Vermont Green Mountain Care Board to implement reference based pricing for hospitals by 2026

Vermont's Green Mountain Care Board is set to implement a significant change in healthcare pricing that aims to enhance transparency and affordability for patients. During a recent House Appropriations meeting, officials discussed the introduction of reference-based pricing, which will establish maximum amounts that hospitals can accept as payment in full for services rendered.

This new pricing model is designed to address the wide disparities in healthcare costs across the state. For instance, the cost of a colonoscopy can vary dramatically from one facility to another, highlighting the need for a standardized approach. By linking hospital payments to a percentage of Medicare rates, the board aims to create a more equitable pricing structure that could also influence payments from insurers, even those not directly regulated by the state.

One of the key features of this initiative is the prohibition of balance billing, which prevents hospitals from charging patients additional fees beyond the established reference price. This means that if a hospital accepts a certain amount from an insurer, they cannot bill the patient for the difference, providing greater financial security for individuals seeking care.

The board will also consult with various stakeholders, including health insurers and healthcare professionals, to ensure that the pricing model reflects the needs of the community and the realities of healthcare delivery. Factors such as population health, demographic characteristics, and local labor costs will be considered in the pricing process.

Implementation of reference-based pricing is expected to begin no later than the hospital fiscal year 2027, which starts in October 2026. This timeline underscores the board's commitment to enhancing the healthcare system in Vermont, aiming for a more predictable and consistent pricing structure that benefits both providers and patients alike.