Senate committee reviews S.126 plan to curb hospital costs, expand primary care and create unified medical records

Senate Health and Welfare members spent their April 8 meeting examining S.126, a wide‑ranging health‑care reform bill that seeks to address rising insurance premiums and struggling hospital finances by expanding financial reporting to the Green Mountain Care Board, piloting global hospital budgets and promoting unified medical records.

Stacy, reporter of the bill, told committee members that the measure grew from the 2022 Act 167 process and subsequent analysis, including an Oliver Wyman review. “We can't afford to keep doing that,” Stacy said of recurring subsidies to hospitals, adding the bill focuses on three areas: hospital budgeting and financial sustainability, a state health‑care action plan and a unified medical‑records data space.

The bill’s nut graf: committee members and witnesses said Vermont faces simultaneous pressures — high per‑capita prices at some hospitals, insurers under financial strain, and gaps in primary‑care access — and that S.126 attempts to create tools for statewide planning and payment reform rather than immediate, one‑time infusions of money.

In her overview, Stacy said the bill would require more common financial reporting to the Green Mountain Care Board so the board can assess hospital budgets and the distribution of administrative and clinical dollars. She said the bill includes provisions to expand reference‑based pricing and to guard against balanced billing, and to move toward global budgeting starting with a single hospital as a pilot.

Mike Fisher, the Office of the Health Care Advocate's representative at the hearing, framed the discussion as a level set of the state’s fiscal and coverage risks. Fisher highlighted that the University of Vermont Health Network reported roughly $259,000,000 in excess revenue over expenses in its audited financials and pointed to surveys showing many Vermonters are underinsured. Fisher warned insurers’ need to increase reserves and higher proposed premium rates could push more Vermonters out of coverage.

Presenters referenced data shown to the committee that compared Vermont to neighboring states on premium growth, utilization and operational expense. A staff presenter said Vermont’s premiums and operational expense growth have outpaced most neighboring states and that utilization is not uniformly higher, complicating the diagnosis of underlying causes.

Committee members questioned how much of S.126 would be viable regardless of pending federal changes, including the possible sunsetting of enhanced premium tax credits. Stacy said some provisions — for example, increased contract and rate transparency between hospitals and insurers — would function whether or not federal funding changes, while acknowledging the committee must track federal actions closely.

Members also discussed behavioral‑health and primary‑care pieces embedded in the bill. Stacy and other witnesses said the bill touches workforce, hub‑and‑spoke substance‑use disorder approaches and integration with designated agencies and specialized service agencies, but several members said the bill could do more on primary‑care payment reform and community‑based services.

Multiple speakers urged the committee to include “guardrails” for reference‑based pricing to prevent large reimbursement imbalances across facilities and regions. Stacy said the bill aims to align reimbursement and reduce price variation, while recognizing academic medical centers will have higher costs than smaller hospitals.

No formal motions or votes were recorded at the hearing. Committee members concluded they will continue to work through the bill and amendments in upcoming sessions; the reporter offered to meet with colleagues and staff to refine sections that members identify as needing strengthening.

The committee set the stage for a detailed walkthrough of S.126 in future meetings and signaled the bill will receive additional scrutiny as premium rate filings and hospital budget submissions approach.

Ending: The committee did not take a formal vote; members directed staff and the reporter to continue drafting and to bring committee questions and proposed amendments back for additional sessions.