Green Mountain Care Board attorney urges narrowing S.126 powers, flags timeline and transparency concerns

Mark Hengstler, an attorney for the Green Mountain Care Board, told the Health Care Committee on May 1 that the board supports reference‑based pricing but urged lawmakers to remove or narrow several provisions in S.126 to avoid duplication, reduce procedural ambiguity and preserve the board's existing budget authority.

Hengstler said one change he recommended was removing language in Section 3 that directs the Agency of Human Services to implement reference‑based pricing for nonhospital providers, because the Green Mountain Care Board already has rate‑setting authority for commercial market hospital and nonhospital providers. “We would recommend just removing it,” he said, arguing the deletion would reduce confusion about who has authority for commercial rate setting.

Hengstler also recommended against a provision that would require the board to exclude revenue hospitals receive for primary care, mental‑health and substance‑use services when setting hospital budgets. He said the board’s finance staff can model such exclusions, but that excluding revenue could complicate budget work and might incentivize hospitals to acquire those services. He described the recommendation as designed to avoid unintended consequences rather than to block efforts to expand community‑based services.

A third major recommendation concerns language in Section 6 that would let the board investigate a hospital network and “take appropriate action” to correct network structure or operations. Hengstler said the board can and should evaluate networks, but the bill’s current wording is procedurally vague about what “take action” means (hearings, contested cases, orders) and could open a path to contentious appeals. He proposed removing the board’s power to issue binding orders to networks under that section while retaining the board’s investigative and recommendation authorities.

Instead of direct orders to a network, Hengstler proposed strengthening the board’s hospital budget authority in Section 5 so that, after investigating a network, the board could use hospital budget orders to limit funds flowing from hospitals to network operations that the board finds inconsistent with state health goals. “We could investigate. We could recommend publicly actions that we believe are necessary,” he said, adding that the board would not be ordering the network itself but could act through hospital budgets.

Committee members asked whether that approach would address hospitals’ legal concerns about regulation of networks. Hengstler said removing undefined authority to “take action” would restrain the board until the Legislature provided more specific statutory language about what binding remedies, if any, the board could use.

Hengstler also addressed a provision that would require hospitals to notify stakeholders if they propose service reductions to comply with a budget order. He said the goal of the notice requirement is to give the board and the public timely information so affected patients can comment before changes take effect. As drafted, the bill now requires notice to the board, AHS, the Office of the Healthcare Advocate and members of the General Assembly and gives the board discretion to evaluate proposed cuts and modify budgets; the statute currently includes a 90‑day timeline for that review.

Committee members raised practical questions about who would qualify as an affected “patient” for notice and whether other hospitals that might receive displaced patients should be notified. Some members suggested broadening notice to “the public” rather than just patients; Hengstler and others warned that the statute should be precise enough to be operational and to avoid creating an untenable process.

On implementation timing, Hengstler warned that imposing reference‑based pricing for all hospitals “no later than 2027” is ambitious. He laid out steps the board would need to complete — hiring a director, developing a methodology, and conducting rulemaking — and cautioned that formal rulemaking typically takes about 6.5 months, while emergency rules last only 180 days. He said the board supports moving quickly but asked the committee to balance urgency with the time needed to develop a workable methodology and associated rules.

Hengstler recommended deleting a provision that would require the board and the Department of Financial Regulation to “ensure” that decreased prices paid to hospitals result in commensurate decreases in insurance premiums. He said the board and DFR should monitor and post findings about alignment between price changes and premiums, but that statutory language promising a strict dollar‑for‑dollar tie is likely unworkable because premium formation depends on a broader set of factors such as insurers’ reserve ratios and nonhospital price changes.

Finally, Hengstler noted a proposed change in Section 11 to clarify that the board may share information received under subpoena or notice to produce with other state officers or agencies, provided confidentiality protections apply. Committee members raised concerns about the scope of confidential material and to which agencies it could be shared; several suggested explicitly naming the Agency of Human Services and the Department of Financial Regulation as intended recipients to limit broader sharing.

Committee discussion covered possible edits — limiting whom the board may share confidential materials with, refining notice language for service reductions, adjusting the 2027 deadline or requiring progress reports, and preserving the board’s hospital‑budget tools while avoiding undefined network orders. No formal votes were recorded during the segment.

The presentation concluded with committee members thanking Hengstler for the walkthrough and requesting additional follow‑up as the committee reconciles competing goals for clarification, speed of implementation and public transparency.