House Health Committee moves to amend H.266, replacing white‑bagging language with hospital drug‑pricing limits and 340B reporting changes

The House Committee on Health Care advanced a proposed amendment to H.266 that would remove the Senate's white‑bagging provisions and replace them with a set of hospital outpatient prescription‑drug reimbursement limits and reporting changes, committee members heard.

Legislative counsel Jenn Carby of the Office of Legislative Council presented the draft amendment, saying it incorporates prior committee changes and highlights new language. "I left the effective date pieces just because I think they're important, and I want to remember to put them in the actual bill. But I have incorporated all of the changes we looked at yesterday, and then, everything new today is, highlighted," Carby said.

The nut graf: The amendment would (1) set percentage limits on what hospitals may submit to health insurers for reimbursement of prescription drugs administered in outpatient or office settings, using the Centers for Medicare & Medicaid Services (CMS) Average Sales Price (ASP) as the reference; (2) create a temporary transitional percentage for an initial period; (3) exempt independent critical access hospitals that are not affiliated with another hospital or hospital network; and (4) change hospital reporting on participation in the federal 340B drug pricing program, including confidential vendor information to be provided to the Green Mountain Care Board and a reporting sunset provision.

Under the draft language shown to the committee, hospitals "shall not submit a claim to a health insurer for reimbursement of a prescription drug administered in an outpatient or office setting in an amount that exceeds" a percentage of the ASP as calculated by CMS. The draft ties what hospitals may charge insurers to the percentage of ASP hospitals were charging insurers on 04/01/2025; for drugs where a hospital previously charged more than a stated benchmark as of that date, the amendment limits future claims to a specified percentage of ASP. The counsel also presented a transitional rule that would allow a different interim percentage between July 1 and late 2025 for certain drugs (the draft text as presented to the committee uses explicit percentage and date references that will be part of the amendment language).

The amendment includes an explicit carve‑out: the pricing restrictions "shall not apply to an independent hospital designated as a critical access hospital and that is not affiliated with another hospital or hospital network based in or outside of Vermont," the draft states. Committee members discussed examples of hospitals that would or would not qualify under that unaffiliated critical access hospital carve‑out; Carby and staff named Springfield and Copley as examples in the conversation and noted some critical access hospitals are affiliated with systems and therefore would not qualify for the carve‑out.

The draft would also preserve a mechanism for hospitals to seek relief: if a hospital demonstrates to the Green Mountain Care Board in its budget submissions that the price cap is having a "negative impact on access to care, the quality of care, or the sustainability of rural health care services," the hospital may propose increases in reimbursement for one or more service lines (the draft gives "primary care" as an example) and the board "shall consider both the demonstrated impact and the proposed increase to reimbursement rates," Carby said.

Committee members asked about timing and operational effect. A committee member noted the bill's effective dates would take effect July 1 and asked how soon insurers and hospitals would see the change. A health care advocate and speakers during the discussion raised concerns about smaller hospitals' resources and whether particular rural hospitals would be left out of the carve‑out. The transcript shows multiple members saying the committee's earlier intent included protecting federally qualified health centers (FQHCs) and some hospitals that participate in 340B, and one committee speaker said, "I voted for this bill originally because it would help our FQHCs," (attributed in the record to a Committee member).

Carby also reoriented the committee to changes the Senate had returned on H.266. She said Section 1 of the Senate proposal did not change the committee's work on manufacturers' restrictions on contract pharmacies in the 340B program. Section 2, she said, revised hospital reporting on 340B participation and added a compromise provision: in addition to public reporting, confidential/proprietary information about vendors who help hospitals manage parts of their 340B programs would be provided to the Green Mountain Care Board. The draft retains a sunset for the reporting requirements, which the draft places on January 1, 2031.

Committee members asked staff to provide a list of which hospitals would be affected by the amendment's carve‑out language so members could see which critical access hospitals are unaffiliated and which are system‑affiliated. A committee member asked, "Vaz could get us out of that list, please? Do you want that before you voted on this?" Staff and members discussed timing for that information.

Procedural action: a committee member proposed that the committee amend the Senate proposal of amendment to insert the committee's draft (striking the white‑bagging sections and inserting the committee language). The record shows a committee voice/show‑of‑hands tally: 10 in favor, 0 opposed and 1 absent on the motion to advance the amendment for committee deliberation. The committee then discussed sponsors for the amendment; Representative Rebecca Alsante was named during the sequence of making and formalizing the motion. Later in the meeting a member said, because one member (Daisy) was not present today, they would "propose that we delay action on this," indicating the committee planned further discussion and formal filing steps before final committee disposition.

Why it matters: the amendment would directly affect how hospitals bill insurers for outpatient/office‑administered prescription drugs, change public and confidential reporting on 340B participation, and create a process for hospitals to request targeted reimbursement adjustments if the price cap causes demonstrated harm. Committee members emphasized the potential effects on rural hospitals and FQHCs and requested a list of hospitals that would meet the unaffiliated critical access hospital carve‑out.

The committee left next steps to staff and members: finalize sponsorship for the amendment, obtain the list of affected hospitals, and determine timing for formal amendment filing and any delayed action requested by a member.