Vermont Legislature SmartTranscripts:

[Robin Scheu (Chair)]: Morning. This is the House Appropriations Committee. It is Tuesday, 03/10/2026. We are starting at 10:15 this morning, and we are getting an update on Vermont's Rural Health Transformation Program and what's happening with the projects so we can all understand how it's working and what we can expect. So we're delighted to have Jelmazza Olson with us and thank you for your patience and for coming to talk with us. I know all interested to hear what you've been up to, and I hope you've been able to sleep a few minutes here in the shed. I love that that got quoted. Know. Take

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: it away. Thank you. Good morning, Jill Mazza Olson. I am the Medicaid and Health Systems Director for the Agency of Human Services. So I report to the secretary, and I have responsibilities for our Medicaid program and for health care reform. And luckily, there are a lot of smart people who work in the agency who work on all of those issues. So thanks for having me. I'm afraid some of you have heard this a few times. And those of you, some of you I see in the audience have really heard this a few times, but here we go. There's always more to tell because this is of course something that's been unfolding for a while and we've made not quite a bit of progress over the last few months. So just to ground us all, so the Rural Health Transformation is a nationally $50,000,000,000 five year initiative aimed at supporting rural health systems. So it's really aimed at helping states support their rural healthcare systems. And we have a first year award. We were eligible for $200,000,000 award or potentially more, and we received 195,000,000 and change. We were really pleased with our award amount and it is per capita and per rural resident. It's one of the highest awards in the country. So it's really significant for Vermont. There were sort of And three, we were scored in three ways, two of which we had little control over. So we were scored based on policies, Vermont healthcare policies, most of which were already existing and in place at the time of the application. Metrics around how rural Vermont is that were set in the application. So there's different ways to define rural, but they had defined it a certain way in the application. And we expected to score not very well on those two areas based on the criteria that was set. And then the third was the strength of our application itself and the programs we were proposing. So in our view, the size of the award really reflects that we had a very strong application and that what we proposed was solid. This is a cooperative agreement. So I think this is a really important point that I always sort of pause on. It is not a grant from the federal government, it's a cooperative agreement. That means So this is more like our head model, which is a major agreement with the potential agreement with the federal government. It means that there is tremendous detailed oversight. So we are anticipating that every subrecipient grant that we write, every contract we write, every payment model we implement, anything we do will need to be approved by our program officer at CMS. So at that level, at that subrecipient grant level. So it's going to be a very high degree of oversight in the process. It also makes it more somewhat more collaborative, it means that we have room to move things around. This is the part I think is really helpful. So as we move forward with our various projects, we may identify some projects where we can't spend the money in the timeframe that we have as quickly and other projects where there might be more opportunity to spend more and we will be able to make those kinds of adjustments. So that's, to us, the advantage of a cooperative agreement. We will have that kind of flexibility. Any funds that we are not able to either expend or obligate by October 30 of this year will go back into the pot for redistribution for year two. So we are internally aiming for August 1 to obligate our funds. That won't be possible for every project, but that's our internal deadline to get funds obligated then so that we're ready for this We have an October August. August 1 is our deadline, or is our internal deadline. August 30 is our first report to the federal government. And we believe that that report is going to largely form the basis of, help form the basis of what our second year award looks like. Now we're learning more every day. We were on a webinar maybe a week and a half ago where we saw new information about how things are going to be scored. So how we're going to be assessed and scored as we go in terms of whether or not we've met our obligations and there's going to be milestones that we have to meet based on large buckets of initiatives. And so we're going to need to really look closely at this scoring methodology because it's going to determine what our second year award looks like.

[Robin Scheu (Chair)]: So just to clarify again, because I started writing and then I crossed things out. So August 1 is your internal deadline to obligate as much as you possibly can. Yes. August 31, the first report is due to CMS.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: Yes.

[Robin Scheu (Chair)]: And then October what date?

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: October 30 is our that's their deadline for obligating funds.

[Robin Scheu (Chair)]: Okay. Okay.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: And then the spending deadline is about a year later, September 30. So, we need to obligate now when we have another year to spend.

[Robin Scheu (Chair)]: So and by September,

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: it's going start to get super confusing, because we're to get into the second year. And then we're going be have first year funds obligated that we're spending and they're going to be in the second year. Luckily, we have very smart financial business office. It's always a good spreadsheet for that. There's a good there's going to be a great spreadsheet. I will not be the person to develop it, but I know that there's going to be great people to do that. So that's kind of, I think this is sort of a helpful big picture. And so what I've been saying a lot to our provider community, to people who are interested in applying for funds, maybe in doing some work that isn't in our current plan, what I've been saying is we are currently in heads down mode trying to get funds obligated for the projects we've already planned to do. That's what we're doing now. We're going to enter into a creative phase again, where we're thinking to the next year of funding. And so we do want to work with our community as our provider community and others as we look to that second year, just not right this second. Just, we just can only do so many things at once. And so we're trying to sequence it. But we do have a website where people can submit to the general inbox dedicated to this project. And we are really interested in people's and people's ideas. So they may not hear back from us right now, but we are interested and we're paying attention to the kinds of ideas that we're getting. I imagine if you get through the first cycle, it's going to

[Robin Scheu (Chair)]: be easier in subsequent years. But this is the very first time and everybody's trying to figure it out.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: Yes. And the other piece is, of course, we're doing this pretty much with the staff that we had when this happened. And we do have 21 positions that are funded by the grant. And so we are going to have actually more people involved in implementation across the agency. And partly, we're going to have a project manager and some other teams. So that will help also just to have some people dedicated to this. We're working on that. So, the notice of funding opportunity outlined the areas of focus for the application along with funding restrictions. So, that was our sort of guiding information about what we could and could not put into the application. We think about RHT essentially as one time funding. So we want to launch things. We want to transition to new models. We want to buy technology. We want to do things that sort of promote new collaborations. We're trying not to add to the base, and we have to have a sustainability plan for anything that we do. So there are some potential pathways like the AHEAD model, which I'm not going to go into now, but if we move into that, that's an agreement with the federal government. There are payment models, ways we support, say, primary care that could eventually be support, was supported under the all payer model, could be supported by the AHEAD model, might be supported in between by Rural Health Transformation. So, that's sort of how we're thinking about it. There's some important funding limitations. We can't supplant the state budget. So if there are things that we already fund, we can't fund them using these dollars. There's a limit to how much we can do in terms of construction. We can't increase property values as sort of the baseline. So, you can we can build partitions, we can maybe move a wall, you know, we can make some modifications, but we can't do major renovations to facilities. If we could, it would be very easy to spend 195,000,000 Yeah,

[Unidentified Member (House Appropriations Committee)]: and more.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: It would be easy. Yeah. We cannot fund services that are otherwise billable that are already being reimbursed. So we can't do rate increases. We can't pay for things that that we are already billable that we pay for now. We can actually, there is some flexibility for services that could be billable but aren't being billed now. There is actually a little bit of room there. But, and this is the next one, provider payments cannot exceed 15% of the total award, which this year is $29,000,000 So what is a provider payment? We don't know yet. We're working on learning. So we think that it is likely to be clinical services provided by licensed people is the sort of the frame that we're how we're thinking about it. So we do, but we are expecting new guidance from CMS. We're going to Washington or Baltimore next week. We have a program officer we've met with and asked this question. And we know that lots of states are asking this question because there's a prevention and chronic disease bucket that doesn't have a cap on it. And then there's a provider payment bucket that does have a cap. And so, and we have several payment models, and I'm going to get to the projects in a bit that impact chronic disease that are probably preventive. How they get defined is going to matter in terms of whether or not they hit the cap. Need to And so, dollars haven't been Some of those dollars haven't been released to us yet by CMS. They haven't approved us to go forward with RFPs and other find that grant opportunities. So, and then the other thing that I'm a question I have is just if it's 15% this year and our award next year is smaller, which could happen, then does that what happens? And so we just need to keep that in mind that we might have a different total. If it's going to be a percentage, that'll be a different number with a different award. So there's lots of juggling that we're doing.

[Unidentified Member (House Appropriations Committee)]: If you don't spend all the money in one year, does that impact how much you might get to next year?

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: I think it probably will. I think it'll also matter in terms of how other states do compared to us. We are certainly, we have a lot of opportunities to meet with our state, with other state counterparts. There are various national associations that are pulling us together. CMS is pulling us together. So we're having, we have different ways to connect with our And we have our own little New England group that we formed just to And this just because it Just to have friends to talk to. And everybody is wrestling with what we're wrestling with. There's a lot of commonality. So I think how we do compared to others is going to matter. We don't have total control over that. Yep. Okay. So these are our initiative categories. So the way that CMS thinks about this is that we have five big initiatives. Oops, not doing that right now. We have five big initiatives and then there are many activities under these initiatives. So, I'm going to talk to you about this on an activity basis, because it's a lot more meaningful than I think, or more, it's a lot more granular, but these are sort of the big buckets that they fit into.

[Unidentified Member (House Appropriations Committee)]: Are these five areas ones that we have thought are important, or are they ones that CMS has told us?

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: We named the initiatives, but they track with what CMS had suggested we could do. So they're focusing on workforce technology. There's various things that CMS said that they were interested in seeing us apply for. And so we actually, let me back up. Thank you for asking the question. Think I sometimes say this on the first slide, but

[Robin Scheu (Chair)]: I didn't this time. We

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: had very little time to create the application. So we had a notice of funding opportunity that was released in mid September and was due November 5. I'm new to state government, but from what I understand from my counterparts, that was like, nobody's ever seen anything that fast for something this big. So we had a very short amount of time. And so we focused on trying to marry together the priorities that we were hearing were the priorities for the grant or for the Cooperative Agreement for CMS. So those are the priorities in the notice of funding opportunity with things that we already knew we wanted to do. Either because on workforce, for example, we have a workforce strategic planning committee with providers that have been working toward a workforce strategic plan with a whole bunch of ideas about what they would do, how we might spend workforce dollars. And so we took those ideas and put them into the application. We are trying to modernize the blueprint, which is a long time Vermont primary care initiative. We'll talk about that more when I get into more detail. Broad agreement that we want to support primary care and we want to use the blueprint. And so, this helps us support the blueprint. So, we really tried to think through what are the rules of the game and what are the things we want to do and put them together, given that we didn't have time for sort of a lengthy iterative process. Had to go with the- So

[Unidentified Member (House Appropriations Committee)]: you have identified areas that we already, know that we have recognized that need work. Yes. And trying to marry them with us.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: Exactly. Or places where we think there's opportunity, where we see some promising change and where we wanted to build on that and where we thought these dollars would be a good use of where this would be a good use of those dollars. That was kind of the direction the secretary set, and I think that made a lot of sense. You know, we're not new to healthcare reform in Vermont. We're not new to trying out and trying to find creative ways to provide services. And so I think we were pretty well positioned because we had lots of ideas already on the table.

[Unidentified Member (House Appropriations Committee)]: So some other rural state might have a slightly different version of that. Yes, yes. But if you look

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: at like Kaiser Family Foundation or any of some that have sort of selected and read all of the applications from all the states, there are broad themes that emerge and we are fit right in. Yeah.

[Unidentified Member (House Appropriations Committee)]: So you're going to try to work and try to get improved metrics and criteria for success failure to work into the Blueprint model?

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: Yes. And there are actually metrics on each of these initiatives too that we need to meet. Yeah, I'm going to need to update these slides as I learn more about, because we're going to be scored. This is actually, this is now starting to be like, what's keeping me up at night right now. But we're going to be scored on an initiative basis, not on an activity basis. The metrics roll up into these five categories. But some of the projects underneath them are kind of disparate. Like, don't necessarily They're all important, and they also fit under this heading, but they don't, they're not exactly like one thing. And so figuring out how the metrics are going to work, how the initiatives are going to work, we may have now that we've, we're now going to be scored in looking at a series of milestones we hadn't seen before. And so we may need to do a little bit of rethinking about how to structure things to make sure that we can hit our targets.

[Robin Scheu (Chair)]: Will? Can you repeat that again?

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: You said we're going to be scored on an initiative basis, not on something else? The activities underneath. So we have, I don't know, I forget how many it is because it's different buckets, but it's maybe 30 activities that fit under these five categories.

[Robin Scheu (Chair)]: I just got a message that we're going to have a roll call.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: Oh, okay. I'm trying to find out. We know it's on if anybody would watch over

[Unidentified Member (House Appropriations Committee)]: this. I

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: think it's an amendment. I

[Unidentified Member (House Appropriations Committee)]: think it's Okay.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: There were two amendments. One was Rep. Donahue, and one was Rep. Patrick's.

[Robin Scheu (Chair)]: Two different bills. So I'm guessing that it's that one that you just said. So let's see, it's No, it isn't. I think it's Bert. Oh, his vaccination. Vaccination. That's right.

[Unidentified Member (House Appropriations Committee)]: Robust concern. Okay.

[Jill Mazza Olson, Medicaid and Health Systems Director, Vermont Agency of Human Services]: So can you hang up or go through your email or whatever? We'll come back. You may just come back as soon as your dean's been called maybe and then

[Robin Scheu (Chair)]: we