DVHA tells committee of $33M midyear Medicaid increase, Planned Parenthood funding swap and several one‑time costs
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Summary
Department of Vermont Health Access officials told the House Appropriations Committee Dec. 16 of a $33 million consensus update to Medicaid spending, a $1.13M general‑fund swap to replace paused federal Planned Parenthood funding, a $2.7M cloud migration request and remaining provider‑stabilization needs.
Sean Groves, commissioner for the Department of Vermont Health Access (DVHA), and financial director Stephanie Barrett presented the agency’s midyear budget adjustment to the House Appropriations Committee on Dec. 16, 2025.
Barrett told the committee the programmatic consensus update — the midyear revision to estimated Medicaid caseload and cost per case — produces a net upward adjustment of about $33,000,000. She said caseloads are declining but the average cost per case is rising, driven in part by higher pharmacy costs and lower rebate percentages, leaving higher‑acuity individuals in the enrolled population.
DVHA also detailed a funding‑source swap to ensure Planned Parenthood of Northern New England can continue family‑planning services after federal changes flagged by the passage of HR 1 paused Medicaid funding to Planned Parenthood. Barrett described replacing roughly $1,130,000 of federal/global‑commitment funding with state general fund for the fiscal year so that the grant can continue serving patients.
On administrative and onetime items, DVHA noted: near‑term contract amendments related to claims processing (GameWell) and other vendor work (just under $2 million in gross adjustments), a move of the Medicaid data warehouse and analytics solution (MDWAS) into a maintenance/operations phase, and partial‑year lease costs tied to return‑to‑office requirements. Barrett said the general‑fund share of an IT cloud migration for Vermont Health Connect is estimated at $2,700,000 to keep vendor systems in compliance until a replacement eligibility system is ready.
Barrett described an alternative‑payment arrangement for behavioral‑health bed days that requires a year‑end reconciliation of utilization; she said prior reconciliations produced general‑fund payments in the single‑ to low‑double‑million range (DVHA cited a previous funding/payment dynamic where the budgeted figures and final paid amounts differed materially).
On the provider‑stabilization general‑fund appropriation (initially $10,000,000), DVHA said about $3,300,000 remains in signed awards, with several pending applications that could exhaust remaining funds; officials explained their review process includes forensic accounting for larger organizations. Committee members asked whether the BAA should include additional stabilization funding or restructure the program rather than rely on one‑time BAA money.
DVHA said $10.8 million in global commitment funding was allocated as onetime bridge payments for primary care and the SASH program (about $5.0 million to SASH and $5.8 million to primary care providers), and that additional general‑fund bridge payments ($835,000 for comprehensive payment reform, $3.2 million for primary‑care transition) were scheduled for January and later disbursements.
Barrett also described a downward technical correction to coding for applied behavioral analysis (ABA) services (affecting provider payments) and a partial‑year adjustment to FQHC/rural health clinic rates tied to the federal medical economic index; both items will be annualized in the FY27 budget presentation.
Committee members asked for follow‑up data on demographic shifts in Medicaid eligibility groups; DVHA said it began collecting monthly age and distribution data in January 2024 and can return with analysis explaining cost pressures. No formal votes or motions were taken at the conclusion of the agency presentations.
