Vermont Legislature SmartTranscripts:

[Chair Robin Scheu]: Good afternoon or good morning still, this is whatever it is, it's 10:35, the House Appropriations Committee on Wednesday, January 21, is that right? And we have Jen here with us to discuss some suggested language to go into the BAA. Go ahead, Jen. Great. Do you know everybody here?

[Jen Carvey, Office of Legislative Counsel]: I do. Okay. Good morning, Jen Carvey from the Office of Legislative Council. So yes, I have brought some language that the chair, I believe, wanted me to walk through for potential addition to the budget adjustment bill. Yes.

[Chair Robin Scheu]: On our website.

[Jen Carvey, Office of Legislative Counsel]: It's on your website under my name.

[Unknown Committee Member]: And

[Jen Carvey, Office of Legislative Counsel]: I thought it might be helpful before we look at the language itself to look at where the statutory change would take place because it provides the context to understand what it's adding an exception to. So I will put that language up. So this is in the so we're in the health care context, you probably know because I'm here, and there is language enacted last year that put some limits on what hospitals can charge for outpatient prescription drugs or prescription drugs administered in an outpatient or office setting. Set a cap on on those charges at 120% of the average sales price, which is a known number set by the Centers for Medicare and Medicaid Services and updated every quarter. So if the hospital was charging any health insurer more than 120% of the average sales price as of April 1, then they would be capped at that 120% of that average sales price going forward. If the hospital was already charging less than 120% of the average sales price for a drug, then they would be capped at whatever percentage they were actually charging at that time. So this was passed last year. The law requires hospitals to update the average sales price for each drug annually twice a year, January 1 and July 1. And then it specifies the purpose of the section is to reduce health care costs. So the hospitals are not allowed to collect any amount from the patient or insurer that exceeds the caps here. So there's no balance billing allowed. The cap is the cap. They're also not allowed to increase their charges for other items or services to try to offset the lost revenue. So this is really looking at reducing health care costs. The language in the existing law allows a hospital to demonstrate to the Green Mountain Care Board in its budget submissions that this price cap is really having a negative impact on access, quality, or sustainability and ask the board to authorize an increased reimbursement rate for other service lines. These caps remain in effect unless and until the Green Mountain Care Board establishes a different reference based price since it's a different percentage that would apply. And then there's a carve out at the end. It says this section shall not apply to an independent hospital that is designated as a critical access hospital. That's a federal designation. And that is not affiliated with another hospital or hospital network based in or outside of Vermont. So currently, independent, not affiliated with any other hospitals, critical access hospitals are not subject to this cap that was established last year and just went into effect three weeks ago. That's all interesting. I see there's a question.

[Michael Mrowicki (Member)]: So what constitutes a non critical access hospital?

[Jen Carvey, Office of Legislative Counsel]: So we're not. A non critical access hospital is a hospital that has not been designated by the federal government as a critical access hospital.

[Michael Mrowicki (Member)]: It has nothing to do with the services they provide, it's just that they haven't been designated?

[Jen Carvey, Office of Legislative Counsel]: For our purposes here, as far as using that term of art, yes, it's just about the federal designation. And there are certain criteria that it makes

[Michael Mrowicki (Member)]: a hospital a critical access hospital has to do

[Jen Carvey, Office of Legislative Counsel]: with it. It's a small number of beds. It's typically in a more rural area where there's not additional That's

[Michael Mrowicki (Member)]: about, that's the limit and there's only

[Unknown Committee Member]: so much they can provide for services inpatient, outpatient.

[Thomas Stevens (Member)]: They get an enhanced. Right,

[Jen Carvey, Office of Legislative Counsel]: there's different rates that get paid to different hospital types based on their federal designation and there are different federal designations. And that was requested by

[Unknown Committee Member]: I just finished my term on

[Jen Carvey, Office of Legislative Counsel]: the board here. So we

[Unknown Committee Member]: just kind of finished last year when that was going through, we had a meeting with the Green Mountain Care Board, some of us about everything just to kind of make sure we won.

[Jen Carvey, Office of Legislative Counsel]: Right, and they often have much smaller margins.

[Michael Mrowicki (Member)]: There will

[Jen Carvey, Office of Legislative Counsel]: be smaller margins. As far

[Unknown Committee Member]: as, you know, define what our hospitals do not define what's charged for the drugs that comes from the suppliers who are referring to, charge a little bit more, not being able to control what it's troubling, what cost is. So that was a concern. Alright,

[Jen Carvey, Office of Legislative Counsel]: so now we will look at the language in this proposal. This proposed language would would amend that section that we just looked at to apply a new to add a new exception. So that's why I wanted to ground you in what the existing law was and the existing exception so you could understand what this section would not apply to if this language passed. So this doesn't change anything about the critical access hospitals, but it adds as a carve out a non critical access hospital that is participating in the rural community hospital demonstration program through the Centers for Medicare and Medicaid Services. And this is a federal, as you can tell, program that selects certain hospitals across the country to participate in a program that pays them more similarly hospitals, although they are not critical access hospitals and it's kind of testing that payment model. So there and to my knowledge, there's only one hospital in Vermont that fits this criteria. To be transparent, my understanding that this the only hospital we have that fits this criteria is Brattleboro Memorial Hospital, which, as you may be aware, is having some significant financial difficulties. The implementation of this would say that one of the hospital that meets that criteria can begin submitting claims to a health insurer for reimbursement of prescription drugs administered in an outpatient or office setting on and after the effective date of this act and amounts that exceed those caps, 120% ASP or actual amount capped. And it allows the Green Mountain Care Board to adjust the budget for a hospital that is authorized to exceed those limits to reflect the exemption. So if that cap is no longer going to affect their financials, then the Board may need to make some additional modifications, and this would take effect on passage.

[Michael Mrowicki (Member)]: The only hospital at this time, do we expect other hospitals or is there chatter that any other, with all the hospitals that are in some kind of economic flux are there things that might be downgraded?

[Jen Carvey, Office of Legislative Counsel]: So it's not a downgrade it's just participation in a payment model, a federal payment model. My understanding from having recently booked is I think they just selected the next group of the groups of hospitals for the three year period that starts in October. So I don't expect there will be any changes in the next few years. Whether and how this provision is implemented beyond that or beyond even this first year, could be up to the legislature and others to determine.

[Michael Mrowicki (Member)]: This is part of the 175,000,000 or $995,000,000 program that was just announced recently?

[Jen Carvey, Office of Legislative Counsel]: No, this is actually separate from the Rural Health Transformation Grant program. I believe they've been testing this particular model for a while, but we had not had either we didn't have a Vermont hospital participating or they were no longer participating. Yes, thank you.

[Thomas Stevens (Member)]: Is this limit that you're talking about here that was done last year, is this the one that is affecting the cancer drugs and the other high expense? You remember what we did with that? It's like we just did this in the last year or two.

[Jen Carvey, Office of Legislative Counsel]: I mean, believe drugs, some of these drugs may be cancer drugs administered in an outpatient or office setting.

[Thomas Stevens (Member)]: But not in the hospital.

[Jen Carvey, Office of Legislative Counsel]: This is not inpatient, right? Is not outpatient. It's all outpatient.

[Thomas Stevens (Member)]: So it could be any drug.

[Jen Carvey, Office of Legislative Counsel]: So it could be any drug. Any drug that right. Any drug for which they were the hospital was charging more than 120% ASP. And it's my understanding is this provision that you passed last year has had a pretty significant impact on reducing hospital budgets in this coming for this current hospital fiscal year.

[Chair Robin Scheu]: Did this request come from number one Brattleboro? Suspect. Did it also come from the, I mean, this is from the Health Committee?

[Jen Carvey, Office of Legislative Counsel]: This is not from the Health Committee. This is a legislative proposal that is not from the Health Committee.

[Unknown Committee Member]: So

[Chair Robin Scheu]: the impetus in this is just from, if it's not from health committee,

[Jen Carvey, Office of Legislative Counsel]: I will defer to your chair to talk to you about process and working. Okay.

[Chair Robin Scheu]: Well, and splint. Yeah, sort of building on what Tom

[Thomas Stevens (Member)]: hospital were not in great financial shape, especially with a small house, especially anybody other than Fletcher Allen. So it seems, this something that being a financial Brattleboro makes the headlines because it's the most vulnerable financially. Is this something that as other hospitals see themselves financially vulnerable, they will ask, is that going be one of criteria to belong to this rural community hospital demonstration program,

[Jen Carvey, Office of Legislative Counsel]: or is it going to be limited by some other kind of? So I don't know what the criteria are that the federal government used in selecting the hospitals for participation in the program, nor do I know which hospitals may have applied and not been accepted. It's just a particular designation that is in effect. New? I don't know that it's that new. It is I don't even know if it's new that we're participating in it, that we have a hospital participating in it, but it is a federally run opportunity. There's some information on their website, on CMS' website, which is really where I got all of my information from. Okay. Good. Thank you. So it was launched in 2004. The World Healthful Demonstration. It tests so here's what I can tell you about it from their website. It was launched in 2004. It tests cost based reimbursement paid to small rural hospitals with fewer than 51 beds that do not qualify as critical access hospitals or covered Medicare inpatient hospital services. It's limited to a maximum of 30 hospital participants at a time.

[Chair Robin Scheu]: Across the country? Across the country. They wanted to have them use offline. I guess so. It seems odd. I mean, I'm sure there's more than 30 qualified to those characteristics. Okay, well I am curious why we have this here simply to benefit Brattleboro which I understand however. Are there any other questions regarding the language here or what it's applying to and its modifying legislation we did last year. All right, then thank you very much, Jen. We will proceed That's not in committee in terms of adding it into the budget. Okay, so thank you. So, I think we can go offline again. I have an updated version of our agenda. We don't have anything until 11:40. Is that correct? I think we have allowed a couple of time segments here for people to work on the reports, report, report, reports, so that I will, I can gather your information tomorrow and then put our whole thing together by Friday to turn it into Go Hops.

[Michael Mrowicki (Member)]: Are we offline?

[Chair Robin Scheu]: We are online So right that's our agenda. You have free time right now to work on that or other things that you may need to work on. We are meeting again at 11:40 with Katie McLean who has information regarding a, oh, there's a pending bill regarding vaccinations and we need to do a drive by of that pending bill. What's the bill number? 545. 545. So I suspect it will be on our website. There's a committee page here and you take a look at that. So 11:40 we need to be back here.