House Health Care committee hears Green Mountain Care Board defend hospital budget enforcement, debates delivery plan, payment changes and public notice for cut

The Vermont House Committee on Health Care spent the morning of May 1 debating S.63 after testimony from Green Mountain Care Board Chair Owen Foster about the board’s enforcement of hospital budgets and a contentious enforcement order against the UVM Health Network.

Foster told the committee that the board enforces budgets under 18 V.S.A. §9456 and an established board rule and policy, that hospitals must operate within budgets set before Sept. 15 and that the board issued an enforcement order on Oct. 1 after a hearing. “Hospitals are statutorily and legally required to operate within that budget,” Foster said, summarizing the board’s approach and timeline: a May 30 notice to UVM, a July 2 response from the network, an Aug. 28 hearing and the October order. Foster said the board’s written decision found UVM Medical Center’s actual revenue “differed substantially” from its budget and cited an overage on the order of roughly $80 million.

The committee heard, and members repeatedly returned to, three linked questions: what process hospitals get to be heard in budget enforcement (Foster said hospitals had multiple opportunities and a right to hearings), how a statewide health‑care delivery plan should relate to the existing Health Resource Allocation Plan (HRAP), and whether the state should proceed toward reference‑based pricing and global hospital budgets and on what timetable.

Representative Donahue urged folding elements of HRAP into the proposed statewide health‑care delivery plan and then sunsetting HRAP once the delivery plan is active. “The health‑care delivery plan that’s being proposed is, in effect, what the HRAP was intended to be,” Representative Donahue said, and recommended adding specific items — such as use of the State’s health care database (statutory section 94 10) and explicit attention to geographic and demographic disparities — to the new plan. She also proposed a notice process so the board would learn about new lower‑threshold projects and programs that no longer require a certificate of need, enabling the board to flag projects that might not align with statewide priorities.

Committee members and witnesses pressed staff and the board about two technical and timing matters that would affect how S.63 functions if enacted: reference‑based pricing and the proposed move to global hospital budgets. Foster and other board representatives described a statutory and operational landscape that complicates implementing all‑payer global budgets quickly. The draft bill ties reference‑based pricing to an implementation timeline (reference‑based pricing no later than 2027 in current draft language) and proposed global hospital budgets for some providers by fiscal 2028 and statewide by fiscal 2030; committee members asked for more analysis before hard dates.

Sarah Teachout of Blue Cross Blue Shield of Vermont warned about the operational and cash‑flow implications of an advanced monthly payment model: “One month worth of payments to hospitals for us is millions of dollars that we don't have ahead of time,” she told the committee, urging careful planning and models for payer contributions. Diane Langford of the Green Mountain Care Board told the committee that several staffing positions that would support global budget work were removed in the Senate appropriations process, increasing implementation risk.

Members debated whether global budgets can be effective without Medicare participation. Foster and other board staff noted statutory and federal constraints: the draft specifies that global budgets should include Medicare “to the extent permitted under federal law” and does not include Medicaid for the global budget construct as drafted, because Medicaid and federal programs have separate processes. Several legislators suggested directing the board to develop methodology and feasibility reporting rather than setting firm implementation dates in statute. The committee agreed to ask the board to report back on methodology, definition, feasibility, resource needs and timelines before firm implementation requirements are finalized.

The bill also drew debate over hospital service reductions and public notice. The draft would require hospitals proposing elimination or reduction of services to give at least 90 days’ notice to the board, the Agency of Human Services, the Office of the Health Care Advocate and legislators representing the hospital service area; committee members sought language that made clear the board would have a short review window before hospitals notified patients and the public, so the board could determine whether to act to preserve access. Members signaled they will work with legislative counsel and the board on specific timing and public‑notification mechanics; they agreed generally that the affected hospital service area or communities should receive notice rather than relying solely on individual patient letters.

Committee actions and next steps included directing staff to remove language at the top of page 11 that would have excluded primary care, mental‑health and substance‑use disorder services from budget review; to move references to HRAP into the new statewide delivery plan with intent to sunset HRAP once the new plan is active; and to have legislative counsel and board staff refine definitions and timelines (including a proposed requirement that the board report back to the Committee on feasibility and required resources for global budgets and payment models). The committee scheduled follow‑up work with legislative counsel and with Green Mountain Care Board staff to refine statutory language and timing.

The committee did not vote on S.63 during the hearing; members discussed conforming edits and asked the board and legislative council to return with definitional language, feasibility analysis and model details before moving implementation dates into statute.

Ending: The hearing laid out technical tradeoffs—statutory authority, budget enforcement practice and major payment reforms—while committee members directed staff and the board to refine definitions and to report feasibility analysis and staffing and funding needs before the legislature sets firm implementation dates.