The Scott administration plans to propose a $300 million bail out of Vermont’s health care system, which has been crippled by the Covid-19 pandemic.
Agency of Human Services Secretary Mike Smith told lawmakers and regulators Wednesday that he planned to make the relief package available to a broad array of medical professionals, including doctors, hospitals, dentists, eye doctors and mental health providers.
“We kept the system from collapsing,” Smith told the Green Mountain Care Board. “Now we need to stabilize it over time.”
The money would be drawn from $1.25 billion in federal coronavirus relief funds, and will be presented to the Legislature for approval by mid-June, he said.
The announcement came after representatives from health care trade groups offered a bleak prognosis for Vermont’s health care system. The state hospital system is losing $100 million a month — and will continue to see similar losses for the foreseeable future, said Devon Green, of the Vermont Association of Hospitals and Health Systems. More than a fifth of independent physician practices may not survive the economic crisis, according to Susan Ridzon, executive director of HealthFirst, an organization that advocates for doctors in private practice.
Advocates for long-term care facilities, hospice and elder organizations also painted a grim picture of too few staff, inadequate personal protective gear, and dwindling cash.
“We have significant increases in costs, significant reductions in revenue, ongoing staff shortages and intense workforce needs, and we really think that these are going to be long term problems that extend well beyond state fiscal year ‘21,” said Laura Pelosi, from Vermont Health Care Association, which represents long-term care facilities.
Hospitals around the state have received $117 million in grants and $159 million in loans from the federal government.
That isn’t enough, advocates for the health care industry told legislators. Hospital revenues plummeted nearly 70% after hospitals canceled elective surgeries and non-urgent appointments during March and April, Green said. Facilities across the system are short-staffed; employees have quit due to Covid-19 concerns, or remain on furlough.
State and hospital officials said they’re expecting a second wave of Covid-19 cases, creating more uncertainty about when business will return to pre-pandemic levels.
“We really, really, really need to keep our entire healthcare system, including the hospital system, strong,” Green said.
Smith said he had reserved up to $300 million in coronavirus relief monies for the medical industry. Health care organizations and practices could apply for the cash, based on revenues lost and increased costs due to the pandemic. Smith said he hadn’t crafted guidance for how the money would be used, but it wouldn’t be a carte blanche affair.
The use of the funds could be audited, for instance, and the financial burden could not be passed on to Vermonters through increased costs or higher insurance rates, he said.
“There will be strings attached to this money,” he said. Smith also is considering a block on rate increases for insurance companies.
The details of the proposal have yet to be ironed out.
Finance Commissioner Adam Greshin said he didn’t have any details. It was also news to health care committee chairs Sen. Ginny Lyons, D-Chittenden, and Rep. Bill Lippert, D-Hinesburg, who urged Smith to keep the Legislature involved.
Still, Lyons said she supports the idea. When considering how to allocate federal money, “the business of health care and caring for people has to be absolutely number one,” she said.
On Wednesday, the Green Mountain Care Board also loosened guidelines for hospitals seeking approval for next year’s budget. The board pushed back application deadlines, and limited the data that hospital administrators must submit to regulators.
This year, hospitals can seek two rate increases: a short-term increase to offset Covid-19 losses, and a standard increase.
“The Board recognizes the hospital budget submission challenges created from the COVID-19 pandemic and these uncertain and ever-changing times,” the board wrote in its budget guidance.