§ 9377 — Payment reform; pilots

(a) It is the intent of the General Assembly to achieve the principles stated in section 9371 of this title. In order to achieve this goal and to ensure the success of health care reform, it is the intent of the General Assembly that payment reform be implemented and that payment reform be carried out as described in this section. It is also the intent of the General Assembly to ensure sufficient State involvement and action in the design and implementation of the payment reform pilot projects described in this section to comply with federal and State antitrust provisions by replacing competition between payers and others with State-supervised cooperation and regulation.
(b)(1) The Board shall be responsible for payment and delivery system reform, including the pilot projects established in this section.
(2) Payment reform pilot projects shall be developed and implemented to manage the costs of the health care delivery system, improve health outcomes for Vermonters, provide a positive health care experience for patients and health care professionals, and further the following objectives:
(A) payment reform pilot projects should align with the Blueprint for Health strategic plan and the Statewide Health Information Technology Plan;
(B) health care professionals should coordinate patient care through a local entity or organization facilitating this coordination or another structure that results in the coordination of patient care and a sustained focus on disease prevention and promotion of wellness that includes individuals, employers, and communities;
(C) health insurers, Medicaid, Medicare, and all other payers should reimburse health care professionals for coordinating patient care through consistent payment methodologies, which may include a global budget; a system of cost containment limits, health outcome measures, and patient consumer satisfaction targets, which may include risk-sharing or other incentives designed to reduce costs while maintaining or improving health outcomes and patient consumer satisfaction; or another payment method providing an incentive to coordinate care and control cost growth;
(D) the scope of services in any capitated payment should be broad and comprehensive, including prescription drugs, diagnostic services, acute and sub-acute home health services, services received in a hospital, mental health and substance abuse services, and services from a licensed health care practitioner; and
(E) health insurers, Medicaid, Medicare, and all other payers should reimburse health care professionals for providing the full spectrum of evidence-based health services.
(3) In addition to the objectives identified in subdivision (a)(2) of this section, the design and implementation of payment reform pilot projects may consider:
(A) alignment with the requirements of federal law to ensure the full participation of Medicare in multipayer payment reform; and
(B) with input from long-term care providers, the inclusion of home health services and long-term care services as part of capitated payments.
(c) To the extent required to avoid federal antitrust violations, the Board shall facilitate and supervise the participation of health care professionals, health care facilities, and insurers in the planning and implementation of the payment reform pilot projects, including by creating a shared incentive pool if appropriate. The Board shall ensure that the process and implementation include sufficient State supervision over these entities to comply with federal antitrust provisions and shall refer to the Attorney General for appropriate action the activities of any individual or entity that the Board determines, after notice and an opportunity to be heard, violate State or federal antitrust laws without a countervailing benefit of improving patient care, improving access to health care, increasing efficiency, or reducing costs by modifying payment methods.
(d) The Board or designee shall apply for grant funding, if available, for the evaluation of the pilot projects described in this section.
(e) The Board or designee shall convene a broad-based group of stakeholders, including health care professionals who provide health services, health insurers, professional organizations, community and nonprofit groups, consumers, businesses, school districts, the Office of the Health Care Advocate, and State and local governments, to advise the Board in developing and implementing the pilot projects and to advise the Green Mountain Care Board in setting overall policy goals.
(f) The first pilot project shall become operational not later than July 1, 2012, and two or more additional pilot projects shall become operational not later than October 1, 2012.
(g)(1) Health insurers shall participate in the development of the payment reform strategic plan for the pilot projects and in the implementation of the pilot projects, including providing incentives, fees, or payment methods, as required in this section. This requirement may be enforced by the Department of Financial Regulation to the same extent as the requirement to participate in the Blueprint for Health pursuant to 8 V.S.A. § 4025.
(2) The Board may establish procedures to exempt or limit the participation of health insurers offering a stand-alone dental plan or specific disease or other limited-benefit coverage or participation by insurers with a minimal number of covered lives as defined by the Board, in consultation with the Commissioner of Financial Regulation. Health insurers shall be exempt from participation if the insurer offers only benefit plans that are paid directly to the individual insured or the insured’s assigned beneficiaries and for which the amount of the benefit is not based upon potential medical costs or actual costs incurred.
(3) In the event that the Secretary of Human Services is denied permission from the Centers for Medicare and Medicaid Services to include financial participation by Medicare in the pilot projects, health insurers shall not be required to cover the costs associated with individuals covered by Medicare.
(4) After implementation of the pilot projects described in this subchapter, health insurers shall have appeal rights pursuant to section 9381 of this title. (Added 2011, No. 48, § 3, eff. May 26, 2011; amended 2011, No. 171 (Adj. Sess.), § 27, eff. May 16, 2012; 2013, No. 79, § 35c, eff. Jan. 1, 2014; 2023, No. 6, § 224, eff. July 1, 2023; 2025, No. 11, § 20, eff. September 1, 2025.)