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 to retain up to 35% of certain payments; and a 3% reconciliation corridor before year‑end adjustments.

Providers and family members urged caution. Gloria Quinn, executive director of Upper Valley Services, warned the committee that the concurrent implementation of SIS‑A funding links and federally required conflict‑free case management is occurring too quickly. “I feel that these changes...feel kind of like a tidal wave,” Quinn said, adding that “the tsunami that's about ready to hit at least 65 people that just UBS alone serves” could lead to people losing homes and built‑in supports unless the state allows more time to refine the model.

Parent testimony illustrated the stakes. Susan Yuan of Jericho described her 51‑year‑old son, who lives with a shared‑living provider, and told the committee: “The funding must be stable and sufficient. I can't even contemplate if the funding were cut for his supports. His good life would fall apart, as would mine.”

Key details of the reform and concerns

- Assessment and budgets: The state would use the SIS‑A to assign one of six support levels, which would translate into a budget range adjusted for residential setting (shared living, group home, independent apartment). Bernard said required context questions would be added to assessments and an exceptions process would let case managers request additional funding when those context factors indicate greater need.

- Payment mechanics: Agencies would receive monthly payments based on the sum of individual budgets multiplied by a negotiated utilization factor (Bernard described conversations with agencies about real delivered percentages). A 5% flexibility fund would be added to overall budgets for Medicaid‑approved uses; shared‑living provider agencies could retain up to 35% of certain funds; and a 3% reconciliation corridor would allow small under‑ or over‑delivery without payback or clawback at fiscal‑year reconciliation.

- Fee‑for‑service carve‑outs: Some items — for example, vehicle and home modifications and certain clinical and nursing codes — would be removed from the monthly bundle and paid by fee‑for‑service so providers could seek reimbursement for fixed costs quickly.

- Data and accountability: The state is using MMIS (Medicaid Management Information System) encounter data to track delivered services and to inform utilization factors; Bernard said encounter reporting and monthly/quarterly data conversations with agencies are part of the plan.

Provider and family concerns

Designated agencies and providers described multiple concerns: that SIS‑A scores in some cases do not capture complex medical or behavioral needs; that some early SIS‑A administrations were not clearly presented as tied to funding; and that, because Vermont lacks a larger safety net of housing and staffing capacity, even modest funding shifts could force people out of existing placements.

Quinn told the committee that Upper Valley Services’ internal modeling found roughly 65 people in their caseload at “significant risk” under the current proposal and that a broader agency analysis showed 89 people at risk of reduced services amounting to about $2.4 million. Jennifer Stratton, an agency director who spoke from the provider perspective, warned that agencies that serve medically complex or public‑safety‑sensitive clients could be disproportionately affected by a move to tiered packages.

Communication and next steps

State staff described outreach plans that include provider briefings, mailings to individuals and families, town‑hall sessions planned for mid to late April and May, and meet‑and‑greet events with new case‑management organizations. Bernard said reassessments can be scheduled for people who believe their SIS‑A score did not reflect their needs; committee staff and department representatives said many early SIS‑A assessments would come up for routine reassessment within three years.

Committee action and requests for delay

Representative Teresa Wood told the committee that House appropriations staff had included budget language recommending a one‑year delay in payment‑reform implementation so the state could separate conflict‑free case‑management rollout from payment changes and complete further analysis. Wood said that language was included in the budget recommendation that the House would consider later in the week.

What was not decided

Committee members and witnesses discussed both process and substance but recorded no formal vote in the meeting transcript. Providers sought additional time for modeling, more extensive reassessment where SIS‑A results appear inconsistent with needs, and clearer, statewide communication to recipients and families.

Ending

State officials said they will continue meetings with agencies, hold town halls and mail informational materials, and that reassessment requests are possible for people who believe the SIS‑A result did not reflect their needs. Providers and family members urged that the state use the budget process to delay full implementation long enough to reassess risks and avoid destabilizing housing and long‑term supports for people with intellectual and developmental disabilities.