Senate panel weighs reference‑based pricing and rules for hospital outsourcing
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Summary
The Senate Health & Welfare committee reviewed S.190, which would require hospitals to express rates as a percentage of Medicare, publish machine‑readable files with those percentages, and set default Medicare‑based price caps for new CPT codes. Witnesses urged careful timing, clearer definitions for outsourced clinical departments, and collaborative rulemaking.
The Senate Health & Welfare committee on Feb. 25 examined S.190, a bill directing the Green Mountain Care Board to advance reference‑based pricing and to tighten rules around hospitals outsourcing clinical services.
Supporters said the bill creates a clearer, comparable way to present hospital prices and could be an important first step toward slowing cost growth. ‘‘You need to think about where you want to be in three to five years,’’ Mike Fisher, Healthcare Advocate, told the committee, urging multi‑year targets and careful modeling so the state hits a middle — roughly the sixth decile compared with national benchmarks — rather than an extreme reduction that could destabilize rural hospitals.
The bill’s main provisions in staff counsel’s presentation would: require hospitals to express provider contract rates as a percentage of Medicare (or another defined benchmark) for provider contracts amended, renewed or entered on or after a specified date; require unique national provider identifiers (NPIs) for off‑campus hospital departments; and require hospitals to include percentage‑of‑Medicare pricing, in addition to dollar amounts, in the machine‑readable files they already publish under federal hospital price‑transparency rules. The bill also authorizes the Green Mountain Care Board to set a default Medicare‑based percentage above which hospitals cannot accept payment for newly established CPT codes unless the board sets a specific reference price.
Hospitals and advocates have raised practical concerns: several witnesses noted that federal rules on NPIs for off‑campus departments are not yet finalized and that adopting state deadlines that precede federal implementation could create conflicts. Counsel also said that the board’s rulemaking must include public comment under the Vermont Administrative Procedure requirements, leaving open whether price setting will proceed as a collaborative process with hospitals or in a more directive manner by the board.
Fisher and others urged the committee to guard against unintended market effects. He warned that reference‑based changes could play out differently across payer markets — potentially reducing costs for some consumers but increasing out‑of‑pocket exposure for people who receive large subsidies in the individual market — and urged modeling on effects for both the individual and small‑group markets. ‘‘We are allowing good risk to leave the [small‑group] pool,’’ Fisher said, calling that trend ‘‘cannibalization’’ of the small‑group market.
The committee asked for a concise written summary of witness testimony to aid drafting and agreed to continue discussions in coming days; staff noted additional testimony will be heard before the committee’s scheduled markup.
What happens next: committee counsel and members said they will reconcile language with House proposals, gather written testimony and proceed to markup at a later scheduled session.