State regulators said no on Wednesday to a hefty increase in service charges at Rutland Regional Medical Center.
On a 4-1 vote, Green Mountain Care Board members denied the request for a midyear increase in those rates, citing concerns about the burden the increase would impose on small businesses and privately insured Vermonters.
Board members also said much of the hospital’s projected deficit for the current fiscal year involves one-time costs, such as retention bonuses and the higher costs of hiring temporary staff.
“I don’t think it’s reasonable to ask commercial ratepayers to absorb this rate and one-time labor costs in perpetuity,” board member Jessica Holmes said, adding that with approval, those rate increases would be “forever baked” into commercial insurance rates.
Claudio Fort, the hospital’s chief executive and president, warned that without the increase, the result could be painful cuts in services, and the hospital could default on its loan payments.
“The trade-off is either we have to do what we’ve seen other health care organizations do and limit or close some beds, or we have to pay travelers to come in and provide those services until we’re able to do that,” Fort told the board.
By denying Rutland’s request, the board essentially averted a midyear cost increase, but board Chair Kevin Mullin predicted that the next fiscal year’s budget season would involve significant increases in charges across the board.
The board’s decision came just hours before The University of Vermont Health Network — the largest hospital operator in Vermont — is slated to present its request for a midyear budget adjustment. The network 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.
As of Tuesday afternoon, no other Vermont hospitals had filed requests for midyear price adjustments with the board. The deadline for filing a request is May 1.
The first hearing on the UVM network’s request is slated for Wednesday afternoon.
