Senate Health & Welfare hears testimony on H.96 to raise Vermont CON thresholds

The Senate Health & Welfare Committee on Wednesday heard testimony on H.96, a House-passed bill that would revise Vermont's certificate-of-need (CON) program by raising cost thresholds, aligning hospital and nonhospital limits and adding several exclusions.

Laura Bellaboe, staff attorney for the Green Mountain Care Board, told the committee, "I am here today to discuss H.96, which reforms and revises the CON laws, primarily by increasing the cost thresholds and, by setting the same cost thresholds for all health care facilities, both hospitals and nonhospitals." She walked members through numeric changes in the bill and pointed to drafting questions the board would like clarified.

Why it matters: CON review determines when large capital projects, new services or major equipment purchases must undergo state review. Backers of H.96 say higher thresholds would reduce regulatory delays and lower costs for new freestanding care sites; critics warn it could remove an oversight check that has blocked low-quality or inappropriate entrants.

Key provisions discussed

- Threshold increases: The bill would raise the capital-cost jurisdictional threshold to $10 million for both hospitals and nonhospital facilities (up from about $1.9 million for nonhospitals and $3.8 million for hospitals under current board guidance). The single-equipment threshold rises to $5 million (from roughly $1.2 million) and the annual operating-expense threshold for a new service to $3 million (from roughly $632,000 for nonhospitals and about $1.2 million for hospitals). Bellaboe also described aligning conceptual-CON (CCON) planning thresholds from about $37.8 million to $50 million and allowing planning costs up to $10 million.

- New exclusions: Section 2 of H.96 would add exclusions from CON review for fully depreciated medical equipment, routine replacement of nonmedical equipment and fixtures (to be handled through hospital budget review), and ground ambulance services.

- Effective date and retroactivity: The bill as drafted sets an effective date of July 1, 2025; several witnesses urged making the change effective upon passage so projects in the pipeline could refile under the higher thresholds.

Requests for carving out state-funded projects

Ashley Johns, a staff attorney with the Agency of Human Services (AHS), asked the committee to add language to Section 2 that would exclude from CON review any state-operated facility or any facility funded in whole or substantial part by a state contract or grant. "It would exclude from the CON process any state operating or owned facility or any facility that is going to be funded in full or in substantial part by a contract or grant that's awarded by the state of Vermont," Johns said, noting AHS projects already undergo legislative and procurement oversight and that lengthy CON review can lead to loss of vendors.

Support and suggested edits from providers and advocates

Devin Green of the Vermont Association of Hospitals and Health Systems told the committee, "This is a much needed reform to our certificate of need process," and urged the committee to preserve retroactivity for projects in the pipeline and to adopt uniform thresholds for ambulatory surgery centers (ASCs) and hospitals. David McMurray and representatives of the Green Mountain Surgery Center also voiced support, saying the changes would encourage local, lower-cost options for care.

Susan Ritson, executive director of Vermont Health First, said the association supported H.96 and described the policy context: "Fifty years of data of CON laws have associated CON with decreased access, increased cost, and worse quality," she said, urging the committee to adopt the bill with the house-passed adjustments and to consider making it effective on passage.

Drafting and enforcement concerns raised

Bellaboe flagged a drafting ambiguity about ambulatory surgery centers in section 1: the bill's language on "expansion" could be read to carve ASCs out from the other thresholds or to keep them aligned. She asked the committee either to include ASCs under the same $10 million/$5 million/$3 million thresholds as other facilities or to plainly state the ASC-specific intent.

The Health Care Advocate's representative and other witnesses cautioned that CON review has sometimes prevented ill-suited entrants. A speaker identified as representing that viewpoint noted the board's review can block projects that are not evidence-based. The Health Care Advocate's office also suggested statutory language prompting the board to consider whether applicants will accept Medicaid and to consider reference-based pricing (for example, limiting certain charges to Medicare-equivalent levels plus a margin), while acknowledging that hard payment mandates could deter new entrants.

The advocacy group also recommended closing a perceived enforcement loophole: conditions the board places on CON approvals often expire after the final implementation report, and the group urged language allowing the board to enforce conditions longer term when necessary.

Inflationary adjustment and process details

Several witnesses urged making periodic inflationary adjustments mandatory rather than discretionary. Committee members and witnesses discussed changing the statutory phrase that lets the board "periodically adjust" thresholds to a stronger requirement ("shall") so the jurisdictional amounts keep pace with construction and equipment costs.

What the committee will do next

Senators and witnesses said legislative counsel and the Green Mountain Care Board will meet with the committee to work through drafting clarifications, possible AHS carve-outs for state-funded projects, and statutory language on inflation adjustments. The committee recessed to schedule follow-up markup with legislative counsel.

Ending: The committee did not vote on H.96 at Wednesday's hearing; members said they intend to reconvene with legislative counsel and the care board for drafting fixes before further action.