Vermont Legislature SmartTranscripts:

[Rep. Alyssa Black (Chair)]: All right, welcome back. We have Devin Green with us from VOS.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: Thank you. Yes, thank you for having me here this afternoon. Devin Green, Vermont Association of Hospitals and Health Systems. I'm here for H. Five eighty three, the Health Care Entities Transactions Bill and Corporate Practice of Medicine. I am, first off, just going to request that I come back with more detailed recommendations. This is the high level overview and some concerns that we have. And I think as this bill moves forward, we are happy to come back in. But for now, we're getting our arms around this and want to point out some concerns that we have. First, I know you all know this, I just want to put on the record, what is a hospital? In Vermont, all of our hospitals are nonprofit. There are only about five states, I think, could be less or fewer at this point, that have no for profit hospitals. We are one of them and we in fact are completely nonprofit. And we have many different types of hospitals listed here and happy to go into that with any of the newer members at some point about hospital status and what our different hospitals look like. But for now, I just wanted to emphasize that all of our hospitals are nonprofit.

[Rep. Leslie Goldman (Member)]: What's a D? What's a designated hospital?

[Devin Green (Vermont Association of Hospitals and Health Systems)]: That is a hospital that provides inpatient psychiatric care. Praddleboro Retreat.

[Rep. Leslie Goldman (Member)]: Yes. But that's because of Windham Center.

[Rep. Alyssa Black (Chair)]: Yes. That's right.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: I don't know if I updated CVMC,

[Rep. Alyssa Black (Chair)]: but no more. I will say that it makes me laugh a little bit thinking about you sitting up here twenty years from now in front of somebody else.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: And being like, what is that hospital?

[Rep. Alyssa Black (Chair)]: And then be like, what? What What is primary care?

[Devin Green (Vermont Association of Hospitals and Health Systems)]: And because all of our hospitals are nonprofit, there law that goes to it. So under ACMBSA 9420, there's a statute around conversion of nonprofit hospitals. So there's recognition that we want to be careful with our nonprofit hospitals, and we're going to do a very comprehensive assessment of any sale, transfer, lease exchange option, otherwise disposal of assets. So pretty broad. And it comes into play when at least $1,000,000 and at least 40% of the assets of the nonprofit hospital are changing. And so there's a whole process. There's an application, there's a hearing, there's public comment, and it involves both the Agreement Care Board and the Attorney General, and potentially the Superior Court. So approval could come down to the Superior Court coming in. So very extensive process. The exception is if another nonprofit is involved in the transaction. So this is really targeted at for profit entities. Additionally, as you all know, we are regulated by the Green Mountain Care Board, and their authority is quite broad. And they have looked into our sort of affiliations in the past, and I'm sure they will continue to do so. But just in our FY 2026 hospital budget guidance, there were questions around your affiliation, what those look like, explaining any changes to your corporate structure, and exchanging any if you're considering about participating in any sort of affiliations as well. So there's oversight there also. Here's where we get into the bill and try to understand it a bit more. Because as we talked about,

[Hunter Young (Head of State Government Relations, ATA Action)]: or as we were hearing, NASHP has their bill, their model bill,

[Devin Green (Vermont Association of Hospitals and Health Systems)]: and that creates a regulatory mechanism to look at transactions, and it's very thorough. This bill has gone in a different direction, and instead of having a regulatory mechanism to look at transactions, it has out and out prohibitions. And those prohibitions are not only for private equity. They're essentially, as I read the bill, for anyone, it says a party. And so those could have a big impact on our hospital system. For instance, A1, a transaction that would give any one owner of an essential healthcare provider. We know that critical access hospitals and FQHCs are included in that. That would have prohibited Gifford Hospital merging with the FQHC there. So essentially, no Gifford health care could happen under these prohibitions. It also means because all of our, I believe, because all of our hospitals are 340B eligible, that another hospital couldn't acquire another hospital or two critical access hospitals couldn't affiliate. And so we do have a concern there because it relates to completely nonprofit entities. Do you have a question?

[Rep. Alyssa Black (Chair)]: I do, but I'm not asking it. It's a question in my mind. I have swirling questions. They're not for you to answer. Great.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: Another place we'd want to look into more is the financing the acquisition of a healthcare entity through the use of debt. And again, this seems to apply if a healthcare entity acquired another healthcare entity by using a loan or issuing a bond. That is one healthcare entity taking on debt. Even if they don't dump it onto the smaller health care entity or anything like that, that would still be prohibited here. And so that just doesn't make a whole lot of sense. It would mean all these transactions, from my understanding, would happen with cash. And that might make that might not make financial sense given where the markets are and interest rates are and might actually increase the cost of doing that acquisition. The other piece that I really need to dive into is this transaction that involves entering into any contract or purchasing agreement with an affiliated legal entity, except when it's a legitimate healthcare purpose or the reimbursement is consistent with fair market value.

[Rep. Alyssa Black (Chair)]: Can we go back this slide? Yeah. Financing the acquisition of healthcare entities through the use of debt. What does it say in the bill? It says Language of the bill.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: Says Let's see. A transaction that involves financing the acquisition of a health care entity through the use of debt that will become an obligation of one or more of the health care entities that are a part two of the transaction. So if two entities are in the transaction, the use of debt Like, they take on a loan. That is the use of debt. That is an obligation to that healthcare entity? Right?

[Rep. Alyssa Black (Chair)]: Well, don't know. We'll have to look at it. Yeah. We'll have to look at it. And look at the language.

[Hunter Young (Head of State Government Relations, ATA Action)]: And

[Devin Green (Vermont Association of Hospitals and Health Systems)]: then this $8.41, the transaction that so our hospitals are looking at doing shared purchasing arrangements. And I think the an affiliated is defined really broadly here. And so, one thing we're trying to do is share specialists. We're also trying to cut down costs. So the questions we have are the exceptions well, first of all, for things that aren't accepted, if it's not a core function, are we saying that a general counsel is not a core function? And so if hospitals pay a percentage of the general counsel, is that prohibited? Because we actually want that. We want people to save money on those not core functions. And then when it comes to the core functions, what is a core function? I think probably medical services, right? Medical care. But there are things that are very important to hospitals that could be a core function like electronic health records. Is that a core function of it? We actually want Southwestern Vermont Medical Center to be paying less for getting onto Epic and getting subsidized by Dartmouth to get onto Epic, that that saves money for Vermont. So we wanna delve into that piece a lot because we think that could potentially have impacts on transformation work too. And then this A-five is not my lane necessarily, but because we accept Medicare and Medicaid, Medicare Advantage, this wouldn't really apply to us. Except when we've been talking about what to do about gender affirming care, the federal government has pretty much weaponized Medicare and Medicaid and saying, if you accept this, you can't do this. And so we may want entities that don't accept that funding so that they could do certain work that would otherwise be prohibited by the federal government. So, I mentioned hospital transformation before. We don't what we don't know like, in the telehealth space, we want to use telehealth. We're not sure how this bill interacts with telehealth. We would wanna understand that more. A lot of the experts say in terms of transformation, you wanna go forward with telehealth, through purchasing, and maximizing and increasing access, opening up appointments, that sort of thing. So we just wanna get an understanding and ensure that there's still flex you know, there are the appropriate guardrails in this bill that would still allow for these things to happen. And then finally, I added this after Helen's testimony yesterday because we do not work in a vacuum and nursing home capacity impacts our capacity. And this slide is just I was going to try to do a fancy thing that shows that nursing home capacity impacts our capacity. There's actually a study that has found that larger declines in nursing home capacity end up with a longer hospital length of stay, and it's prevalent in rural areas. This slide is just from 2023 when that capacity crisis was happening. I just want to say we don't want to go back there. Not for our patients. It's really bad outcomes for our patients. And if we're talking about affordability, it doesn't help affordability either. So we would want some sort of plan if this is going to impact skilled nursing facilities, nursing homes, and those organizations.

[Rep. Alyssa Black (Chair)]: Just have a question to you, and I'm just posing the question because I realize this is not your area of expertise. But I didn't have a chance yesterday to help.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: You're welcome, Helen. I

[Rep. Alyssa Black (Chair)]: just keep Well, if we look in Vermont, I mean, right now. First of all, we've been fairly sheltered from this for quite some time. I see this as an opportunity to put measures in place so that it doesn't happen because once it happens, we're not stopping it. But it's a larger sort of philosophical question, particularly around nursing and long term care. Because that's the space where we actually have seen in Vermont that this has infiltrated. It's just kind of like when you look at Genesis, how long were they here? Three years, maybe? Three, four? Like the exact same model of what is happening everywhere. And there's been public news stories about staff shortages, decline health. I believe that some deaths were attributable to staffing issues. And I'm not saying that we don't have problems with the impact of long term care or skilled nursing. And I know exactly what it's doing to our hospitals. There's a rung a long way. I'm not buying the argument that if we put parameters in place, that that's the way to save nursing homes or long term care, that somehow we have to compromise human beings in order to sustain that system. And nobody's talking about what resources we want to allocate to the system. Instead, it's like, I'm frustrated with the Well, we really need it, so we'll take anything we can get and then leave devastated because I mean, just like what Genesis did or they sold off to someone else. I mean, exactly the same model that's used. I know you put this in your slide because I do understand how it affects the hospitals. I'm just not Surely, want to use long term care and skilled nursing care as the example of why we shouldn't be doing this because I think it's a bad example.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: I'm saying, I hear you on that. Yeah. No. I hear you on that. And we're not saying I think what we're trying to say is we can't put this in place and nothing else. Right? Like, if we put this in place and nothing else and nursing homes closed, that twenty percent number was very scary to me because we can't deal with twenty percent of those people coming into our hospitals. And just as you were saying that some of these nursing homes are linked to death, deaths are linked to this. And so it is not enough to put a prohibition in place and think that it will be okay. That's what I'm trying to say. We need to think I think I'm with you in that we need to think of the picture more comprehensively.

[Rep. Alyssa Black (Chair)]: I see a lot of struggling entities throughout the healthcare system in the state of Vermont, and I'm just so afraid that this is going to be the solution for some because of desperation. And it will undo all the work we've been trying to do in the last few years. Anyways, let's go out. I'm sorry.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: The only other thing I would add to this. Sure.

[Rep. Leslie Goldman (Member)]: What I'm hearing is a trade off of deaths. Do we have deaths in the hospital?

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Do we

[Rep. Leslie Goldman (Member)]: have deaths in the nursing homes? And I'm sorry.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Are

[Rep. Leslie Goldman (Member)]: we allowed to create a system? Are we allowed to not respond to a system that has failed? When we know that there are deaths there because of impacts? How do we integrate the whole thing?

[Devin Green (Vermont Association of Hospitals and Health Systems)]: It needs to be more than this is what I'm saying.

[Rep. Leslie Goldman (Member)]: Well, it's a start because I mean, Genesis Springfield, right? I mean, I know people in Springfield, and they're covered in pieces, or they were. And it's just not Okay. And I get what you're saying, but I'm also feeling very frustrated at the idea of people exploiting long term care, which is what private equity appeared to have been doing, and then not wanting to take action on it.

[Rep. Alyssa Black (Chair)]: Go ahead.

[Rep. Allen "Penny" Demar (Member)]: There's no one thing that's gonna fix all of this. You're talking about Genesis. Nursing Home Up Home, I don't know who owned it before, but I had relatives there. Genesis bought it quite a few years ago. No complaints anywhere in Franklin County. So I guess it depends on the company that purchases and what they're purchasing it for. But I guess before I put all these rules into place, I'd want some guardrails. I want some safety.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: Think that's what the city They said this would let us fill in.

[Rep. Allen "Penny" Demar (Member)]: Well, it could backfire on us.

[Rep. Alyssa Black (Chair)]: Well, I think I'm going to let Debra finish.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: Sorry, Devin. No, no, no, that's okay. I know, and I'm not trying to I don't wanna talk about death on a Friday afternoon. But I do just want to make the point of, one, I'll say I think all the nursing homes are struggling, and that includes the hospital owned nursing homes. And I think that is a function of where long term care is at right now. And then the other piece I'll say is I hear you on the once private equity is in, we can't stop it. But at the same time, if you have places that close and you prevent a hospital from buying them, those places will close forever. And so I think it's just really worth thinking about what this bill is trying to prevent and ensuring that the transformation work, we keep our capacity at a place that is sustainable, those really core functions of our health care system can remain.

[Rep. Francis McFaun (Vice Chair)]: Yep, I have one more question.

[Rep. Alyssa Black (Chair)]: Go ahead.

[Rep. Allen "Penny" Demar (Member)]: The grant that we just got from the federal government, 190,000,000 for five years, for rural healthcare transitions or transactions, That's gotta be Transformation. Is the word I want to That's gotta come into play here.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: I don't necessarily think it does, but it's essentially one time funding. It's not gonna prop up our system for the next five years.

[Rep. Allen "Penny" Demar (Member)]: But part of it was for nursing homes, right? You couldn't do construction other than nursing homes. It was to add some equipment.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: We were hoping to put dialysis into nursing homes. Dialysis and respiratory.

[Rep. Karen Lueders (Member)]: Go ahead, Karen. And so, understand, as what we're trying to address here is private equity imposing a huge amount of debt on the very good care provider, at a fraction of the value and then just leaving town and maybe teasing it. That's the point of it. So I've been kind of wrestling with the idea of no debt as well. I was listening the language in the bill and what kind of merging, working together, cooperating among non profits or something like that could work. So I think it's really maybe a good subject to actively think about, because we are all non profit, because we are all on the same page, how can we address the issue, which is, doesn't care about healthcare, just the asset and quick get out of town, and making flexibility and fluidity within the system that could improve it would save costs on other things. So I don't know if that's language that could be created or thought about, but anyways, thank you for your testimony on that. And then the other one is there's folks in the hospital that shouldn't stay there, but they're not safe to go home. And yet the long term care nursing home isn't the right thing either. I'm just wondering if you see, or this is part of what you see with your hospital work, of the congregate homes that are kind of like nursing, and I don't know if you call those level three or something else, but you know, that they're are the right place for that person without being the big expense of either the hospital or the long term If you see that need and how big it is and

[Rep. Alyssa Black (Chair)]: the structure. I know that's not your subject today. Yeah, no, actually

[Devin Green (Vermont Association of Hospitals and Health Systems)]: yes on that. I think across the spectrum, that would be needed. I think Helen can speak more to the availability of that. I think home health is an important piece of that puzzle as well. I think the other thing that we're seeing, and Helen touched on this yesterday, is the issue of getting medical directors into nursing homes also. So in general, we're seeing greater acuity in the hospital, greater acuity in the nursing home, more complex cases. I have tried to recruit hospital physicians to be medical directors in nursing homes. Years ago, it was just after work, stop by the nursing home, chat with folks, do some rounds. Pretty standard and a sought after job. And nowadays, people are much more acute. Physicians worry about the liability that they're taking on when they do that. We're moving away from the more generalist space and specialization. And so that has become very difficult. And we want to ensure that that can happen here as well, because that's adding to this issue.

[Rep. Alyssa Black (Chair)]: I'm just saying that the minute the other member happens to walk in this room, we are stopping this and we are okay.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Is Have you seen my ex movies? Oh,

[Rep. Alyssa Black (Chair)]: yes, no, no, I know that.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Oh, okay. Working on it, but Okay.

[Rep. Alyssa Black (Chair)]: Did a lot, see that, thank you, Jack. I was riveted by Devin. I have a few questions for you, just really quickly. First of all, it seems like in your testimony that there's a lot of, we have concern. And we're not sure. We're not sure. So I commit to you that we will make sure and that everybody knows that everybody is coming from a place of understanding whether or not. But you didn't speak to the corporate practice of medicine piece of it. I had asked a question the other day of someone I don't remember. Do any of the hospitals use non disclosure or non competes in their contracts

[Devin Green (Vermont Association of Hospitals and Health Systems)]: My understanding, hopefully it hasn't changed, because I think I polled them last year on this, but no hospitals use non compete clauses in their contracts. I think there are instances of if there's legal actions and there's a settlement, nondisclosures are pretty routine in those situations, so it's possible that there are nondisclosure agreements in discrete settlements, but I don't believe there's anything in contrast to that.

[Rep. Alyssa Black (Chair)]: Okay. And what was the other, I had another question for you around the corporate practice medicine piece, and now I can't remember what it was. Can't remember. I'm sorry. You will be back.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: I'll be back. Thank you so much.

[Rep. Alyssa Black (Chair)]: Hunter, I believe, is online. Would you mind waiting? Oh, good. Perfect. Great. We're going to have some committee discussion around two separate. We have some decisions to make or some choices.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Jen Carvey, Office of Legislative Counsel. So as I started trying to put together language for you that addresses the case that Charlie from the Health Care Advocates Office, I think he may be online, was talking about. It became clear that the language would have an impact that I'm not sure you had discussed. And so I wanted to and so my understanding of of what you wanted to do was to make sure that if somebody used their this card, this drug discount card if somebody used this drug discount card and they didn't use their health insurance because it was gonna be cheaper for them to go through the RARX program and use the discount card and pay cash out of pocket, that that amount they spend out of their pocket would be applied toward their deductible and out of pocket maximums and all that stuff. That's what I understood this committee was interested in. What the language does that you were looking at or that you were talking about would say that if the discount card would give a lower price than what the PBM or what any other form of going through the insurance would have to or not going to the insurance would have to would would allow, then the PBM has to basically let the person pay that amount through their insurance, the lower amount out of pocket, and then apply that toward their deductible. So I think the question is whether you saw the use of this card as involving insurance and the PBM and having that be the lowest cash price, which is sort of implied by the existing statutory language, but we hadn't talked about specifically that this would be the impact, that it would then affect the amount that the PBM would have to pay or would have to not put on to the patient. So if that is your intent, that's fine. And I can make the language say that. It takes, I think, two different pieces to kind of make sure that the amount that they pay, that the patient pays, is ensured that that is applied. But that wasn't sort of what I first walked away thinking was my were my marching orders. So and I can put language up if that would be helpful to sort of explain the the what and the or

[Rep. Alyssa Black (Chair)]: to show the what and the how. And I apologize because I understood the intent was that we were bypassing insurance completely. Am I wrong? And that was the impression that Right, so the way

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: The first way, Jen,

[Rep. Alyssa Black (Chair)]: sorry. Yes. So the way you're And if we use the language, it would now involve a transaction between the PBM, the patient and the pharmacy. And I don't think that's what anyone of us intended. Agree.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: So let me put the language up that is the existing statutory provision. So with two different pieces of of statute that are implicated that are not in your bill, You're rethinking reporting, actually. That's that. That's fine. There's one in title eight that is that is kind of talking about the PBM or the insurer. And then there's the one in Title 18 that's specifically the PBM. And so the bill from last year, H202, that you didn't end up moving this piece forward on was really the cap on what the patient could have to pay at point of sale going through their insurance. But when I looked into it, I also looked at the health insurance statutes and realized if you want it applied to the deductible, we have to put it in both places. And Charlie and I had a back and forth. Now here we go. Alright. So the existing statutory language that I'm going to And this is statutory language, not language that's in our bill? Not language that's in your bill, language that is outside of your bill, but does bear on it the bill. And so we may want to do some carving out depending on what it is you're looking to do. Let me the right screen here. Right. So we're here. I'd like to share this for me. Alright. I'm not getting the option. Alright. Too many windows open up my computer. Alright. I gotta close this up because I can't find what I'm trying to show you.

[Rep. Francis McFaun (Vice Chair)]: Just get rid of

[Rep. Alyssa Black (Chair)]: everything else.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Alright. Let's try.

[Rep. Alyssa Black (Chair)]: Alright.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: So this is in our PBM Licensure and Regulation Statute. We have some prohibited practices about the contract between the PBM, pharmacy benefit manager, and a pharmacist, various things it can't do. PBM can't prohibit a pharmacy or pharmacist from doing certain things. We get down here to e, and it says a PBM shall not require a covered person purchasing a prescription drug to pay an amount greater than the lesser of the cost sharing amount under their health plan, the maximum allowable cost for the drug, or here's the one we're looking at, the amount the covered person would pay for the drug after application of any known discounts if the covered person were paying the cash price. Like, arguably, this is already saying if you do this RARX card that, you know, I think the health care advocates office is interested in making it more explicit. But saying but adding in, you know, here, I think this is already saying the PBM cannot require a covered person to pay more than the the array r x amount if that is what they because that would be application of any known discounts. Then we in two, so that's e one. E two is saying the PBM has to attribute anything paid by or on behalf of a covered person, including any third party payment, financial assistance, discount, coupon, or other reduction in out of pocket expenses made by or on behalf of a covered person for prescription drug toward the out of pocket limits for their prescription drugs, the covered person's deductible if they have a deductible, and then as long as it's allowed under federal law, their annual out of pockets. And then there's other pieces saying but there's carve outs from that saying that that out of pocket credit only applies when there's no generic drug, no generic version, or there is a generic, but there's a reason the person has to take this particular drug, which again, I'm not sure is consistent with your goals with the prescription drug program discount card, because I think some of the examples you saw showed that it was cheaper for the person to to use the card for generics in addition to prescription drugs. Although I think the insurers had concerns about some of those amounts being applied to deductibles. I don't so this is why I can't just drop language in and show it to you is I think there's some decisions to be made here around what the committee's goals are as far as when the person is or is not using their insurance and what applies to the deductible and whether you're capping the PBMs out of pocket amount they can have the patient pay if and sort of making the PBM come down to the array price. I have a question, toppers got one.

[Rep. Francis McFaun (Vice Chair)]: So let me make sure that I understand this.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: You're trying to.

[Rep. Francis McFaun (Vice Chair)]: All of the discount cards included in what you just read.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: I believe they I mean, it just says any known discounts under existing law. So after the maximum, the amount the person would pay for the drug, if they were paying cash after application of any known discounts is the cap on what the PBM can require the person to pay, the covered individual pay. So my understanding is that includes all of the discount. Is my understanding as well. I don't see that that doesn't apply, but I don't think that's necessarily been part of your conversation so far. Think

[Rep. Francis McFaun (Vice Chair)]: Brought it up early in the beginning of our discussion.

[Rep. Alyssa Black (Chair)]: Okay. So I just want to ask a basic question, and I'm hoping you can answer this. There's a patient, there's a drug, and there's somebody dispensing the drug. If a patient pays $10 instead of $100 using ArrayRx, who's losing $90 Is it the PBM? Is it the pharmacy? Is it It's not the patient, I know that. That's the one person in the transaction.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Is Where does it cost $100 I think part of the question is to whom does it cost $100 Yes.

[Rep. Alyssa Black (Chair)]: Well, I mean, if somebody goes in and they're told you have a $100, because it's a name brand drug or whatever, you have a $100 tier three copay or, and then they look it up on ArrayRx and it's only $50 And they're like, well, I'll just use this instead. I think the intent that we thought around here was that they then could submit a claim and say, I paid $50 please apply that to my out of pocket. But in that transaction, I'm trying to figure out

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: where that extra $50 who did it go to? Who's losing out? Well, I look at it forget the ArrayRx. If you're in that same situation, you go in with your insurance card and the insurance says it's a $100 and you say, well, what's the cash price? Cash price is $50 Isn't it the insurance company that's losing out on the $50? I guess not because they were all supportive of this. So that can't be the answer. So I would then say it's the drug company, the PBM that's losing out of it.

[Rep. Alyssa Black (Chair)]: Well, PBM different than the drug company. PBM. PBM.

[Rep. Francis McFaun (Vice Chair)]: Oh, I see.

[Rep. Alyssa Black (Chair)]: But PBMs didn't have a problem with this either. No.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Right. I mean, some of it may be where does the pharmacist's reimbursement come from and what did it cost the pharmacy to acquire the drug? And are they, you know, is the pharmacy better off or worse off receiving $50 than they would have been to receive whatever amount they would have gotten from the PBN? I don't know the answer.

[Rep. Francis McFaun (Vice Chair)]: I think the pharmacist loses in this.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: I think it depends. I don't think we know because sometimes, because it depends what the, I think what the pharmacy's acquisition cost was from the wholesaler compared to what they're receiving for the cash price from the patient versus what the pharmacy would have received from the PDM as the reimbursement based on the whatever cost plus dispensing fee or integrated amount they receive. And I don't know that we have enough insight into what those amounts are other than they're not enough is what you I

[Rep. Alyssa Black (Chair)]: mean, I'm going to Daisy and Karen, but just to add another layer on top of this, where on earth is representative Fortis when we needed her to add We a know that the insurance companies contract with the PBM, they have a set price at the big, you know, they negotiate a price and then the PBM does all their stuff that nobody ever gets to see. And so for instance Blue Cross or I'll use MVP as an example since I've been looking over MVP right now. MVP gets, they pay what they had contracted with the PBM. If the PBM, if somebody goes in and they only have to pay 50, then that means that the PBM has to match that. So is the insurance now paying more than what they haven't negotiated with the PBM?

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: I don't know if you've

[Rep. Alyssa Black (Chair)]: Yeah, Lori. Sorry, no, other people were first. Oh, no, I'm sorry.

[Rep. Daisy Berbeco (Ranking Member)]: Is this language in response to the committee asking that the payment for drug spot with this card be applied to their deductible? Initially,

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: because I understood the Health Care Advocate's Office had language. And so once I went trying to sort of understand how that language, which was more directed toward the cap fit in with the application to the deductible part, then I, after some back and forth, recognize that the existing provision already kind of sets that cash. I mean, like So if your question is, can we We just ignore this. No. Because I think now problem. No.

[Rep. Alyssa Black (Chair)]: Okay. Because because we I think

[Devin Green (Vermont Association of Hospitals and Health Systems)]: you need

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: to decide how you want the existing provision to apply. I got it. Because under existing law, the way it caps the PBM, what the PBM can require a covered person purchasing prescription drug to pay includes the out of pocket cash price after application of any known discounts, and this is a new known discount you are creating.

[Rep. Alyssa Black (Chair)]: And why doesn't it fall under that, though? I'm having a

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: hard time

[Rep. Alyssa Black (Chair)]: grabbing a render of it.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: I believe it does.

[Rep. Alyssa Black (Chair)]: And why do we not?

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: I'm not sure that that was the committee's intent.

[Rep. Alyssa Black (Chair)]: So if we do nothing If nothing, it is That's what's supposed to happen.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Right. And that was not my understanding of the conversation was all about people doing things without insurance to use the arrear exit. I'm saying it actually is connected under existing law unless you do something different to existing law. Do

[Rep. Brian Cina (Member)]: we have to decide today or can we sleep on it?

[Rep. Alyssa Black (Chair)]: No, we don't have to. You may

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: to let all the people weigh in because I could be off base or there could be to do things in certain way. I just want to clarify something. But then there was that second piece of the statute that said generic drugs are excluded and generic drugs are a big piece of this bill, right? Generic drugs are excluded from what the insurer has to apply towards your deductible if you pay out of pocket. So It's not the cap. It's not the cap. But if we want this to apply to the deductible, we need to ensure generics so are we need ensure. Let me make sure that's true. And maybe it's not true. Let me see. Let me look at let me put it up on the screen again so we can all look at it. Easier. Alright. So one says PBM cannot require a covered person purchasing the prescription drug to pay more than the lesser of cost sharing amount under their plan, maximum allowable cost for the drug, or the amount they would pay after application of known discounts if they were paying cash. Two, alright, so yes, it's just for the application to the deductible. Two says a PBM must attribute any amount paid by or on behalf of the covered person, including any, and I don't frankly know how it works if it's a discount. I'm not sure paying a discount card using a discount card makes a difference to this piece because you're still paying what you're paying out of pocket. But including any third party payment, financial assistance, discount coupon, or other reduction in out of pocket expenses toward the out of pocket limits, the deductible, and the out of pocket maximums. And then it says the provisions of a, relating to third part to things going relating to third party payment, financial assistance, discount coupon, etcetera, only applies to a prescription drug where there's no generic or there is a generic. So this is just, I think, trying to get away from somebody using a manufacturer's coupon that's worth a lot and crediting that toward their deductible without them having their without there being a reason they need the brand name. Oh, okay. Did you Okay. Okay. Thank you. But the the actual amount that they pay would still go toward their out of pocket Okay. Because it's not about a third party payment, I think. Although it's not entirely clear because it does talk about a discount. The provisions of subdivision a relate to a discount made on behalf of a covered person, but the discount in this case only only affects the amount that they pay, the individual pays. But I think it could use some clarify I think it could all use some clarification depending on your intent. The fact that we can go round and round on this means that people applying it can go round and round on this. Okay.

[Rep. Alyssa Black (Chair)]: So Yes. Yes.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Sorry. Another clarifying question. And so the intent can be you use a discount card, pay cash credit. You then go home and fill out a claim and submit it to the insurance. Or the PBM has to accept the price of the ArrayRx. And you, as a consumer, don't need to go home and fill out any form. It's automatically going to be against your deductible.

[Rep. Daisy Berbeco (Ranking Member)]: Because

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: it went through the PBM. Yes. Think for the I think for the drug discount card, yes. And then either way you go, I think we want to clean up the language to clarify.

[Rep. Alyssa Black (Chair)]: The PPM has to match that. Right.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Right. And I don't know what effect that has on insurance, etcetera. That's why.

[Rep. Alyssa Black (Chair)]: Go ahead, Lori.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: No, go ahead.

[Rep. Alyssa Black (Chair)]: No, I was going to say, I think we need more time.

[Rep. Allen "Penny" Demar (Member)]: Yes.

[Rep. Alyssa Black (Chair)]: Yeah. I'm putting it out there to any, I warned that we were voting on this thing 20 times. So if you're listening, you're listening. If you want to weigh in on this, then you need to come to us and we will clarify things, we'll figure out what our intent is and where we want to go with it. But we're obviously going to have to table this for this moment. And Lori?

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: Can I ask that maybe the folks who brought this forward, the Paychecks Office, could do some research on what other states are doing and come back to us?

[Rep. Francis McFaun (Vice Chair)]: When we do this, I think we need to have some evidence from infants gun cats to see how it works based on what the law is right now.

[Jennifer (Jen) Carbee (Office of Legislative Counsel)]: I'm not sure if you need other discount cards or if you need an insurer or PBM to tell you how they apply it now.

[Rep. Francis McFaun (Vice Chair)]: All of us can get that information. Would be important.

[Rep. Alyssa Black (Chair)]: Alright. Thank you. Thanks, John. Not sorry.

[Rep. Allen "Penny" Demar (Member)]: So

[Rep. Alyssa Black (Chair)]: let's move back. Is our next witness here? Yes.

[Rep. Karen Lueders (Member)]: It's like ping pong today.

[Rep. Alyssa Black (Chair)]: Which feels like it?

[Rep. Brian Cina (Member)]: Feels more like tennis.

[Devin Green (Vermont Association of Hospitals and Health Systems)]: Hi,

[Rep. Alyssa Black (Chair)]: Hunter, I'm representative Glass, welcome.

[Hunter Young (Head of State Government Relations, ATA Action)]: Hello, thank you for having me. Happy to be here.

[Rep. Alyssa Black (Chair)]: Want to introduce yourself and provide your testimony on five eighty three? H583?

[Hunter Young (Head of State Government Relations, ATA Action)]: Absolutely. So my name is Hunter Young. I serve as the head of state government relations for ATAction, which is the American Telemedicine Association's affiliated advocacy organization. First and foremost, I want to thank you, Chair Black, Vice Chair McFaun, the Committee on Health Care as a whole and staff for the opportunity to testify on House Bill five eighty three. We hope that this is just the beginning of a robust and collaborative process surrounding this important legislation.

[Rep. Alyssa Black (Chair)]: Keep going. I I just wanted to make sure you explain to us exactly what that is because I'm not sure where

[Hunter Young (Head of State Government Relations, ATA Action)]: the The American Telemedicine Association? Yes. Yeah. Absolutely. Absolutely. So ATA Action advances policy to ensure that all individuals have permanent access to telehealth services across the care continuum. We support the enactment of state and federal telehealth policies to secure telehealth access for all Americans, including those in rural and underserved communities. Between ATA Action and the larger ATA, we represent a broad membership of more than 400 organizations, including hospital systems, commercial payers, virtual only providers, academic medical centers, pharmaceutical manufacturers, medical device manufacturers, health law firms, and advisory firms. Is that

[Rep. Alyssa Black (Chair)]: Sort of. Do you would we be familiar with anyone or

[Hunter Young (Head of State Government Relations, ATA Action)]: Absolutely. So, I mean, our specifically in ATA Action, some of our members include Amazon, Teladoc, Hims and Hers, Roe. We also have members that serve virtually serve patients receiving care for opioid use disorders such as work at health. Are Ophelia, those are just a handful of examples of our membership there.

[Rep. Alyssa Black (Chair)]: Great. We actually have a question already.

[Rep. Brian Cina (Member)]: Well, just, I want make sure I'm understanding that it sounds like your professional association represents the corporate providers who employ healthcare providers, not the actual category of licensed providers? Like you don't represent doctors or nurses, it's like the employers of doctors, nurses, etcetera.

[Hunter Young (Head of State Government Relations, ATA Action)]: I would say that we So especially in the on the ATA side, the larger side, I do I do think that we have some of both. We have some smaller, entities over on the ATA side. For clarity, ATA is a a trade organization nonprofit. We established ATA Action about four years ago as we started to get more into the advocacy work. It didn't wanna threaten the tax status of the ATA. So ATA Action, I I actually have an ATA title as well. I'm two headed. I work, with both groups, but here representing ATAction, which is our advocacy arm that also represents the interests of the larger ATA community as well.

[Rep. Alyssa Black (Chair)]: Okay.

[Rep. Brian Cina (Member)]: Thanks. I found your website too, so I'll read more while you talk. This way. You don't have to keep explaining it.

[Rep. Alyssa Black (Chair)]: Thank you. Go ahead.

[Hunter Young (Head of State Government Relations, ATA Action)]: Yeah. And happy to answer any more questions as well.

[Rep. Alyssa Black (Chair)]: Sorry. I think we were just sort of confused over who you're representing here.

[Hunter Young (Head of State Government Relations, ATA Action)]: Yeah. Totally understand and happy to provide some more clarification necessary there as well. So before I get into the bulk of my testimony, I really want to make clear that our organization supports transparency in the provision of health care and is in strong support of the notion that nothing should interfere with physicians and other health care providers' clinical decisions on patient care. As a preliminary matter, we're aware that this bill was significantly shaped by the National Academy for State Health Policies or NASHP's model for state oversight of proposed health care mergers, excuse me, or the what I refer to as the NASHP Act. We respect NASHP and their work, but we want to make clear, to this committee that the model act was not a product of consensus with various stakeholders. Notably, it did not include any health care investors as participants. It did not include any perspectives from practices that had taken, private investment and had beneficial effects. And importantly, for our purposes, it did not include, any telehealth or emerging innovative entities that rely on private investment. This is important to mention because if these entities were involved in the process, we believe the drafters would have understood that the act includes a number of broad, impractical mandates that pose significant unintended consequences that will upend and prohibit how currently compliant telehealth provider entities contract would lay entities for business operations, nonphysician expertise, investment. And we're concerned that this could lead to significant unintended consequences for innovation and health care investment in Vermont, which would then negatively impact patient care and potentially reduce patient access to care. For example, action has serious concerns with the provision of the legislation that requires majority stakeholders to exhibit meaningful ownership by being present in the state and or to be substantially engaged in delivering medical care or managing the medical practice. By requiring shareholders to be physically present in Vermont, this provision is fully incompatible with the realities of telehealth care as providers often serve patients in many states, including telehealth entities in important fields such as behavioral health, gender affirming care, and reproductive health care. This provision also undercuts rules from the Vermont Office of Professional Regulation, which permits out of state health care practitioners to provide telehealth services to Vermont patients through interim registration or through the various licensure compacts of which Vermont is a member. There's also a significant lack of clarity on what constitutes meaningful ownership of a medical practice contemplated here and what subsequent ownership requirements this would implement for telehealth providers operating across state lines. In effect, this would require national telehealth practices to change their entire corporate structure instead of making a unique Vermont practice. We're concerned that many will choose not to undertake that expense, meaning Vermonters could lose access to care. ATA action also has significant concerns with how this legislation would upend the established physician corporation and management services organization framework that many telehealth entities utilize, stifling investment and innovation. I'd be happy to dive more into these concerns through written follow-up or in answering questions from the committee on this front. But a little bit on that. ATA action has significant concerns regarding how the legislation would ban without exception any shareholder, director, or officer of a medical practice often referred to a physician corporation or PC from also being employed by or holding any shares in the contracted management services organization or MSO. This is a severe restriction and will have a disproportionate impact on emerging and innovative entities where the MSO and PC are built together from the ground up and capitalize upon synergies that would not be possible if such a restriction was put in place. Many telehealth entities have found that having a physician affiliated with both the medical corporation and the MSO improves decision making, provides direct and open lines of communication, and leads to heightened patient and provider satisfaction. We would say rather than broadly prohibiting physicians from entering contracts that they deem appropriate, we would instead encourage the mitigation of these concerns through enforcing existing ethical guardrails and or requiring the parties to clearly delineate and agree to the separate responsibilities. Furthermore, the PC MSO structure has helped medical providers access needed financing and investment to expand their practice and innovate, including emerging telehealth companies who aim to reach underserved and often stigmatized populations. The provisions included in this legislation seem to suggest that an investor would no longer have any input in the shareholders of the medical operation they are supporting, nor could they implement any guardrails to minimize the impact of ownership changes on business operations. If implemented, we believe these requirements would significantly chill investment, that has been chill the investment that has been critical to the deployment of health of telehealth and health care innovation. As legal commenters have highlighted, physician practices seeking to attract investment will find doing so challenging if non physician investors have no effective means to limit financial risk or voice in the leadership of the medical group that they're supporting and helping to grow. The ability for lay entities to invest and partner with physicians in new health care ventures, while at the same time ensuring physicians have control over treatment decisions need not be mutually exclusive endeavors. ATA Action recommends taking an approach focused on empowering physician control over actual treatment decisions and care rather than an approach that restricts their ability to attract and partner with growth investors. Additionally, much of the dialogue around this legislation has focused on national entities and private equity, particularly around large scale investor acquisition of institutional medical practices or specific care settings. It bears emphasis that the mandates in this legislation apply to every medical practice taking investment or working with nonphysician entities, and we believe it will asymmetrically disadvantage smaller organizations and clinics. Many of our members are emerging entities specializing in niche practices like substance abuse treatment, gender affirming care, and reproductive health services, or are focused on specific patient populations, including the underinsured or Medicaid beneficiaries. These smaller organizations cannot afford the same level of legal planning and restructuring fees larger entities will be capable of absorbing to accommodate the significant changes proposed here. Additionally, ATA Action fears the overwhelming effect of this legislation will be less investment in and more pressure on smaller entities that deliver care and ultimately less access for remote patients. Should the general assembly, this committee, and the sponsors wish to advance this legislation in this space, we encourage looking to the process Oregon undertook when they sought to enact more robust guardrails around investment in health care. While the initial draft of the Oregon legislation in this space from 2024 included very encompassing mandates, the sponsors recognized that further dialogue and nuance was needed to ensure a balance between ensuring clinician control over care and not stifling investment. After considerable stakeholder engagement, including robust meetings held over the interim hearing from dozens of impacted entities, Oregon enacted a law which included significant significant improvements from the introduced version. We played a key role in that stakeholder process, moving from opposition to the bill to neutral on the legislation, and we hope to contribute to an equally robust stakeholder process in Vermont. In conclusion, action agrees with the apparent overall intent of this legislation to ensure that Vermont health care providers have control over their clinical decisions while also recognizing the instances in our health care system where nonphysician entities and investor have improperly crossed the line into patient care. The solution to these well meaning goals, however, is not to hastily implement this broad and onerous legislation with untested concepts that will, whether intended or not, restrict the growth and development of innovative care models to Vermont patients. Now is not the time to enact barriers to care. Rather, we encourage robust collaboration with affected stakeholders on a framework that more narrowly addresses the problem at hand, provides entities with clarity on how their requirements can be practically applied, and considers where enforcement of existing regulation could serve as an alternative pathway to ensure provider independence in delivering patient care. We hope that this is just the beginning of the dialogue around this legislation, and we look forward to hopefully working with the sponsors and the committee to strike the proper balance and ensure patient access to telehealth care is not impacted. Thank you again for the opportunity to testify, and I'm happy to answer any questions.

[Rep. Alyssa Black (Chair)]: First of all, could you send us your testimony? I'm assuming that you were reading there.

[Rep. Francis McFaun (Vice Chair)]: Was just

[Rep. Alyssa Black (Chair)]: Not that you weren't a wonderful reader, apologize. If you could send us your testimony in writing, it's always very helpful. So we can like go back and say oh I remember he said something about that. Absolutely. So we'd appreciate it. I'm gonna open up for questions. I just wanted to ask really quickly ATA action. Yes. Do any of your members, I'm trying to sort of look to see who your members are, do you have any members that are currently domiciled in Vermont? Not providing services to Vermonters because I'm well aware that lots of Vermonters are getting services from some of your members. But do you have any that are domiciled here in our state?

[Hunter Young (Head of State Government Relations, ATA Action)]: Like headquartered in Vermont? I would I would need to check with our membership on that, not to my knowledge, but I also don't know off the top of my head where all of our members are headquartered. So I can I'd be happy to follow-up with more information on that.

[Rep. Daisy Berbeco (Ranking Member)]: Oh, Daisy, Thank you for joining us. It's really great to have the opinion of someone who represents such a broad network of providers. Do you know if Innovatella is a member of yours? Because I do know that our state holds contracts with them, and I'm just curious.

[Hunter Young (Head of State Government Relations, ATA Action)]: Again, I would I know they are not a member of ATAction. I would have to check if they're a member of the larger ATA. I with over 400 members on the ATA side, I don't know all of them off the top of my head, but I would be happy to to look into that and follow-up with you on that as well.

[Rep. Alyssa Black (Chair)]: Thank you.

[Rep. Brian Cina (Member)]: Brian? Did hear correct You're gonna submit something in writing so we can read this later, but did I hear correctly that if we wanna move forward, there's an example of a solution in what Oregon did?

[Hunter Young (Head of State Government Relations, ATA Action)]: Yes, we believe that we were at so Oregon back in 2024 introduced a bill that was fairly similar to the introduced version here. And we think that after working with the sponsor's office there of now Majority Leader Bowman's office, We we attended a lot of meetings, and there was a an entire stakeholder process that took place over the interim where they heard from a lot of stakeholders to improve that bill. And we think that they landed in a much better place, in their final and active legislation than is in this the introduced version of this Vermont bill. Yeah. Sorry. Go ahead.

[Rep. Alyssa Black (Chair)]: Yeah. No. Go ahead.

[Rep. Brian Cina (Member)]: My follow-up my follow-up question is that that's helpful. I will look at it. I I personally will look at it. Maybe we can look at that solution and see what the strengths and weaknesses of it might be. I'm curious if you track the financial health and lifespans of acquisitions within the corporations in the ATA? Like for example, is there any data about how these interstate healthcare provider organizations, how long they last, how they impact local economies in terms of liquidating assets, some of these other challenges that we see with private equity investment practices? That's not information that we collect regularly from our members in terms of their financial operations and the

[Hunter Young (Head of State Government Relations, ATA Action)]: way that they operate in that manner. So I don't have more information on their of their merger and acquisition history. But I can say that the the majority of the members that I've worked with in my, almost coming up on three and a half, four years working with ATA Action has maintains sort of have maintained their business operations and haven't gone out of business after being acquired by private equity or or things like that.

[Rep. Brian Cina (Member)]: And you have a list of all the ATA members that's public. Right?

[Hunter Young (Head of State Government Relations, ATA Action)]: The so if you go to the ATAction website, we've got got two different websites, but the the ATA action website, we do have a list of our ATA action members on there. There's a logo scroller.

[Rep. Brian Cina (Member)]: Is it the Advocacy Council member companies?

[Hunter Young (Head of State Government Relations, ATA Action)]: So the Advocacy Council, that's one of our membership tiers. We have two different membership tiers within ATAction. The Advocacy Council is one of them. Then there's the advocacy.

[Rep. Brian Cina (Member)]: See now. There's also a members list. I'm sorry. I see it.

[Hunter Young (Head of State Government Relations, ATA Action)]: No reason to apologize.

[Rep. Alyssa Black (Chair)]: Thank you. And thank you so much, Hunter. Thanks for joining us. And again, love to have your testimony in writing. I think before we go, I've asked I think we're just gonna wrap this up and we're gonna wrap up this week because we've heard a lot. And I've asked Sam if he wanted to just to have some thoughts before we go into the weekend so that we can think about this all weekend. Please go

[Sam Posner (Office of the Health Care Advocate)]: and spend time with your families, do fun things and stuff. Thank you, Sam Posh, the healthcare advocate. I just want to thank folks that testified, and we are going to take these concerns back. I'm not going to go point by point addressing the concerns right now. I think there'll be a time to do that hopefully next week. We have some changes I think that we will make to make some of the language really clear or much more clear and streamline some things and address some of the concerns, some of which I think there's a lot of shared agreement with our office. Stay tuned. That's really the high level message. Thank you for taking the time and you'll hear some more testimony next week from us and also some other experts in the field that we work with.

[Hunter Young (Head of State Government Relations, ATA Action)]: I don't know

[Sam Posner (Office of the Health Care Advocate)]: you want say anything, Mike.

[Rep. Alyssa Black (Chair)]: I thank everyone for bearing with this bill this week. I also committed to ensure that where there is confusion or concerns, that we want to get this right. Okay, I think we're done.

[Rep. Karen Lueders (Member)]: Thank you.

[Rep. Alyssa Black (Chair)]: Thank you. You. You're welcome. I'm live.