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Vermont Medical Society urges caution on benchmark choices, asks for primary-care payment planning in S.126 debate
Summary
The Vermont Medical Society told the committee that benchmarks for reference-based pricing should be flexible, cautioned against using net patient revenue alone to regulate hospitals because it mixes volume and cost, and urged a stakeholder process to design primary care payment alternatives if AHEAD does not move forward.
Jessa Barnard, executive director of the Vermont Medical Society, told the legislative committee that her organization supports the broad goal of S.126 but urged more granular work on benchmarks, payment models for primary care, and how hospital budgets account for services where volume should increase.
"How can we use some of our payment systems to incentivize the type of care we all agree on are critical for access, prevention, primary care type services," Barnard said, summarizing members' concerns that some payment approaches could unintentionally penalize services the state wants to expand.
Barnard recommended flexibility in selecting benchmarks for reference-based pricing. She noted Medicare is one possible benchmark but may not be appropriate for services such as pediatric care, obstetrics, or some behavioral health and substance-use services where Medicare has limited fee benchmarks. She and other witnesses suggested options such as blended commercial averages, workers' compensation fee schedules, or a different benchmark for specific service categories.
On hospital regulation, the Vermont Medical Society urged lawmakers to disaggregate net patient revenue metrics because combining cost and volume can "blur really important distinctions," potentially penalizing hospitals that expand access to primary care or transfer patients. Barnard said hospitals that decline transfers because of revenue constraints can force patients to travel out of state for care.
The society also advised caution before extending reference-based pricing and price-setting to non-hospital commercial services. Barnard said the Green Mountain Care Board may be the more appropriate body to regulate commercial benchmarks rather than the Agency of Human Services, and suggested the committee consider delaying expansion beyond hospitals until methodology and coverage scope are clear.
Barnard supported creating or tasking a stakeholder group to design contingency primary-care payment models (monthly per-patient payments similar to FQHC bundles or the AHEAD monthly primary-care payment) in case AHEAD does not proceed. She said a focused working group could return policy recommendations to the legislature.
Barnard raised concerns about two other provisions: a new statutory term "clinical leadership" tied to reporting of salaries and benefits, which she said may duplicate existing administrative reporting, and a proposal requiring providers to produce contracts on request, which she described as burdensome because payer-provider contracts are often long and detailed.
She said the Vermont Medical Society supports continued attention to ACO capability and data aggregation functions that helped primary care and said the group will continue to provide section-specific feedback.
