Committee considers strike‑all amendment to expand reference‑based pricing to QHPs, limit extreme rural outpatient charges and add optometry Medicaid SPA

The Health Care Committee reviewed a strike‑all amendment to the bill that would expand early reference‑based pricing to qualified health benefit plans (QHPs) and certain school‑employee health plans, direct the Green Mountain Care Board to set hospital reimbursement limits for hospital fiscal year 2027, and add protections for Medicare beneficiaries at critical access hospitals while adding Medicaid coverage language for advanced optometry procedures.

The Chair introduced the proposal as a staff‑drafted strike‑all amendment and said, "I've asked Jen to draft some legislation, which is, a strike all amendment," framing the change as an attempt to preserve the bill's strengths while replacing a hard 250% cap on payments by QHPs with a process run by the board. A staff member summarized the text for the committee: "[The bill] directs the Green Mountain Care Board to determine the amount of hospital spending that can be reduced for hospital fiscal year 2027" and to implement those reductions through limitations on commercial reimbursement rates for QHPs and the state's Beehive plans.

Why it matters: committee members said the change targets affordability in the individual and small‑group QHP markets — which members described as especially vulnerable — while seeking to avoid sudden damage to hospitals. Members estimated the policy could affect tens of thousands of Vermonters in the exchange and small‑group markets; one member said, "So what I'm getting at is that we could potentially affect, like, 90000 lives." The amendment would give the Green Mountain Care Board flexibility to set reference‑based prices and apply percentage‑of‑Medicare limits rather than locking a single statutory percentage into law.

Key provisions

- Board authority and spending targets: For hospital fiscal year 2027 the board would be directed to determine how much hospital spending can be reduced and to order hospitals to implement required spending reductions principally by limiting commercial reimbursement rates paid by QHPs and Beehive plans. The amendment also authorizes the board to determine up to 2.5% in hospital spending reductions annually for years after 2027 until reference‑based pricing is fully implemented.

- Removal of a fixed 250% cap: The amendment removes the prior 250%‑of‑Medicare cap from statute and instead instructs the board to set reference‑based prices and the applicable percentage of the Medicare‑adjusted base rate for the applicable hospital fiscal year. A committee member warned that a strict 250% cap "would have the effect of us... hurting hospitals," underscoring members’ concern for hospital sustainability.

- School employee plans (actuarial value): New sections would require that the actuarial value of school employer plans (including employer HRA‑paid out‑of‑pocket costs) not exceed the QHP with the highest actuarial value on the exchange. Staff said those provisions would apply for plan year 2029 and thereafter; some members asked for witnesses on collective‑bargaining and labor implications before acting.

- Critical access hospital outpatient cost sharing: The amendment directs each critical access hospital to identify outpatient services for which the hospital's charge is five times or more the Medicare allowed amount and to reduce such charges to be at most five times Medicare for hospital fiscal year 2027. Staff described the intent as preventing situations where a Medicare beneficiary's cost share could exceed 100% of the charge.

- Medicaid coverage for optometry specialities: The amendment would add two sections directing Vermont Medicaid (through the Department of Vermont Health Access) to seek a state plan amendment with CMS so that services within the scope of an optometrist holding an "advanced therapeutic procedure specialty" would be covered for Medicaid participating providers. Staff set the SPA filing and specialty effective dates beginning July 1, 2028.

Questions and concerns

Committee members pressed staff on the origins of the 2.5% figure (traced to prior Act 68), the timing of global hospital budgets (members referenced 2030), and whether the board's cap would allow room for carrier‑provider negotiation or would function as an absolute cap. Staff repeated that the board would set item‑and‑service reference prices and that carriers would be prohibited from agreeing to reimburse above the board‑set limits for the applicable fiscal year.

Members also sought more analysis and testimony on the actuarial‑value requirement for school plans, possible collective‑bargaining implications, and whether the five‑times‑Medicare threshold for critical access outpatient charges was the right numeric policy. Several members urged the committee to hear hospital and rural‑stakeholder witnesses to assess the numbers before a final decision.

Process and next steps

Committee members did not take a vote on the amendment. The Chair said the committee could not finish consideration that day and scheduled continued work and a vote for 9:00 a.m. the following morning, asking interested witnesses to sign up for testimony. The amendment would require additional drafting (staff said they would post updated language) and further stakeholder input before a final committee vote.

Sources and attributions: quotes and descriptions in this report come from the committee proceeding transcript; staff descriptions were delivered by a legislative staff member who read the amendment language to the committee, and procedural and policy remarks were offered by the Chair and multiple committee members.