Senate Health & Welfare reviews draft bill on reference-based pricing, global hospital budgets, data sharing and oversight

The Senate Health & Welfare committee on March 14 reviewed draft request 250907 (draft 2.1), a committee bill that would overhaul aspects of Vermont's health care payment and delivery system, including implementing reference-based pricing for hospitals, establishing global hospital budgets, expanding hospital reporting and data sharing requirements, and creating an advisory structure and funding to develop a statewide health care delivery plan.

The draft's stated goals, as presented by Jen Carvey of the Office of Legislative Counsel, include improving health outcomes and access, creating an integrated system of care with stronger primary and long-term services, stabilizing providers and reducing commercial insurance premiums through total cost-of-care approaches, and increasing health insurance coverage. Carvey said the draft still carries a draft request number because it has not been formally introduced.

The bill would require the Green Mountain Care Board to establish reference-based prices for Vermont hospitals "as soon as practicable, but not later than 2027," with initial prices tied to a percentage of Medicare rates and the option to update prices later using a separate growth measure such as the Medicare Economic Index. Carvey said the draft requires the board to consider community factors such as demographics, payer mix, acuity and social risk factors when setting reference-based levels.

Carvey described draft language that would bar hospitals from balance billing patients above the reference-based amount: "the board shall implement reference based pricing in a manner that does not allow hospitals to charge or collect from patients any amount in excess of the reference based amount established by or for the item provided or service delivered," she said. The draft also directs the board, in collaboration with the Department of Financial Regulation, to monitor whether lower hospital prices translate into commensurate decreases in health insurance premiums and to post findings annually.

On global hospital budgets, the draft changes earlier targets. Rather than requiring budgets for "not fewer than five" non-critical-access hospitals at the outset, the bill directs the board to establish global budgets for "one or more" Vermont hospitals no later than hospital fiscal year 2028 and for all Vermont hospitals no later than hospital fiscal year 2030. The draft specifies that global budgets "shall include Medicare to the extent permitted under federal law, but shall not include Medicaid," language Carvey said reflects the Agency of Human Services' request.

Hospitals would face expanded submission requirements to the board. The draft asks hospitals to propose how they would support community-based, non-hospital providers (including mental health and substance-use disorder providers, primary care, long-term care and services such as SASH and Choices for Care), and to provide standardized accounting data so the board can compare expenses across hospitals.

The bill contains a new hospital-network review provision permitting the board to investigate the structure and financial operations of hospital networks, including compensation of network leadership, and to recommend corrective action. Carvey noted any final order by the board under that section would be appealable under the board's existing procedures.

The draft establishes a statewide health care delivery plan to be led by the Agency of Human Services in collaboration with the Green Mountain Care Board, the Department of Financial Regulation, the Office of the Health Care Advocate and others. Carvey described an advisory committee with representation from insurers, hospitals, federally qualified health centers, physicians, free clinics, designated mental health agencies, home health agencies, long-term care facilities and other stakeholders; the secretary of human services or designee would chair the committee.

The bill adds data-integration work: the agency would coordinate with the state's health information exchange steering committee, align processes with the statewide health information technology plan, and "integrate clinical data, claims data and data regarding social drivers of health." Committee members asked for ongoing updates on the data integration work, and Carvey agreed to add a reporting requirement.

The draft also would expand the Green Mountain Care Board's subpoena-sharing authority so the board may share subpoenaed records with other agencies if those agencies agree to maintain confidentiality where required.

Implementation and reporting deadlines are embedded in the draft: the Agency of Human Services would provide an implementation update to the Health Reform Oversight Committee by Nov. 15 each year on progress toward the statewide delivery plan and data integration; the Green Mountain Care Board would report to the committee by Feb. 15, 2026, on reference-based pricing and global budget methodology and implementation activities.

The draft authorizes five new permanent classified positions at the Green Mountain Care Board in fiscal 2026 (a director and project manager for global budgets, a director and project manager for reference-based pricing, and a staff attorney) and includes appropriations in the draft to support agency and board work. Carvey said the draft shows an Agency of Human Services appropriation of roughly $5.5 million (which in the draft includes $250,000 for hospital transformation grants, $200,000 for contracts/consultants and a $250,000 health information technology fund allocation for data integration) and a Green Mountain Care Board request of $1.5 million (including $850,000 for the five positions, $500,000 for contracts and $150,000 for expenses). Those amounts appear as proposed appropriations in the draft bill language.

Why it matters: the draft would change how hospitals are paid and how insurers reimburse care in Vermont, create new oversight tools for hospital networks and finance transformation work, and require the state to collect and share more standardized hospital and claims data. Committee discussion focused on implementation timing, protections for access and quality, how Medicare and Medicaid participation would be handled, and how the state will compel or obtain claims and clinical data from insurers for the planned data system.

The committee did not take a final vote on the draft during the March 14 discussion; staff indicated they would redraft language based on committee direction and return with updated bill text and amendment options.