The University of Vermont Health Network asked regulators Wednesday to OK significant increases in service charges for two of its hospitals.
The discussion started just hours after the Green Mountain Care Board refused a similar request from Vermont’s second-largest hospital.
The board is expected to vote on UVM Health Network’s request as early as next week. If approved, the increase would ratchet up the cost of health care for self-insured small businesses almost immediately. Vermonters covered by commercial insurance would likely pay higher premiums next year.
The midyear charge adjustments for the three hospitals echoed each other in referencing the severe financial strain that the pandemic and rising personnel costs have placed on the state’s health care system.
The network — the largest hospital operator in Vermont — is requesting a 10% price increase for two of its hospitals, UVM Medical Center in Burlington and Central Vermont Medical Center in Berlin. Together, those hospitals expect a $44 million deficit this year.
Whereas the care board on Wednesday morning took an almost combative approach to Rutland Regional Medical Center’s request, the afternoon discussion was collegial.
Perhaps in a sign of things to come, outgoing network chief executive John Brumsted was present at the virtual hearing, but Al Gobeille, former Agency of Human Services secretary and a network employee since 2019, delivered most of the remarks in a polished appeal. There were oblique and not-so-oblique references to the political power Gobeille wields as a former state regulator.
“We’ve been an entity that’s suffered rate cuts repeatedly,” Gobeille told the board. “And now we’re in dangerous water, and we have no ability to raise our prices without you.”
Gobeille harped on the network’s contribution during the pandemic, from staffing rehabilitation and nursing home beds to shoring up the state’s blood supply when the Red Cross could not. He said the bed shortage at the Brattleboro Retreat and the state psychiatric hospital in Berlin only contributed to the network’s distress in recent years.
Green Mountain Care Board members took issue with the timing of the UVM network’s request. They said a midyear charge increase could be a tough pill to swallow, particularly for the most vulnerable Vermonters. They also said Vermonters should prepare for higher premiums in the next fiscal year, which begins Oct. 1.
Kevin Mullin, chair of the care board, predicted the next budget cycle would feature the highest hospital rate increases since the inception of the Green Mountain Care Board in 2012.
The board set the stage for higher rates on Wednesday, when it voted 3-2 to approve an aggregate rate-increase ceiling of 8.6% over the next two fiscal years. That’s higher than the usual 3.5% growth rate hospitals get each year.
Green Mountain Care Board staff members have yet to deliver their recommendations to the board. The board usually follows staff recommendations, but deviated from that tradition in Rutland Regional’s case. Staff members suggested that the board approve the 9% increases the Rutland hospital requested. The board denied that request and voted for no midyear raise.
As of Wednesday afternoon, no other Vermont hospitals had filed requests for midyear price adjustments with the board. The deadline for filing a request is May 1.
Rutland had asked the Green Mountain Care Board for a 9% increase to cover a projected $7.5 million deficit in the current fiscal year. But regulators denied the request, telling executives from Vermont’s second-largest hospital the request could hurt self-insured small businesses almost immediately.
By denying Rutland’s request, the board essentially pushed the prospect of ballooning health care costs to next year’s budget cycle.
