Health Care

Senate approves 16-bed psychiatric facility to replace Vermont State Hospital

Vermont State Hospital. VTD/Josh Larkin
Vermont State Hospital. VTD/Josh Larkin

The Vermont Senate approved the governor’s plan for a 16-bed, state-owned psychiatric facility as part of a decentralized, regional mental health system on Wednesday night. The vote was 28-0.

Though in the end the decision was unanimous, senators debated the issue for nearly four hours and defeated three amendments which would have expanded the replacement facility for the Vermont State Hospital to potentially accommodate at least 25 beds.

The discussion centered on the merits of a community-based system and on the uncertainty regarding federal funding for the construction and operating costs for the facility, which would likely be sited in central Vermont.

Republicans and liberal Democrats joined hands in opposition to the governor’s plan; Shumlin Democrats outnumbered the minority two to one.

Proponents of the smaller facility cited financial concerns and said they had faith that a community-based approach would work; opponents questioned whether patients from northern Vermont who need intensive mental health services would be turned away because of a lack of bed capacity.

There were fundamental disagreements on community versus institutional care, but the debate largely revolved around numbers — the number of beds, the number of patients, the number of caregivers and especially the amount of money it would cost to run the new system.

Senate President Pro Tempore John Campbell told the senators that they had a choice between an institutional model and a community-based model with one smaller central facility — and the difference between no federal support and $8 million to $12 million a year in Medicaid subsidies. The 60 percent match isn’t available for Institutes for Mental Disease, or standalone psychiatric facilities with more than 16 patients, he explained.

“We’ve heard many times about what the Centers for Medicaid and Medicare will pay for and won’t pay for,” Campbell said. “The federal government decided they were going to make a policy decision we were not going to go along with the institutionalized model.”

The state would need to obtain a federal waiver to operate a larger facility. Campbell held up a letter that outlined a conversation the governor had with CMS officials. Shumlin says the federal agency will not fund a facility with more than 16 beds. Calls and emails for information about the waiver from have not been returned by CMS.

Sen. Peg Flory, R-Rutland, asked why the governor wasn’t seeking help from the congressional delegation for a waiver, in light of Shumlin’s assurances in press appearances that the state could obtain waivers from the federal government for his signature, single-payer health-care reform plan with assistance from Rep. Peter Welch and Sens. Patrick Leahy and Bernie Sanders.

“I can remember being on the floor passing bill requiring five waivers, two of which couldn’t be applied for for five years,” Flory said. “We have a wonderful congressional delegation that will help us get the waivers. I agree with that. We have a wonderful delegation that would help us.”

Another Republican senator, Joe Benning from Caledonia County, pressed for an option to expand a 16-bed facility to 25 beds if needed. He cited monthly declined admission numbers from regional hospitals. Forty patients a month are turned away by Fletcher Allen Health Care in Burlington, he said. Rutland Regional and Brattleboro Retreat also decline patients access to care because of a lack of capacity. When Fletcher Allen goes off-line, Benning questioned whether the community-based system would have enough beds to accommodate roughly 160 patients who regularly need intensive psychiatric care, since 68 percent of those patients live in northern Vermont and the governor’s plan relies on facilities in southern Vermont. Benning’s amendment was defeated 10-19.

“There are two steps to the financial question of how do we pay for what we’ve built — that’s where the FEMA money comes into play — and how do we pay for what we’ve built to operate it,” Benning said. “The Medicaid money is in a state of flux. No one can tell us if we will receive the money. … If we’re unable to obtain waivers to continue operations already granted to us for $10 million in costs if we don’t get that waiver, then the cynic in me says how is it then possible to obtain waivers to run a $5 billion health-care system. If the governor believes we can do that then there are ways to get operating costs for this facility.”

Sen. Claire Ayer, D-Addison, said the debate was not about 16 beds or 25 beds for patients with severe psychiatric problems, but about 41 or 54 beds that would be available to Vermonters in the proposed community system model.

“It’s about providing intervention and support at the local level,” Ayer said.

Sen. Philip Baruth, D-Chittenden, said lawmakers frequently repurposed a quote from the film, “Field of Dreams” — “If you build it they will come” in discussions about building a facility with more than 16 beds that would be “magically” filled.

“I don’t believe that myself,” Baruth said. “If you followed that logic you’d build nothing and no one would come. That is simply fantasy.” His amendment for a 25-bed facility, which was co-sponsored by Sen. Tim Ashe, D/P-Burlington, failed 10-19.

The legislation, H.630, was precipitated by Tropical Storm Irene. The Vermont State Hospital was damaged on Aug. 28 when floodwaters from the storm swamped the Waterbury facility, which housed 54 patients and cost about $22 million to operate. Because the hospital had been decertified by the Centers for Medicaid and Medicare the state was not eligible to receive federal funding.

That changed when patients were placed in regional hospitals after Irene. The state received a 60 percent match for qualifying patients, totaling about $10 million a year.

Gov. Peter Shumlin urged lawmakers to move quickly to approve a plan for a decentralized system of mental health care that includes “step-down facilities,” more supports from a regionalized community care system, peer services and a state-owned hospital for patients with severe mental illnesses for 16 patients. The Department of Mental Health would also outsource services for “level one” patients to regional hospitals in southern Vermont. Brattleboro Retreat would provide 14 beds and Rutland Regional Medical Center would have six beds. The state would pay for new units to accommodate the additional patients at the private facilities.

Under the governor’s plan, about 41 patients would receive care in intensive institutional settings and an additional 40 patients would be treated in community-based residential programs. The state would plow new money — about $9 million a year — into local support services.

Making the new system work financially is difficult because much of what the state wants to do is tied to complex rules and formulas for federal funding. The Federal Emergency Management Agency will likely back the construction of a new facility with a 90 percent federal, 10 percent state match, after the state’s insurer pays its share of the replacement cost for the state hospital in Waterbury.

Lawmakers have said they don’t want to leave one-time FEMA money for construction on the table.

Though federal funding will likely be available for the structure, it’s possible the Centers for Medicaid and Medicare could drop funding for annual operating costs if the state builds a facility with more than 16 patients, according to lawmakers and Shumlin administration officials.

The Senate vote comes on the heels of a mass layoff of 80 Vermont State Employees Association members. The Shumlin administration announced the reduction in force of the workers last Friday.

After Irene, state workers had been reassigned and asked to provide support for patients who were moved to Rutland Regional Medical Center, Fletcher Allen Health Care and Central Vermont Medical Center. In many cases employees were asked to work 12-hour shifts and drive long commutes to their new workplaces, leaving their families for periods of time.

Sen. Vince Illuzzi, R/D-Essex-Orleans, pushed for a union-friendly amendment that would have created a 50-bed hospital and required regional hospitals to hire state employees. The proposal failed 10-18.

Though senators praised state employees for their dedication in the aftermath of Irene, they stopped short of approving provisions for early retirement options, or guaranteed placements at local hospitals or in other positions in state government.

State hospital workers testified in hearings that the Shumlin administration’s human resources department gave them the option of taking jobs with lower pay in the private sector or state government.

Conor Casey, a lobbyist for VSEA, said the Senate vote was “very difficult for our members.”

“When the governor makes such a bad decision, we look to the Legislature to intervene,” Casey said. “We thought the Illuzzi amendment was a very reasonable proposal. It allowed people to continue to do the jobs they loved.

“We know the Legislature can’t rescind reductions in force from the executive branch, so these are the only proposals we can make,” Casey said. “The governor talks about Vermont strong; this decision was Vermont weak.”

The Labor Caucus met on Wednesday afternoon to pass a resolution honoring the “heroes of Tropical Storm Irene,” the state workers with the Vermont State Hospital who worked long hours far from home to ensure that patients received good care at regional facilities.

The stage is now set for contentious conference committee negotiations, which will likely take place after the next week’s Town Meeting Day break. Though the House and Senate bills are nearly identical, the House overwhelmingly supported a 25-bed facility on Feb. 2 (story here), and debate over that issue will likely be intense.

The Senate plan does not include an option to expand the 16-bed facility to 25 beds if more capacity is deemed necessary at a later date.

Such an expansion clause, as proposed by Benning, could be the compromise pressure point in conference committee negotiations. When asked if the administration, which has been adamant about a 16-bed solution, would consider a provision that would allow for an expansion of the facility from 16 beds to 25 beds, Jeb Spaulding, secretary of the Agency of Administration, didn’t rule out the possibility. He said: “We’d prefer not.”

Editor’s note: This story was updated at 6:15 a.m.

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Anne Galloway

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  • Since Brattleboro retreat is an IMD with more than 16 beds are they going to write their losses off as a capital loss or is the State going to pay for those beds annually?

  • If like myself, one could not keep up with all the amendments, the Senate version of H. 630 will be posted online in the Senate Journal (
    ) either later tonight or tommorrow morning as well as on the Joint Fiscal mental health/VSH page (

  • Curtis Sinclair

    Hopefully the 27 year battle over VSH is coming to an end. That’s right – it was in 1985 that the legislature decided to close VSH for good. It has been nothing but gridlock ever since.

  • Fred Woogmaster

    Thanks for this extremely informative(and important)well written piece.

  • David Dempsey

    Now that Shumlin is assured of having a bill on his desk, I would like hear his plan for getting Vermont out of the crisis we are in and averting the likely tragedy he talke about. As he said, lives are at stake here and the Senate did as he asked.

  • Pete Everett

    Curtis, you have made valent points to the need of more community services and to get rid of institutions. However, whether there is 16 state run beds or 50, the Retreat, FAHC and Rutland are still institutions, so all you have been saying is null and void. Now there will be 3 acute institutions as opposed to just 1. Those other 2 institutions are not going to have well trained staff, they may in 3-4 years, but until that time staff will not have the knowledge to treat Level 1 patients. Taking away the staff that have years of experience and replacing them with less experienced staff is not going top be the right move for these patient. Also why don’t you try to find information on the multiple deaths that have occurred in the past 3 months at the retreat. You can’t because it is a private sector who doesn’t have to release this information, like a public institution does. Also guess who the Govenor’s main 2 contributors are to his political campaign? You guessed it The Retreat and Rutland Hospital, which to my knowledge is against the law for a public voted official to benefit a private contributor over the public sector. Like i said I fully agree with the need for more community care services, but there are still going to be institutions within the state and some may be done illegally.

  • Curtis Sinclair

    At least the Retreat, FAHC and Rutland hospitals have not failed inspections year after year after year. The state has shown a complete inability to run a psychiatric hospital. Is it any wonder that the governor wants to have private hospitals take on some of the patients? Let the state show it can properly run a 16 bed hospital before pouring more money into it.

  • Pete Everett

    They haven’t failed because they don’t have the same restrictions. Also, they don’t have to release any information to the public like VSH does because they are in the private sector.

  • Curtis Sinclair

    Private hospitals get inspected by CMS. There have been private psychiatric hospitals that have had to close because they lost CMS certification. That quickly gets patients out of the bad situation. But when a state run hospital loses certification it stays in operation, continues to mistreat patients, and just starts sucking up state taxpayers money that should be going to community services.

    There is plenty of evidence to show that managed competition in public service delivery drives efficiencies that saves taxpayers’ money while at the same time improving services. With VSH failing for a decade isn’t it time to try this type of model?

    From an article by Leonard Gilroy of the Reason Foundation:

    “Florida has contracted with the private sector to operate several of its psychiatric facilities. In 1998 it contracted with a private company to operate South Florida State Hospital, an aging facility which had never been accredited in its history and which was facing a major class action lawsuit concerning patient abuse and poor conditions. Within two years, the private operator was able to achieve accreditation for the existing facility (removing the lawsuit), while at the same time financing and building a new, modern facility to replace it. No capital dollars were involved and the state will own the new facility when the debt is retired.”

  • katy langdell

    I wonder, was there any further CMS/DOJ/JACHO investigations into this?? Curtis.. it’s an interesting read!!

  • katy langdell

    just a follow-up site with more information regarding my last posting..

  • katy langdell


    (Rutland Mental Health services, Rutland Regional, and Brattleboro Retreat, all involved )


    there are many interesting reports on this site.. check it out yourself..

    yes they may seem outdated.. however some keep referring to past incidents at VSH as if they happened yesterday.. truth be told.. the incidents happened in 2003 and 2004, all reports on this site as well…

  • katy langdell

    ON OCTOBER 10, 2003

    FYI: the patient was a 16yo boy, who had experienced extensive trauma already.. this is what the providers put this kid through…. APPREHENSABLE!!!

  • Curtis Sinclair

    When abuses happen at other facilities they conduct investigations and implement plans of corrective action. When there were abuses at VSH their administration denies doing anything wrong, documents the incidents poorly and fails to take corrective action. That is why CMS has not certified VSH for the past decade. That is why DOJ found VSH guilty of violating patient’s civil rights.

    Hospital staff are not helping their cause by denying the problems at VSH or pointing fingers.

  • This is a truly interesting cunundrum. As someone who had to be sent to VSH years ago because there was no opening at FAHC, I believe strongly that the 16 bed option is preferable. However, I am appalled to learn that FAHC and CVMC will not have the same accreditation as the Rutland and Brattleboro hospitals will have. I believe with the feds that having a psychiatric facility attached to a “regualar” hospital is preferable with any emergency admission. Dual and triple diagnoses are not uncommon and having neurologists and other specialists on staff is very important. It seems that there are not very many folks around who remember the deinstitutionalizing of Brandon Training School as I do! Perhaps the amendment will be a good way to solve the problem for now. Build it only if we need it in the future, but keep CVMC and FAHC open also!