Hospitals raise concerns about reference-based pricing’s impact on Vermont access and finances

Devin Green of the Vermont Association of Hospitals and Health Systems told a Feb. 5 meeting that hospitals are "open to all sorts of solutions, including reference based pricing," but urged careful evaluation of how such a plan would interact with global budgets and affect access, quality and hospital finances.

Green said Vermont hospitals are "in a fragile place" and noted other states' experiences with reference-based pricing. He told the meeting that Montana implemented a version of reference-based pricing through its state employee plan under contract rather than by legislation and that the latest Montana contract "has backed away a bit from pure reference based pricing" to give the state more flexibility. He also said Oregon’s approach includes a number of exemptions — hospitals with 50 or fewer beds, critical access hospitals, sole community hospitals in counties with fewer than 70,000 residents, and hospitals for which Medicare comprises more than 40% of payer mix — that would effectively exclude most Vermont hospitals from the policy if applied here.

A meeting moderator asked whether the hospital association would be amenable to exempting critical access hospitals; Green answered that the association would support exempting critical access hospitals from any proposed reference-based pricing policy. Green emphasized that the association’s focus is understanding the proposal’s mechanics and its likely effects on access and quality as well as financial viability.

Green’s remarks were presented as information for the group to consider; the transcript records no formal vote or decision on adopting reference-based pricing. The meeting then concluded its discussion of the topic and moved on.