Senate backs emergency bill letting Green Mountain Care Board trim hospital payments, appoint observers amid Blue Cross solvency concerns

The Vermont Senate on Monday moved to send H.482 to the House with the Senate's proposed amendments, approving a committee recommendation to allow the Green Mountain Care Board to reduce certain hospitals' commercial reimbursement rates and to appoint independent observers when hospitals materially misrepresent budget information.

The bill was presented to the Senate as an emergency measure to address two urgent problems: the near-insolvency of Blue Cross and Blue Shield of Vermont, the state's only domestic health insurer, and recent instances in which the Green Mountain Care Board found material misinformation in a hospital budget submission.

Committee chair (Senator from Southeast District) told the chamber that Blue Cross "requires about $35,000,000 a week to pay claims" and that the insurer's reserves were rapidly declining. The senator said the bill's first section would allow the Green Mountain Care Board, after consulting the Department of Financial Regulation commissioner, to reduce a commercial insurer's reimbursement rates to one or more hospitals when necessary to remediate an immediate threat to the insurer's solvency.

The bill sets financial guardrails. A hospital would be eligible for a rate reduction only if it met one or more financial criteria (for example, having at least 135 days cash on hand and a positive operating margin in the prior fiscal year), and any ordered reduction could not…