Committee weighs reference-based pricing, global hospital budgets as bill moves through markup

Lawmakers and agency and hospital representatives spent the March 13 Health & Welfare committee meeting discussing a bill that would require implementation of reference-based pricing for hospital services and direct the Green Mountain Care Board to establish global hospital budgets over a multi-year timeline.

The committee examined the bill’s core elements, including a proposal discussed by Jeff Fannon, executive director for Montana, that would set reference-based prices for certain hospital services at multiples of the Medicare rate. “The concept here is reference based pricing ... in this case, the proposal, it’s bill charges at 200% of Medicare,” Fannon said during the meeting. He and others described carve-outs for critical access hospitals and said the draft segregates larger hospitals for initial application.

Why it matters: Devon Green, Vermont Association of Hospitals and Health Systems, told the committee that a Green Mountain Care Board report estimated a statewide revenue reduction in one scenario of about $79,000,000 to hospitals, and that excluding critical access hospitals would still produce roughly a $62,000,000 cut. “This would basically be a 79,000,000 cut, to hospitals statewide,” Green said,…