Lawmakers, Green Mountain Care Board Chair and UVM Medical Center clash over network oversight, loans and costs

University of Vermont Medical Center President Steve Leffler and Green Mountain Care Board Chair Owen Foster laid out competing concerns about proposed state oversight of the UVM Health Network during a legislative hearing focused on Section 6 of a health affordability bill.

Leffler, who identified himself as president of the UVM Medical Center, said the medical center and the network have accepted a set of commitments negotiated with the Green Mountain Care Board intended to reduce health-care cost growth and improve transparency. "I fully acknowledge that right now Vermont is facing a health care affordability crisis and that I am here on behalf of the medical center in the network to be part of the solution," Leffler told the committee.

The agreement Leffler described includes funding commitments and operational limits intended to slow price increases: a one-time $11,000,000 primary-care bridge for non‑UVM primary care providers for 2026; a prior $12,000,000 payment to resolve 2022–23 budget disputes with Blue Cross Vermont; and a commitment to submit compliant budgets for 2026 that hold network revenue growth to 3.4 percent, commercial rate increases to roughly 3 percent, and expense growth under 3 percent. The network also agreed to form a five‑member work group — described by Leffler as two Green Mountain Care Board members, a network board member, a medical center board member and an independent liaison — to review network efficiency; the independent liaison named in the hearing was Mike Smith.

Leffler said the network supports several elements of the bill, including new reporting on staff ratios and executive compensation and standardization of hospital budgeting tools. He voiced concern, however, about a requirement that a hospital give at least 90 days' notice before reducing or eliminating a service, saying sudden events (loss of a sole provider, a facility failure, or federal rule changes) might make a 90‑day window impractical unless exceptions are spelled out.

Owen Foster, chair of the Green Mountain Care Board, told the committee the board supports the legislation because the network's finances are large, opaque and have implications for Vermont ratepayers. Foster said his office needs direct authority to examine the network's operations — which he described as a separate, parent organization with its own expenses — so the board can determine whether those expenses should be borne by Vermont hospitals and commercial payers.

Foster presented figures the board has reviewed showing that certain network loans and transfers link Vermont hospital dollars to affiliated hospitals in New York. He cited a December letter documenting a $76,300,000 due from CVPH (Clinton County Hospital) to the University of Vermont Medical Center and roughly $17,000,000 from Alice Hyde and Elizabethtown as of the same date. Foster said board analysis showed invoices and transfers the network listed as loans or due‑from balances lacked formal payment terms, interest or documented contracts.

"We need to understand if they're appropriate," Foster said. "It could be valid, but it needs transparency so Vermonters know whether Vermont dollars are paying for New York operations."

Foster also walked the committee through network expense lines that he said are sizable compared with some Vermont hospitals: the network's revenue‑cycle budget was submitted at about $89,000,000 for fiscal 2025; a population‑health organization line rose in the budget from about $21,000,000 to $29,000,000 with roughly 162 FTEs; network administration and HR operations budgets rose into the tens of millions with dozens to more than 150 budgeted FTEs in recent filings. Foster asked the committee for authority to review these network functions directly and to do so without facing costly litigation or procedural limits the board now confronts.

Leffler acknowledged the network has made mistakes the prior November and said UVM and the network have worked closely with the Green Mountain Care Board on a settlement and an operational plan. He told legislators the network believes shared services (IT, HR, purchasing) can yield scale savings, and that the five‑member work group and independent liaison will examine those savings over about 16 months. He also warned against simplistic cost controls: "Reference‑based pricing does drive down the cost per service, but has no impact on utilization," Leffler said, arguing that reference‑based models risk disincentivizing unprofitable but essential services (primary care, mental health, OB, NICU) and that a true global payment model would better align incentives to reduce utilization and keep people healthier.

Committee members pressed Leffler on contingency planning if federal Medicaid funding were cut and on the capacity of UVM Medical Center to absorb displaced patients if smaller hospitals close. Leffler said such cuts would be "devastating" and would require statewide coordination; he said the medical center lacks capacity to absorb all displaced patients and highlighted telehealth, shared electronic medical records and specialist outreach as mitigation tools.

Several legislators and Foster emphasized the urgency. Foster noted estimates presented to the board suggesting commercial premiums could increase by double digits without action and warned that a shrinking commercial risk pool could worsen insurer solvency. He told lawmakers the board supports Section 6 because it would let the board review network loans, the effect of New York hospital margins on network bond ratings, and the appropriateness of network expenses borne by Vermont member hospitals.

The hearing produced no formal legislative vote recorded in the transcript. Committee members asked the board and network to provide more detailed, documented financial information, including contracts or terms for intra‑network loans, and to propose any clarifying language the board believes would make Section 6 workable.

Looking ahead, Leffler told the committee the network will proceed with the agreed work group and with internal efforts to limit expense growth and show efficiencies. Foster said the Green Mountain Care Board will continue to press for the authority to review network finances and for clearer disclosure of transactions the board believes affect Vermont ratepayers.

Ending note: witnesses and members requested follow‑up briefings and documents; both UVM Medical Center and the Green Mountain Care Board offered to return with more detailed financial schedules and proposed statutory language to address the committee's questions.