DVHA urges committee not to extend Medicaid prior-authorization waiver from ACO to hospital global budgets

Alicia Cooper, director of Managed Care Operations for the Department of Vermont Health Access (DVHA), told the Senate Health & Welfare Committee on April 17 that DVHA does not recommend continuing a prior-authorization (PA) waiver that was used under the Vermont Medicaid Next Generation ACO (VMNG) program.

Cooper said the PA waiver was implemented with the VMNG contract with One Care Vermont in 2017 and remained in effect through the program's conclusion at the end of 2025. "Under this arrangement, providers did not have to seek prior authorizations for any Medicaid members who were attributed to the ACO," she said, noting the waiver provided DVHA with data that informed broader PA changes.

The department outlined two central concerns with carrying that waiver forward into the state's hospital global budget era. First, the ACO attribution model established shared financial accountability between payer and participating providers for an attributed population; by contrast, Cooper said, "under the hospital global budget methodology, the shared financial accountability is more limited to those services that are specifically happening within a hospital organization." She warned that a blanket PA waiver would therefore be less likely to align financial risk with the hospitals now operating under global budgets and could shift financial exposure back to Medicaid.

Second, Cooper described a technical barrier: the ACO-era waiver relied on an attribution list that DVHA's claims-processing system could check to apply the waiver. "In our hospital global budgets, we don't have an attribution framework," she said, explaining that operationalizing an equivalent PA waiver would require a different claims-processing build. Cooper added that certain populations (for example, dual-eligibles or members with other primary payers) were not attributed under the ACO and would not have been covered by the prior ACO waiver.

Summing up DVHA's position, Cooper said, "for those reasons we do not recommend including the proposed amendment." Evan, speaking for the Green Mountain Association of Hospitals and Health Systems, told the committee the association would "hold this proposal" and work with DVHA to explore approaches that reduce administrative burden for hospitals and patients.

The committee did not adopt the amendment during the session and invited DVHA and stakeholders to continue technical conversations, including providing suggested language and system specifications before any future action.