Legislators debate S.126 sections on statewide health-care delivery plan, advising body and monitoring capacity

Legislators and invited experts continued work on S.126 on April 20, focusing on Sections 8 and 9, which would require the Agency of Human Services (AHS) and partners to develop a statewide health‑care delivery plan and create a Health Care Delivery Advisory Committee to set affordability benchmarks and monitor system performance.

The statewide plan and advisory committee matter because Vermont faces pressure on primary care access, rising commercial prices for hospital services and pharmacy spending, and several hospitals reporting negative operating margins; witnesses told the committee that improved analytic capacity and clearer enforcement authorities are needed before a durable rebalancing of services can be achieved.

Christopher Kohler, a senior staffer at the Milbank Memorial Fund, told the committee he views Sections 8 and 9 as addressing two distinct problems: “guidance … for administrative agencies” about allocating scarce resources and “what resources are needed to monitor the Vermont healthcare system to generate objective performance goals.” He advised that while many states lack an effective, detailed planning function (Section 8), there is stronger precedent for the analytic and monitoring work in Section 9 and that Vermont should prioritize building that capacity.

Kohler emphasized primary care as central to system stability. “Primary care is really struggling in our states right now,” he said, and urged that targets be set to rebalance spending toward primary and community‑based care. Kohler cautioned against provisions that carve out hospital revenue tied to hospital investments in primary care or mental‑health services from total cost‑growth targets; he characterized carve‑outs as a way hospitals might seek credit without producing systemwide rebalancing.

Elena Barabee, director of health systems policy at the Green Mountain Care Board, told the committee the board supports planning work but raised concerns about duplication and capacity. Barabee noted existing statutory tools, especially the Health Resource Allocation Plan (HRAP) and the board’s statutory duties, and asked whether S.126 creates a genuinely new function or overlaps with existing duties. She recommended that any new analytic or monitoring functions be placed where they can be resourced and acted on—either within AHS, the Green Mountain Care Board, or an existing independent entity—and stressed the need for contingency planning for potential hospital closures. Barabee reported early financial results indicating “maybe more than six hospitals with negative margins again in ’25,” and told the committee that contingency planning for closures or essential‑service losses should be part of Section 8’s planning scope.

Jen Carvey of the Office of Legislative Council walked members through the bill language for Sections 8 and 9, noting the plan must align with statutory principles for health‑care reform and that the bill requires AHS to engage stakeholders during 2025–2027, prepare the plan in 2028, and present it by Jan. 15, 2029, with updates every three years thereafter. Several legislators said the 2029 delivery date and three‑year update cadence feel slow given current fiscal pressure on hospitals.

Committee members pressed witnesses on where analytic capacity should be housed and funded. Kohler and Barabee both suggested multiple options: (1) building capacity inside AHS to access Medicaid matching funds, (2) housing work in the Green Mountain Care Board or a commercial‑insurance regulatory office, or (3) leveraging an independent body such as the Vermont Program for Quality in Health Care. Kohler noted Rhode Island had directed insurers by regulation to rebalance spending toward primary care; he said financing for analytic capacity can come from state general funds, grants, or dedicated assessments on insurers/providers.

On enforcement and making targets “stick,” Kohler urged legislators to give the Green Mountain Care Board clearer authority to set binding constraints (for example, cost‑growth or rate rules) or to allow rulemaking that is defensible in court. He said voluntary growth targets are often exceeded and that the real challenge is making limits enforceable without immediate political blowback.

Witnesses also discussed Medicare alignment and the AHEAD model (an all‑payer/global budget approach) as ways to coordinate signals across payers so providers receive aligned incentives. Kohler called Medicare alignment “too good to pass up,” while Barabee described tradeoffs and the need to avoid duplicative new agencies in a small state.

Several committee members raised process questions about the bill’s advisory committee in Section 9: its 14‑member composition, whether the group is advisory or decision‑making, reporting and accountability (annual reports or other reporting were not specified in the advisory‑committee language), and possible redundancy with existing HRAP work. Sarah Teachout of Blue Cross Blue Shield of Vermont observed the Green Mountain Care Board recently adopted affordability guidance for commercial health insurance, raising a question about whether the advisory committee’s affordability work would be duplicative.

No formal votes or final legislative actions were taken during the hearing; the committee continued to solicit technical suggestions and testimony on the bill language.

Next steps identified during the hearing included clarifying statutory overlaps (HRAP, Act 167 and the board’s existing duties), specifying contingency planning language for closures and financial distress, adding reporting or implementation milestones to shorten the effective timeline, and deciding where to place the analytic/monitoring capacity to ensure both independence and implementability.

(There were no formal votes reported during this hearing.)