Vermont's CFCM Transition Is Done — But the Billing Disruption Isn't Over

Vermont spent years negotiating with CMS over a conflict of interest that was hiding in plain sight: the same agencies providing direct services to HCBS participants were also managing their cases. By December 2025, that arrangement was over. More than 4,600 Choices for Care, Brain Injury Program, and Developmental Disabilities Services participants were transitioned to independent case managers — and the billing structure that held those services together changed with them.

What Vermont Was Correcting

Under Vermont's previous HCBS system, Home Health Agencies and Designated Agencies (DAs) served a dual function: they delivered direct services to participants while also managing their cases. The federal HCBS Final Rule prohibits this arrangement because of the inherent conflict — an agency steering a participant's care plan toward its own services isn't providing unbiased case management.

CMS had been pressing Vermont on this issue for years. The solution Vermont developed and CMS approved in March 2023 was a full separation of functions, with a compliance deadline of October 2025 and additional time through May 2026 for evaluation.

The Choices for Care Transition

For Choices for Care, Vermont's primary HCBS program for elderly and adults with physical disabilities, case management responsibility transferred from Home Health Agencies to Vermont's five regional Area Agencies on Aging. The goal was to complete all CFC transitions by July 2025, with Adult Family Care and Flexible Choices participants following by December 2025.

DAIL confirmed in its FY26 budget presentation that all case management transitions were complete. That's the good news. The operational reality for Home Health Agencies is more complex: they retained their direct service delivery contracts, but lost the case management function they had built around those relationships. Authorization workflows, service planning processes, and the communication channels between case management and direct service are all different now — and clean billing depends on those channels working smoothly under the new structure.

The DD Services Overhaul

The DD Services transition went further. Vermont's Designated Agencies didn't just lose case management — they were replaced in that function by two new statewide Case Management Organizations: Benchmark Human Services and The Columbus Organization. These CMOs began taking on case management responsibility at the end of FY25, with transitions continuing through the implementation timeline.

Simultaneously, Vermont launched DD Payment Reform on October 1, 2025: standardized service rates, a new standardized needs assessment (SIS-A), an updated reconciliation process, and a new budget framework for calculating individual and agency funding. For DD providers, this means the rate structure, the assessment tool, and the case management entity all changed within the same quarter.

The Billing Exposure

When case management changes, authorization exposure follows. Providers serving participants mid-transition — where the old case manager has handed off but the new CMO hasn't yet completed the new Individual Support Agreement — are operating without fully confirmed authorizations. Billing into that gap creates the same problem it does in every state that has gone through a similar transition: claims submitted against stale or pending authorizations that either deny outright or require manual resolution.

The new standardized rates also required billing system updates. Providers still submitting claims at old DA-negotiated rates after October 1, 2025, were billing at rates that no longer existed in the fee schedule.

What Providers Should Do Now

Confirm that every active participant's case management has been fully transitioned — and that the new CMO has a current Individual Support Agreement in the system before the next billing cycle. For DD providers, verify that billing system rate tables reflect the October 2025 standardized rates. And for home health providers, ensure Sandata EVV records are transmitting cleanly through Gainwell before claims go out — EVV gaps and case management transition gaps hitting the same claim at the same time create compound denials that are slow to resolve.

Vermont's HCBS restructuring was years in the making and is now largely complete. The agencies that navigate the post-transition billing environment successfully are the ones that closed the operational gaps before they showed up in the remittance.