Senate committee advances reference‑based pricing language, debates 250% cap for QHP hospital reimbursements

The Senate Health and Welfare Committee reviewed a comprehensive amendment to S.190 that would require hospitals and health insurers to begin expressing certain provider rates as a percentage of Medicare and would limit hospital reimbursements in the Qualified Health Plan (QHP) market.

Jen Haring, legislative council, presented the amendment and the board’s approach, including a definition of the “Medicare adjusted base rate” and an applicability‑date approach that delays some requirements until the Green Mountain Care Board’s rule takes effect. Haring said the amendment would initially require hospitals and insurers to “begin expressing as a percentage of Medicare” the rates for items and services identified through a collaborative process between the board and representatives of Vermont hospitals.

Devin Green (Vermont Association of Hospitals and Health Systems) told the committee hospitals do not understand why they must do conversions the board could do, arguing the board should provide the conversion information. Emily Brown (Green Mountain Care Board) responded that if the state is to implement reference‑based pricing for FY27, hospitals and insurers need to start converting prices to percentages of Medicare now and that the board lacks resources to do one‑on‑one conversions for every hospital.

A central policy point in the amendment would cap reimbursements for items and services provided to individuals enrolled in a QHP at 250% of the Medicare adjusted base rate. The amendment also would prohibit balance billing for patients covered under that cap and would require carriers that reimburse on a capitated or other non‑fee‑for‑service basis to adjust payments so the cap is respected.

Board representatives said the 250% cap is intended to stabilize the QHP market, which the board regulates, and to ensure savings accrue to QHP premiums. Hospitals and hospital advocates cautioned the cap could significantly harm financially vulnerable hospitals, particularly those with a large share of Medicaid and QHP patients. Several committee members urged a mechanism to adjust the cap or provide budget‑process relief if applying the cap causes a hospital to miss required budget guidance.

The committee coalesced around an order of operations discussed by staff: first apply a 250% cap in the QHP market, and only if a hospital still cannot meet budget guidance should the board target reductions at commercial reimbursement rates that exceed 500% of Medicare or otherwise focus on the highest relative prices. The committee instructed staff to add budget adjustment language similar to Act 55 so the board can seek relief through the hospital budget process where appropriate, and to require the board to ensure reimbursement limits are reflected in QHP premiums.

The amendment would also remove most of the original outsourcing restrictions and instead require the Green Mountain Care Board to collect information and report on outsourcing’s impact on access, quality and provider tax revenue; that work would include findings and recommendations to the Senate and House committees by January 15 of the next year.

The committee did not adopt final, binding text on every point and deferred final decisions to a later meeting; members said they will return to S.190 this week to resolve remaining items. The amendment language as presented also creates a study committee on public employee health benefits and adds a public interactive data tool requirement for the board.