VITAL outlines $12.2M operating plan, warns of federal funding dependency

VITAL CEO Beth Anderson told the Health Care Committee that VITAL, the nonprofit that operates Vermont’s statewide health information exchange, submitted a FY25 budget projecting roughly $12.1 million in revenue and $12.2 million in expenses and is using board-designated assets to cover an intentional, short-term operating loss.

Anderson said the Agency of Human Services provides about 97% of VITAL’s current fiscal-year revenues under a contract that follows the state fiscal year (July 1–June 30). Will Dempsey, the Agency of Human Services health data officer, said that the state share of VITAL funding is primarily drawn from the Health Information Technology Fund, which in turn receives a portion of the health care claims tax under 32 VSA §1042(b) and related statutory reporting requirements under 32 VSA §1031(g). Dempsey noted Act 144 of 2024 extended the fund’s sunset date to July 1, 2026.

Why it matters: VITAL’s operations rely on a mix of federal matching dollars, state Health IT Fund dollars and smaller revenue streams. Committee members pressed AHS and VITAL on contingency plans should federal funding levels change.

VITAL’s scope and use metrics: Anderson said VITAL (a Vermont-based 501(c)(3) nonprofit) works with 241 organizations across hospitals, federally qualified health centers, specialty practices, long-term care, pharmacies, labs, payers and EMS. She reported that VITAL holds data on 98.9% of Vermonters for whom it has records and, for calendar year 2024, received “over 60,000,000 messages of health care records.” She said VITAL delivered more than 1,300,000 test results into providers’ electronic health records, shared roughly 23,000 reportable lab results with the Vermont Department of Health, and delivered about 1,000,000 immunization records to that agency. Anderson added the provider web portal has more than 2,700 users at 183 organizations and recorded almost 23,000 chart accesses in January, and that monthly chart accesses increased 53% between December 2023 and December 2024.

Budget details: Anderson said FY25 maintenance-and-operations (M&O) costs are about $6.8 million and development/design/implementation (DDI) project work is budgeted at about $4.5 million. She said software costs for day-to-day HIE operation are roughly $2.4 million, outside support includes about $1.6 million for operational contractors and nearly $2.3 million tied to DDI projects, and personnel costs are nearly $5.0 million. VITAL is budgeted for 33 full-time-equivalent staff and one limited-service clinical education position tied to a two-year provider-outreach effort.

Funding mix and federal match: Dempsey described federal CMS outcome-based certification (OBC) funding that provides varying federal match rates for VITAL activities. He summarized the current allocation used in the state’s calculation, noting DDI activities for the VHIE receive a majority federal share and a state share drawn from the Health IT Fund, and M&O activities receive a higher federal share with a remaining state portion supported by the same fund. Dempsey said outcomes and quarterly metrics are reported publicly to CMS and influence the federal share.

Questions and contingency planning: Committee members asked for clarification on deferred revenue (an accounting recognition for multiyear deliverables) and on the Health IT Fund’s share of the health care claims tax. A committee member asked whether contingency planning is underway if federal funding declines; Dempsey and Anderson said contingency discussions are active and involve both AHS and VITAL. Dempsey also agreed to share the AHS report on the Health IT Fund with the committee assistant.

No formal votes or policy decisions were recorded during the presentation. The meeting moved on after committee members asked follow-up budget and accounting questions.