A Senate committee has dropped a controversial plan to regulate and tax Vermont’s independent surgical centers.
After weeks of debate, the Senate Health and Welfare Committee on Thursday unanimously voted against S.278 and its proposed amendments.
Sen. Claire Ayer, D-Addison and the committee’s chairwoman, had been a strong supporter of regulating surgical centers. But Ayer said it became clear that any decisions made this session would be premature.
โI think we’ve come to a place where we’re all not sure that we’re ready to move forward with anything,โ Ayer said. โIt’s too fast. There are too many open issues.โ
The decision was good news for surgical center advocates. Amy Cooper, who manages the proposed Green Mountain Surgery Center project in Colchester, said the bill threatened to derail a planned 2019 opening.
The legislation’s demise is โa really good result for us, but also for all of the businesses and patients and community stakeholders who’ve been supporting us,โ Cooper said.
Independent surgical centers are a relatively new addition to the Vermont health care landscape: Only one such facility, the Vermont Eye Surgery and Laser Center in South Burlington, is currently operating.
Proponents of ambulatory surgical centers say they provide increased health care access at prices that are lower than hospital rates. But opponents โ including hospital administrators โ argue that there’s no need for the centers and contend that they could drive up the overall cost of health care.
There also has been concern that the centers fall outside traditional forms of state health care regulation, such as Green Mountain Care Board budget review.
Ayer’s bill sought to regulate and tax ambulatory surgical centers in new ways. In addition to imposing licensing requirements and care board oversight, S.278 also imposed several taxes and fees including a 6 percent provider tax levied on net patient revenues.
Ayer pointed out that some of the proposed regulations already were in Green Mountain Surgery Center’s state certificate of need, issued last year. She also said it’s fair for surgical centers to contribute to the state’s health care regulation system.
On Thursday, before the committee’s vote, Ayer said she wasn’t questioning the centers’ quality of care. Rather, she said, โthe issue is how ambulatory surgical care centers fit into the whole picture of health care and health care reform.โ
Surgical center administrators pushed back, saying the bill’s regulatory requirements and financial burdens could undermine their cost-cutting mission and possibly even put them out of business.
Cooper argued that surgical centers, given their small budgets and small staffs, should not be regulated in the same manner as hospitals.
โIt was clear from the testimony that, one, surgery centers are so different from each other, and two, surgery centers are so different from hospitals,โ Cooper said. โThere were a lot of complications that hadn’t been considered.โ
Dr. Juli Larson, founder and medical director of the eye surgery center, told committee members on Thursday that S.278 โcould eliminate (ambulatory surgical centers) and drive up health care costs.โ
โOne has to ask, who really benefits from this legislation?โ Larson said. โIn my opinion, certainly not the patients of Vermont, nor the employers of Vermont. It seems to me this gives all power to the hospitals by reducing competition.โ
Committee members subsequently aired their own concerns.
Sen. Ann Cummings, D-Washington, said the committee was โshooting in the darkโ due to a lack of information. Even if the bill was amended to allow for more time to determine appropriate taxation, Cummings said that still could affect Green Mountain Surgery Center’s efforts to get up and running.
โTheir bank is looking at their costs, and we’ve got a great big list of taxes and fees which are wide open โ the provider tax being the big one,โ Cummings said.
Sen. Dick McCormack, D-Windsor, said it’s โa good idea to be governed by caution.โ At one point in the debate, he wondered, โWhat is the situation if we do nothing?โ
That’s what the committee decided to do by voting against the bill. There was some discussion of appointing a study committee to look further at ambulatory surgical center regulations, but that didn’t gain any traction.
S.278 has a companion bill in the House, H.824. That bill’s language has not been the subject of any committee testimony and likely won’t be advancing this session.
The House bill’s lead sponsor, Rep. David Yacovone, D-Morrisville, said he’s still in favor of regulating ambulatory surgical centers.
โThese issues don’t go away,โ Yacovone said Thursday. โWe ask (medical) providers to pay the provider tax. Why we wouldn’t ask these folks to is beyond me. It’s called a level playing field.โ
Yacovone also said he’s concerned that hospitals, which must maintain high overhead costs to provide a wide variety of services, will be negatively impacted by independent surgical centers.
โThat revenue loss hurts the system as a whole,โ he said.
The issue could come up again as soon as next year. But it likely would again spur a strong response from surgical centers.
โCertainly, we would oppose any bill that was like this one,โ Larson said. โBecause this one just did not make sense for so many reasons.โ
