Vermont bill would require reference‑based hospital pricing, new reviews and oversight, and $5.4M in start‑up funding

Vermont House appropriations committee members spent Thursday reviewing S.126, an act "relating to health care payment and delivery system reform," which would direct the Green Mountain Care Board to establish reference‑based prices hospitals must accept as payment in full and create new reporting, planning and funding requirements for statewide health‑care transformation.

The bill is intended to change how hospitals and other providers are paid, increase transparency in payer–provider contracts, and fund a two‑year strategic planning and implementation effort. "We are looking at S.126, an act relating to health care payment and delivery system reform," said Jen Harvey, Legislative Counsel, Office of Legislative Counsel, as she introduced the measure to the House Appropriations Committee.

Why it matters: supporters say the combination of reference‑based pricing, annual hospital budget reviews aligned to a statewide strategic plan and new committees focused on affordability and primary care would better align spending with value, boost primary‑care reimbursement and curb widely varying prices for the same services. Opponents and questioners warned implementation will be complex and could shift costs among hospitals; the committee heard repeated cautions about hiring, contracting and potential antitrust risks when hospitals coordinate on spending.

Key provisions explained

Reference‑based pricing: The bill directs the Green Mountain Care Board (GMCB) to set reference‑based prices that represent the maximum amounts Vermont hospitals shall accept as full payment for items and services. The statute would base those reference prices on a percentage of Medicare reimbursement or another appropriate benchmark and allow the board to update prices using a separate growth measure, such as the Medicare economic index. The board also would be required to implement pricing "as soon as practicable, but not later than hospital fiscal year 2027," the fiscal year beginning Oct. 1, 2026, and to review prices annually as part of hospital budget review.

No balance billing and scope limits: The bill bars hospitals from charging or collecting from patients or insurers amounts above the established reference price…