Vermont Veterans Home requests $9.7 million budget adjustment after delayed Medicaid settlement and capital costs

The Vermont Veterans Home asked the House Appropriations Committee on Thursday, Jan. 23, for a $9.7 million budget adjustment to cover a Medicaid settlement, capital project reimbursements and higher operating costs through the end of the fiscal year.

The request includes a Medicaid settlement tied to a retrospective waiver-based reconciliation and reimbursements for security and American Wing work that the home already paid from operating cash. “We are an agency of the state of Vermont,” Melissa Jackson, chief executive officer and licensed administrator of the Vermont Veterans Home, told the committee as she introduced the adjustment request.

The nut of the request is a Medicaid settlement of roughly $4.27 million for fiscal year 2023 that the home said will true up interim Medicaid payments to its actual costs. Jackson said the home currently receives an interim Medicaid rate of $475 per day and that true-up settlements have run substantially higher — “most recently, it’s been a little over $700,” she said — producing the settlement now being requested in the budget adjustment.

Committee members pressed for clarity on how the settlement flows through federal and state accounts. Committee members and staff referenced section B.301 of the budget documents, which shows reconciliation of federal and state Medicaid funds. Committee members said they would follow up with the administration’s budget staff to verify the federal/state split and how the dollars are recorded in the adjustment.

The request also seeks reimbursement of capital spending the home says it advanced in cash. Jackson said the home installed a facilitywide security system with RFID badge entry and breach notifications after reporting more than 40 exterior doors that could be accessed without notification. The home said the project drew 65% federal VA grant funding and that the state’s share is roughly 35%. The total security project cost was described as about $2.5 million; committee discussion confirmed the VA covered the majority and that the home is seeking state capital/bond reimbursement for its share.

Jackson said design work is under way for the American Wing, a 30-bed unit built in the 1970s with failing cast-iron plumbing in a concrete slab; the wing will be rebuilt as a “state-of-the-art memory care unit,” she said. While the wing is offline for construction planning, the home is operating at about 100 beds instead of its licensed 130. The home budgeted for 130 licensed skilled nursing beds (30 in a secure memory-care unit) and eight residential-care beds.

Staffing costs were a second major driver of the request. The presentation listed roughly $5.9 million for agency (contracted/travel) staff to cover nursing shortages. Steve McClafferty, finance director at the Veterans Home, said agency staffing costs are trending down as the A‑wing is closed and the home is consolidating residents, but the home continues to recruit RNs and LPNs. Asa Whitcomb, chief operating officer, said recruitment efforts include running licensed nursing assistant classes, increasing pay ranges and daily hiring activity.

Other unplanned expenses cited in the adjustment included roughly $400,000 for rehab and physician services and HVAC replacements after multiple unit failures. The home reported a current census of 94 residents (86 in the nursing home and 8 in domiciliary assisted-living beds), with most residents coming from southern Vermont.

Committee members asked for follow-up documentation about ownership and capital accounting. Jackson said the land is owned by the home’s board of trustees and that the buildings and capital work are coordinated with the state’s Buildings and General Services (BGS) and outside architectural firms; she asked the committee to coordinate with BGS about how bond authority and reimbursement should be handled. The committee agreed to follow up with legislative budget staff and BGS to clarify whether the requested reimbursements should be processed through the capital bill or the budget adjustment.

No formal committee action was taken at the hearing; members said they would review the paperwork, confirm fund-source details with budget staff, and follow up with the home and BGS before deciding on approvals.

The House Appropriations Committee will revisit the Veterans Home request as it completes review of the governor’s budget adjustment and ahead of the FY26 budget process.