State Health Reform Laws

Presidential Candidates' Proposals

Federal Legislation

Vermont

Full text of both
2006 and 2007 Acts

The following is a summary of Vermont's Health Care Reform Plan enacted May 25, 2006. For more information, visit http://www.hcr.vermont.gov/ or call (802) 879-5900.

On May 25, 2006, Vermont Governor James Douglas signed into law Acts 190 and 191 (Acts Relating to Health Care Affordability for Vermonters). These Acts provide the foundation for Vermont's Health Care Reform Plan, augmented by portions of Act 215 (the Fiscal Year 2007 State Appropriations Act), Act 142 (Establishing a SorryWorks! Program), and Act 153 (Safe Staffing and Quality Patient Care).

Together, this comprehensive package of health care reform legislation is designed to simultaneously achieve the following three goals:

In 2007, two additional health care reform bills were signed into law: Act 70 - Corrections and Clarifications to the Health Care Affordability Acts of 2006 and Act 71 - An Act relating to Ensuring Success in Health Care Reform.

GOAL: INCREASE ACCESS TO AFFORDABLE HEALTH INSURANCE FOR ALL VERMONTERS

Enhance Private Insurance Products

1. Catamount Health Plan. A separate insurance pool is created for the purpose of offering a low cost health insurance product for uninsured Vermonters. A comprehensive benefit plan will be provided under the Catamount Health policy, which is modeled after a preferred provider organization plan with a $250 in-netwrok deductible and $800 out of pocket maximum for individual coverage. Cost sharing is prescribed in statute, and includes a waiver of all cost-sharing for chronic care management and services, and a zero deductible for prescription drug coverage. Lower premium costs are anticipated based on estimates concerning the claims costs of the uninsured relative to the claims costs of the general population, and based on reimbursement rates established in the law that are lower than commercial rates (but 10% higher than Medicare rates). Catamount Health policies will be offered to the uninsured by Blue Cross Blue Shield of Vermont and MVP Health Care beginning October 1, 2007. The Health Care Reform Commission will review the Catamount Health insurance plans and the Catamount Health Assistance Programs by October 1, 2009 to determine the cost-effectiveness of the program, which may trigger discussions of an alternative approach to achieve the overarching goals of the health care reform.

2. Non-group Market Consolidation Study. A viable non-group market (where premiums are perceived as affordable and where enrollment is stable for all demographic groups without access to employer-sponsored insurance) is an essential component of a well-functioning, all-lines health insurance market. Like many other states, the Vermont non-group market is characterized by low enrollment, adverse selection, high prices, and limited carrier participation. Act 191 directed the state to study the impact of current trends, market rules and laws on the non-group and small group markets and make recommendations to the General Assembly to improve this option for Vermonters.

3. Local Health Care Coverage Pilot. Although the state is now engaged through broad health care reform to provide and improve healthcare access and services for all Vermonters, there may be potential for other more localized models to address these concerns. Communities can play a key role in the availability of structures, facilities and services that support healthy behaviors and provide access to care. Act 191 provided funds to support a planning grant of $100,000 to one community organization or corporation to assist in establishing a local initiative to provide health care coverage or insurance to a community, region or geographic area of the state.

4. Individual Insurance Mandate. Act 191 requires that if less than 96% of Vermont's population is insured in 2010, the legislature must consider implementing a requirement that every Vermonter have health insurance.

Provide Assistance with Insurance Affordability

1. Catamount Health Premium Assistance Program. A Vermont resident who has been uninsured for at least 12 months, who is not eligible for a public insurance program such as Medicaid, and who does not have access to an approved employer-sponsored insurance plan may apply for financial assistance to purchase a Catamount Health policy at the following rates:

2. Employer Sponsored Insurance (ESI) Premium Assistance Program. If cost-effective for the state, adults currently enrolled in the Medicaid VHAP program and new VHAP applicants who have access to an approved employer-sponsored insurance (ESI) plan will be required to enroll in the employer-sponsored plan as a condition of continued premium assistance or coverage under VHAP. The premium assistance program will provide a subsidy of premiums or cost sharing amounts based on the household income of the eligible individual to ensure that the individual out of pocket obligations for premiums and cost sharing amounts are substantially equivalent to or less than the annual premium and cost sharing obligations under VHAP. In addition, supplemental benefits or "wrap-around" coverage will be offered to ensure VHAP enrollees continue to receive the full scope of benefits available under VHAP.

The ESI Premium Assistance Program also will make health coverage more affordable for uninsured low-income Vermonters who are not eligible for Medicaid or VHAP, have incomes under 300 percent FPL, and who have access to approved employer-sponsored coverage. The ESI Premium Assistance Program will provide a subsidy of premiums or cost sharing amounts based on the household income of the eligible individual, with greater amounts of financial assistance provided to eligible individuals with lower household income and lesser amounts of assistance provided to eligible individuals with higher household income. However, if providing the individual with assistance to purchase Catamount Health is more cost-effective to the State than providing the individual with premium assistance to purchase the individual's approved employer-sponsored plan, the State shall enroll the individual in the Catamount Health Assistance Program.

3. Decreases in VHAP Premiums. As a result of Act 191, premiums for children enrolled in the Medicaid Dr. Dynasaur program were decreased by 50%; premiums for adults in the Medicaid VHAP program were decreased by 35%.

Improve Outreach to the Uninsured

1. Medicaid Enrollment Initiatives. Fifty-one percent (51%) of the uninsured in Vermont are eligible for but not enrolled in a Medicaid program. The health care reform legislation required a report to be completed by stakeholders and the state regarding how to improve outreach activities for these individuals.

2. Comprehensive, integrated and aggressive education, outreach and enrollment strategy. To facilitate success with the new coverage initiatives, the State is implementing an aggressive and comprehensive campaign to encourage the uninsured to access coverage. The campaign encompasses all solutions for the uninsured, and uses a unified multi-stakeholder campaign, with specialized interventions for specific uninsured populations, and targeted at multiple stakeholders (health care providers, community-based providers, grass-roots organizations, advocate organizations, state employees, employers). A national media firm has been hired to develop a marketing strategy and media materials. The state is also developing a single web-site and 800 number to provide information about enrolling in Medicaid, VJAP, Dr. Dynasaur, Catamount Health and the premium assistance programs; is revising the current application process and materials to make them more user-friendly; is collaborating with advocacy groups to develop grass-roots organizers to assist with enrollment recruitment and training; and is lead by an Outreach and Enrollment Director who is advised by a broad-based Steering Committee.

GOAL: IMPROVE QUALITY OF CARE ACROSS THE LIFESPAN

Improve Chronic Care Management

1. Blueprint for Health - the State's Chronic Care Plan. Chronic conditions are the leading cause of illness, disability, and death in Vermont. More than half of all Vermont adults have one or more chronic conditions (e.g., diabetes, hypertension, cardiovascular disease, asthma, arthritis, cancer, respiratory diseases, depression and other mental health disorders, substance dependence and many others). Caring for Vermonters with chronic conditions consumed more than three-quarters of the $2.8 billion spent in the state in 2002 on health care. As such, Vermont has decided to invest significant public funds in the redesign of the health care system to improve the quality and cost-effectiveness of care for those with chronic conditions.

Launched in 2003 by Governor James Douglas as a public-private partnership, the Blueprint for Health was fully endorsed in Act 191 of 2006 as Vermont's plan to have a systemic statewide system of care that improves the lives of individuals with, and at risk for, chronic conditions. The Blueprint model focuses on five change areas:

The Blueprint initially focused on two Vermont communities, and has expanding to several more in 2007. Act 71 of 2007 requires that the Blueprint be implemented statewide by 2011, and that other chronic care initiatives within the reform package (described below) align with the Blueprint priorities and projects.

2. OVHA Chronic Care Management Program (CCMP). The Office of Vermont Health Access (OVHA), the state's Medicaid agency, was required to develop a chronic care management program, consistent with the policies and standards established by the Blueprint for Health, through a contract with a private company for the 25% of Vermonters enrolled in Medicaid, Dr. Dynasaur and VHAP. This new program started on July 1, 2007.

3. Medicaid Reimbursement Incentives for participating in CCMP. OVHA also is mandated to determine how to restructure payment to health care professionals for chronic care to pay doctors to provide the right care at the right time. They also will provide incentive payments to health care professionals participating in the Medicaid care coordination program; and reimbursement increases in the future will be tied to performance measures established by the Blueprint for Health - the Chronic Care Initiative. Act 71 of 2007 expanded this payment reform to include all payers in two pilot communities, to be implemented in early 2008.

4. State Employee Health Benefits Program Alignment with Blueprint. The state's self-insured health care plan for employees was required to include alignment with the Blueprint as a component of the contract re-bid process in 2006.

5. Employer-Sponsored Insurance (ESI) Premium Assistance Coverage. ESI plans approved by the state for the premium assistance programs must include chronic care coverage consistent with Blueprint. In addition, the state's premium assistance program will cover all chronic care cost-sharing amounts for beneficiaries enrolled in a chronic care management program.

6. Catamount Health Plan Chronic Care. The Catamount Health Plans are required to have a chronic care management program, and to waive cost-sharing for chronic care for individuals participating in chronic care management.

7. Chronic Fatigue Syndrome Informational Packets. The Vermont Department of Health was required to develop and broadly distribute information on this often-hidden syndrome.

Increase Provider Access to Patient Medical Information

1. Health Information Technology. The Health Care Reform financially supports the Vermont Information Technology Leaders (VITL), a public-private partnership, as the entity to develop the statewide, integrated, electronic health information infrastructure for the sharing of health information among health care facilities, health care professional, public and private payers, and patients. As a first step, the Medication History Pilot Project will reduce the risk of adverse drug events; improve the quality of health care for many Vermonters, and save health care costs. VITL also is the conduit for the Chronic Care Management Information System to support the Blueprint for Health. Act 191 also required that VITL develop a State Health Care Information Technology Plan to address issues related to data ownership, governance, and confidentiality and security of patient information. Act 71 of 2007 created a mandate that the state develop a Health Information technology Fund to assist provider practices to employ Electronic Health Records, starting with a pilot in two sites, funded by the primary carriers, Medicaid, and the state hospital association.

2. Master Provider Index for Vermont Health Care Professionals. A work group of the Area Health Education Centers (AHEC) Program of the University of Vermont College of Medicine was charged with developing recommendations about how to create a master provider index for information technology referencing purposes.

3. Loan Program for Physician Electronic Medical Records Infrastructure. The legislation required that the State develop a loan and grant program for electronic medical records at primary care practices, and that implementation be a component of the VITL State Health Care Information Technology Plan.

Promote Wellness

1. Free Immunizations. Act 191 requires that clinically recommended immunizations be provided to all Vermonters across the lifespan at no cost when not otherwise reimbursed. The initial stages of this program will be implemented in October, 2007.

2. CHAMPPS (Coordinated Healthy Activity, Motivation and Prevention Program). Vermont has recognized that public health concerns such as those relating to overweight and poor nutrition are major drivers in the incidence of chronic disease incidence, and in increased medical inflation. CHAMPPS provides competitive multi-year grants to communities to assist them in promoting healthy behavior and disease prevention across the lifespan of the individual, consistent with the Blueprint and community goals. Examples include the promotion of good nutrition and exercise for children, community recreation programs, elderly wellness, lead poisoning abatement, obesity prevention, maternal and child health and immunization, and tobacco prevention and cessation programs.

3. Catamount Health Plan. The Catamount Health Plans are required to include preventive care, and to waive cost-sharing for treatments.

4. Healthy Choices Insurance Discount. The Catamount Health legislation authorizes the Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) to adopt regulations permitting health insurers to establish premium discounts (up to 15% of premiums) or other economic rewards for insured's in Vermont's community rated non-group and small group markets. Premium discounts will be available for those who participate in programs of health promotion and disease prevention.

Increase Provider Availability

1. Loan Repayment Program. Recognizing the need to attract and retain providers in underserved specialties and geographic areas, the legislation authorized awards to Vermont health care providers and educators that meet these criteria who have outstanding loans, with the agreement that they will serve patients with Medicare, Medicaid, or state health benefit coverage

2. Loan Forgiveness Program. The legislation also augmented an existing loan forgiveness program for dental hygienists and nurses, specialties that hard to recruit and retain in Vermont.

3. Funds for FQHC Look-alikes, Uncompensated Care Pool. Uncompensated care pool funds were designated for an income-sensitized sliding scale fee schedule for patients at FQHC look-alikes. The goal is to provide equal geographic distribution of funds to ensure an FQHC look-alike in every county.

Promote Quality Improvement

1. Consumer Price and Quality Information System. A major factor in the success of consumer driven health care plans is consumer access to good price and quality information. This is especially important as more benefit plans require higher levels of out of pocket spending. The Health Care Reform legislation directs the Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) to adopt rules for health insurers to provide transparent price and quality information so that consumers are empowered to make economically sound and medically appropriate decisions.

2. Multi-payer Data Collection Project. Health care providers, hospitals, insurers and the state need a comprehensive health information system in order to improve the quality and cost-effectiveness of the health care system. Modeled after programs in Maine and New Hampshire, BISHCA was directed to design the data collection program and to begin program implementation.

3. Adverse Event Reporting. The Vermont Department of Health was required to develop a Patient Safety Surveillance and Improvement System, designed to be used within Vermont hospitals to improve patient safety, eliminate adverse events, and support quality improvement efforts. Hospitals must track adverse events and analyze the causes, with protections for patient confidentiality and peer review, and they must report to patients or family when an adverse event causes death or serious bodily injury. Information on hospital adverse events and infections will be reported to the public on an annual basis through hospital community reports.

4. Safe Staffing. Hospital nurse to patient ratios and other nurse staffing measures now must be made available to patients and the public.

5. SorryWorks! Another component of the health care reform legislation is a voluntary, pilot SorryWorks! program in which physicians and hospitals promptly acknowledge and apologize for mistakes in patient care that result in harm and promptly offer fair settlements. Such an oral apology or explanation of how the medical error occurred, made within 30 days, may not be used to prove liability, is not admissible, and cannot serve as the subject of questioning in administrative or civil proceedings. Negotiations under SorryWorks! are confidential, and the statute of limitations is tolled during negotiations. A settlement resulting from participation in the SorryWorks! program bars further litigation; if settlement is not reached, the patient may bring a civil action.

6. Advanced Directives. The health care reform legislation enhanced Vermont's Advanced Directives statutes by requiring health care providers to notify the registry and submit a copy of any amendments, suspensions, and revocations about which it knows. It also clarified that an advance directive can specify who can and cannot bring probate court action and the probate court must honor this. The law is also applied to "procurement organizations" as appropriate.

GOAL: CONTAIN HEALTH CARE COSTS

Increasing Access to Insurance and Improving Quality of Care

1. All of the initiatives described above that increase insurance coverage and improve quality of care are expected to have a direct effect on containing Vermont's health care costs. For example, reducing the number of uninsured and underinsured people, increasing the rates paid by public health insurance programs, and assisting enrollment in employer-sponsored insurance programs will reduce the cost shift, which in turn will reduce increases in health care premiums. In addition, the Blueprint and the multiple other efforts related to prevention and chronic care are built on the premise that preventing disease and improving the quality of care for people with chronic illness are effective ways to reduce the overall demand for high-cost treatment services and reduce the growth rate in health care costs throughout the system. Improved quality of care and cost savings also are anticipated from implementation of many other initiatives, including the provision of transparent price and quality information, the adverse events system, and SorryWorks! In addition, there are specific initiatives described below that are aimed at directly decreasing the cost shift and improving administrative efficiencies to control escalating costs.

Decrease Cost Shift

1. Medicaid Provider Reimbursement Increases. Significant Medicaid provider underpayments can threaten access to care, and underpayments result in a cost shift to commercial plans that must be paid by commercial health insurance premiums. To begin to address this, the Health Care Reform legislation over both 2006and 2007 increased Medicaid provider reimbursements in the following manner: (i) evaluation and management services will be paid at Medicare rates in order to support primary care physician practices; (ii) supplemental payments will be provided to dentists with high Medicaid patient counts; and (iii) hospital rates will be increased annually until the federal upper limit is reached.

2. Other Cost Shift Initiatives. Individuals and businesses who pay commercial health insurance premiums pay additional premium because of the shifting of costs attributable to the uncompensated care of the uninsured, and attributable to Medicaid and Medicare underpayments. The Department of Banking, Insurance, Securities and Health Care Administration has undertaken several cost shift initiatives, including:

Simplify Health Care Administration

1. Common Claims and Procedures. The Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) is charged with adopting regulations designed to simplify the claims administration process, and to lower administrative costs in the health care financing system. The Common Claims workgroup is developing strategies in the following five areas:

2. Uniform Provider Credentialing. BISHCA was charged with setting a standard form and process to be used by insurers and hospitals for credentialing their providers. The Council for Affordable Quality Healthcare credentialing application form is now being used by health insurers and hospitals that perform credentialing of providers beginning in January, 2007.