[A]dministrators at Vermont’s two ambulatory surgical centers – one of which has not yet opened its doors – say proposed state regulations could jeopardize their existence.
Representatives of Vermont Eye Surgery and Laser Center in South Burlington and the proposed Green Mountain Surgery Center in Colchester converged on the Statehouse Friday morning to raise concerns about S.278, which would increase state supervision of standalone surgical facilities. Both centers provide outpatient procedures only.
In addition to new regulatory requirements, the bill also includes taxes and fees that could add up to hundreds of thousands of dollars annually. That could wipe out the centers’ profit margin, administrators said.
At issue are surgical centers that aren’t affiliated with UVM Medical Center, the state’s largest hospital, which has made an effort to create a large network of providers in Vermont and New York state.
Vermont has very little competition for patient services and has only two independent centers: Vermont Eye Surgery and Laser Center received its state permit in 2007, while Green Mountain Surgery Center received a certificate of need from the Green Mountain Care Board in 2017 after two years of wrangling with state regulators.
Dr. Greg McCormick, a surgeon at the South Burlington center, said “new financial burdens … threaten the viability of our organization and are an unfair burden on a small group of doctors who are doing really good things for Vermont.”
Sen. Claire Ayer, D-Addison and chair of the Senate Health and Welfare Committee, said there’s room for compromise. But she believes the bill is an important regulatory initiative for a relatively new type of health care facility.
“I feel like it’s our responsibility … to make sure we do it right,” Ayer told center representatives. “And what I heard from you is, you’re already doing most of this. I feel like we can come to a good place.”
Advocates counter that the independent centers provide increased patient access to procedures at lower prices.
Amy Cooper, who is managing the Green Mountain Surgery Center project, said Vermonters are “losing their options for where they would like to receive care” due to health care consolidation.
“We need more and better access to specialists’ care, which can be provided by (ambulatory surgical centers),” Cooper told lawmakers.
Burlington-based UVM Medical Center and other hospitals in Vermont have lobbied against the creation of both of Vermont’s independent surgical centers because the centers could impact hospital revenues. The Vermont Association of Hospitals and Health Systems, a hospital lobbying group that gets most of its funding from UVMMC, has argued that there’s no clear need for surgical centers. The association says the independent centers could drive up the overall cost of health care in Vermont.
Last year, when the association fought the approval of Green Mountain Surgery Center, hospital representatives argued that the independent surgery centers “would fall outside of most of Vermont’s regulatory structures.”
Ayer’s bill – along with H.824, a companion bill in the House – attempts to change that.
The bills impose new regulatory and reporting requirements, including a mandate that the Green Mountain Care Board review and approve surgical center budgets in the same manner that the board approves hospital budgets.
There also are financial requirements, the largest of which is a 6 percent provider tax levied on a surgical center’s net patient revenues. Hospitals also pay the provider tax, though there are provisions for reimbursement that may not apply to surgical centers.
Surgical centers also would be liable for a $2,000 annual licensing fee. And they would have to cover a portion of the operating costs of the Green Mountain Care Board; the Office of the Health Care Advocate; and the Vermont Program for Quality in Health Care Inc. – a responsibility already borne by hospitals, insurers and others.
Cooper speculated that the purpose of S.278 might be to “make this fair to hospitals if we’re going to have another (surgical center) open in the state.” But Ayer said that was “not the prime motivation.”
“The idea is that we have a health care system to ensure cost (containment) and quality and access for patients,” Ayer said. “You obviously will offer something new in cost, for sure, and we expect excellent quality. But (the bill) is to make sure people are under the same umbrella, and all health care providers are contributing to improving health care.”
Cooper countered that “different kinds of providers are best regulated in different kinds of ways.” She said surgical centers have limited licenses because they have smaller budgets and much smaller staffs than hospitals. Green Mountain Surgery Center is slated to have 22 employees on the payroll, 19 of whom will be clinical staffers.
By comparison, UVM Medical Center, the state’s largest hospital, employs about 6,500 people.
Cooper said surgical centers are for-profit entities that, unlike nonprofit hospitals, are liable for property taxes.
She believes the new taxes and fees in S.278 could add up to at least $500,000 annually. According to her budget projections, that could easily wipe out the center’s income even after a few years of operation.
Green Mountain Surgery Center’s developer is on track to break ground this spring. But Cooper says the passage of S.278 “would seriously interrupt our progress in getting the center off the ground.”
In contrast to the fledgling Green Mountain Surgery project, Vermont Eye Surgery and Laser Center has been operating for 10 years. McCormick, however, shares Cooper’s concerns about the bill’s potential impacts.
In fact, his business may be affected in more ways than Cooper’s. While S.278 is partially built on conditions imposed last year in Green Mountain Surgery’s state certificate of need, those conditions were not part of Vermont Eye Surgery’s certificate issued more than a decade ago.
For example, McCormick objected to a requirement that all of his center’s doctors have admitting privileges at a local hospital. Such a requirement is unnecessary and “bizarre” given his center’s limited mission, McCormick said.
McCormick also took issue with a requirement that Vermont Eye Surgery’s doctors must “be willing to accept any insurance.”
“We trusted the state and the (certificate of need) process,” McCormick said. “Please don’t change the rules, jeopardizing our ability to continue our good work.”
Cooper also wondered about the proposed legislation clashing with both the spirit and the letter of her center’s certificate of need. Ayer said she has no intention of doing that.
“I think I speak for the committee in that we didn’t want to interfere with the (certificate of need) process or override the Green Mountain Care Board,” Ayer said.
A Green Mountain Care Board spokesman said the board has not discussed S.278 and “currently does not have a position on the bill.”
The care board, however, has explicitly left the door open for additional state laws governing ambulatory surgical centers.
The board, in its certificate of need approval for the Green Mountain Surgery Center last year, urged the Legislature to “examine whether these entities – new to our state but prevalent in others – should be subject to more stringent regulatory oversight to ensure that they in fact reduce health care costs, provide high quality care, and to prevent any increase in unchecked utilization.”
