MONTPELIER, Vt. — A Vermont health care organization working to keep patients healthier while reducing costs is expanding the number of people who will be covered by a new system that pays providers a set amount of money for its patients, rather than paying the providers for the services they provide to those individuals.

The accountable-care organization OneCare Vermont announced that it was expanding the program beyond the 30,000 Medicaid patients announced earlier this year to include patients covered by Medicare and private insurance. Once implemented, it would cover about 120,000 Vermonters who get their health care from providers from one end of the state to the other.

“This is the big transition step, this is part of a multi-year plan,” OneCare CEO Todd Moore said Wednesday.

The system is designed to pay participating health care providers a set fee for each patient in the program. Although there are limits, if that person’s care costs more than the fee, the provider will have to make up the difference. If it costs less, the provider will benefit.

OneCare said it will be working with, among other organizations, nine hospitals in Vermont and one in New Hampshire, 24 independent physician practices, eight home health agencies and six mental health and substance abuse agencies.

Andrew Garland, a spokesman for Blue Cross Blue Shield of Vermont, said Wednesday the organization was working with OneCare to design a program for its customers that would begin on Jan. 1.

Last year, both state and federal officials agreed to the concept that it hopes will keep Vermont patients healthier while reducing costs by encouraging providers to focus on keeping people healthier. When state officials approved the project, they said the hope was that within six years up to 70 percent of health care provided in the state would be paid for through accountable-care organizations.

In February, state officials announced the first accountable care organization that would participate in the program, OneCare, which would work with 30,000 Medicaid patients the first year. The total cost of the Medicaid program for those first 30,000 patients was about $93 million in state and federal funds.

Moore said that so far this year, the Medicaid program is almost on target, although “we do have a little bit of excess spending” that is above target.