Vermont payment reform and new case‑management rules prompt warnings of service cuts for people with disabilities

At a House Human Services Committee meeting at the State House, department officials described a new payment model for Medicaid‑funded developmental‑disability services while family members and designated‑agency leaders warned the change could force service reductions and housing losses for some people who rely on those supports.

Jessica Bernard, Deputy Director of Payment Reform, told the committee that “payment reform is a response to some audit findings,” and described an approach that ties individualized budget ranges to a standardized assessment (the Supports Intensity Scale for Adults, SIS‑A), uses Medicaid encounter data and a utilization factor to set monthly payments, and builds in a 5% flexibility pool and a 3% reconciliation corridor for providers.

The proposed model aims to increase transparency, accountability and equitable distribution of resources across the state, Bernard said, but providers and families said the model — and the timing of its rollout alongside federally required conflict‑free case management — risks disrupting services for people in shared living and other residential arrangements.

Why this matters

The payment changes would shift how designated agencies and specialized service agencies receive monthly payments and how certain items are funded (for example, vehicle and home modifications and some clinical services would move to fee‑for‑service). Providers would receive a monthly payment based on an agency’s aggregate individual service budgets and an expected utilization percentage (Bernard said agencies often deliver around 80% of authorized services). The model also includes: a 5% flexibility pool on budgets; a provision allowing shared‑living provider agencies…