Vermont Legislature SmartTranscripts:

[Rep. Robin Scheu (Chair)]: Good morning. This is the House Appropriations Committee. It is Wednesday, 02/21/2026. It's just a few minutes after 9AM, and we have a day ahead of us. We have a bunch of things going on. We're going to first hear from Dale as a result of some information we got from House Student Services last week. We asked them to come in and explain some things a bit further. So that's going to happen this morning. A couple of us are going to have to leave ten for another meeting that has to do with budget adjustments, that we're trying to figure some stuff out. Will be coming and going. We've been asked to do a drive by of H545, which is the bill about vaccines. It's not about what you should get. It's about advising about vaccines and the changes that are going on in Washington. The passed out of House Human Services on a ten-one-zero vote yesterday, it's going to be on the floor today. And so we need to do we're just doing a drive by and straw poll. So that we'll do this morning. We may ask you to hold it open so we can get two more votes on it later. We also have a potential addition to the budget adjustment bill related to the pharmaceutical bill that was done last year that came through this committee. Jen Carvey is going to explain that. And then, again, I probably will not be here when that happens, but have the conversation. If we need to get more people in, we can do that. That doesn't have to be voted on or decided today, but we need to talk about it today and see if and how we want to proceed with that. So that's happening. This afternoon, we're going to have GCF in. Also, it's a follow-up to human services letter from last week. Are going to Emily Byrne's going to come in. She's going to try to cut sheet for us for the budget adjustment. So we'll start. We'll continue to do some markup. She and I had a brief chat this morning. Even with all these kind of extra things going on, we both feel that we're still on track. So we're not losing sick about that. So even though it is a little chaotic at the moment, it is going be a day, and I don't know if things are going to change as we go along, but that's where we are for the moment. Donald, he had trouble with

[Rep. Eileen “Lynn” Dickinson]: his car on the

[Rep. Robin Scheu (Chair)]: way, so we had to go get a loader in St. John's earlier, and then he got here. Happened to him last year too. Anyway, we'll figure all

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: that out.

[Rep. Robin Scheu (Chair)]: So in the meantime, we have a lot of folks from Yale. We appreciate you all coming. Who's coming to the table? Come on, whoever you want to bring and I see we also have Tracy here so we have other questions. You're welcome to join them at the table. We need to speak and we've got somebody online, so we have lots of people to talk to us. Know we're talking, we can write them down. What do you say from the Secretary's office? No, the committee. Anyway, welcome everybody, and we appreciate you coming back again so quickly as we learn new information this week. We have I think this is mostly Yacovone's budget, but I think there are questions from a lot of people. But I don't know whether you want to explain things or Dave, you want to start or how we want to proceed. I'd be glad to frame it. Why don't you do that, if Thank I you. Good morning. Good

[Rep. Trevor Squirrell (Clerk)]: to see you both.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Thank you.

[Rep. David Yacovone]: There's three areas I wanted to cover, and we have forty five minutes and I'm not going to consume them all,

[Rep. Robin Scheu (Chair)]: but we can do it.

[Rep. David Yacovone]: I wanted to talk briefly about ERC, I wanted to talk about EFR, and I wanted to talk about DS, and for those who watch on TV, I'll go over the acronyms, I apologize. The EFR, when the Committee of Jurisdiction Human Services came down last week, they seem to express concerns that it's continuing to happen. And their belief, I think from testimony they took, it's driven in large part from traveling nurses costs they incur that compound the situation for needing extraordinary financial relief, EFR. Inaccurately indicated, I think I got the year wrong. I said, Folks, they get rebased periodically. And right now they had a rebasing, I believe on nursing. And I think they're getting paid today in '26, what their costs were in '24. And somebody corrected me to say actually it's twenty three day. Now, in any event, we can have somebody from your shop tell us exactly what the year is. But if it's not so simple as pay them more, your core staff, pay them more so you can avoid having to hire travelers to fill the empty slots. But it's certainly difficult to do if you're not being paid what the current cost is. If it lags behind several years, whether it's '23 or '24. I wanted your opinion as to whether travelers is driving the need for PFRs. And if so, is there a way to adjust the reimbursement somehow, so that their reimbursement is more current, thereby allowing them to pay perhaps a different rate?

[Rep. Eileen “Lynn” Dickinson]: Is any of that clear?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yes, all of that is clear. Thank you for the question. For the record, I'm Doctor. Jill Bowen, commissioner for Dale. And with me is I'm Jennifer Garabedian.

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: I'm the Developmental Disability Services Division Director for Dale. Hey,

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Team AHS, this is Dylan.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: Dylan Fraser, I'm Deputy Director of Medicaid Policy at the Agency of Human Services.

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: Good morning, Tracy O'Connell, Chief Financial Officer of the Agency of Human Services. Angela Srinjang, Deputy Commissioner Adelaide.

[Rep. Robin Scheu (Chair)]: Great. And we have somebody on the screen.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Wait, one more. I mean, more than one more, but yeah.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: Finance, correct?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: And then we have Rebecca. And Angela M. Angela McMahon, Director of the Adult Services Division. Good morning. Okay, appreciate that we brought a panel because we weren't sure exactly what you want. And this is, you know, some All brain the right

[Rep. Robin Scheu (Chair)]: people in the room.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: To your points and to your question, so I want to say yes and yes. Your first question was, is it mostly due to the travelers? And to a good degree, it is about the contract staffing that is driving the costs. So that's one, just confirming that that continues to be the case. Though it has decreased a little bit from 30% to 25% of the staff, that's still way above where the national average is, which is at this point down to closer to 5%. The what percent? Five. Five? Nationally. We have many reasons why it's harder in Vermont. There's fewer people, there's affordability issues and housing. Just a number of issues. To your other point about should there be some other way in terms of the rotating and having the current rate being connected to past rates? So it is on the twenty three year, I believe, confirming with expert A over there. And it's a lot closer to reality than it was the last year, which was based on closer to what was happening during the pandemic year, so that was off. So this helped close the gap a bit. The EFR this year is a lot less than it was last year, but it's still high. Think it's 14,000,000 this year. So if you look at the EFR report that was created by DIVA, and we did work with them on that, but that was their submission. It goes into the specifics of EFR really in detail with recommendations for how to address. And one of the recommendations is to reduce the amount of time. So for the nursing on a two year cycle, but for some of factors, it's more on a four year cycle. So one suggestion was to align it and to shorten it. So one of the things that are being looked at is how frequently the rebasing occurs. Anything that I missed on that, or is that correct? Okay. I got a thumbs up. Does that answer that question?

[Rep. Robin Scheu (Chair)]: People know it's extraordinary financial relief.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Extraordinary financial relief is only for nursing homes that would otherwise close, and we are in a significant space right now where we really can't afford to have. Can

[Rep. Thomas Stevens]: I go back to the travel nurses?

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: Yes.

[Rep. Thomas Stevens]: Twenty five percent of our nurses are traveling now, is that what you or is that the use rate is that high?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Approximately, that's correct.

[Rep. Thomas Stevens]: And then nationally it's only five percent?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yes, it dropped in both cases, but it dropped a lot more nationally than it did in Vermont.

[Rep. Thomas Stevens]: So and and one reason you gave us affordability, which I'm assuming is a is is housing related. Or is that I mean, I I I'm gonna push that aside for a minute because

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: I think it's all the things that we talk about.

[Rep. Thomas Stevens]: So there's a million things to talk about affordability. But rather than just use it as an umbrella, I'm just going to push it off to the side and just ask, we've been dealing with this issue of traveling nurses, the need for them and the concept of having them versus we don't have enough nurses, we need to train more nurses here locally, all this stuff that we want to have homegrown full time benefited nurses that work for the organizations that are now hiring traveling nurses. And in the last eight or ten years since this has been an issue, it hasn't changed. So at what point does the administration or does the division accept the fact that we're going to have this many traveling nurses and we kind of have to right size our budget in order to take that into account rather than saying this is something that's broken and gosh, I wish we could get down to the national average. And I'm not saying that's your attitude, it's just the idea of having this ongoing conversation as if it's something that we can fix this year or next year or last year or five years ago. And boy, it's this feeling of we hear this every committee that deals with nurses at all that takes testimony that it's there. And there's either nothing we can do about it or we can accept it. So I just want to throw that out as like, do we accept that this is our reality in our system and in our culture and move on in a way that instead of trying to make it a crisis, make it as a way of life?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yeah. Okay. So I feel like we have to do both of those things. To some degree, we need to accept that we will have some contract staff, and we're gonna need that. But I also don't think that nothing is happening. The fact that they're even reduced, and the amount of EFR has dropped significantly reflects on a number of things. One is that the legislature provided grants for training for LNAs. And LNAs are your biggest sort of backbone to the nursing home. And that is having an effect. We're in the second year of granting of that and are looking to actually normalize that. We're actually looking to normalize this training effort and approach so that we have it continuously and we have a pipeline that's building for the LNAs. And the fact that it even dropped by the 5%, we think we don't have all the data yet because year two's data is not in yet. But year one, the number of people that it has reached and the number of nursing homes that have picked up this opportunity is significant. We're also working with CMS around LPNs and nurses in terms of tuition, forgiveness, tuition, coverage, so that we can really address in a positive way, not just an acceptance way, but in a positive way, that's below. So I think there's work that is currently happening that is having some impact, and we will have more data on it next for the current one that's running now. And how many nursing homes picked that up this year? Seventeen? Seventeen of the nursing homes picked it up this year. I think it was 10 or 11 last year. 11 last year.

[Rep. David Yacovone]: Out of a total of thirty two?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Thirty three nursing homes. So this is an effective approach where we have some initial preliminary data saying it's helping to impact that. The EFR amount went down. The percentage of utilization of travelers went went down. So we're not sort of just throwing in the towel. The other thing is what Dave was speaking about, with representative sorry, was speaking was speaking about, which is, how do you do the rebasing in a way that it's closer to the actuals in terms of cost? So

[Rep. Robin Scheu (Chair)]: Okay, Lynn has a question, and then Dave and we'll just keep an eye because we can probably spend the whole time on EFR and I know

[Rep. Eileen “Lynn” Dickinson]: we This have follows up on what Tom is asking. Okay, I'm a legislative trustee with the state colleges. So obviously the state colleges have been working like crazy the past five years trying to get the nursing staff up training all over the state. One of the things that I got an email last fall was somebody who wanted to know because we had a loan forgiveness program, think it's part of the R. Bausch money program. And she didn't get her back, so she wanted to know why we didn't have more RNs. And she had people going into RN training, she couldn't figure out what it was that they have to do this. And when I passed them on to do a demonstration, apparently we use a lot of that for the LPNs. Are the LPNs predominantly my understanding of the LPNs are often predominantly in nursing homes as well? This is the next level up. And that those are considered nurses. And that was our largest group of forgivable loans, because they'll talk about that in terms of what policy is the need and if you need if the stacked credential routine that we've been using has been successful, but LPNs is an important part of this?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yeah, so yes. LPNs are an important part of that. They are licensed. So there is certain things that they can do. There are certain things that you need an RN for. There were the rule changes that were going to be being prepared for that the current federal administration has pushed, pulled back on, which was going to require a certain amount of different types of skill sets and certification and credentials. But yes, LPNs are also important in the nursing home system. But we also, because of the complexities we're seeing, we're also interested in nurses that have specialization.

[Rep. Thomas Stevens]: And

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: so that's something that is in our plan. We are embarking this year on what will be a ten year plan to stabilize and sustain the nursing home system. And we're focusing in on several different areas, the workforce being one of them, but not the only one. To your point, it's not the only one that we're focusing on. We're also looking at complexities, which goes back to your point that we do need RNs in addition to LNA. We all of them. Need all of them. The LNAs as the backbone of the nursing home system is just so stark, and that's where you have a lot of the travelers still coming in from. In the hospitals, they have struggled with RNs and LPNs, but that seems to have stabilized more than nursing.

[Rep. David Yacovone]: Madam Chair, I'm going to try to I just want to close out on EFR and then move quickly, five to ten minutes on ERC and then get to DS. I wondered if you, for your FY27 presentation, would bring to us your reaction or consideration of a couple of reimbursement practices that were tried in the past, if you think they're needed. This body, in working with the industry on a couple of different occasions did what was called a wage pass through. They infused funds into the nursing home line item for wage increases with look behind audits. So if I was a facility and I got an increase and I didn't spend it, the money was recouped, called back. And additionally, that's one suggestion. And finally, other one, some type of prospective reimbursement that said providers tell me, tell the state of Vermont what you intend to pay your caregiving staff in FY '27, whatever the year that we're in. We will true it up and do that, but there'll be a follow-up audits to make sure you did and if you didn't, we would claw that back. So trying to put perspective reimbursement more heavily into the system than it currently is. Moving on to ERC, we had testimony from the Human Services Committee on ERC reimbursement. Plus what ERC is? The Enhanced Residential Care. Thank you. And we were told there were three tiers. There were funds that were provided, I think last year, to increase the ERC rates. And tiers two and three were increased, but tier one was not. And it's caused some disruption within the community with providers not taking people on tier one and causing some difficulty. We heard particularly in areas of early stage Alzheimer's. Can you tell us why that happened and if there's a remedy?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yeah, so I'll tell you what the deep dive information to understand this was. So a few years back, there was a rate study that was done by the state that looked at all of the ERC rates, including the ACCS, which is your sort of basic entry that everybody

[Rep. David Yacovone]: Assisted Community Care Services, ACCS,

[Rep. Trevor Squirrell (Clerk)]: yep.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Correct. And so my understanding of what happened there was that there was a recommendation based on the rate study that showed an increase across all of the tiers, the ACCF and the tiers, but only because they were all combined together. So in other words, not everything that came out of the rate study showed an up. Tier one didn't show an up, but ACCS was combined with it because everybody gets an ACCS, and then you get something on top of it. So everybody gets an ACCS, and then you get something on top of it. So what it had looked like, as I understand it, I wasn't here at the time, but as I understand it, it was a win across the board, because overall, everybody got an increase. And so it's my understanding providers were part of that. They understood that, they saw that, they agreed to that. But what ended up happening is that when the legislature approved it two years ago, they only approved half of it. So they approved the ACTS piece, and that went up. That gave everybody an up. And that was two years before. Then when they did the one last year, they did the other half of it. Well, if you take it separate, it's a down. If you took it as one whole thing, then it was an up across the board. And so that's how that happened. And I think that somehow people didn't actually think about that or see that. I know that we saw it after the fact and reached out to the legislature to let them know that that's what we were seeing. So that's how it ended up being that. For those who would have been, you know, comfortable with if it was all done at once, They were no longer comfortable because it had been two years with the up, and now it and the old ERC-one rate instead of the combined But that's how that ended up coming to be. And I think it just comes back to the fact that if it's seen as one whole initiative based on the rate study, it's an up. And if it's seen as two separate approvals, it comes in the second one in one space, in the two or the three, but in

[Rep. David Yacovone]: Thank you. Madam chair, given our time, I'm gonna move to the final topic, but I

[Rep. Robin Scheu (Chair)]: Oh, okay. Well, and that one, just It was never our intent to have anybody's race get reduced on them. So, yeah, okay, let's keep going, and then And

[Rep. David Yacovone]: I apologize, but if someone could put into writing what you just said, thank you, and submit it to them.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yeah, probably do have it in writing, I

[Rep. Robin Scheu (Chair)]: think we've explained it a Yeah, couple of

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: okay, that would be

[Rep. David Yacovone]: It would help us, I think.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Happy to do And now

[Rep. David Yacovone]: on the DS, developmental services, yep, We've heard from many, a number of different sources, who've asked that the payment reform be put on pause for perhaps up to a year to give the industry time to catch up with a lot of different changes, case management changes, the alternative payment reforms, etcetera. Can you share with us what your opinion and why is on that?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yeah. I'm gonna just make a general statement and then have some of the more specific subject matter experts speak to it. But payment reform is a critical part of conflict free case management. We have to be in compliance with conflict free case management. We were out of compliance with conflict free case management. CMS had us on a corrective action plan and a timeline, and that's why we had to go live. We went live October 1. The payment reform model was expected to go earlier, before even conflict free took effect. But it was delayed and delayed and delayed and delayed. What you're asking now is the same question that was asked last year, and it's the same answer. And it was the same thing that the year before and the year before. So this is a system that's been worked on since the 2014 state audit, right? So we're talking about it now. We're talking about twelve years of work, very intensive, collaborative work, side by side. So pausing payment reform means going out of compliance. Puts our, really, our whole Medicaid system at risk. Yeah.

[Rep. David Yacovone]: And just clarifying, how does payment reform impact the conflict free case management?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Okay, I can answer that, but Dylan can better answer that, right?

[Rep. Thomas Stevens]: Yeah, so there are a

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: few key points. One, and again, Dylan Fraser with Medicaid Policy Agency of Human Services. A few key points on the inextricable link between payment reform and conflict of interest would be that number one, designated agencies prior to conflict of interest had been doing everything for an individual, including delivery of case management and receiving those payments for case management. And so necessarily, we needed to remove the funding for the case management activities from the DAs and have that paid to the new case management organizations. So that would be one. Another one would be that direct service providers, the DAs in this instance, can't be the ones who are controlling the cost of services and individuals' budgets. That would be, a conflict of interest. And so what payment reform does for us is it provides us with standardized statewide rates, whereas prior to payment reform, rates are determined on a regional basis based on reported costs for providers. In addition to standardized rates, we can ensure that there is separation in terms of payment. So we're not duplicating payments, which is a big problem in Medicaid world, duplicating payment for case management.

[Rep. David Yacovone]: May I, just to clarify, are you saying that the system instead of as a provider, negotiating with the state over the rates for the people I serve, the CMO is now the person I should negotiate with? Negotiate may be the wrong word. To work with to get paid?

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: No representative. So under this new model, the state has standardized set rates for the same across all regions. The case management entity creates the service plan with the individual guardian and the team that flows through the state for approval. The direct service organization, or the DA and SSA and transition to for individuals who sell for family direct care services, still play a role, obviously, in determining what is available to provide, how they understand the needs of the individual. But it flows through the case management organization as opposed to the direct service organizations indicating what rates they can support. And there was a lot of consistency, but there was still variation across the state. So while I think you would hear that there was probably a lot of similarity, we still saw variation across the state around different rates for similar services. And this corrects for that and allows the state to have set those rates.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: If I may, if the agency that's providing the service is also determining what those services are and how much they're gonna pay. That stops. That stopped on October 1.

[Rep. David Yacovone]: Okay.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: And the other thing is the accountability, because with the new model, we have view into the flow of the funds, which was a requirement based on the state audit.

[Rep. David Yacovone]: So there has to be a separation between who determines what the services should be and the person who's being paid to provide them, as opposed to the provider who's being paid getting both. Think you need this, thank you, I get paid.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Right, that's one of the aspects that are where conflict conflict was was in the system prior to October. There's a couple of other places, but

[Rep. David Yacovone]: Can you appreciate I'm sure you can. Can is there merit, though, given the changes and the people getting up to speed, including the CMOs, etcetera, to take more time to implement this? We're hearing there's cash flow problems at the agencies, serious days cash on hand, kind of on one hand, that type of thing. Does that warrant relief?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Do you wanna speak to

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: So we had heard early on that there were concerns around the ability to Oh, I'm sorry. Yeah, I'll use my outdoor girl voice. So we had heard initially that there would be concerns around billing the per member per month component of this payment model. To address that, we enacted a sort of plan B so that when there are challenges in approving the monthly per member per month, that agencies have the ability to bill the previous per member per month rates. The variance between anyone per member per month is pretty modest. Agencies were satisfied with this backup plan. And so that seemed to rectified the issue. Once we instituted this backup plan, we weren't hearing concerns around that. This model is a hybrid model. There is a per member per month component. There's also significant fee for service billing, which is paid at 100% of the fee for service rates and would allow agencies to be paid in a fairly timely process. You submit your fee for service billing, and you should be reimbursed the next week.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: I'm also going to back it up a little bit because Sorry? No, no, because I, you know, I came into this nude to this. And so I, from needing to learn it and understand it, I just want to back up for a second. Most states that implement conflict free case management do it fee for service, the very straightforward, easy system to implement. You provide the service, you get paid for the service. In Vermont, over these many years of working with the providers, they asked for something different. And what ensued is actually a somewhat complex hybrid model. We could go back to going just fee for service, but it doesn't seem to be what is most helpful for the providers. And I don't want to speak for them, they're in the room. But I do want to say that the cash on hand issue is not new. It didn't start with heme reform. Several of the providers have struggled with cash on hand. We haven't had any, like, emergency, we're not going to make payroll. There is a finance stabilization grant. There's only one of the designated agencies who applied for that based on long standing challenges, not based on the new payment reform model. And for DS, there's only one that has requested the financial support through the DIVA, similar to the EFR process. It is somewhat different, but it is a stabilization fund. So we weren't hearing a lot of new concerns about cash on hand. That being said, the old model gave 100% authorization, regardless of what actually was provided, and we can't do that anymore. Then we're out of compliance with CMS. We can only pay for what is actually provided. All the residential, the shared living providers, all the residential is paid at 100%. So they get 100 of that up front with a very hefty administration percent that they can use that's not tied specifically to service, that they can use. That's one of the ways to help with things like cash flow. Another is that the kinds of service provision that is not routine, but this one needs therapy, and this one needs this, and this one needs that, can be billed for fee for service, which also helps with cash flow. There's also flexibility factors and risk and risk corridors. So it's a complex system because the designated agency wanted some amount of money up front. If you gave the full 100% of money up front, given the variability in what percentage historically has been provided, there will be a crashing sound at the end of the year when reconciliation goes in, because there would need to be a return. That is destabilizing. So the idea of putting some percentage of the money up front was kind of like the compromise between the designated agencies having some money upfront before they provide the service, and the ability to make sure that it's somewhere in the realm of what is likely to actually happen. Did I explain that well?

[Rep. Robin Scheu (Chair)]: Do you have more? Well, I don't, may I? Yes, go ahead.

[Rep. David Yacovone]: We've got twenty minutes here. At the risk of confusing things, I spoke with two providers over the weekend. One shared with me that out of their 100 developmental services clients, 40 of them had care plan changes that reduced what they were going to be paid, and they requested exceptions on them. Which made me think that when there's a large number, I think, to see a reduction in. The other providers said, Dave, you as the state of Vermont paid the CMO, I think it was $8,000,000 in a Dale budget ask to engage these two contracted care companies to do this. But in addition to that, the budgets for my people have been reduced by a service coordination amount. So instead of getting 20 a week to do the service coordination for Dave, it went to zero because the case management agency is doing it. So those dollars, where did they go to?

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: Yeah. Okay. So you've asked two different questions. I'll address That's okay. Just wanna be sure I address them separately. So you talked about the acceptance process, you talked about the SSA, which is the Supports Intensity Scale, which is our new independently administered needs assessment, part of our conflict of interest mitigation strategy. So that's a needs assessment. The needs assessment determines the supports that an individual needs. And you're right that some of those needs assessments have come back, suggesting that people have been awarded more services than what the standardized scale would suggest that they need. That doesn't mean that they're getting more services than is appropriate. What it means is that just mathematically, there's a variance. We a verification process and a validation process. We did a validation process that suggested 15% of individuals would need an exceptions process to retain the amount of services that they were getting through our old needs assessment. So hearing that an agency that supports 100 people have 20 people who need an exceptions process actually seems about in line with what our validation test suggests, because we have found that through the entire process of everyone who has taken this assessment, eighty five percent of the people are getting supports that fall within their assessed score, and 15% do need to ask for that exception.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Just to be clear, that means that they don't need an exception. Their budget came out about the same as it was. So no change for the vast majority of the people in the system. For those that fall in, they have a reduction. The exceptions process is built for that. And it is an easy process. It's not a difficult process. It's an easy one to ask for, and it's an and one that will be reviewed quickly, and most will end up getting their services. But you have to go through an appropriate process because it falls outside of the standardized.

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: As of last week, we had received almost 40% of the exceptions that we expect to receive, and we had approved about half of them. About half of them we had sent back asking for more information. Again, this is not about reducing people's services. It is about having appropriate paperwork on file and justification in the event of an audit.

[Rep. David Yacovone]: Wayne has a question, too. Can we get to the second question first? May I just Well,

[Rep. Robin Scheu (Chair)]: he I I'm sorry. I cut in front of him, so I'm going give him back his question.

[Rep. Trevor Squirrell (Clerk)]: I don't mind if he wants to

[Rep. Robin Scheu (Chair)]: complete that first. Is it are you changing the subject?

[Rep. David Yacovone]: Nope, I guess there were two questions and Chittenden's gonna Okay,

[Rep. Robin Scheu (Chair)]: all right, we'll go after your second Do

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: you wanna repeat it again?

[Rep. David Yacovone]: Yeah. Service coordination dollars to the CMO. We paid for that $8,000,000 in the budget. But in addition to that, their budgets were being reduced for service coordination.

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: Yeah, so you're right. We did come to you and ask for some funding related to funding the case management organizations. So we needed funding to bring in these independent case management organizations. As Dylan spoke about, we also needed to make sure that we're not providing duplicative services. So we stopped on October 1 having agencies they don't bill for it, but they encountered service coordination. So service coordination as an accountable service, as a discrete service, is no longer part of our system. We took the funding that was as a line item in people's home and community based services, and we used that to fund the administrative supports that go into each direct service.

[Rep. David Yacovone]: To give them flexibility.

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: Yeah, so we increased that administrative funding, but we did also move some of that over because some of the functions of a service coordinator moved to the case management organization. So it did go too fast. Thank you.

[Rep. David Yacovone]: Thank you, Madam Chair.

[Rep. Trevor Squirrell (Clerk)]: Okay, great. So it sounds like since you're taking corrective actions and stuff, there must have been an audit at some point.

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: So the federal government, and Dylan can correct me or jump in

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: mute me. If you want to go ahead and cancel. Is it a reference to state audit, though? I swear to spoke So

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: there was a state audit in 2014 related to how the Developmental Services Home and Community Based Waiver or home and community based services, it's often referred to as the DS waiver, was doing its billing and the lack of accountability and transparency that the state auditor found. But we were also under a federal, corrective action plan, in order to ensure, the final steps of our compliance with the, CMS, conflict of interest mitigation.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Vermont was virtually the last state to come into compliance

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: It was with 2014 that we were told by CMS we needed to come into compliance with. That was around probably 2019 that they told us that. So after five years, they said,

[Rep. Robin Scheu (Chair)]: by the way, Vermont.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: You didn't do it, Vermont.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: So we had to enter into a corrective action plan with the Centers for Medicare and Medicaid Services, and it gave us roughly three and a half years to come into compliance with the conflict free case management requirement, which we did starting on 10/01/2005.

[Rep. Trevor Squirrell (Clerk)]: It sounds like you've been taking up accountability and procedures as directed by that. My question then is, as far as you come along, the possibility that the Feltus should come and look at the whole system are there, what's the magnitude of risk that you feel? I know you don't know, you feel. Do you feel that we're in a risky situation or do you feel that we're comfortable in terms of management of this?

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Are you talking vis a vis the compliance, or are you saying just in general?

[Rep. Trevor Squirrell (Clerk)]: In general.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: I think we're where one would expect. We've only had one quarter under our belt. We consider that transition. We consider where we are now in early implementation. There isn't a transformational program, and I've done a lot of them in my career, but that doesn't have some period of time. But we actually do need a little more time to get the data, and the data mostly comes from the provider. So we need to make sure that we're analyzing it and that we have. We actually have a report due to the legislature on February 15. That is our update early implementation report. So we're working on that. That's still about a month of work that we will be doing to be able to report back.

[Rep. Trevor Squirrell (Clerk)]: Are you confident that you have enough quantity and quality of data coming from the agencies.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Do you want add that?

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: We have a strong partnership with all of our entities. So we have a great partnership with our DAs, SSAs, and Transition two. Our CMOs are working really hard when we have quality issues with I'm sorry. When we have quality issues with our CMOs, we are quick to address them. Would agree with the commissioner that this has not been without its wrinkles that we've had to address and try to smooth out. Nothing has been perfect, but I think we do have the strong partnerships that we need to address this.

[Rep. Trevor Squirrell (Clerk)]: That wasn't my when I said quality, I meant quality in a couple of sentences. Are you asking them for all the things that you need to assess any issues that might come down?

[Jennifer Garabedian, Developmental Disabilities Services Division Director, DAIL]: I believe that we are getting the data information that we need to be able to adequately assess this. Yes.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: It is very regular ongoing meetings and conversations that help to support, like making sure we get it. I think that we are confident that this is on a good path. I mean, we will sit here, I expect, next year and be able to give you a whole slew of data and information that we wouldn't have been able to get if we hadn't implemented the system, because there's few in. Also, you know, when we hear from, like, the DB Council, the Green Mountain support advocates in terms of some of the folks who are receivers or families of receivers, they are excited about this and still very supportive of it, even if understanding that there's tweaky time. And that's because they get more of a view in, they get more choice, and they kind of do like that there's an independent. But it is a culture change, a big one. And the providers did a really good job. They continue to do a really good job. It's different now. You know, the person doesn't show up at the provider for soup to nuts. They actually have to go through a step wide process. Is that more complicated? Absolutely. Is that necessary? Absolutely. It's also true that the system here was built in a very complex way, and so it's going to have these kinds of difficulties. Like we said, fee for service would be like a slide down like a slide at the park. Shoom! Right? Instead, we have sort of monkey bars. You have an oxymoron. Yeah, okay.

[Rep. Robin Scheu (Chair)]: Great. And Tim has a question.

[Rep. Tim (last name unknown)]: Yeah, thank you very much for all of you for coming today. Think I'm just trying to wrestle with what I've heard through conversations with a couple of designated agencies, the rate that you're giving to agencies upfront, it's based on utilization rates, It's not the same across the system, right? So some are getting 40%, is that right? And some are getting 70%. And I guess my question is, does it have to be, I mean, in a transition year that's going to have pickups, you know, kinds that we were just talking about, Why not set the bar at a kind of uniform rate so that for agencies that have cash flow issues, traditionally they're not then forced with yet another financial stressor.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Yeah, so the reason for that is because we needed to be as close as possible to what will likely actually be provided. As a whole, in the past, the service the the whole network, if you averaged it out, they were providing about 55% of the authorized services. Some were providing 80% of the authorized services. Some were providing about 30%. If we don't match it to what is likely to be the result this year, there will be a real destabilizing effect at the end with reconciliation. They will have to claw back a lot of money from the people who got too much upfront based on what their history of service provision was. And those who did more would have to be paid a lot more later on. So the whole point of it was designed to match what the service provision with growth factor built in. So there was a 5% growth factor built in. The whole system incentivizes doing more services. So one of the things I'm hoping for when this really starts to rock and roll is that we're going to see the percentage of service go up, and we're going to see more utilization. And that's going to be a time when everybody will celebrate, because the goal here and everybody gets paid for the services they provide. Reconciliation, make sure that everybody gets the services paid for the services that they provide. The issue will be if you got more money than you provided service for, you have to pay it back. And if you've got less money, then you have to be paid back. That in and of itself will be destabilizing. So this was built to try to have the best, based on historical data, the best estimate for what is being provided, with an understanding that it would be to be reconciled. And there is a lag time between being able to really see all of the data that comes in, because that's where claims data and encounter forms all, you know, are required for this. So did that answer that question?

[Rep. Tim (last name unknown)]: Yeah, mean, think there'll be further conversation about this, I'm looking at Representative Yacovone, did you

[Rep. Eileen “Lynn” Dickinson]: have a response or a question?

[Rep. David Yacovone]: I have a little question, if I can squeeze it in, but it may not be your main exactly before the clock runs out. We'd like some clarification from someone on what's called retroactive billing. We've been told it's not allowed anymore. Oh.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Can somebody help us with that? You're talking about Medicaid retroactive? Yes, I'm sorry.

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: Who wants to explain that?

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: I think you might be talking about setting rates retroactively. And so there's federal Medicaid law requires that we issue public notice for how we're going to pay providers. And we have to issue that public notice prior to the start date for when those rates would be paid. And so that, as in, that cannot be retroactive. We could issue public notice today and start saying that we're going to pay agencies 5% more tomorrow. We can't issue public notice today and say we're going to pay agencies 5% more for services that were already delivered because we didn't issue public notice for that. And part of that comes back to the fact that our federal partner CMS is paying for more than 50% of our services and they want to have that information out ahead of time in the public and not have to be told that retroactively we're deciding that we're going

[Rep. David Yacovone]: to increase rates. So a provider can go back and bill retroactively if there's been some issues and complexities around client eligibility.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: Oh, absolutely. Thank you.

[Rep. Robin Scheu (Chair)]: I have a follow-up question on that. Maybe you've already said something about this. My head is sort of spinning right now.

[Rep. David Yacovone]: This is not my wheelhouse.

[Rep. Robin Scheu (Chair)]: If we wanted to do retroactive, could we use general fund to make some sort of payment or does that mess up CMS? I'm just throwing that out there. Have no idea.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: So there's nothing wrong with using state general fund for a grant or financial relief.

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: I

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: think that there would

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: We called it retroactive.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: Have to think about, if it was framed as we're going to supplement Medicaid rates by X amount retroactively using state only dollars, I think that raises some questions about Medicaid payment as being the payment of last resort for And

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: state that that's determined is that.

[Rep. David Yacovone]: And I would

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: just add to that.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: We're doing dental fund grants to a number of providers, that's a lot of administrative work for both the state and tracking on the provider side.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: That's on what the in a state directed payment. We cannot have state directed payment. Right and then we

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: have the whole state of what

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: the payments say. You have to be careful.

[Rep. Robin Scheu (Chair)]: Right and that's why I'm asking these questions because if there's there's a way that the general assembly says it would like to help, we want to help without actually hurting. And I know that there's unintended consequences. So that's why I'm asking, what are some ways that we could manage to support the agencies without getting us all into trouble and hurting them down.

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: I think there are definitely ways that we can talk about that. Don't want to just open

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: up and

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: speculate right now. I think that there

[Rep. Robin Scheu (Chair)]: could

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: be

[Rep. Robin Scheu (Chair)]: I

[Dylan Fraser, Deputy Director of Medicaid Policy, Agency of Human Services]: know that some of us

[Rep. Robin Scheu (Chair)]: are thinking about that and it may not go anywhere, but it's just good to know what the results might be or not be. Thank you. It's just about 10:00. Dave, did you get your questions answered for now? Thank you. Okay, really appreciate you all coming in, all of you. Thank you, thank you. We'll be continuing the conversation, this has been very helpful.

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: Thank you. We really appreciate the opportunity.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: It's been ongoing. Yeah, it does.

[Rep. Robin Scheu (Chair)]: So we really appreciate working with

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: you on that.

[Dr. Jill Bowen, Commissioner, Department of Disabilities, Aging and Independent Living (DAIL)]: Thank you. You.

[Rep. Robin Scheu (Chair)]: Committee, we're going to take a break. Some of us are running off. The agenda has changed a little bit. So at 10:30, should you guys be quiet over there, please? We're still live. Thank you. You can take it in

[Tracy O’Connell, Chief Financial Officer, Agency of Human Services]: the hallway 10:30 we'll have

[Rep. Robin Scheu (Chair)]: you come back at 10:15 and talk about reports and then it's 10:30 Jen Harvey's coming in at 11:40 I'll be back, Katie McGlynn is going to come in to talk about eight 05:45, we're going do a soft hold. Kascenska is coming in late, we're going to, our PCF is going come in at 01:15, so we'll have more time for lunch.