A proposal to grant the Green Mountain Care Board greater control over hospital budgets has fallen prey to the status quo.
The five-member independent board already regulates service charges at Vermont hospitals. But members this year have argued before legislators that giving the board the additional authority to regulate budgets would further address the ballooning cost of health care.
The Vermont Senate last month passed a bill, S.285, that would appropriate almost $5 million for the care board to study and implement a model that would grant the board budget-setting authority.
But in the House Committee on Health Care this week, Ena Backus, Gov. Phil Scott’s director of health reform, raised concerns that setting hospital budgets in isolation would damage the state’s signature health reform effort, the all-payer model.
Backus argued that changes to the health care system should happen in the context of the state’s ongoing negotiations with federal partners about all-payer. She also warned that introducing strict controls on hospitals could lead them to simply cut services, exacerbating the ongoing issue of long wait times for medical services in Vermont.
Any substantial change to Vermont’s health policy “needs to be more expansive than hospital payments alone,” Backus said.
In the process, S.285 morphed into a set of guidelines for advancing the all-payer model. Committee members stripped funding for the care board to pursue its study. The bill now directs Backus and the board to work together on a new proposal that may, but not necessarily, include the budget-setting authority the board wanted.
The committee voted, 7-2, in favor of the bill on Thursday, with “no” votes from Reps. Woodman Page, R-Newport City, and Arthur Peterson, R-Clarendon. Reps. Bill Lippert, D-Hinesburg, and Emily Long, D-Newfane, were absent.
The final version says that in moving forward with the all-payer model, the care board and the director of health care reform should consider the cost of care, Vermont’s rural nature and strategies that strengthen primary care.
S.285 also directs the board to create a plan for a “data-informed, patient-focused, community-inclusive engagement process” to help Vermont hospitals lower costs “while maintaining sufficient capacity for emergency management.”
Even if the Vermont proposal includes these provisions, the final agreement is up to the federal Centers for Medicare and Medicaid Services, the other party to the model.
“This provides broad legislative direction that we would like (the Vermont Agency of Human Services) to move forward with, understanding that they have a policy direction and the feds have a policy direction,” said Rep. Lori Houghton, D-Essex, who ran Thursday’s meeting in the absence of Lippert, the committee chair.
The all-payer model — and OneCare Vermont, the organization that’s become synonymous with it — is meant to change how Vermont pays for its health care by paying hospitals and independent providers a flat fee for keeping patients well.
But after OneCare consistently fell short of the enrollment targets it set for itself in the contract with the Centers for Medicare and Medicaid Services, state and federal partners are now renegotiating changes to the model. A new agreement is supposed to go into effect in 2023 or 2024. In the meantime, the existing model remains.
In its original form, S.285 was meant to be the Green Mountain Care Board’s answer to the ever-increasing cost of health care in Vermont.
Hospitals are the largest piece of Vermont’s health sector, accounting for just under half of the health care spending in the state. The care board’s proposal intended to control costs by setting budgets that hospitals would have to follow.
A predictable budget, the board argued, would help hospitals align their services and offerings to the needs of the community. It also would control hospital costs, and by extension, the cost of services to Vermonters.
The financial picture stands to worsen when hospitals are no longer being propped up with pandemic-related federal aid money, said Robin Lunge, a care board member who also served as director of health reform under former Gov. Peter Shumlin.
“If we don’t try to tackle the challenges in our system, we would expect the hospitals’ financial health to deteriorate once the federal relief funds cease,” Lunge told lawmakers.
After the vote, Houghton said the House committee’s version of the bill had the same “overall intent” as the one the Senate passed.
“We need to continue moving forward with health care reform through the All Payer Model and ensure our regulatory process aligns with that reform,” she wrote in a text message.
Sen. Ginny Lyons, D-Chittenden, the chair of the Senate Health and Welfare Committee, said on Thursday afternoon that she has not seen the amended bill and cannot comment until she has read it.
