Green Mountain Care Board outlines year‑long hospital budget review, adds operating‑expense benchmark and seeks better price reporting

Matthew Sutter, a staff member of the Green Mountain Care Board, told the Vermont Health Care Committee on March 22 that the board’s hospital budget‑review process runs year‑round and that the board has added a new operating‑expense benchmark for 2025 and is tightening reporting requirements to capture commercial price changes and network‑level dynamics.

Sutter described the guidance development timeline that begins with internal post‑mortems after the prior season, moves to draft guidance in January, a public draft presentation in February and a finalized guidance by March. Hospitals must submit budget materials to the board by July 1.

“We added an operating expense benchmark this year,” Sutter said, explaining the measure was intended to capture cost trends the board believed were not being controlled by revenue‑focused limits alone. He said the board also asked hospitals to provide more detailed “rate‑decomposition” worksheets and monthly actuals in the same account structure as their budget so staff can compare year‑to‑date performance with submitted budgets.

Why it matters: The board’s guidance shapes the revenue and price requests hospitals can make and informs rate reviews that affect commercial insurer payments and health care prices across Vermont. Committee members said better, consistent reporting is needed to detect irregularities and to compare hospitals of different sizes.

Sutter said hospitals historically were reviewed against changes in ChargeMaster and net patient revenue; after the pandemic the board increased emphasis on commercial price changes and added the operating‑expense benchmark to address wide expense growth at some systems. He cited an example that, on a compounding basis since the pandemic, UVM had experienced about 9 percent year‑over‑year expense growth — a number he presented as context for the new benchmark.

The board also asked certain hospital systems to file consolidated tables this year so the board can assess network‑level finances (Sutter specifically mentioned asking the UVM health network for consolidated information). That change is intended to spot flow of expenses and revenues across network affiliates earlier in the review cycle.

On data and oversight: Sutter said the board’s finance team is small — “four people on our hospital system finance team” — and that the board is seeking contract help to improve its reporting manual so hospitals can report non‑salary operating costs consistently. He said additional public comment on the operating‑expense benchmark was solicited during the guidance process and that the board publicly posts change logs and guidance documents.

Committee members asked whether the state auditor can perform audits of hospitals. Sutter said he would follow up on the precise authority of the auditor. A committee member observed the state auditor’s reach is typically limited to state‑funded matters and that private hospitals can only be audited for their use of public funds.

Legislative drafting and H.266: Earlier in the meeting Jen Carvey, head of legislative counsel, presented an amendment to H.266 that moved language on price caps and added subsections to ensure the law for 2025 included a prohibition on balance billing and a mechanism allowing hospitals to demonstrate that a price cap harms access, quality or sustainability and to ask the board for rate increases for specific service lines. Carvey explained the amendment moves certain language into the 2025 section and sets an effective date of July 1, 2025, for that portion of the bill. Committee members unanimously agreed to include additional supporters on the amendment and proceeded to amend the draft for the House calendar.

No final statewide policy or new funding was adopted at the hearing. Sutter told the committee the board will continue to press for better, consistent data from hospitals, monthly actuals and more transparent rate decomposition to make budget reviews more meaningful. He and committee members discussed the potential of technological tools and data visualization to reduce manual workload and improve timeliness of public reporting.

Next steps: Hospitals will finalize budgets and submit by July 1 under the board’s March guidance; the board will use monthly year‑to‑date reporting and supplemental workbooks to audit submissions. Committee members asked the board to explore exempting some small or critical‑access hospitals from heavy reporting requirements in future guidance to reduce administrative burdens.