Agency of Human Services urges caution on AHEAD changes, seeks to preserve OneCare functions as S.126 moves forward

At a legislative committee hearing, Agency of Human Services officials said they are generally supportive of S.126 but cautioned the committee to reassess parts of the AHEAD model as federal priorities shift and to protect operational functions now provided by OneCare.

Monica Ogilby, the state Medicaid director, told the committee the agency has been "working really hard and really well with Green Mountain Care Board, Healthcare Advocate, other community partners" and that the state is "delighted to be here to be a resource for you." She said the federal Center for Medicare and Medicaid Innovation (CMMI) has recently signaled changes in emphasis and that the agency is taking time to determine what elements are right for Vermont.

The agency flagged two practical areas for lawmakers: maintaining critical OneCare functions and clarifying who may set reference-based pricing for non-hospital commercial services. Ogilby said OneCare performs "robust and incredible data analytics functions" and other operational work the state would not want to lose; the agency is working to identify "key gaps" that would need support if OneCare winds down and has provided a list of bridge-funding items to the committee, she said.

On payment policy, Ogilby said Medicaid already uses reference-based pricing under its Section 1115 waiver and that the agency is not seeking new authority to set commercial rates. "We are not necessarily seeking authority over anything commercial," she said. "It would be pretty unprecedented for that to change." Sarah Rosenblum, deputy director of healthcare reform, echoed that the paragraph in S.126 that would allow the Agency of Human Services to "implement reference-based pricing for services delivered outside of our hospital" has created confusion because the agency already applies reference pricing in Medicaid.

Agency witnesses argued that hospital global budgets are a critical tool to control cost growth and said implementing hospital global budgets sooner would benefit the health system. "Hospital global budgets implemented sooner would be beneficial to the healthcare system in terms of a cost control lever," Ogilby said, noting Vermont already operates Medicaid hospital global budgets and that S.126 would extend similar approaches to commercial payers.

Committee members pressed for specifics. A member asked for a concrete list of the functions OneCare performs and what bridge funding would be needed; Ogilby said the agency has provided such a list to the committee and offered to follow up with more detail. On timing, Ogilby noted the agency is reassessing which elements to pursue now versus later, and said federal funding opportunities could change the calculus.

The agency also emphasized that quality measurement is part of Medicaid's reference-based approach. When asked about quality measures used in reference-based pricing, Rosenblum said the Medicaid program reports process and outcome metrics quarterly to CMS, including access and patient experience indicators, and offered to share the state's quality metric reports with the committee.

No formal action or votes occurred during the AHS testimony; agency staff said they will provide follow-up materials to clarify the items they referenced, including the operational gaps tied to OneCare and specifics about how Medicaid establishes hospital global budgets.

The committee indicated more technical follow-up is needed from the Agency of Human Services and from the Department of Vermont Health Access staff who oversee the hospital budget methodology.

What's next: agency witnesses said they will follow up with the committee on the OneCare gap list and quality measures; lawmakers signaled they will consider language changes to clarify which body (AHS or the Green Mountain Care Board) has authority over non-hospital commercial reference pricing.