Family members and designated agencies tell Vermont committee H.13 must raise Medicaid rates to stabilize home- and community-based services

Lawmakers continued testimony on H.13 on Wednesday, Feb. 5, hearing from family members and leaders of designated and specialized service agencies who said current Medicaid reimbursement and persistent staffing shortages are reducing services for Vermonters who rely on home- and community-based supports.

The hearing, held before the House Committee on Human Services, featured extended testimony from Lisa Stamatis of Milton, a parent whose family waited seven years for agency services and who described a four-year interruption in supports during the COVID period that she says harmed her adult children’s skills and independence. "Support services enable us to be parents," Stamatis told the committee. Her testimony included specific examples of medical and safety risks that followed the loss of regular staff and described the differences her family saw after transferring to Champlain Community Services (CCS).

Why it matters: agency leaders told the committee that designated agencies (DAs) and specialized service agencies (SSAs) are heavily dependent on Medicaid — roughly 90 percent of revenue systemwide — and said current rates do not cover costs. Beth Seitler, chief executive officer of Washington County Mental Health Services, summarized the mismatch in practical terms: "A case manager costs about $80 an hour and we're reimbursed, I think, $50.55," she said, adding that unreimbursed tasks such as paperwork, overtime and crisis staffing drive agencies into deficit.

Agency testimony and evidence presented

- Staffing and turnover: Multiple witnesses said vacancy and turnover rates are high across developmental and behavioral services. Agency leaders said turnover is concentrated among direct-service staff and cited a systemwide vacancy/turnover figure in the low double digits (about 12–13 percent) of roughly 6,000 positions. Speakers said turnover increases recruitment and training costs and prevents employees from developing the long-term relationships needed for effective supports.

- Funding and payer mix: Presenters showed that the DA/SSA system is heavily Medicaid dependent and therefore sensitive to rate-setting and timing of increases. Several agency witnesses said that a "level-funded" state budget functions as a cut because health insurance, liability insurance and other uncontrollable costs rise with inflation.

- Cash reserves and capital: Agencies described thin cash positions. Witnesses said system averages for days of cash on hand are lower than hospitals' averages (a system average cited around 63 days, with some agencies reporting much less), leaving agencies fragile when unexpected costs occur.

- Use of contracted staff: Several witnesses said agencies are forced to contract with higher-cost outside providers (referred to in testimony as "TLC" and similar vendors) at rates that substantially exceed the agencies’ payroll costs, which further pressures budgets.

- Payment reform and the model under development: Agency leaders and committee members discussed a draft payment model that would use six levels (from a Supports Intensity Scale or "SIS"-type approach). Witnesses said the draft model did not yet account for roughly 45 percent of current service-budget items and that many individuals could see reduced authorized service budgets under the proposed levels unless the model includes flexibilities and additional funds.

Family testimony and proposed solutions

Lisa Stamatis recounted concrete harms from service disruptions: loss of employment for one son, cognitive and functional decline in another with early-onset dementia, and severe family stress. She recommended a set of practical measures discussed in testimony, including internship programs with tuition forgiveness to recruit staff, loan-forgiveness tied to multi‑year commitments, inter-agency partnerships to equalize pay and benefits, and creative use of community donations (for example, agency vehicles from nonprofits such as Good News Garage) to reduce operating costs. She also urged caution about shifting management to a new statewide case-management entity, saying she feared it could dismantle smaller, effective agencies.

State and committee remarks

Committee members pressed for details on how the payment model would treat authorized service hours, noting constituents reporting cuts in service plans. Amy Johnson, who identified herself as "director of policy in the department," told the committee that implementation of certain elements is federally required: "We have to do it. So we don't have a choice about doing it," she said, while acknowledging that the department and the committee could influence implementation choices.

Process and risk

Witnesses repeatedly said the draft payment model is incomplete and that the implementation timeline is aggressive. They warned that if shared‑living providers or other community supports fold under financial strain, the state could face far higher costs to provide higher‑level (institutional or contracted) care for people who can no longer remain in community placements.

Next steps

Committee members scheduled an oversight and accountability session to review payment reform and conflict‑free case management. No formal votes or motions were recorded during the Feb. 5 session.

Ending

Speakers urged the committee to prioritize predictable, cost‑based rate adjustments and to build implementation flexibility into any payment‑model changes so agencies can preserve staffing, maintain services and avoid higher downstream costs to hospitals, corrections or institutional care.