The Vermont Agency of Human Services announced today that Vermont has signed an agreement with the Federal Government to join the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) model. The AHEAD program will bring additional money for healthcare transformation to Vermont. Most importantly, Vermont's agreement allows the state to invest in and strengthen its healthcare system.
Vermont will participate in Cohort 2. The new funding model will take effect January 1, 2027.
Over the coming year, AHS and its partners will be working to stand up the processes and structures necessary to implement the agreement. Starting in 2026, the State will recruit Vermont hospitals to join the Medicare Fee for Service Hospital Global Budget program. Throughout the transition process, Vermont will continuously assess whether the model meets Vermont’s needs. The State has the option to withdraw from the agreement if cost and quality targets are not met.
“Vermonters know that the high cost of healthcare is one of the critical affordability challenges we face,” said Secretary of Human Services Jenney Samuelson. “Our healthcare system needs support to evolve to better serve the needs of Vermonters. This agreement will help by moving us toward a funding model that better supports the care Vermonters need.”
Elements of Vermont’s AHEAD agreement include:
- Establishment of a new way of funding Vermont’s healthcare system. This model, known as Total Cost of Care, gives Vermont the authority to more flexibly manage and control healthcare costs and quality and make important investments in our system.
- Up to $150 million in additional Medicare funds annually starting in 2027, with increases each year to reflect inflation, to strengthen Vermont's healthcare system and fund services not typically covered by Medicare.
- Establishment of a hospital Global Budget model to help keep care affordable and predictable for Vermonters while providing budget predictability and flexibility to allow hospitals to transform and adapt to better serve patients.
“Many people put in a lot of work to make this a reality, and I am grateful for their efforts,” said Brendan Krause, State Director of Healthcare Reform. “This agreement is the culmination of years of work by AHS and many partners, and months of negotiations with the federal government, to create an agreement to help improve access and make care more affordable. In particular, I would like to thank our excellent team here at AHS and the membership and staff of the Green Mountain Care Board.”