House Health Care committee debates reference-based pricing, hospital budget changes in S.126

On May 6 the House Health Care Committee reviewed draft 1.3 of S.126, a bill that would authorize the Green Mountain Care Board to set reference-based prices for Vermont hospitals and to incorporate those prices into the hospital budget review process.

The committee discussion focused on four linked questions: how to define reference-based pricing and its benchmarks; whether and how to prevent hospitals and other health care professionals from balance-billing patients; which payers and services should be covered (and whether Medicare and Medicaid must be carved out); and how the board and agencies should monitor that lower hospital prices translate into lower insurance premiums.

Harvey, legislative counsel at the Office of Legislative Council, summarized the bill’s opening language: "The purpose of this act is to... achieve transformation of and directorial changes to Vermont's health care system," and walked the committee through editing choices in draft 1.3. The draft moves system goals such as improved outcomes, population health, and investments in primary care higher in the bill’s purpose language.

On reference-based pricing, committee staff proposed that the Green Mountain Care Board set maximum amounts that hospitals "shall accept as payment in full" for items and services. "The board shall implement reference based pricing in a manner that does not allow health care professionals to charge or collect from patients or health insurers any amount in excess of the reference based amount established by the board," Harvey said while presenting the draft language.

Stakeholders and committee members debated how to set…