[A] member of the Green Mountain Care Board has raised questions about the growth of Central Vermont Medical Center’s practice in Berlin and the budgeting process its umbrella organization uses.
Con Hogan said Thursday the board will open up a special review of the growth of a facility on the Barre-Montpelier Road in Berlin, and he suggested the hospital might need to be fined up to $100,000.
Additionally, Hogan said the hospital budget process at the board is based on trust and that the University of Vermont Health Network has broken it by allowing Central Vermont Medical Center, a member of the network, to keep taking in more revenue than was budgeted.
The hospital exceeded its budget by $16.1 million, or 9.2 percent, in fiscal year 2016. In the year prior, the hospital took in $7.8 million, or 4.7 percent, more than budgeted.
“We have been involved with this process for five years now, and it’s always been done in a position of mutual trust and collaboration,” Hogan said. “That’s what’s made it work.”
“We gave, we took, we negotiated, and we came up with numbers — the best numbers we could, not always perfectly correct — but that trust was important,” he said. “And I’ve got to tell you, I’ve lost my trust in Central Vermont (Medical Center).”
A week earlier, Hogan questioned how the hospital continued to expand its urgent care and rehabilitation care operation on the Barre-Montpelier Road in Berlin. He asked whether the hospital decided to grow that operation over time to avoid the certificate of need process, in which the board decides whether to allow capital investments and aims to limit the growth of health care costs.
The board had determined years ago that the ExpressCare clinic didn’t meet the cost threshold for formal regulatory review.
Cheyenne Holland, the chief financial officer for CVMC, said at the previous meeting that she would send him more information on the expansion soon. Hogan said Thursday, after reading that additional information, that the facility cost almost $4 million — about half the amount by which the hospital went over budget in 2015.
“We are going to take that up under a special CON review,” Hogan said. “I have no idea what that’s going to lay out, but from a personal point of view, I’ve even thought about the provision in the law that allows us to fine the hospital for somewhere between $40,000 and $100,000. That’s how serious loss of trust can be.”
Hogan went on to criticize the leadership at the UVM Health Network, which was formed in 2011 to be an umbrella organization for UVM Medical Center and CVMC. The network now has three hospitals in New York and is adding Porter Medical Center in Middlebury.
“We’ve had trust with the (UVM) med center, and I think that will continue, but they own you now, and I don’t see any evidence that the med center worked hard on your budget,” Hogan told Holland at Thursday’s meeting.
“Yes, there were savings in purchasing supplies and there were savings associated with using physicians part time to fill gaps and work those kind of things through, but I don’t think the med center to this point in time has really done its job as it relates to your budget,” he said.
“We’ve been accused of being too close to the hospitals, publicly,” Hogan continued. “But that closeness is based on trust, and we believe what they give us and what they tell us, and I don’t believe you folks ever — and I would like you to check your records — spoke about this expansion over the four years or so when it occurred.”
Holland told Hogan the hospital informed the board about its plan for the Express Care practice, which opened in 2014.
“I can go back to 2006,” Holland said. “We began this in 2006, not just over four years,” she said of the facility on the Barre-Montpelier Road.
Hogan replied: “I would like to see the record on that.”
Holland said: “We’ve had legal review of this as well and feel assured that we haven’t violated any of the CON provisions.”
Hogan told Holland she should not be the one to answer his questions. He said the board of trustees at the UVM Health Network should be brought in to answer for CVMC and the network.
“I also would like at some point, and we’ll schedule it, to have your board here so we can understand the depth of their review of your budget, and the review over time as to how you’re performing,” Hogan said.
Hogan told the UVM Health Network, which will have to submit a third budget for Porter Medical Center this year, to continue submitting separate budgets for its hospitals. The network has been asking the board to consider them as one entity instead of as individual hospitals.
“I think I’m speaking for the board that, in this stage in the game, we think having separate budgets for the (UVM) med center, Central Vermont and then Porter, is the way to continue,” Hogan said.
He said filing one collective budget for three hospitals “may save you a little work in the way those things have been put together, but it’s the clearest way that we have to understand” what’s going on.
Marc Stanislas, the director of finance for the UVM Health Network, told Hogan at the meeting that he hears the board’s concerns.
“We hear you about the monitoring of all of the affiliates within the UVM Health Network, and there’s a responsibility of Health Network corporate to maintain appropriate level budgets within all of its affiliates,” Stanislas said. “I also want to let you know that we hear that.”
In all, eight hospitals went over budget in fiscal year 2016. The board declined to vote yet on what to do about that. The board’s next meeting is Wednesday.
