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DVHA outlines Medicaid reference‑based pricing and hospital global‑budget evolution to the committee
Summary
Alicia Cooper of DVHA described Vermont's use of Medicare as a reference point for many Medicaid fee schedules, existing fixed‑payment ACO arrangements and a planned Medicaid hospital global budget methodology for 2026 to maintain revenue predictability for hospitals.
Alicia Cooper, director of managed care operations at the Department of Vermont Health Access, told the Senate Health and Welfare Committee that Vermont Medicaid already uses Medicare as the reference point for many fee schedules and that the department is working on hospital global budgeting.
Cooper said Medicaid fee schedules vary by service line but are commonly tied to Medicare: for example, clinical laboratory services are reimbursed at about 97.5% of the Medicare fee schedule in the current approach. She noted that percentages can fall when Medicaid appropriations do not keep pace with annual Medicare fee‑schedule increases.
The department described two fixed‑payment efforts. The Vermont Medicaid Next Generation ACO (VMNG) program, operating since 2017 with OneCare Vermont, pays hospitals fixed prospective payments for attributed populations. Cooper said those predictable payments were helpful during pandemic revenue swings. In 2024 DVHA launched a Global Payment Program pilot to let hospitals opt into a complementary fixed payment that, together with ACO payments, makes a broader portion of hospital Medicaid revenue prospective and fixed.
Cooper said DVHA is developing a Medicaid hospital global‑budget methodology for 2026 to preserve revenue predictability, encourage population health investment and align with federal AHEAD‑model expectations. She cautioned that alignment across payers and participation are important, and that the department's approach has favored voluntary pilots with early adopters that then scale.
Committee members asked whether Medicare is a reliable reference and how state rate changes interact with Green Mountain Care Board commercial rate decisions. Cooper said Medicare methodology is a practical external benchmark though not a perfect match for every provider cost structure, and she invited continued coordination between DVHA and the Care Board.
Cooper provided certification and fee figures for ACO oversight included in draft statutory language: $10,000 for initial ACO certification, $2,000 annual renewal and $125,000 for a full ACO budget review, per the draft.
