House Health Care Committee reviews bill to license freestanding birth centers and exempt them from certificate-of-need review

Legislative counsel Jennifer Carver reviewed H.40 for the House Health Care Committee on Feb. 7, describing a bill that would license freestanding birth centers, remove those centers from the state's certificate-of-need (CON) requirements, and direct the Agency of Human Services to seek federal approval for Medicaid coverage of birth-center services.

The bill’s stated purposes are “to reduce health care costs, protect women's access to prenatal, maternity, birthing, postpartum, and newborn care services, and ensure women have a choice in how and where they give birth,” Carver told the committee. She cited endorsements of the birth-center model by national groups and federal evidence that birth centers can yield better outcomes and lower costs for low‑risk pregnancies.

H.40 would add a new licensure chapter to Title 18 defining a birth center as “a facility that is not a hospital or part of a hospital at which births are planned to occur away from the pregnant individual's residence following a low risk pregnancy,” and would require Department of Health licensure before opening. The draft sets a $250 licensing fee deposited into the hospital licensing fees special fund, allows accredited centers to use Commission for the Accreditation of Birth Centers certificates to satisfy renewal requirements, and directs the Department of Health to adopt rules aligning Vermont licensure with national birth‑center standards published by the American Association of Birth Centers.

Minimum licensing standards in the draft include compliance with health, safety and sanitation standards (including state fire marshal rules and municipal ordinances), a clear process for responding to patient complaints, and inspection authority for the Department and its designees. The bill would prohibit unlicensed entities from advertising themselves as a “birth center.” It also replicates standard administrative processes for denial, suspension or revocation of licenses and provides for appeal to superior court and, if necessary, the Vermont Supreme Court.

On insurance, H.40 would add birth‑center locations to the existing requirement that plans offering maternity benefits cover services rendered by licensed midwives and certified nurse‑midwives; the bill also requires reimbursement for prenatal, maternity, postpartum and newborn services provided at a birth center, including facility fees. Section 6 directs the Agency of Human Services to seek Centers for Medicare & Medicaid Services approval to allow Vermont Medicaid to cover and separately reimburse birth‑center facility and professional fees; the draft sets an effective date of Jan. 1, 2026 for the act, and makes Medicaid coverage contingent on federal approval, with the agency required to submit its request on or before July 1, 2025.

Committee members asked multiple operational and jurisdictional questions during the walkthrough. Carver said that if the legislature expressly exempts licensed birth centers from the CON statute in section 3 of H.40, that exemption would apply regardless of any separate bill that raised monetary CON thresholds. Committee members asked the Green Mountain Care Board to clarify jurisdictional determinations if the committee moves the bill forward; Carver and others noted that the Department of Health would fill in many operational details through its rulemaking process, including standards for transfer to a hospital. Carver also noted existing requirements for licensed midwives to have written plans for consultation and emergency transfer and transport filed with the Office of Professional Regulation (the committee discussion referenced those requirements as part of current statute).

No formal committee action or vote on H.40 was recorded in the transcript. Committee members discussed scheduling further witnesses — including the Department of Health, the Green Mountain Care Board and the Office of Professional Regulation — to address implementation, rulemaking, and jurisdictional questions before any markup.

Next steps: The bill as presented would require rulemaking by the Department of Health before licenses could be issued; the Agency of Human Services must seek CMS approval for Medicaid coverage and the bill ties the start of Medicaid reimbursement to the later of federal approval or Jan. 1, 2026.