State officials held a public comment session today on proposed hospital budgets for 2012, kicking off a six-week review process in which they will work to ensure the budgets are in keeping with the statutory net patient revenue increase of 4 percent.
The state’s 14 hospitals are required under Act 128 to bring net patient revenue increases below 4.5 percent in 2011 and lower, to 4 percent, in 2012.
When Gov. Peter Shumlin signed Act 48 into law, the public oversight commission that had been conducting budget reviews in previous years dissolved. This year, in lieu of that process, Steve Kimbell, commissioner of the Department of Banking, Insurance, Securities & Health Care Administration, and deputy commissioner Mike Davis will review the budgets with public input gathered at today’s comment session.
The public session was hosted in Montpelier’s Vermont Interactive Television space at the Department of Labor building. The turnout was very small. Three commenters, all from the Healthcare is a Human Right campaign, were present at the Montpelier location and two others participants commented remotely from VIT locations in Rutland and Williston.
The Montpelier commenters’ concerns focused on both the new budget review process and the pending sale of five Fletcher Allen dialysis clinics to Fresenius Medical Care North America, a national firm based in Waltham, Mass.
Steven Kung, a Healthcare is a Human Right activist, said the new budget review process provided less transparency because members of the public are not able to directly question hospital administrators with regulators present.
“It’s a violation of our campaign’s principle of transparency,” Kung said.
Jeanne Keller, a registered lobbyist for Fleischer-Jacobs Group, an insurance broker, echoed these concerns.
“To not question the regulated entity in front of the regulator does somewhat reduce the level of accountability that the public can bring them to,” Keller said.
Kimbell said the process was as transparent as ever.
“The numbers are in the system,” Kimbell said regarding the budget data under review. He told Kung that while no hospital administrators were subject to public comment sessions under the official review process, they would likely answer any questions he posed to them privately.
In response to concerns about Fletcher Allen’s sale of dialysis clinics, Kimbell said the hospital “needs a permit from me, and we’re right at the beginning of that review process. I don’t have an opinion about it yet.”
Keller’s comment focused on the state’s choice of a 4 percent increase ceiling. She questioned Kimbell on the state’s contribution in that increase.
“Did that state budget have an increase of 4 percent toward programs that pay out to hospitals?” she asked. If state programs aren’t increasing payments to hospitals, she said, consumers are paying an unfair portion of the increase.
Hospitals are required to stay at or below the 4 percent increase, but certain costs such as information technology investments and private practice acquisitions can be exempted from these calculations.
Davis stated that while 10 hospitals’ budgets came in over the 4 percent increase limit, only one – Copley Hospital in Morrisville – was still over the limit if all possible exemptions were accepted by BISHCA.
Ken Davis, an insurance broker commenting from Rutland, called the exemptions cost-shifting.
“I see this cost shifting, and I’ve been seeing it now for 40 years [in the insurance industry,” Davis said. “This has got to stop.”
Davis labeled the budget review process “voodoo economics” and said that while the state is trying to enforce a limit, exemptions allow providers to bring costs above it and remain within the law.
“Somebody’s paying the other part of it,” he said.
