by Devon Green, VP of Government Relations, VAHHS
On the timeline of the legislature, we’ve gone from introductory testimony right into the thick of policy. Below is what happened last week:
FY 2025 Budget Adjustment Act: On Friday, the House passed the FY 2025 Budget Adjustment Act (BAA), a mid-year adjustment to the FY 2025 budget.
Health-related funding includes:
- $10M in one-time health care provider stabilization grants, $4M of which is dedicated to mental health and substance use providers
- $5.2M for the ACO 2023 reconciliation
- $11M for the Brattleboro Retreat payment model reconciliation
- $4M in one-time funds for the Medicaid global hospital payment program to cover tail end claims and recruit additional hospitals
- $2M for the next phase of Act 167—the feasibility analysis and technical assistance
FY 2026 Budget: The FY 2026 Budget started making the rounds in committees last week, starting with House Appropriations. Health-related funding includes:
- $4.45M in bridge funding for the Blueprint for Health and Support and Services at Home (SASH) for 2026 after the All-Payer Model ends in 2025
- Funding to convert the Northeast Correctional Complex in St. Johnsbury into a 15-bed Recovery Campus
- $866k for alternatives to emergency departments for mental health
EMS: The EMS Advisory Committee provided an update to the House Health Care Committee on Medicaid reimbursement for care at home and current structural challenges, such as lack of reimbursement for basic life support services in hospital-to-hospital transport. As a result of reimbursement and workforce challenges, some areas in the state are struggling to meet call volume. The EMS Advisory Committee also testified in the Senate Finance Committee on S.31, which suspends the ambulance agency provider tax for two years.
Affordability and Health Care Reform: The Senate and House health care committees heard from Elliot Fisher, Professor of Medicine and Health Policy, The Dartmouth Institute, and Christopher Koller, President of the Milbank Memorial Fund. Fisher testified that the largest driver of cost is hospital inefficiency with a potential savings of $150M in the near term. All hospitals, excluding CAHs, have substantial opportunities to improve performance. Physician productivity is lower than peers. The most opportunity is in administrative costs. Near term recommendations include:
- Advance global budgets now
- Build now on existing strengths in quality improvement
- Prioritize high impact initiatives, including pregnancy and newborn care
Koller testified that hospitals act economically rationally. He also noted that providers want alignment across payers. Koller focused on
- Setting a hospital price cap
- Establish a hospital price growth cap
- Prospectively review and approve hospital revenue and or price growth
Koller reminded legislators that the GMCB already has the tools to move forward on price caps and global hospital budgets. It is up to the legislators to hold the GMCB accountable.
Reference-Based Pricing: The Auditor’s Office presented on their findings around reference-based pricing, which would set hospital prices as a percentage of Medicare. The Vermont Chapter of the National Education Association and the Vermont State Employee Association supported reference-based pricing in state employee and teacher health care plans. Blue Cross Blue Shield of Vermont advocated for expanding reference-based pricing to all commercial plans instead of limiting it to teachers and state employees, but also noted that reference-based pricing would likely need to be phased in. VAHHS testified and provided greater context around the experience of other states, noting that we do not know the starting financials of hospitals in states using reference-based pricing; Montana has moved away from reference-based pricing; and Oregon’s exemptions to reference-based pricing would apply to all but one hospital in Vermont. VAHHS noted that they would examine the impact of any reference-based pricing proposal put forward.
Act 167 Update: The Agency of Human Services testified in the Senate Health and Welfare Committee that they have enlisted the Rural Health Redesign Center to oversee the feasibility component of Act 167 hospital transformation. The Agency also discussed hospital transformation efforts to adapt operations to improve access and reduce costs.
UVM Health Network: The UVM Health Network testified in the House and Senate health care committees on their services and broke down their total revenue. They also detailed their plans to increase access to Vermonters.
Certificate of Need (CON): The House Health Care Committee heard a walk-through of H.96, the CON bill that raises the jurisdictional threshold to $10M for equipment, construction, and health care services. VAHHS testified in support of the bill and noted that a higher threshold for academic medical centers providing tertiary care would make the thresholds more proportional.
Birthing Centers: The House Health Care Committee heard an overview of H.40, which licenses freestanding birthing centers and exempts them from the Certificate of Need process. The committee will be taking testimony on this bill and consider it in conjunction with H.96, the CON bill.
Legally Protected Health Care Services: The Senate Health and Welfare Committee heard a walk-through of S.28, which strengthens consumer and licensure protections against deceptive advertising and representations in health care and protections for prescribing providers for gender affirming and reproductive treatments.
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