Shumlin Heads To D.C. To Seek An All-Payer Waiver For Vermont

Sep 12, 2016

Gov. Peter Shumlin is heading to the nation’s capital this week for a high-stakes negotiation with the U.S. secretary of health and human services. Billions of federal dollars are at stake, and so is the future of health care reform in Vermont.

Shumlin’s time in office may be running short, but the outgoing governor still has some unfinished business to tend to.

“This is something I really want to get done before I’m done being governor,” Shumlin says.

That “something” is the so-called “all-payer waiver” from the federal government. And the agreement could change the way billions of federal dollars flow through the health care system in Vermont.

The waiver would allow for changes to the way health care is paid for, and it's at the heart of Shumlin’s quest to change the way hospitals and other providers are compensated for treating patients.

“What President Obama and I really want to see is a system where Medicaid, Medicare, private pay, everybody, pays our providers based on keeping folks healthy, instead of quantity of care, fee-for-service care,” Shumlin says.

Shumlin and other top health officials say the payment reform initiative is the only way to control health care spending. And they say the all-payer waiver is the only way to enact true payment reform.

"This is something I really want to get done before I'm done being governor." - Gov. Peter Shumlin

Here’s the rub: The state and the feds have to agree not only on how much money Vermont will get over the next five years, but the manner in which that money can be spent.

“How do you do it in a way that gives the incentives to reduce cost and improve quality, but also doesn’t have you look back in four years and say wow, this cost Vermont money that we otherwise would have had,” Shumlin says.

Resolving that dilemma will be at the heart of a negotiation between Shumlin, some of his top aides and U.S. Secretary of Health and Human Services Sylvia Burwell.

Al Gobeille, chairman of the Green Mountain Care Board, a five-person panel that oversees just about every aspect of health care in Vermont, will also be in Washington, D.C., on Wednesday.

“This has been a two-year journey, and this is the basic, final meeting,” Gobeille says. “I think what we’re really talking to the federal government about now is, how do we properly fund the reforms that have to occur, where do those funds come from?”

Gobeille says payment reform in Vermont will be hampered if the feds and the state can’t come to an agreement on the waiver.

“We lose the opportunity to build a system that allows for Medicare and Medicaid and commercial insurers to work together in the way they pay providers,” Gobeille says.

That an outgoing administration is brokering a deal that the next governor will have to administer isn’t lost on Gobeille. But he says there will be plenty of opportunities for the state to extricate itself from the deal, which wouldn’t take effect until 2018.

"If a new governor came in and said, 'I don't like this,' we could get out of it before it ever started."- Al Gobeille, Green Mountain Care Board chair

“If a new governor came in and said, ‘I don’t like this,’ we could get out of it before it ever started,” Gobeille says.

The prospect of the all-payer waiver is causing anxiety among a large swath of the provider community. That’s in part because the state isn’t allowed to disclose the terms of the waiver until it reaches a final deal with the feds.

But Gobeille says if the state is successful, he’s confident he can explain to providers why they’ll benefit. And he says providers are ultimately in the driver’s seat.

“And if we can’t make this new model attractive, they won’t want to be a part of it,” Gobeille says. “They’ll vote with their feet, and it won’t exist.”

Shumlin says the clock is ticking on reaching an agreement. And he says he hopes to have resolution soon.

“Let’s do this thing, or let’s give up,” Shumlin says. “But let’s not just spin our wheels.”