Committee reviews bill to raise monetary thresholds for health care certificates of need

A legislative finance committee reviewed H.96 on increasing monetary thresholds that trigger a certificate of need for health‑care projects, a measure sponsors say would reduce the number of projects that must seek Green Mountain Care Board review.

The bill would align hospital and non‑hospital thresholds, raise the capital threshold for projects from current lower levels to $10,000,000 for construction and capital projects, raise the threshold for a single piece of diagnostic or therapeutic equipment from $1,000,000 to $5,000,000, and increase the annual operating expense threshold for a new service or technology from $500,000 to $3,000,000 in the next two fiscal years if the service was not offered in the prior three years. It would also raise the conceptual development CON threshold for very large projects from $30,000,000 to $50,000,000 and make related adjustments to preparatory expenditure limits.

The committee heard that the Green Mountain Care Board charges a filing fee for CON applications at a rate of 0.125% of project costs, with a minimum $250 and a maximum $20,000. The board’s CON‑related fee revenue has averaged roughly $50,000 per year; staff told the committee this bill could reduce that income by up to about $20,000 annually — roughly 0.2% of the board’s budget — but the board said it could absorb the change and that fewer reviews would free staff time for other work.

Jen Gargrey of the Office of Legislative Counsel walked members through the bill’s technical changes. She described the bill as a “strike‑all” that consolidates the separate hospital and non‑hospital monetary triggers into one unified threshold and narrows the statutory list of actions that constitute a “new health care project” from an open, "includes" list to a definitive list of covered items.

The bill would also add exclusions. Routine replacement of fully depreciated medical equipment would be excluded from CON requirements. Ground ambulance services, affiliated agencies, and their equipment and supplies would be excluded. Projects owned or funded in whole or in substantial part by the State of Vermont would be excluded provided the sponsoring state agency informs the Green Mountain Care Board within 30 days of award or prior to commencing the project.

Committee members debated the policy tradeoffs. Supporters argued the increases would ease the burden on small providers — including birthing centers and other small facilities — that previously deterred innovation because the CON process and fees can make small projects prohibitively expensive. One committee member described the bill as an “opportunity” to reduce unnecessary regulatory workload and cited an Oliver Wyman recommendation.

Other members urged caution and suggested broader study. Several speakers said they would like a larger review of whether a CON program is needed at all, citing concerns that CONs can suppress competition and delay new entrants, which in turn could affect access and prices. Members noted the CON program originated from federal encouragement decades ago and that other states have moved away from CON programs entirely.

The committee did not take a final vote on H.96 during the hearing; members agreed to place the bill on the committee calendar for a future vote. Committee staff and the Green Mountain Care Board offered to provide additional data if members want a fuller assessment of workload and fiscal impacts.

The bill’s effective date would apply to new projects initiated on or after passage; existing applications with granted interested‑party status would continue under the rules in effect when they filed.