Herald.

Proponents of the all-payer model say the system encourages providers to only perform medically necessary procedures, while detractors worry that federal requirements doom ACO-like models, the article adds.

Matt Bevin speaking
Kentucky Gov. Matt Bevin

In other state news, Kentucky Gov. Matt Bevin has received federal approval to make good on his campaign promise to dismantle Kynect, the state’s ACA exchange, meaning residents will have to use the federal exchange marketplace,, the Courier Journal reported. The state will roll out a new platform, called benefind, for consumers seeking Medicaid, the news outlet added.

Though the Obama administration approved Bevin's move, Andy Slavitt, acting administrator at the Centers for Medicare & Medicaid Services, said in a letter obtained by the Courier that the change could produce confusion for many of the state’s 500,000 consumers who enrolled via Kynect. “We remain concerned that Kynect’s transition to the federal platform may disrupt the seamless system of coverage that Kynect established,” Slavitt wrote.

Kynect had played a role in Kentucky’s uninsured rate dropping from 20.4 percent to 9 percent, and the exchange received high approval ratings among state residents, FierceHealthPayer has reported.