Appropriations committee hears request for $11 million reconciliation payment for Brattleboro Retreat psychiatric stays

The House Appropriations Committee on Jan. 31 heard from Stephanie Barrett, identified in the transcript as chief financial officer for the agency referred to as “Diva,” about an $11 million reconciliation payment the state expects to owe the Brattleboro Retreat for inpatient psychiatric services used in calendar year 2024.

Barrett said the payment stems from an existing alternative payment method agreement under which the state buys a baseline number of beds at a set rate and reconciles actual utilization after the fact. “For several years, I think since 2020, [we] been paying the Brattleboro Retreat under what's called an alternative payment method,” Barrett told the committee. She said the agreement set the 2024 baseline at 51 beds a day but actual utilization in 2023 and 2024 averaged “62 to 64 beds a day,” producing the reconciliation liability represented by the $11 million figure.

The committee was told the $11 million would be general fund because federal Medicaid matching cannot be claimed for some days. Barrett explained that part of the census is Medicaid-eligible under an SMI waiver but that stays in an Institution for Mental Disease (IMD) or stays longer than 60 days do not qualify for federal matching: “we can't draw federal matching monies for those days because the retreat is what's called an IMD,” she said. Committee members asked whether the agency plans to negotiate more bed days or adjust rates; Barrett said negotiators had reached a near-final agreement to buy more beds at a lower per‑day rate while keeping the same baseline appropriation and that another reconciliation could be needed if utilization remains high.

Committee members pressed on timing and budget effects. Barrett said enacting the appropriation now would allow earlier payment and would clear an item out of the FY26 budget, but the final reconciliation remains contingent on claim runout and payer mix (for example, Medicare or commercial coverage exhausting before a Medicaid claim is recorded). She said the agency expects to have a clearer number by May when claims runout is complete and that current estimates point to the $11 million figure.

The committee also asked whether increased inpatient capacity reflected a reduction in emergency department boarding; Barrett said utilization changes suggest “a lot less” pressure of people stuck in emergency rooms who could not find inpatient beds, but she deferred system-wide utilization detail to the Department of Mental Health, which tracks clinical flows.

Committee members were given budget context for the program: the transcript indicates a baseline appropriation figure referenced as “57.7” (stated in the record as “57.7 1,000,000”), a per‑day rate the transcript records at about $3,100, and the 2024 purchased baseline of 51 beds a day. The committee was told the state had a reconciliation for calendar year 2023 that was accommodated at the agency level but that this year’s reconciliation is larger and is being proposed as a general fund appropriation.

The committee did not take a vote during the Jan. 31 hearing; members indicated they would consider how to treat the item in the budget adjustment process and follow up as more claims-run data become available.

Brattleboro Retreat and officials at the Department of Mental Health did not testify at this portion of the hearing; the committee directed technical questions about system utilization toward DMH and financial questions to Barrett and her agency.