Health Care Committee weighs H.96 as Rutland Regional warns CON rules delay equipment replacement and birthing‑unit upgrade

The House Health Care Committee heard testimony on H.96, a bill that would raise Vermont's certificate of need (CON) monetary thresholds, with hospital officials and policy advocates saying current limits delay necessary equipment replacement and construction projects.

Jonathan Reynolds, vice president for clinical operations at Rutland Regional Medical Center, told the committee the current CON thresholds — $1,800,000 for replacement equipment and $3,600,000 for construction — are “pretty low and easy to trigger” and that inflation and modern regulatory requirements have made routine replacements more costly. "The CON application significantly delays the start of the construction," Reynolds said, adding the process can delay projects "by at least a year, if not longer."

Reynolds testified that Rutland Regional submitted two recent CON applications: a $3,100,000 MRI replacement and a $4,000,000 linear‑accelerator replacement for radiation treatments. He said the MRI unit performs about 6,000 scans a year and the linear accelerator delivers almost 6,000 radiation treatments annually. Reynolds said manufacturers told the hospital the older devices could no longer be supported and that cybersecurity risks and lack of parts required replacement.

Reynolds also described a planned consolidation of the hospital's birthing center and its women's-and-children's unit into a single LDRP (labor, delivery, recovery, postpartum) model so patients would remain in one room from admission through discharge. He said the consolidation is currently estimated at roughly $5.5–$6.0 million and, under today's thresholds, would trigger a CON. Reynolds said the hospital estimates that by combining the units it could reduce labor costs by almost $1,000,000 a year and reduce reliance on nursing travelers.

Hayden DeBlois, a visiting fellow at FGA Action, supported H.96 and cited national research arguing Vermont's CON rules are more restrictive than in many states. DeBlois referenced a Mercatus Center at George Mason University study and said raising thresholds would "promote competition in [Vermont's] health care marketplace" and could reduce per‑capita health expenditures; he offered the Mercatus finding that reform could lower per‑person spending by about $228 annually.

Committee members and other witnesses discussed implementation details. Reynolds and others said H.96 raises the CON monetary threshold to $10,000,000 for specified capital expenditures; Reynolds said that higher threshold would allow Rutland Regional to proceed with projects without awaiting CON approval. A committee member noted the bill's stated effective date is July 1, 2025; witnesses suggested the committee and the Green Mountain Care Board (GMCB) would need to consider whether pending applications should be grandfathered or otherwise addressed.

Members also discussed a so‑called "reverse CON" concept — a mechanism to review proposed reductions or closures of service lines — and whether that authority should be exercised as part of the GMCB's hospital budget review. Committee participants described the question as unsettled: some said the GMCB might be the right forum to require hospitals to present transition or continuity plans as part of budget reviews; others cautioned that the GMCB is a regulator, not an operator of hospitals.

Mike Fisher of the Albuquerque Advocate noted that depreciation exemptions for equipment replacement have appeared in related proposals; witnesses referenced S.10 (a Senate bill) and said the GMCB had proposed an exemption for equipment that is fully depreciated and requires replacement.

No formal committee votes were recorded during the testimony portion summarized here. Committee members indicated they would continue the discussion at a later meeting; the chair said the item would be taken up again on Friday.

Questions and clarifications in the hearing addressed staffing impacts, capital budgeting, and whether specific projects would be covered under the bill. Reynolds said Rutland Regional currently employs 60–70 traveler nurses across the organization and that consolidation would permit elimination of some traveler positions. When asked about the CON application's total staff cost, Reynolds said he did not have a precise tally on hand but offered to provide rough estimates to the committee.

The testimony combined hospital operational examples (equipment replacement, birthing‑unit consolidation) with policy testimony citing national studies and recent reform efforts in other states. Committee members asked staff and the GMCB to consider whether and how to handle applications already in process and how a reverse‑CON mechanism might be structured if the legislature wants to review service reductions.

(Notes: No formal votes or motions on H.96 were recorded in the provided transcript excerpt. The effective date mentioned during the hearing was July 1, 2025.)