Committee introduces bill to let Green Mountain Care Board trim hospital reimbursements, appoint observers

The House Health Care Committee voted to introduce draft request 25-0975, draft 3.1, a committee bill that would expand the Green Mountain Care Board’s authority to adjust hospital reimbursement rates and to appoint an independent hospital observer.

Legislative counsel Jennifer Harvey told the committee the draft clarifies the solvency trigger the board may use and tightens the criteria for which hospitals could have rates reduced. “A regulatory action level event…which I believe is less than 150%,” Harvey said, referring to the risk-based capital threshold for domestic health insurers.

The bill would permit the board to order a reduction in an insurer’s reimbursement rates to one or more Vermont hospitals when the insurer faces an “acute and immediate threat to its solvency” tied to that regulatory action level event. Harvey said the committee made two related changes: raising one cash-on-hand threshold from 125 to 135 days and clarifying that the board may act when a hospital meets one or both of two criteria laid out in the draft.

Harvey also said the draft broadens when the board may appoint an independent hospital observer, adding a finding that a hospital has materially misrepresented information or is materially noncompliant with a budget the board established under the statute as triggers for an observer appointment. The draft also contains a proposed sunset of the observer authority: Harvey said the text proposes repealing the current observer authority (referred to in the draft as 18 BSA 94 56 g 2) effective 01/01/2030, and she noted the committee could select a different date such as 07/01/2030.

Committee members discussed the edits and confirmed that the draft’s language reflects the board’s intent. One member sought confirmation that a hospital in a network could meet either cash-on-hand/operating-margin criteria itself or qualify via consolidated network-level figures; committee counsel confirmed that pairing of criteria was intended. The transcript’s wording on the consolidated-network criterion and the numeric thresholds is not fully explicit in places and is recorded in the clarifying details below.

A motion to introduce draft request 25-0975, draft 3.1 — “an act relating to Green Mountain Care Board authority to adjust the hospital’s reimbursement rates and to appoint a hospital observer” — was made and seconded. The clerk called the roll; the transcript records the following votes as "Yes": Representative Chinos; Representative Cortes; Representative Quichela; Representative DeMour; Representative Goldman; Representative Houghton; Representative Powers; Representative Rebecca; Representative McFong; and Representative Black. The motion passed. The committee directed that the draft be emailed to drafting operations, which will forward the introduced version to the clerk. According to comments in the meeting, the draft is expected to be introduced on Tuesday and placed on notice the following Wednesday.

The bill, as introduced, would (1) tie the board’s temporary rate-adjustment power to a specified insurer-solvency trigger described in state risk-based capital rules, (2) raise one hospital cash-on-hand threshold from 125 to 135 days in the draft’s text, (3) add material misrepresentation and material noncompliance with board-established budgets as triggers for appointing an independent observer, and (4) repeal the observer authority after a fixed period (the draft proposes 01/01/2030, with other dates discussed). The committee and counsel emphasized this measure is an extraordinary, not long-term, tool to address acute insurer solvency threats while broader health-care decisions remain pending.

Next steps: drafting operations will finalize the introduced version and send it to the clerk for formal introduction and first reading; the committee noted potential downstream procedural issues if the bill requires review by a money committee.