Committee finds S.18 favorable after testimony on $250 birth‑center licensing fee

The committee found S.18, a bill to license freestanding birth centers in Vermont, favorable by a 10–1 vote after testimony on licensing rules, a $250 application fee, inspections and potential Medicaid implications.

The bill would add a chapter to Title 18 to authorize the Vermont Department of Health to license and regulate freestanding birth centers, require inspections at initial licensing, renewal and ownership changes, and deposit fees into the hospital licensing fees special fund. It also directs the Agency of Human Services to seek federal approval for Vermont Medicaid to cover birth‑center services and exempts qualifying birth centers from the state’s certificate‑of‑need rules.

Supporters described the centers as low‑risk, homelike facilities staffed by midwives and other maternity providers. "They're essentially places to provide maternity care, perinatal care, outside of a hospital and specifically devoted to that level of care," said Lauren Layman, general counsel for the Vermont Department of Health. Layman said the department would develop rules, partner with the Department of Disabilities, Aging, and Independent Living for inspections, and that a single $250 fee would cover the licensure and inspection event at initial application, renewal or a change of ownership.

The Department of Health told the committee the $250 fee would not fully cover the internal cost of inspections but that existing inspection staff who currently inspect hospitals, ambulatory surgical centers and nursing homes could handle the expected small number of birth centers without adding new positions. "We could definitely do the work within our existing resources," Layman said.

Nolan of the Joint Fiscal Office said initial revenues from fees would be nominal and depend on how many centers apply. The fiscal office noted Vermont averaged 2,033 births per year from 2021–2023; any state‑level savings or costs would depend on utilization, timing of centers coming online and whether Medicaid reimburses at different rates. Nolan said the evidence suggests birth centers can reduce costs for payers, but there is uncertainty until centers open and CMS rules on Medicaid reimbursement.

Members pressed two main concerns: whether the $250 fee is appropriate and whether birth centers would shift Medicaid reimbursements and patient volume away from hospitals. Some members urged caution about setting a fee that would be a barrier to new centers; others emphasized that licensing fees typically are set to shift costs to licensees rather than general funds.

Laurie Foster, a certified nurse midwife and legislative liaison for the Vermont affiliate of the American College of Nurse Midwives and a member of the Vermont Birth Center Coalition, said birth centers generally are not profit makers and that one or two centers could open in the state if licensing were available. Foster provided comparative facility‑fee figures cited by insurers and advocates showing large differences in facility charges: an example cited in testimony was facility fees of about $17,000 at UVM, $11,000 at Dartmouth, $6,900 at some community hospitals and $2,800 at freestanding birth centers.

Key provisions in S.18 include: rulemaking requirements that at minimum follow the American Association of Birth Centers’ National Birth Center Standards; prohibitions on cesarean sections and epidural anesthesia at birth centers; written transfer agreements with hospitals and EMS; requirements for facility policies, staffing, record retention and quality improvement; placement of license fees into the hospital licensing fees special fund; an exemption from the certificate‑of‑need process effective July 1, 2025; and a licensing effective date of January 1, 2027, or upon adoption of Department of Health rules, whichever comes first. The health‑insurance coverage provision would take effect Jan. 1, 2027, and Medicaid coverage would begin after CMS approval.

Votes at a glance: the committee voted that S.18 is favorable by a roll call of ten yes, one no (10–1–0). Representative Holcomb made the motion to pass S.18 as presented; a formal second was not recorded on the transcript. Recorded roll call: Representative Brannigan — yes; Representative Burkhardt — yes; Representative Pelvis — yes; Representative Higley — yes; Representative Holcomb — yes; Representative Kimball — yes; Representative Maslin — yes; Representative Odey — no; Representative Wozesak — yes; Representative Canfield — yes; Representative Kornheiser — yes.

The committee did not vote on fee changes during the session. Members agreed that the committee may solicit more testimony about fee levels and potential local impacts, and that questions about hospital financial effects remain for hospitals and the health committee to address.

S.18 will be reported out of committee favorable with the recommendation that the House pursue rulemaking, Medicaid approval steps and further stakeholder engagement before birth centers open in Vermont.