House Appropriations reviews S.190 to set hospital payment caps under reference‑based pricing

The House Appropriations Committee met May 21 to consider S.190, a strike‑all amendment out of the Health Care Committee that would expand reference‑based pricing and set limits on how much hospitals may be reimbursed by certain insurance plans.

Jen Harvey of the Office of Legislative Council told members the bill directs the Green Mountain Care Board to use reference‑based pricing to reduce hospital prices incrementally toward national median prices by hospital type by calendar year 2030, and to measure progress using high‑quality, nonpartisan data tied to Medicare benchmarks. "We start off dealing with reference‑based pricing," Harvey said, describing the bill as a follow‑up to last year's Act 68 work.

The amendment would require hospitals and carriers to express rates as a percentage of Medicare (or another benchmark the board adopts) in provider contracts and in public, machine‑readable price files, alongside dollar amounts. Harvey also said hospitals must obtain and use unique national provider identifiers for off‑campus hospital departments on claims filed after 10/01/2027.

On budgetary mechanics, Harvey said the board may direct an amount equal to 3.5% of a hospital's combined commercial net patient revenue (based on approved FY2026 budgets) for hospital fiscal year 2027 to reduce commercial reimbursement rates for qualified health benefit plans (QHPs) and plans covering school employees (BEHI plans) using reference‑based pricing. For hospital fiscal year 2028 the bill would cap reimbursements at no more than 300% of the Medicare adjusted base rate, and for FY2029 at no more than 250%.

The bill would prohibit hospitals reimbursed under those limits from balance billing patients beyond allowed cost sharing. Harvey said the legislation instructs regulators — the Green Mountain Care Board and the Department of Financial Regulation — to ensure those reimbursement limits are reflected appropriately in premium reviews so the changes exert downward pressure on premiums or premium growth.

Members questioned timing and implementation. Several asked when the board would complete rulemaking, how annual budget orders and midyear adjustments would interact with the caps, and whether reductions would take effect immediately or with the next provider contract. Harvey and others said the board's rulemaking process is underway but may not be complete in time; Representative Elizabeth Black warned that the board needs authority from the Legislature to begin reference‑based pricing for FY2027 to match legislative intent from the prior session. "They have not completed their rulemaking process yet," Black said.

A member who identified as a former provider and regulator urged clearer criteria, saying that allowing the board latitude to reduce rates beyond the reference benchmark could create an unstable environment for hospitals and payers. Committee members also sought specifics about monitoring and when the board would identify and reduce the highest commercial rates relative to Medicare.

The committee posted its short amendment and planned to finish section 2 before proceeding to a vote upstairs; members were told a large floor amendment on the cannabis bill is expected at 11:15. No final vote on S.190 was recorded in the transcript.

Next steps: the committee will complete its review of the posted amendment, then take the committee's vote and proceed as scheduled to the floor where a separate amendment is expected later in the morning.