Vermont Senate Health & Welfare hears competing views on reference-based pricing, global budgets and protections for primary care

The Senate Health & Welfare Committee on March 11 took testimony on a committee bill that would restructure aspects of hospital and statewide health care financing, including a proposed reference‑based pricing pilot, potential hospital global budgets and expanded duties for the Green Mountain Care Board.

The bill’s sponsor told the committee the goal is to complete the committee bill “by listening to folks who have been engaged with this, including AHS,” and to “focus in on commercial insurance” and reference‑based pricing for hospitals as a way to address rising premiums.

Why it matters: Committee members and witnesses framed the bill as a fast‑moving attempt to curb rising health care costs and shore up primary care. Testimony showed disagreement about pace and scope — hospitals and their association warned the timetable was too tight and that pilots must include actuarial adjustments and measurable guardrails; an insurer asked for broader flexibility in statutory language; an independent provider urged site‑neutral pricing and protections for small outpatient practices.

Devin Green, speaking for Vermont hospitals, advised the committee to “keep it simple, have adequate representation, and have the process.” Green urged that hospital global budgets be pursued through the federal AHEAD model so Medicare participates, and warned that implementing broad hospital global budgets outside an all‑payer framework would increase administrative burden. Green told the committee that hospitals already are preparing budgets with July deadlines and called for realistic timing for any statutory changes.

Sarah Teachout of Blue Cross and Blue Shield of Vermont urged the committee to give the Green Mountain Care Board flexibility to design reference‑based pricing and to clarify statutory language about which services and payers are covered. Teachout said she was “not aware of any state that’s on reference‑based pricing outside of the hospital system,” warned that the statutory timing could be too fast for carriers’ IT and contracting systems, and suggested staging implementation so hospitals are addressed first.

Sharon Goodwin, owner of an independent physical‑therapy practice, urged the committee to prioritize site‑neutral reimbursement for routine outpatient services and to protect independent providers. Goodwin said independent clinics historically delivered much outpatient care and that hospital acquisitions have reduced competition and raised prices; she called site‑neutral pricing “the only way to eventually get there” and recommended starting with a small set of low‑complexity codes to test the change.

Common concerns and suggested changes included: slowing the timetable for a reference‑based pilot so hospitals and payers can prepare; including actuarial adjustments for acuity and social risk in any pilot; requiring annual outcome measurements tied to access, quality and hospital financial reserves; and ensuring the Green Mountain Care Board uses existing accounting systems rather than duplicating tools. Witnesses also discussed a possible Medicaid growth assumption to improve hospital predictability.

Committee members and witnesses repeatedly emphasized process. Green asked for a formal reconsideration or review path at the board level; hospitals and the insurer sought stakeholder input during pilot design. Testifiers urged clearly defined triggers for pausing or ending a reference‑based pilot if quality or access deteriorate.

The committee did not take any formal votes during the hearing. Members scheduled additional testimony from the Agency of Human Services and the Green Mountain Care Board in coming meetings and said they will revisit bill language after collecting more details.

What to watch next: Committee staff said they will meet again at 8:45 a.m. the following day to review drafted statutory language and testimony. The committee flagged hospital budget deadlines (July) and a possible target of FY 2027 for some payment model changes as timing constraints to keep in view.