Committee advances framework for reference-based pricing; asks Green Mountain Care Board to study global hospital budgets

At a House Health Care Committee markup session, legislators revised draft bill language directing the Green Mountain Care Board to establish reference‑based prices and to report on the possible future use of global hospital budgets.

The committee directed the board to set reference‑based prices that “represent the maximum amount that hospitals shall accept as payment in full” for items and services delivered in Vermont and allowed the board to set minimum payment amounts for nonhospital providers to prioritize certain services and care settings. Committee members specified that the board’s authority as written would not apply to services provided to patients enrolled in Medicaid or Medicare. The board was told to begin implementing reference‑based pricing as soon as practicable but no later than hospital fiscal year 2027.

Lawmakers also asked the Green Mountain Care Board to provide a one‑time implementation update on or before Feb. 15, 2026, that must include the board’s work to establish methodologies for and begin implementing reference‑based pricing, and to report on “the potential future use of global hospital budgets,” including a definition, feasibility assessment, timeline considerations, and advantages and disadvantages of pursuing global hospital budgets in Vermont.

Committee staff said the bill text was changed to base initial reference prices on a percentage of Medicare reimbursement for the same or a similar item or service, while giving the board flexibility to update benchmarks or methodologies in the future. Members discussed carving out Medicare and Medicaid given the board’s limited authority over those programs.

Members also inserted language directing the board to identify “factors that necessitate terminating or modifying the use of reference‑based pricing” such as “a measurable reduction in access to or quality of care.” The committee retained reporter requirements so the legislature would receive both the special 2026 update and the board’s annual reporting beginning Jan. 15, 2027.

The discussion combined technical decisions about pricing methodology and statutory drafting choices, and committee members emphasized they expect the board to report back if reference‑based pricing proves more difficult than anticipated so the legislature may adjust timelines or requirements.