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House Health Care Committee amends S.126 to require 2.5% hospital spending cut, reports bill favorably to appropriations
Summary
The House Health Care Committee amended S.126 (draft 3.2/3.3) to direct the Agency of Human Services to convene health care providers and achieve at least a 2.5% reduction in hospital spending for fiscal year 2026; the committee voted to report the bill favorably to the Appropriations Committee.
Montpelier — The House Health Care Committee on Oct. 11, 2025, amended S.126 and voted to report the bill favorably to the Appropriations Committee after adopting draft 3.2 (later cleaned to 3.3).
The measure directs the Agency of Human Services (AHS) to facilitate collaboration among hospitals and other health-care providers to develop rapid responses to fiscal pressures, identify efficiency opportunities, improve quality, reduce prescription drug spending and increase access to essential services. The draft instructs AHS to aim to reduce hospital spending for fiscal year 2026 by not less than 2.5% and to supervise participants’ involvement so the collaborative process can be afforded state-action immunity under applicable federal and state antitrust laws.
The draft language was presented to the committee by Jen Carvey, Office of Legislative Counsel, who said, “So this is draft 3.2,” and walked members through the changes. The committee removed a subsection that had contained specific approval criteria and instead directed AHS to report monthly on the reductions it approves; the committee record shows a reporting cadence with a noted gap between July and October.
Committee discussion included a request that contingency planning be considered outside the current bill. One committee member raised concern that state fiscal conditions could change rapidly and suggested the General Assembly or a designated group examine scenarios if Medicaid funding were reduced or lost. The member said they were not asking to add language to the bill but were urging that the possibility be studied through another vehicle if necessary.
Members on the committee also discussed the bill’s lineage and earlier Vermont health-care reforms, referencing Act 167 and Act 51 as prior efforts the current measure builds upon. Committee members praised parts of the draft — one called the reference-based pricing provision “game changing” for affordability — while acknowledging the bill is not perfect and will likely be revised in future sessions.
The committee first conducted a straw poll to amend S.126 with draft 3.2; that voice tally was recorded as 11-0-0 in favor of the amendment. The committee then voted to accept S.126 as amended and report it favorably to the Appropriations Committee. The roll-call recorded in the transcript shows eight yes votes and three no votes. A committee member stated they would serve as the bill reporter and that the bill would be on notice the following day.
The amended draft also directs AHS to adopt an evidence-based evaluation framework to assess implementation effectiveness and overall impact. The committee removed several detailed statutory approval criteria from the earlier draft and replaced them with an approval-and-reporting approach, delegating more discretion to AHS while preserving monthly reporting to the committee.
No final appropriation or implementation timetable beyond the fiscal-year-2026 spending target was specified in the committee record. The measure must next be considered by the Appropriations Committee per the committee’s report.
The committee’s discussion and votes occurred during its regular legislative meeting on Oct. 11; public comment was not recorded on this item in the provided transcript.
