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Vermont Medical Society presses committee to shore up 2026 primary‑care funding and set up alternative payment program
Summary
The Vermont Medical Society urged the Health & Welfare Committee to address an expected 2026 funding gap for primary care and to require the Agency of Human Services to develop a per‑member‑per‑month payment and an all‑payer alternative payment model by 2027 to sustain independent primary care practices.
Jessa Barnard, executive director of the Vermont Medical Society, told the Health & Welfare Committee that primary care in Vermont faces a funding cliff in 2026 unless lawmakers act to preserve current payment levels and build a durable alternative payment infrastructure.
Barnard said a set of existing payments that support independent primary care — including Blueprint and ACO payments — lack a secure funding source beyond 2025 for many practices. She urged the committee to include language in its bill directing the Agency of Human Services to develop, by Jan. 1, 2026, a per‑member‑per‑month (PMPM) payment rate and distribution methodology to maintain 2025 funding levels. She also asked the committee to require that, by Jan. 1, 2027, AHS consult with stakeholders and develop an alternative payment program for primary care that could include PMPM or capitation and apply to adults and children alike.
Barnard told the committee that payment reform must protect practices that have already moved away from pure fee‑for‑service under Blueprint and ACO arrangements. She warned that benchmarking professional rates to Medicare creates risks because Medicare’s physician fee schedule has declined in recent years; Barnard said the Medicare professional fee schedule has fallen “about 33% since 2001” and recommended including an inflation adjustment (for example, the Medicare Economic Index) in any benchmark tied to Medicare.
Why it matters: Witnesses said primary care is the foundation for value‑based delivery reform. Without stable funding in 2026, independent practices may lack the capacity to participate in broader payment reform pilots or to serve as the community‑based care backbone that global budgets and total‑cost‑of‑care contracts assume.
Additional requests from the Vermont Medical Society included: - Explicit statutory language ensuring the Agency of Human Services consult with primary‑care providers when designing rate methodologies and alternative payment programs. - Greater clarity about which payers a reference‑based pricing pilot would apply to (regulated commercial payers vs. broader markets) and legislative guardrails to detect unintended harms. - Applying primary‑care payment protections and incentives across locations of care (hospital and non‑hospital settings) rather than limiting them to non‑hospital sites.
The committee asked staff to circulate written testimony and to consider statutory language that both preserves 2025 funding and begins a stakeholder process to design an all‑payer alternative payment approach. No formal votes were taken.
