Health Care

UVM Health Networks seeks 7% increase in commercial insurance prices

A hospital bill from UVM Medical Center. Photo by Mike Dougherty/VTDigger

The state’s largest health care provider is asking regulators to let it increase its prices for commercial insurers by an average of 7% next year.

The University of Vermont Health Network submitted a combined $2 billion spending plan for its three hospitals in Burlington, Berlin and Middlebury to the Green Mountain Care Board on Thursday. (The network also includes three hospitals in northern New York, but they operate outside the board’s jurisdiction.) A crucial part of its proposal: how much it would like to increase its prices.

Overall, the network would like to hike net patient revenues by 6% next year. But that figure assumes Medicaid will keep its reimbursement rates flat and Medicare will go only as far as a 2.5% bump. To make up for what government payers won’t pay, the network says it needs to raise rates for private insurers by about 7%. About half of all Vermonters get their health care coverage via commercial carriers.

“We are continuing the long-term work of carefully emerging from the Covid-19 pandemic, a process that will take years,” John Brumsted, the network’s CEO, said in a statement. “Through careful and deliberate expense management, we are aiming to keep costs down while ensuring we move forward with the high-quality care and services our patients need and deserve.”

The topline 7% figure is also an aggregate of each hospital’s proposed commercial rate increase. The University of Vermont Medical Center seeks a 7.05% increase. The Central Vermont Medical Center in Berlin seeks a 7.41% increase. Porter Medical Center in Middlebury seeks a 5.86% increase.

Labor costs continue to be the network’s greatest cost-drivers, officials say, followed by rising pharmaceutical prices.

“Similar to last year, our labor and pharmaceutical expenses are not factors unique to Vermont — these are regional and national challenges, and are largely beyond the UVM Health Network’s or the board’s control,” hospital officials wrote in their budget summary to regulators.

July 1 is the deadline for all 14 hospitals in the state to submit their budget proposals to the board, although information for other providers is not yet public. The board will take a first look at hospital budgets on July 28 and schedule public hearings through August. A final decision by regulators must be made by Oct. 1, the start of the federal fiscal year.

Last year’s hospital budget approval process was contentious. A showdown between regulators and providers ultimately ended with the Care Board ceding to the hospitals’ demands, although regulators said they did so not to jeopardize federal Covid-19 relief funds.

Mike Fisher, the state’s health care advocate, said he hadn’t yet had time to review UVM’s budget proposal in full, and his staff would be reviewing it in the coming weeks to weigh in before the board later this month. But he warned the cost of ever-rising hospital budgets would ultimately be borne by everyday consumers.

“Hospital commercial increases lead directly to increases in premiums and out-of-pocket costs, and many Vermonters are already priced out,” he said.

Health insurers, meanwhile, submitted their proposed rates for next year before regulators in May. The requests were a mixed bag. Blue Cross Blue Shield of Vermont, the state’s largest insurer, requested an 8% decrease in health insurance rates for small businesses and nonprofits — a first for the company. MVP Health Care, on the other hand, filed for a 5% increase. Both insurers filed for much larger hikes for plans offered through Vermont Health Connect, though federal dollars could offset the cost.

Public hearings on insurance rates are scheduled for July 19, 21 and 22. A board decision is expected Aug. 5.

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Lola Duffort

About Lola

Lola Duffort is a political reporter for VTDigger, covering Vermont state government, the congressional delegation and elections. She previously covered education for Digger, the Concord Monitor in New Hampshire and the Rutland Herald. She has also freelanced for the Miami Herald in Florida, where she grew up. She is a graduate of McGill University in Canada.

Email: [email protected]

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