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Lawmakers question incentives tied to heavy use of contract nurses as rebasing raises rates
Summary
Committee members were told Vermont nursing homes use contracted travelers at much higher rates than national averages and that rate "rebasing" now being applied to 2023 costs may have raised allowed rates, creating concerns about incentives to rely on contractors.
Lawmakers pressed department officials on whether current rate-setting rules unintentionally reward facilities that rely heavily on contracted nurses.
Jamie Mooney, director of the Division of Rate Setting at the Department of Vermont Health Access, told the committee contracted-traveler use varies widely across the state—ranging from nearly 0% at some facilities to 70.76% at another. She said 11 of 33 facilities had traveler shares above 40% and five facilities had contracted travelers that outnumber permanent nursing staff. Mooney noted the national contracted-staff average is roughly 5% to 6%; Vermont's system is closer to 25% by the department's measure.
Mooney said department analysis found contract nursing staff costs are substantially higher than the cost of employed staff: "The contract nursing staff costs we found are approximately three times more per hour than the employed." Committee members argued rebasing the nursing rate to fiscal year 2023 costs (captured July 1, 2025) means higher contracted-staff costs are now embedded in the rate, which could reduce the financial incentive for providers to hire permanent staff.
Department staff described policy work underway: adjusting the timing and frequency of rebasing, reconsidering per-diem caps with peer-group approaches (to avoid penalizing small facilities), tweaking the "step-up" property basis rules for recently sold facilities, validating PDPM casemix scores with audits, and providing education to providers around special rates. Mooney said the department will pursue validation audits of PDPM scores and examine whether providers are coding and reporting casemix consistently.
Members asked the department to flag in the next data update which facilities that receive high traveler shares also received EFR in 2025. The department agreed to provide this cross-tabulation and to supply the updated 2025 dataset by the end of May.
The committee did not take a vote but directed staff to return updated data and further analysis of rebasing effects and sustainability measures.
