Vermont Legislature SmartTranscripts:

[Alyssa Black, Chair]: Welcome back, Mary. And we are continuing on to a couple other sections. So let's have Jenny come up and walk us through efficient service delivery.

[Jennifer Carbee, Legislative Counsel]: Good afternoon, Jen Carvey from sections of the bill. This is starting with section 10 on page 20, and there's a crystal language up on the screen. For the first change is fairly small in its scope. What means are we gonna get? It's 20. So if you remember when we talked earlier this year about the legislation passed last year, and there were a couple of cleanup pieces that we did last year or clarifying pieces around claims edits and prior authorizations. These two sections deal with that. The first one is a fairly small claim from a substitute standpoint. It is modifying a provision of the statute on processing claims, down coding, and adherence to coding rules specific to prepayment coding validation edit review. It says under existing except as otherwise provided in subdivision two, health plans can't and cannot use prepayment coding validation edit review, which is where the plan would require the provider to give medical record documentation along with or after submission of a claim, but before the claim has been adjudicated. And then Existing Law says nothing in this subsection, so this is the Except For piece, shall be construed to prohibit targeted prepayment coding validation edit review of a specific provider, provider group or facility under certain circumstances. And the first one is including evaluating high dollar claims. And this is defining, instead of using the term high dollar claims, is putting a number on it. So including evaluating claims exceeding $25,000 per episode of care. So that is I'm trying to give some context, but really the change here is just changing high dollar claims to claims exceeding $25,000 per episode of care. If we put that in here, it's not tied to any

[Alyssa Black, Chair]: inflationary thing. So if we put in $25,000 theoretically, ten years from now, it's you know, going to get a Band Aid will cost you $25,000. Then Oh, good. Would we have to change

[Jennifer Carbee, Legislative Counsel]: You would have to you would have to change the number that is in statute, but it is the context here is targeted prepayment coding validation edit review under of specific provider under specific circumstances. So if this turns out to be too low at some point or too many providers are being subject to this review, I expect you will hear from them that the threshold needs to be increased.

[Brian Cina, Member]: Brian? I want to save my question for DFR. Okay.

[Alyssa Black, Chair]: I was wondering where the $25,000

[Brian Cina, Member]: That's what I was going to ask the EFR.

[Jennifer Carbee, Legislative Counsel]: You can save that question from.

[Brian Cina, Member]: And there's more. Yes, it's

[Jennifer Carbee, Legislative Counsel]: a number from VFR. I it. Thank you. Them to answer when you hear from them, I think next. Next up is a bigger change. So this is in the exemption from prior authorizations for primary care providers that was also in that Act 111 that was then amended last year. This is narrowing the prior authorization exemption. So in current law, says, except as provided in subdivision B, a health plan shall not impose any prior authorization requirement for any admission item, service, treatment or procedure ordered by a primary care provider. And then it says, but primary and then B says, there is no prohibition on prior authorization requirements for prescription drugs or for anything provided out of network. The bill would qualify that primary care providers to just providers who practice an independent physician practice that is not owned or affiliated with a hospital or hospital network, and the provider is not employed by or otherwise under the control of a hospital or hospital network. Really independent physicians.

[Alyssa Black, Chair]: Jen, could you remind us when this went into effect? And I know it's not in the bill, but the little three ellipses, I believe, indicate some reporting check-in check back.

[Jennifer Carbee, Legislative Counsel]: That's not where the reporting is. The reporting was in the act, but so, yes, give me just a moment and I will see if I can I save this somewhere useful? We can certainly look at the act, or I know you have witnesses with time constraints. So if you want me to come back on that, I can do that as well. Maybe. Okay.

[Alyssa Black, Chair]: I just I believe this went into effect 01/01/2025.

[Jennifer Carbee, Legislative Counsel]: Do you think that's right? But I would need to double check. And then you do have reporting requirements that were elsewhere in that act that call for reports to come back to you, I believe next January from the insurers and from the providers on the impact of the prior authorization exemption. Okay.

[Brian Cina, Member]: The air it's the refrigerator.

[Francis "Topper" McFaun, Vice Chair]: Yeah. Okay. You're ready.

[Brian Cina, Member]: That was like sirens.

[Alyssa Black, Chair]: It's the refrigerator. It's working every task.

[Lori Houghton, Member]: And then we

[Jennifer Carbee, Legislative Counsel]: get to section 12 on page 22, which is on-site neutral billing, and this would amend the same section of statute where reference based pricing was added last year for the Green Mountain Care Board to also add in site neutral billing. So the first thing it does is amend the intent subsection, subsection A. Most of this initial stuff isn't really a change. It's just formatting and adding in health care services because that's the term we usually use. But it adds a third intent statement that it is the intent of the General Assembly that payments for healthcare services that can be delivered safely and affordably outside a hospital setting should be standardized regardless of the healthcare setting in which they are delivered. And it continues on. Just for clarification, is that facility fee? Is that what we're talking about? No. No. Yeah. So let's look at what the language says. So site neutral billing here, this would add on. So reference based pricing is subsection E. This adds in a new subsection F on-site Neutral Billing that directs the Green Mountain Care Board in coordination with DFR to identify outpatient or ambulatory items and services that are safe and appropriate to be delivered in lower cost non hospital settings. And for each of these items and services, the board would establish a single reference based price that would be applied in all hospital and non hospital service locations across Vermont. So the same reimbursement amount. Based on a percentage of the Medicare reimbursement rate for the same or a similar item or service or another benchmark as appropriate using the same kind of parameters around benchmarks as used in reference based pricing. You want me to second? Sorry. I got it. Yeah, just who? The board.

[Brian Cina, Member]: Okay, thank you. I just want to confirm that I understood.

[Jennifer Carbee, Legislative Counsel]: Boarding, right, and collaboration with DFR. And in developing these site neutral reference based prices for site neutral billing under this subsection, the board and department are directed to consult with health insurers, hospitals, other health care professionals as applicable, the Office of the Healthcare Advocate, and the Agency of Human Services. It directs the board. And so a lot of the rest of these are similar to reference based pricing. There's a balance, no balance billing. So the board shall implement site neutral billing in a manner that does not allow health care professionals to charge or collect from patients or health insurers and does not allow health insurers to pay any amount for the outpatient or ambulatory item or service in excess of the site neutral reference based amount established by the Board. It directs the Board to identify factors that would necessitate terminating or modifying the use of site neutral billing, such as a measurable reduction in access to or quality of care. Again, these align with the same provisions in reference based pricing and also states that the Board's authority to implement site neutral billing under this subsection does not include the authority to set amounts for outpatient or ambulatory items provided or services delivered to patients enrolled in Medicare or Medicaid. So again, same as for reference spaces.

[Alyssa Black, Chair]: So how is this any different than what we did last year in ACT, I don't know the number, but S-one 26. 68. Eight. Okay, you. How is that any different than what we did with setting a reference based pricing for hospitals with a ceiling, and then we gave the board authority, I think they were in consultation with somebody else, I don't know who, to set a floor for community providers or providers.

[Jennifer Carbee, Legislative Counsel]: So this would be a single rate that would apply across all hospital and community settings. So that's one piece. I mean, this is, you know, it's just some extent both complementary and conflicting with reference based pricing, because I think with reference based pricing, you were looking at the hospital, at least with the hospitals and potentially community providers having sort of an individually tailored reference based price based on the financial needs of the hospital, its payer mix, security, location, etcetera. This would have one rate, a single reference based price that would be applied in all hospital and non hospital locations across Vermont. Although this is for outpatient and ambulatory items, not inpatient. So it would be a subset of hospital services. So

[Alyssa Black, Chair]: in essence, let's say, you know, in Brattleboro, they wanted to really foster a certain type of service, Green Mountain Care Board would be able to set within a hospital a reference based price. And if this went into effect, you're basically saying it doesn't matter if you're providing that service at Brattleboro, St. Johnsbury, Burlington, everybody gets the same price.

[Jennifer Carbee, Legislative Counsel]: This link, right. This link has a single reference based price for all settings for outpatient and ambulatory items and services, with the caveat that are safe and appropriate to be delivered in lower cost non hospital settings. So if it's something that can be safely delivered in the community, it would be subject to this provision. If it was something that really needed a hospital environment, it would not be eligible for this provision.

[Alyssa Black, Chair]: Daisy, do you have a question? I do. I don't think it's addressed in here. But with this and I guess just reference based pricing in general does this bind us a fee for service structure? Or could within this language, people be paid per member per month or case rate?

[Daisy Berbeco, Ranking Member]: Does this constrict any of those models?

[Jennifer Carbee, Legislative Counsel]: I mean, it is specific to I think both are specific to prices and billing, but whether those prices could be used to create an average per member per month or something like that in the future, I think that's possible. I think you'd want to hear from the board and others about whether and to what extent that is possible or whether it is more tied to pay for service. I mean, think it may not be of as much utility in a non fee for service system, because I think you're looking at costs differently when you're creating capitated or bundled rate for anything. I still, mean, with reference based pricing, it's based on the percentage of the Medicare cost for that item or service. So you could still potentially use Medicare as the reference for developing a bundled rate or I mean, it may still be a useful reference point, but it may not be implemented as setting a cap. It may be part of a larger

[Daisy Berbeco, Ranking Member]: larger Yeah, it is.

[Jennifer Carbee, Legislative Counsel]: Yeah, larger, thank you.

[Daisy Berbeco, Ranking Member]: Language here, board in coordination with DFR shall identify outpatient or ambulatory items that are safe and appropriate to be delivered in a low low cost, non hospital setting. And for those items, they should establish. Are we basically saying any services or items that they find that can be delivered, are we mandating that they set a price for all of those? As written, I

[Jennifer Carbee, Legislative Counsel]: think, yes. It says identify those items and services. And then for each of these items and services, the board shall establish establish a single reference based price that shall be applied in all settings. For every service that's That is what this language would do. Okay.

[Francis "Topper" McFaun, Vice Chair]: Alright. That's non hospital and hospital settings.

[Jennifer Carbee, Legislative Counsel]: Right, it would be applied in all hospital and non hospital locations across Vermont.

[Alyssa Black, Chair]: When we say hospital settings or non hospital, or hospital and non hospital, are we talking specifically about like the outpatient? Okay, so if your primary care provider is located in a hospital but it's still an outpatient visit, is that considered to be a hospital setting?

[Jennifer Carbee, Legislative Counsel]: I would have you ask VFR because this is their link. Okay.

[Alyssa Black, Chair]: I guess I'm just trying to figure out what I'm on the So

[Jennifer Carbee, Legislative Counsel]: you may want to use different What is a hospital

[Alyssa Black, Chair]: setting? A

[Brian Cina, Member]: A very expensive way to get health care.

[Alyssa Black, Chair]: Commissioner, don't answer that question, because you'll never be able to answer it fully to my

[Kaj Samsom, Commissioner, Department of Financial Regulation]: I do think it

[Francis "Topper" McFaun, Vice Chair]: doesn't necessarily need to be quite seral in terms of this bill.

[Alyssa Black, Chair]: All right, thanks. Any other questions for Jen around

[Jennifer Carbee, Legislative Counsel]: language? I'm not done.

[Alyssa Black, Chair]: Oh, I'm sorry.

[Jennifer Carbee, Legislative Counsel]: Section thirteen thirty two, Reinsurance Waiver. It is authorizing the Department of Vermont Health Access in consultation with the FR to submit a state innovation waiver under Section thirteen thirty two of the Affordable Care Act. So these are waivers for innovation waivers. That is the specific section. They're sometimes referred to as just a Section thirteen thirty two waiver or a thirteen thirty two waiver. To establish a program for reinsurance and to seek the federal pass through funding that comes from the amounts that would otherwise come to the state through premium tax credits and cost sharing reductions that are available as part of a Section fifteen thirty two waiver. So authorizing, not requiring at this point, but authorizing them to submit a reinsurance waiver. There are several states that I believe have already done a thirteen thirty two reinsurance waiver.

[Alyssa Black, Chair]: If you're like me and don't understand any of this at all, we'll wait until Debra comes in. I think they're

[Jennifer Carbee, Legislative Counsel]: best to answer. Yeah. Think the DFR is gonna talk to you some about this. Yeah. And finally, the act would take effect on July 1.

[Alyssa Black, Chair]: So we're going to start with sharing when and I apologize profusely for this morning. I know you're nice and so comfortable. Really appreciate you sticking around.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Not a problem. I very much thank you and the committee here for listening to me. And, I appreciate it. That said, I'm Sharon Gooten. I am a physical therapist by profession. I graduated in 'seventy nine. And, I could see, problems within our healthcare system way back then. My conversation downstairs was just about this. And my profession specifically has not done a good job in going into preventative care, in large part because it's not insurance reimbursable. But when I had the chance to start my own business, the rehab gym, I went there. And I love that third bullet point that says empowering people to participate in their own health care to the best of their capacity. My role prior to starting this business, I was a ski and snowboarder instructor, actually part time and a PT part time. So it wasn't my interest to go into business, but my friend said, Let's do it. And I did it, and she bowed out and I kept going.

[Alyssa Black, Chair]: The

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: one message I got clearly working as a liaison between the orthopedic surgeons, which now the group is at Tilly Drive, and the physical therapy realm of what patients would have to have, is that they weren't happy with physical therapy in general. Can I just do my own physical therapy? I just need a small gym and direction. And it wasn't really done. But there were a couple of doctors that had respect for me. And without applying hands, without charging them, I ventured into this physical therapy where I would give protocol and then instruction on how they can do the rehab on their own, like rotator cuff. One hundred percent of rotator cuff repairs went through physical therapy. So I started with this group and not only did they get better, they got better faster and stronger, sooner. And what I saw was when you empower a person to take care of their own health care, they don't rely on someone else and they tend to do more on their own. And as it's structured now with physical therapy, you might get one, two appointments a week and not really pay attention to your own ownership in between that time. And so you tend to tighten up more and so forth. So, when I was able to do that, my business shot up because I was onto something. And I got the 2008 Small Business Person of the Year Award, not for my physical therapy, but the business model that just so happens to be embedded within healthcare. I'm a disruptive innovator. I will just do it. Got a call from the American Physical Therapy Association saying I couldn't do it. It won't work for you, it won't work for my customer. The problem is that independents are going out of business. And right now, what we know for sure is that the affordable, accessible care remains in this group of providers and independents. The most expensive care is the hospitals. And when I graduated in the 1970s, there were no private PT clinics. It was all owned by the hospitals. So, we have gone from statistically, and it's in the paperwork that was delivered through e file, 70% of providers were independent not long ago, and now it's 70% are pretty much based out of a hospital owned business. And to answer your question with site neutral, which I'm thrilled about. The language here sounds exactly what I'm here to talk about. Any service pretty much that can be delivered by anyone with the same quality should be paid the same. That's common sense. It's fair. But it's more than that. It basically connects the small business with the customer. And and and now I'm talking business, which health care is. Health care is a business that unfortunately captured by the hospitals that have grown into systems, not just hospitals anymore. You're confused. Like, I don't know if this is hospital, if doctor is in the hospital. Hospitals, not long ago, used to take care of acute critically ill. And they have grown into systems now. UVM has their hand in it all. Pharmaceutical, products, physical therapy, everything. And we thought beginning that if we build it bigger, it would be better, and it turned out to be not better and more expensive. So monopolies have never worked in any industry. And what we have now, we face a monopolization where over half of all of health care dollars are put into one business with separate you know, it's one big umbrella. So in any case, the hospital, though, is like motherhood and apple pie, I tell people, the mother is eating apple pie. And we're not gonna have either if this continues. And I strongly believe, but there is no easy way to get back there, is a hospital needs to stay a hospital. A hospital is good for caring for the acute and the ones that are in accidents. What they have not done well in is everything else. But you can't, like, this is tricky. You can't break up this monopoly. But site neutral will naturally, organically, in the most fair, least amount of government necessary effort to get to where we need to get to. And think about it this way. It puts it back in a marketplace setting, which we know stimulates innovation, efficiency. Everything is good when there's when there's a when there is a free and fair market, which does not exist right now. And my business can thrive, it is really all reference based if we want it to be based, the reference is Medicare. My business runs like on under 100%, like with Medicaid, to at most 135% of Medicare. And the physical therapy that is hospital based through UVM is at about three thirty, 50%. Per visit, I get 88 from Medicaid, I get like between 100 and 110 for Medicare. And the commercial payers will pay about my cost and a little bit more at about 150 an hour. The hospital gets about 500 an hour per visit of care. And the hospital not only actually, a lot of clever ways to do things, too, now at Tilly Drive, they will go through an evaluation then and send the patient away. An evaluation is the most lucrative of all of the visits. So they are with the cream, and they mind sharing the patient's room with the community after they've kind of done that. So site neutral will allow for a natural flow of people also to where they want to go. So it increases access, increases choice, increases innovation, and we have to do it now. I have been working with the Green Mountain Care Board as an advisor on their committee for a very long time. And we are up against not only the power of the hospital and the lobbying, and it's not just Vermont, it's national, and it's huge. But there is also a hesitancy in government to handle the monopolies. And also the strength that they've gotten in a credibility that they really haven't deserved because the numbers don't show anything of what they purport as far as being an advantage. And what I've provided and I can continue to provide is site neutral is not new. Started in 2015, the federal government was CMS. And they thought first because they saw hospitals gobbling up independence. So what they said is, okay, we'll grandfather all the ones you have. You can continue to get a lot more money for those. But when you take on any more, you're going to have to accept the payments that that practice have been accepting all along. And they found change, but it wasn't sizable enough. So over the years between then and now, they have added on to this year where they have made it so that it is site neutral with CMS. In other words, no more does the hospital get the same amount. But they want, they're trying to get the states on board because the only way that site neutral is really going to reap in the benefits to our economy and to our patient population is to have it be in all planes. It can't be spotty. It can't be, okay, here we're going to do it, here we're not. We're going to have a different structure. And I'm not excluding any of the other options like universal health care. I know that's not a topic. But what we need now is we need to push a lever that we know statistically will save money immediately because it's not like we're going to We don't need $500 a visit if you get me up to 140%, 150. And the nice thing about small businesses, they don't do it for the profit. They don't care to get rich. I don't want the money as much as I want our ability to have our taxes be reasonable, to have us be having more money to put into housing, to basically have more people willing to move into our state. The ripple effect from what has occurred is devastating. We already heard that, so I don't need to go back there. So we don't have time for anything more than to pull what we know is this, what is it, you know, the alarm, you know, you have the alarm valve in a building and have there be the flow of the sprinkler system coming on to put out this fire. So, I handed the paperwork to you. We don't have to do it alone either. There's a nonpartisan independent business called the National Academy for State Health Care Policy. You can plug into them to basically give the framework of how we do it, but this really is the simplest. This really is really simple. Just pick a number anywhere between, I would say, for hospitals to go from three fifty down to that, I don't want to put anybody out of business. It would put them in more competition to have the motivation to increase efficiency. But I would love to know where the committee is and what, like, my testimony, because I hope to be asked back and there's other things I can help you with too, like what I heard about claims and whatever. But I'm not here to represent physical therapy. I'm here more. I want to leave with the impression made that this is so bigger than only one part. This is our economy. This is our lives. Every single, every single one of us.

[Alyssa Black, Chair]: Thank you. Anyway, Tucker, go ahead.

[Francis "Topper" McFaun, Vice Chair]: Could you talk a little bit about, from the old visits, the impact on the patient?

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Yeah, this year is the first year because we would be out of business if I kept going as I did last year. I've had to drop Medicaid patients. I'm not dropping them completely, but this is devastating. Devastating to me personally. Health care providers like myself, the whole reason we go into our profession is to help people not turn them away. But for me to stay in business to see anyone, I have got to have enough money to pay my employees. I've not been able to give the raises that these doctors in physical therapy need to even buy a home. The hospital can. The hospital can pay 20,000 more for providers. They've harvested from my group. I'm looking at maybe potentially having to close Bay Area location, which needs us the most. I'm putting my own money in to hold it there because I do believe that this is fixable. And it isn't just my practice. We have other practices that are going under. So when we go under, what's it going to do? It's going to reduce the accessibility immediately and push into the most expensive care, and not a little, but a devastating amount. This is a we're we're standing at a tsunami wave of potential. Catasplismic like effect. And once you lose independence, where are you going? If I go, where am I going to go? And unfortunately, I don't have enough years of my life to recover. So I'm investing more of my money. We are not going to go out of business. Fortunately, I'm a conservative business person, and so I did not take the money out that I made. I have other resources. Real estate. I feel like the Peanuts character, Lucy. It's real estate. So it's real estate. She gives advice. The answer to questions, it's all real estate.

[Alyssa Black, Chair]: Makes sense.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Invest in real estate.

[Brian Cina, Member]: I get it.

[Alyssa Black, Chair]: Okay. Brian.

[Brian Cina, Member]: I have a serious question now. Not that that was not serious, but I mean, just didn't know what you meant. Just think of a peppermint patty with the, you know, with the

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: I brought

[Alyssa Black, Chair]: you there.

[Brian Cina, Member]: Now I'm thinking about pig pen with the clouder.

[Jennifer Carbee, Legislative Counsel]: Oh my god.

[Jessica Barnard, Vermont Medical Society]: Feel like I have a

[Brian Cina, Member]: better metaphor for the healthcare system right now, like I mean, said, he talked about being a business person and being concerned about paying staff. We hear repeatedly personnel is the bulk of expense in the healthcare system. When you look at a hospital budget, it's staff, paying staff, their benefits, it's all that. And machinery. Machinery. There's lots of people when we look at the annual budget, I think what we see is the recurring expense. They're not buying an MRI every year, but they're paying the doctors every year, they're

[Francis "Topper" McFaun, Vice Chair]: paying

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: their 72% of my budget goes into salaries.

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: Thank

[Brian Cina, Member]: you. So you've just confirmed that it's the bulk of your expense.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: These are lives, these are

[Brian Cina, Member]: Yeah, and then the services they're providing, it's like an individual doing their labor and then your billing. So the site neutral billing, it sounds like for your practice, give a more fair compensation to your business so that you can continue to employ these people. What I'm wondering is, do you have any other ideas? Sounds like you support site neutral billing. Is there any other ideas of ways that the state could change policy or not mess up policy to keep you in business?

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: No better way for sure. Hands down. Nothing even comes close to site neutral. And mainly because it's complicated and any complication comes with a cost. How insurance has evolved with all of the requirements and so forth. There's a tremendous amount of administrative costs that come with our insurers' demands of us. So that's a separate topic, it was just touched on in the bill, and it sounds like it's being addressed. Definitely can save money there. Saving money in admin, it's there. We just have to tap into that. We save money by empowering people. So for instance, the rehab gym is set up not to be just strictly a PT clinic. We see the full gamut. If somebody comes in and has the ability to do independent rehab with our direction, that cost, my end, goes from $150 to $50.45 dollars And it's pretty much just to deal with admin. You know what I mean? In a little bit of money. So I have innovative ways in why I got my award, and it's not just one award, and I'm known nationally, is that we've got to move out of this one way of delivering services. And unfortunately, we're plugged into already a bureaucratic coding system that limits us. But I'm working with Blue Cross and Blue Shield, for instance, to shift off of all of this to get to a simpler form of delivering care. But it has to be in this one place where I've got people working on prevention along with people in rehab. It's a great business model as well. So it's more than one thing. But I run it as a business, and if we can get more people in healthcare to run it as a business, then we're going to lower cost.

[Brian Cina, Member]: I might use the wrong language, not in an offensive way. I just might use the wrong term. That's a warning. Yeah, yeah. I might use the wrong term. So people don't leap on me, you can gently be like, that's not what that means. But in the ACO model, just kidding. In the ACO model, there were capitated payments where providers were given these chunks of money to say to-

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Yeah, I know the ACO, yeah.

[Brian Cina, Member]: Yeah, so did your businesses receive any capitated payments? And if so, was that helpful? Is that kind of concept useful to a business being guaranteed some income for keeping your doors open? What kind of bureaucracy does it bring?

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: It's heavily bureaucratic, but it works more with primary care where you've got a captive population by and large. With physical therapy, it isn't that way. And so a lot of services in an outpatient setting, you have an issue, you go in for the issue and then you move on. Now, the rehab gym has become, though, more like a community in that we have people coming in either proactively or reactively and understanding that we're here for their health. And so, in other words, when we have a patient that has a shoulder problem but is in chronic disease, and the only cure for chronic disease is to catch it early and apply exercise, nutrition and mental health. And we have worked with this population and have had what people would call miracles happen in their lives from them taking ownership of their health. We all know that we need to exercise and eat well, but they need a community of support on how to do that. Doctors who say, oh, you know what? You need to exercise more. So I want you to walk more and here's a handicap parking sign. You don't if they don't get it.

[Brian Cina, Member]: I don't mean to laugh, but I see the irony.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Exactly. And the primary care is saying you need to be more active, and they give a handicap sticker just because they're overweight and they've got sore knees. A physical therapist understands how to take that person in that state and keep them on the trajectory that's going up with other people who do their own thing, they generally start too fast and then they develop like an arthritic flare up, plantar fasciitis, if you know what that is, in the feet from. In other words, you've got to do it in a measured way, in a medically directed way. And there's no other providers, not even a doctor who understands the anatomy physiology of exercise in a therapeutic way.

[Brian Cina, Member]: I appreciate that. Have one last question. I don't know what time constraint is, so I don't want to like, I'll just ask it and then I'll stop, hopefully. It sounds like you're talking about physical therapy is provided in a system of care as a specialty, maybe that's the wrong word, but like as a specialty recommendation. And so that's the way that we have framed physical therapy in the system of care is different than primary care, which has what you call the captive audience or captive population or whatever, a family that they're taking care of patients. But it sounds like you also spoke to the potential of physical therapy in a system of care. And

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: not everybody sees this as potential. And the PT profession has orchestrated in getting there, But we're already there. It's

[Brian Cina, Member]: just You are.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Yeah, we are. Yeah. Yeah. In the rehab gym, we already take that on and hopefully the future and then I can stop and maybe be invited back. The model is to work in concert with what we call primary care. In other words, there'll be a medical doctor's office to take care of what they take care of, but they need to integrate because what we provide in an annual evaluation, for instance, is keeping track of the person's body as they age and keep them active longer because the longer you stay active, the healthier you are. And also, we can take those people early stage and reverse the disease. It is curable. We have seen it. And so it is the primary care model using exercise, nutrition and mental health, because they're all tied in.

[Brian Cina, Member]: So I think we, I would like to talk more, I know we need to move on, but it sounds like there you have vision for how physical therapy could fit into the system of care Exactly. In a better

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: that's what I would like.

[Brian Cina, Member]: And I would like to talk with you more at a future time about Blue Zones and how you might help Vermont become a Blue Zone. And if you can give me your email, I want to send you something to look at.

[Francis "Topper" McFaun, Vice Chair]: And so

[Brian Cina, Member]: we have to move on now.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: I've got property in the blue zone in Costa Rica. That's what I thought. In Costa Rica, I've got a piece of property. It's not built up, but it's there.

[Brian Cina, Member]: Maybe you will have many pieces in this blue zone.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Thank you. And I do hope I have a

[Brian Cina, Member]: question. One

[Alyssa Black, Chair]: more question. Does this feel does this language address your wishes? What I just saw on

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: the screen right before I talked? Yes.

[Alyssa Black, Chair]: Okay.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: I really think so. And answering all of your questions is you don't have to understand it all. People that are in it can see it trust me, it's any service and leave it at that.

[Alyssa Black, Chair]: I will just go on record as saying that I have been, since my very first day in the legislature, I have been a proponent of what I've always considered to be pay parity. I'm struggling a little bit with this only in I know that it's not a switch that can get flipped at a moment because we have to at the same time be working on a more sustainable path for hospitals so that they can provide the services that hospitals

[Jennifer Carbee, Legislative Counsel]: But that will get there. That

[Alyssa Black, Chair]: will get there, but it's a balancing act of trying to get them all at the right time.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Well, just I caution you because they've been here year after year after after year. And when you look at the research, and I provided some of that, that's what they're going to keep you going with thinking. And you've got you got to realize we can't. And if they go out of business in certain of these areas, that would help them to really do what they do best, and that's acute care. In other words, that's what they were doing before, and they were doing it well and they were sustainable.

[Alyssa Black, Chair]: Thank you. Thanks for your patience with us today.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Thank you.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Thank you very much.

[Alyssa Black, Chair]: And thanks for rehab too.

[Jennifer Carbee, Legislative Counsel]: Well, wait, if you get this right,

[Jessica Barnard, Vermont Medical Society]: I'll be here to say thank you

[Jennifer Carbee, Legislative Counsel]: in person. Thank you. You. I felt thank you.

[Alyssa Black, Chair]: All right, pivoting back to Mary, just to sort of talk about these sections, and Kai, if you wanna.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Joey Joe. The whole team.

[Jessica Barnard, Vermont Medical Society]: The whole team.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: I was gonna start if she hadn't left by saying I yield all of our time to her.

[Alyssa Black, Chair]: I'll go forever. Just kidding.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Hi, Samson. Commissioner, DFR. And indeed, Mary, I think, is equipped to really run us through the site neutral billing piece. I will say for you know, we all have our personal anecdotes anecdotes. When I was in my twenties, being a hardworking CPA, I developed carpal tunnel syndrome. And I went to a physician, I was referred to a hand and wrist specialist who immediately had surgical solution and was ready to schedule it. And fortunately, till your third bullet, I had a family that had gone through all kinds of illnesses. And so I knew that I knew that as a patient, you have to advocate and ask questions and said, Isn't physical therapy something that we would try? And, Oh, yeah, you could try that. I'll probably see you again in six months. But did physical therapy. Didn't even follow through with the visits. I just followed through with the exercises, and I've never had an issue again. So that's a little case study that you're all aware of.

[Brian Cina, Member]: And then you got

[Alyssa Black, Chair]: a job at DFR where you didn't have to, like, add a like Do

[Brian Cina, Member]: you do the exercises still?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: I do. If things start to flare up. Show us one while you go up on the board jam and pull your thumb back and it's just constant stretching. You're kinda open up as

[Alyssa Black, Chair]: you can see between this. At 12:00, 03:00.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Okay. Yep. Okay. And that's $50, by the way.

[Alyssa Black, Chair]: Unless you're you're yeah. Mean, that's just short.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: But, yeah, we'll we'll take you through Mary will will kick us off, take us through site neutral billing. Yes. So,

[Mary (DFR official)]: Ty's lying to you. I'm gonna take you through act one eleven.

[Brian Cina, Member]: Oh, sorry. And then I'll take I'll take site

[Kaj Samsom, Commissioner, Department of Financial Regulation]: neutral billing.

[Mary (DFR official)]: And then Joe's going take you through site neutral billing. We've got to go through all the sections. Pardon my voice, it's going again. We have two sections of Act 111 that we are looking at. Both involve utilization management. Utilization management is one of the tools available to insurers to manage cost. Obviously, we all know, after all the conversations around act one level one eleven, overdoing utilization management causes pain points for providers and consumers. But limiting too much utilization management, increases the risk to insurers that they won't be able to spot and prevent or manage problematic claims or claims that are unnecessarily costly, like, you know, high dollar imaging at a hospital when they could get an open MRI, for example. We understand that act one eleven was a hard fought battle and understand its importance. But, you know, in in thinking about this, we think there's a way to make some tweaks that will better balance the needs of the the system. So the high dollar claims section, as Jen outlined, currently allows an exception under the claims edit prohibitions, but that exception is undefined. We had discussions with the insurers about where they thought the spot should be, and I will admit that I picked the spot that was the lowest because there was some variation. It floor, is so it doesn't mean that the insurers will do edits at 25,000 per episode of care, but they can if they need to. By setting that number specifically, I think it makes it more transparent to all sides and provides that bright line where everybody knows where the practice is allowed and where it's not allowed.

[Alyssa Black, Chair]: Can I ask a question about that? Sure. First of all, I remember in Act 111, there was the question of what is a high dollar claim? Isn't keeping it high dollar, isn't that actually giving the insurance companies more flexibility? Because if you don't define what high dollar is, it's sort of up to the discretion of the insurer on what they think something is high dollar and it doesn't constrain them to I mean, if they get a claim for 24,999, they could theoretically right now say this is a high dollar claim. We wanna we wanna do a prepayment audit.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: I I think

[Alyssa Black, Chair]: It seems like we're actually constraining them more than just the random high dollar claim.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: I think what we learned in in talking to them is that they're a little gun shy because there's a law now. Right? And so I think they're looking for that clarity, but it's fair point to to have them respond to.

[Mary (DFR official)]: Is if there is truly, for example, fraud, waste, and abuse, the statute allows them so at twenty four nine ninety nine, if they think there's fraud, waste, or abuse, they still have the ability to look at that because there's other sections of that Yep. That paragraph that would allow for that. So this number is just it's a high dollar claim, so we can look at it.

[Alyssa Black, Chair]: Okay. Alright. Thank Moving

[Mary (DFR official)]: on to the even more fun one, prior authorizations. Obviously, prior authorizations are another form of utilization management. Act 01/2011 exempted first blueprint providers, and then effective oneone hundred twenty six, that definition shifted to primary care providers who were contracted as such with an insurer. It has absolutely resulted in a decrease in prior authorizations and provided relief to providers, although this relief sometimes can be hard to quantify. We've been meeting with stakeholders about the transition to assess the implementation. Interestingly, some of the feedback we've gotten, the hospital systems have expressed the most difficulty with the changes due to the fact that it's manual, and they have difficulty identifying eligible providers. Obviously, if you're an independent provider, you know whether you're contracted with the insurer as a primary care provider or not. Both providers and insurers recognize the benefit of reducing PAs where appropriate, and there are a number of insurers and insurer organizations like AHIP who have voluntarily publicly committed to plans to limit PAs. You know, that said, PAs do provide insurers with an opportunity to review potentially problematic or unnecessarily costly procedures when needed. It's a deterrent to unnecessary referrals and conflicts, and it provides an opportunity for reflection on the need for a particular procedure. Our change attempts to narrow the scope of the exemption while continuing to support the independent community based providers in line with the efforts being made through AHS's Rural Health Transformation work. The language we continue to allow the exemption for independent providers and independent practices not owned or affiliated with the hospital. We believe that the providers who will no longer be exempt have a better support systems for PA processing and have a higher potential for more conflicts because they're sitting in a hospital system where referrals are far easier and may there may be some motivation to make them, so they they potentially have a higher risk.

[Alyssa Black, Chair]: Go ahead, Leslie. So we had testimony from the academic medical center last year that they had 75 people in their billing department doing these kinds of things, And that seemed like a lot of people. So does that mean they go back to that kind of staffing? How do we balance that?

[Mary (DFR official)]: Yeah. I'm not sure they decrease their staffing. I'm talking, you know, in the feedback that we've gotten, they're doing this all manually, deciding who gets PA who has to have a PA and who doesn't.

[Jennifer Carbee, Legislative Counsel]: So I don't think Why would

[Alyssa Black, Chair]: they have any more trouble making that determination than an independent provider?

[Mary (DFR official)]: Because the way the definition is, it's a primary care provider who is contracted with the insurer as a primary care provider, as a hospital. Do you know that?

[Alyssa Black, Chair]: Yeah, so if you're a primary care provider employed by, say, the UVM Health Network, they're not the network.

[Brian Cina, Member]: UVM Health. UVM Health. Period.

[Jennifer Carbee, Legislative Counsel]: UVM Health. If you're

[Alyssa Black, Chair]: therapist and UVM Health has a contract with say Blue Cross Blue Shield, then if that's the primary care provider, you know that they have a contract. Why is that any different than an independent provider? That

[Mary (DFR official)]: was just the feedback that we got. They had more difficulties with identifying providers. Mind you, remember that piece of the statute only went into effect in January. They had trouble identifying Blueprint providers, even though they're getting Blueprint payments. So same question, right? They should know. But they did express that it was manual and difficult.

[Alyssa Black, Chair]: Not that it pertains anymore, but it wasn't for BLUEPRINT providers. That's how it was interpreted, which is why we had to go back a year later and change it. It was for providers that are considered to be primary care providers using the definition that it's a blueprint, not blueprint. Anyways, that's the either here or no then. Water under the bridge. Yes. All right, Leslie. Because I'm just curious, I mean, I understand that the academic medical center, big system, lots of, but what about our smaller hospitals who employ have primary care practices and employment? How would this affect that?

[Mary (DFR official)]: They would not be exempt.

[Alyssa Black, Chair]: So, is that what we want? Do you feel like even though it's been almost exactly one year, we have not received any data yet on utilization on whether it has gone up, whether it has gone down. We've made no determination over the effect of ACT-one 111. Do you think that maybe we should wait till we have some of that data before we start undoing pieces of it?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: I don't think you can get that data because so much of it is if you're saying OPA, prior authorization for procedure x y z, we've removed that barrier and procedure x y z hasn't tripled. There's so many other reasons why procedure x y z was actually gonna go in half. So by staying steady, and furthermore, is a deterrent effect or as a more polite way of, there's a moment of reflection, well, if I have to go through a prior authorization, does this treatment, you know, inefficient cost of care, does this next step really make sense? Is it the right next step? Is it necessary? And quantifying that effect is near impossible, I think. So it's not to say impossible is too strong a word, but it's difficult to really assess that, I think. I

[Alyssa Black, Chair]: think it's not that hard to assess that. And it's not, did this procedure increase? It's a simple looking at, okay, diagnostic imaging being ordered in 2024 versus did we see increased diagnostic imaging orders in 2025 and 2026.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: And you would be able to attribute all of that difference to the change in law if you saw that data?

[Alyssa Black, Chair]: No. But you would be able to tell outliers, which if we think that it's increasing utilization, you'd be able to tell. So, I mean, one of the things I'm very, very interested in, and remember, I was deeply wedded to this bill. You know, part of the reporting was, I want to know, I mean, we asked this at the time. I want to know if we reduce prior authorizations for all primary care providers, regardless of the setting in which they practice, whether it be at a hospital or be at an independent or an FQHC, I want to be able to look two years later to see, okay, ordering go up across different levels? If we think that hospitals might be referring more to drive up billings within their own entities, then we will be able to see that, okay, FQHCs, their utilization on their patients didn't go up and yet hospitals doubled. That's meaningful data, and that's data we're going to be able to get.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: But there are so many conflating variables. For instance, the Green Mountain Care Board has been very clear and fierce with revenue caps. How does that impact the exact same behavior? And that that that argument cuts both ways, meaning, I'm not sure. I can't tell you for certain it is a problem. Maybe the maybe the revenue caps, and how that's being enforced by the care board will do everything that, we're hoping some moderate coming back on prior authorizations would do. So I admit that. I just think that data the data will tell you something. I'm not sure if and it's always interesting, but I'm just not sure that it it proves or disproves anything.

[Alyssa Black, Chair]: If we if we don't know if something is proven or disproven, then why are we changing something?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Quite honestly, this one, in talking to the insurers, they feel it would make a difference, and I want to hear what they have to say about it. We're going to hear and hopefully, we we, of course, hear what what the hospitals say about it. But, you know, we engaged with insurers and said, what can bend the curve here and what can make a difference? And this was wonderful.

[Mary (DFR official)]: They didn't like it from the beginning.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Correct. Yeah. So, you know, I'm so I'm sorry to to to bring it up and and make you know, you know, you don't, of course, have to, but if you know, it may bring up all the same, you know, arguments, some data driven, some not. But it's I I don't think it's necessarily something you can prove or disprove with data. I but which is a challenge. Not easy. I acknowledge it. Okay. Lori, did you have a

[Lori Houghton, Member]: question, please? You asked it. Okay.

[Alyssa Black, Chair]: I'm sorry to dominate the conversation on this, but this really was my baby. Okay. Moving on to site neutral, I think. Oh, there anything more about prior authorization, Mary?

[Mary (DFR official)]: For me, I will turn it over to Joe.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: Right. Joe Valenti, Director of Policy at DFR. My apologies for not being able to join you today. I'm just hoping that I did not pick up what Mary has because that it sounds very unfortunate.

[Mary (DFR official)]: It's not my fault. I'm just going to testify to that. It is not my fault.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: That is true. I will walk very quickly through sections twelve and thirteen to finish us out before we turn back to the beginning and the insurer accountability and governance piece. St. Neutro Boeing, I do think that you had an excellent example from Ms. Gutwin about how it works in practice. The idea behind the bill is that this is it's another flavor or modification on top of reference based pricing, where, you know, reference based pricing, you have a benchmark. It may be a Medicare rate. It may be something else. And you set a rate based on that. Site neutral is setting for some services, setting a single rate regardless of whether it is delivered in a hospital setting or not, or out in the community. What we had heard from insurers is often there are two rates for a given service. There's the outpatient rate, and then there is the professional rate, which is the rate that the same service would be charged out in the community. And one of the complications here is with the growth of hospital practices. When we say, you know, delivered inside or outside of a hospital, it's not always the conventional, it's the, you know, large building in a city. It is, you know, I have a UVM primary care right down the street from me. And if I am, and I do not know for a fact if this is the case, but if I were to go to a doctor visit at that facility down the street that is hospital owned, which rate am I being charged? Is it the hospital outpatient rate or is it the professional rate? So site neutral establishes again for a limited number of services that where it's very clear that they do not need to be in hospitals. And as some of the examples of physical therapy, occupational therapy, speech therapy come up frequently, office visits. And then the other two that are sort of the lowest hanging fruit here that we've heard about are labs and imaging. That for those services, there is a single rate regardless of where that service is ultimately delivered. And that may end up being a blended rate in some cases where if previously the outpatient rate were $300 and the professional rate were 100, kind of like Ms. Gudlin's example, maybe the site neutral rate would be 125. But that would be sufficient to significantly reduce costs for the in hospital or hospital owned services and would promote the kinds of community practices and competition that do have the potential to bring care closer to people and to drive costs down overall. In terms of how the language was structured, we did copy extensively from the reference based pricing statute in act 68, which is why it looks so familiar. We had initially had looked at the model that miss Goodwin had had recommended to the committee, the NASHP model. That model was designed for states that didn't already have reference based pricing in place. And so we actually were a step ahead and were able to propose something that's simpler. But in our our view, this would be a process where DFR and the CARE board would jointly identify the services, and then we'd and then it would be up to the care board to set those rates based on consultation.

[Alyssa Black, Chair]: I'm just, I'm a little confused with your testimony just because I'm seeing this as essentially setting the professional rate at the exact same amount regardless of where that visit happens. But you're talking about professional rate and then you seem to be also talking about facility fee.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: The way that we understood and the examples we had in talking to, and I saw real examples with real rates for real procedures and codes, and not sure I can share the details because it would

[Alyssa Black, Chair]: Every hospital has price to experience.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Okay. So I'll

[Alyssa Black, Chair]: tell you right now.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Okay. Perfect. So the I think the reference to the facility fee is is, I think, one way that they discuss what the hospital rate is charged for the exact same service. So I think Joe's testimony is the same as what you're thinking.

[Alyssa Black, Chair]: Well, I guess I'm thinking about in terms of a primary care practice within a hospital, you're still just getting the one professional fee, the office visit, as opposed to if you were at an FQHC, you'd also be getting that exact same professional fee. I mean, the fees would be wildly different. I I'm saying that, but it's the same same code, same fee. And then you

[Kaj Samsom, Commissioner, Department of Financial Regulation]: At a different rate.

[Alyssa Black, Chair]: Yeah. But they're both a professional fee, but you were talking about how the hospital and I think that's what you're referring to is maybe facility fees, which are different. They're often oftentimes in the outpatient setting, will have the professional component like diagnostic imaging. You will have a professional component and then you will have a facility fee for the actual facility and the equipment. And then you have the professional that reads it. And I think we're I think we're just sort of conflating a little bit here.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Maybe. I don't think we're saying get rid of facility fees. I think we're saying for that specific service that would be defined that you may not charge a hospital. There's one there's one rate regardless of whether yeah.

[Francis "Topper" McFaun, Vice Chair]: Does that is that

[Alyssa Black, Chair]: Yeah. That's what to me, that's what the language reads. Right.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Right. Sorry for the confusion.

[Alyssa Black, Chair]: Anyone have any questions on how I I have a question. Sure. I was honest before, if I had my way, we would have this to model.

[Brian Cina, Member]: Mutual billing.

[Alyssa Black, Chair]: Site mutual billing. I have never understood why one provider providing the exact same type of service with the exact same credentials, one gets reimbursed five times more than the other one does. I don't. I cannot wrap my brain around that and that is the system that we live in and I understand that. But as I understand that you're the regulator and you're the insurance regulator.

[Francis "Topper" McFaun, Vice Chair]: And

[Alyssa Black, Chair]: we're really, really trying to ensure that our insurers are healthy so that they can insure our population. But what do you do if you're us sitting around this room and the hospitals have not testified yet, but I am fairly certain that this would put every single one of our hospitals in the state in peril and immediate peril. How do we thread the needle with this?

[Francis "Topper" McFaun, Vice Chair]: Oh, sorry.

[Alyssa Black, Chair]: Yeah. Go ahead.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: So I think care board and DFR get together, determine a list of services rates. Care board absolutely has their eyes on the solvency of hospitals. I have my eyes on the solvency of insurers. We can constrain that more under the advice of the care board who, for us, at least, is the resource of what is affordable in terms of rapidity of of a change like this or how deep, you know, that cuts. But I'll tell you when we've talked about this internally, it's a pretty limited list to start. That list would be and if the legislature wants to advance this with more hands in what the list is, etcetera, let's do it. Because I'm with you. I think I think this because this is more than just about immediate direct cost savings as you heard from a prior witness. This is about taking away an unnatural incentive to private practices so that you can charge more for the exact same service. That incentive exists in how we got here today, and that dynamic needs to change. But I think the care board's involvement will be sensitive to hospital solvency, must be sensitive to hospice solvency. And if the committee wants more direct assurance that advancing a bill like this will not cause an insol hospital insolvency, there's many way we should just talk. And I think the care board and the hospitals should be part of that conversation. It can be a stepwise thing. Right? We develop a list, shall contain no more than this impact. And in the following year, we'll be here and talk about what it was and whether to move forward with with a bigger list or or lower rates. But it's I think it's all

[Alyssa Black, Chair]: We'll have to amend this language because this language clearly says here to identify and move forward. So on all.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: There is, however, in subsection three, the board shall identify factors that would necessitate terminating or modifying the use of site neutral billing. And so there is, as I see it, there is a relief valve there if in the implementation that there is something that is not working as intended that we did we did anticipate that the same exists for reference based pricing as I recall.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: So, chair Black, are you saying the language I'm sorry. I don't have it in front of me. Compels the care board and DFR to identify every single okay.

[Alyssa Black, Chair]: I mean, your language says that you shall identify outpatient ambulatory items and service services that are safe and appropriate to be delivered in a lower case setting. And then for each of those services, you shall establish the reference. So that means for everyone that you've identified, you need to move forward to establish that reference. Yeah. It seems like you are more talking about possibly targeting. So we would have to change this language to say

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Well, I think if we identify a service, we're gonna identify services that we wanna set a price on.

[Alyssa Black, Chair]: Sure.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: We're not gonna identify services that are so consequential to hospital solvency, so they wouldn't be on the list. But certainly open I I think we're on the same page on the sensitivities where we wanna go. So let's

[Joe Valenti, Director of Policy, Department of Financial Regulation]: I'm just The other piece I'd note here is we did not get into anything about the timing of this provision. I think that would be that's a subject for further discussion.

[Lori Houghton, Member]: I know we haven't talked about,

[Jennifer Carbee, Legislative Counsel]: I think the last piece

[Lori Houghton, Member]: is reinsurance that we haven't talked about yet. I'm just curious with everything that's on the table in this bill, are there Do you, in your mind, have a priority order? What would be the most effective and most important to do versus others?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: You know, it's hard for me to separate my personal priorities or my personal thoughts from like, you know, so let me get back to you on that one.

[Alyssa Black, Chair]: Awesome. Thank you.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: I think in terms of dollar impact, site neutral billing is the most consequential in here directly and immediately depending, you know, and and calibrated in such a way that it's not catastrophic. And I would say prior authorizations claims that it's, you know, an an important to us to to allow some greater scrutiny by insurers, but probably less impactful. I think age rating from a state by state competitive here I am answering it. Yeah.

[Alyssa Black, Chair]: I keep

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Age rating from a state by state competitive point of view, I'd say in the middle there. And I think I really think from an equity point of view, I think that's so out of balance from where it was originally devised. That's some baby step. 5% is uncomfortable. 2%. I think that's a moderate priority. And then we'll talk about the other things. You can talk about them.

[Lori Houghton, Member]: No, that was helpful. Can I ask one further? And again, sorry, more broad than it is just to the slight neutral stuff. I was thinking over lunch. So if we did age rating, so we lower for some, raise for others, and we allowed association health plans, which will pull people out, does that mitigate the effect to the people left in the pool because prices are just gonna go up?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Yeah. So the HP the age rating covers the small I'm sorry, the small group market and the individual market. Sorry. What did say? Age rating covers both both of those. AHP, of course, only impacts the small group. So the age rate.

[Alyssa Black, Chair]: No. No. No. Absolutely not. It affects the individual because True.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: That's true. Yeah. Correct.

[Lori Houghton, Member]: See. Right. Right. Do two things that in the end, it's kinda like Yeah. I think someone commented that in another committee, they were talking about how insurance premiums are stabilizing. And there was something out that said here in Vermont this year, insurance premiums only went up 1% or 2%, the lowest it is. However, because we lost the subsidies, no one has seen that small increase. So are we going to see the same thing if we do both age rating and AHPs?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: They work in opposite directions, potentially, except for the fact that age rating, we can control here, and some of the AHP impact may never happen if the feds don't change their, aren't capable of happening.

[Alyssa Black, Chair]: Of course. On the site neutral, is there a problem with referrals? Is that like, the hospital network, it's not called the network, would be more inclined to refer their own business. I feel sorry for some of these businesses that are out there, the PP businesses and everything, because if they're not getting referrals, they're not.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: It's hard to prove intent, but that risk is absolutely there. That if you are and through the transparent you know, if you see the difference in these prices and you see the volume of some of these services, the the incentive is certainly there to, whether it be refer more than you ordinarily would or to be less attentive to how much you're referring if it's a big moneymaker.

[Alyssa Black, Chair]: And I understand that it's fire to beware that you should be somebody who advocates for yourself and will Right. For these kinds of things. That's not where you live. No. And I I don't know I don't know what to do about that.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: It's like a neutral bill.

[Jessica Barnard, Vermont Medical Society]: It makes it public.

[Alyssa Black, Chair]: Advertise. I will say, going back to the prior auth piece, we tend to think of it in terms of the insurer, the provider, but we forget the effect that it has upon the patient themselves. And that removing that administrative burden from the patient having to wait for that prior approval and having to jump through hoop after hoop. And we received gut wrenching testimony and delayed care, delayed services. And I'm thinking of the work we did last year around the CON and testimony we've already gotten this year that the removal of the prior approval and the CON, we now have another independent diagnostic imaging, Blue Cross Blue Shield is actively promoting, please go here because it's so much less expensive.

[Devin Green, Vermont Association of Hospitals and Health Systems]: And

[Alyssa Black, Chair]: that if we started rolling back before we actually have data on how this is driven and it's driven consumer and patient care and where are the real cost drivers, I'm just not sure why we're doing that yet when we just don't know. And don't worry, I will be asking the insurance companies when they come in. Any other questions regarding this? Oh, are you on the Can

[Francis "Topper" McFaun, Vice Chair]: I ask a clarifying question? Yes. The intent is to drive certain types of care to less expensive settings. I appreciate that. I wonder if the language I read, the way I read the language, it would also now allow for differentiating between hospitals and I wondered whether that was your intent. Is it might reasonably we should reasonably consider a different price for you, Neil, in my country? I

[Kaj Samsom, Commissioner, Department of Financial Regulation]: just wonder whether you've thought about that or I would follow the care board's lead on that but the language as you read it and what it means, I agree that that is what it means. It's one site neutral statewide reimbursement, but absolutely, it may be appropriate to think differently about that. And I think that could be done without sacrificing the benefits that have been discussed about the proposal.

[Alyssa Black, Chair]: Thank you. So oh. I'd like to say,

[Francis "Topper" McFaun, Vice Chair]: can react a little bit to that. Different hospitals do different things. So when you have a site neutral, think that it's not gonna affect all the hospitals. For instance, if they're performing brain surgery.

[Alyssa Black, Chair]: That's not happening.

[Jennifer Carbee, Legislative Counsel]: It's not that, it's written. Outpatient.

[Alyssa Black, Chair]: This is only for services that are outpatient, in a hospital, out of a hospital. Yeah. Okay. Thank you.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Are we

[Joe Valenti, Director of Policy, Department of Financial Regulation]: done? Do we do a minute on reinsurance?

[Alyssa Black, Chair]: Since Oh, we need to do more than a minute on reinsurance because I don't understand that.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: Think most most of this, I will be very brief, but, I believe Diva was on the list. You may want to hear from them. This is very much a joint effort between Diva and DFR. So the Affordable Care Act allows states to apply for innovation waivers under Section thirteen thirty two. And roughly 19 states have successfully used one of these waivers to start a reinsurance program. What tends to happen is that the state receives some federal funding. I'll explain why in a minute. And that federal funding along with state funding ends up taking up a portion of the highest cost patients or claims in the system. So it's effectively a relief valve for the insurers because some of that risk reinsurance of course is insurance for insurers. Some of that risk is being transferred to the state. And so that improves the economics for the insurers. It improves the rates that in the premiums that would be charged to individuals on the exchange. Of the states that have done it, some of them have seen reductions in premiums. I think single digit, some even double digit. There was one state that was able to make the market more attractive for additional insurers to enter the marketplace. The funding mechanism, there is typically a requirement for some state funding, but most of it comes from what would have gone toward premium tax credits at the federal level. But for the fact that costs are lower and premiums are lower, the threat there and the real unknown unknown to use the Donald Rumsfeld term here is that with the expiration of the enhanced premium tax credits, there's less of this foregone tax revenue to measure it against. And so Colorado is one example. Last summer they projected that with the expiration of the tax credits, their reinsurance program would take a 40% cut. And so we don't know at this point what the cost savings would be. We don't know if it's appropriate for our pool. We know our pool is different from others. This is simply authorizing DFR and Diva to submit the application. If based on further analysis and there are funds in the Rural Health Transformation Grant Program to do the actuarial work to see if this would be a good idea. If it makes sense for Vermonters, we would want to be able to pursue that waiver. It requires statutory authorization. We wouldn't have to wait until next session to do that.

[Alyssa Black, Chair]: Okay. Any questions on that? Yeah, go ahead.

[Lori Houghton, Member]: This came before us in '19 or '20. I'm wondering if I'm just looking at the report now, but do you know what the cost estimates were to the state? Or do you have any idea what they would hypothetically be now?

[Joe Valenti, Director of Policy, Department of Financial Regulation]: We do not. For better or worse, none of us were at the department the last time this came up, to my knowledge.

[Alyssa Black, Chair]: I like the report.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: Right. Part of the recognition too is that we don't know the posture that CMS will take. We don't know what the fund the funding environment and the pool that there are so many things that are different since that time. It's hard

[Alyssa Black, Chair]: for us

[Kaj Samsom, Commissioner, Department of Financial Regulation]: to gauge. Yeah. I think that and if it wasn't clear with Joe's testimony, the CMS funds this because by lowering premium with a reinsurance program, they have to pay less in subsidies. Federal governments are just paying less in in subsidies and tax credits now. So the pool of money available to make and you can optimize that as a state so that it is cheaper even after subsidy, a lowered subsidy so that the person on the street is paying less. That's that what was a little more certain for many states to to do that is certainly less certain now. But in the spirit of exploring every option before us and and not dragging our feet, so to speak, if if we come to a conclusion September that there's a an opportunity here, we'd like to submit an application rather than wait until the following session and and potentially delay the whole thing if if there's real value there. I will say I I'm not sure. I would I if I were a betting person, I'd say probably not gonna see a lot of value because of be able to compute a lot of value in this because of the uncertainty.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: But that is I do see that

[Kaj Samsom, Commissioner, Department of Financial Regulation]: a guess.

[Joe Valenti, Director of Policy, Department of Financial Regulation]: That Addison from Diva is on camera if if she's able, if the chair is willing that she can add

[Alyssa Black, Chair]: to Yeah, this absolutely. Addison, we're talking about this, I think this is what you were testifying on. Why don't you just

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: weigh in? Yeah, that sounds great. Thanks for having me. Addison Stromlow, Deputy Commissioner at Diva. I was told to log on now to give the reenforcement deal on you.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Probably because we were saying it all wrong.

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: Actually, Joe covered pretty much everything I was planning to say. The only thing I would add is that as as representative Houghton mentioned, we did study this. We've studied it multiple times over the years, but as recently as last year in our marketplace report. So we do have some projections about what it would mean in terms of dollars. And I'll just reiterate what has been said. I think this has been a very standard practice doing an innovation waiver for state based reinsurance, but it's a bit of a new world with this administration. There haven't been recent waivers, so there's a level of uncertainty on it. In the last study, we looked at targeting a 10% rate reduction in the individual market. That would require a state investment of around $10,000,000 And in return for that investment, we would get $27,000,000 back from the federal government in that pass through concept that Joe described. That's just an example of what it would look like. So it does require an ongoing state investment, an annual budget in addition to administrative and operational costs, but the value is that you can get the savings that you are giving the federal government in reduced tax credit payments as a lump sum to invest into the same program. And I would just also add that this, you know, would be a benefit to the entire individual market, not to the small group market, and not specific to the subsidized market. So for those who are, you know, much larger population now who are not able to access the subsidies over 400%, this would be a mechanism to break down those those base premiums.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: May I ask a question?

[Jessica Barnard, Vermont Medical Society]: Yeah. Please.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Addison, I don't know if you followed the discussion this morning or or I'm sure you've seen the bill, but if there was a slight age rating change and there was, by miracle, the type of economics you just described in your last study of an innovation waiver, And we know that a lot of the high dollar claims, etcetera, are concentrated in an older population. Is it possible that the premium savings on the older population could outpace or pay for any increase in that same population in a slight age rating future? It's not the longest question I've ever asked, but I bet you you followed that. Well,

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: actually, I think you need to ask out of an actuary.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Oh, darn. That's always the answer.

[Jessica Barnard, Vermont Medical Society]: Ask to. But,

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: yeah, the age rating would definitely factor into it. But I think predominantly in that initial estimate, we would have to make about what the savings would be at the federal government and then what we would get through the pass through funding.

[Alyssa Black, Chair]: Tupper has a Basically

[Francis "Topper" McFaun, Vice Chair]: all that you're asking for here is to be able to apply for the waiver if it looks good for Vermont. Correct.

[Jennifer Carbee, Legislative Counsel]: But can I ask a question on the

[Lori Houghton, Member]: title Of course? Of the So you apply for the waiver. Would it be that you apply for the waiver, you might get an answer when we're not in session, And so you would be making the decision to allocate the money in the next year's budget. I guess, what's the timing of that?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: Do you know the timing, Addy? I do not. And and how these things typically go down?

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: We would definitely have to come back next year with a budget ask related to this if it seems viable. Before that, we need actuaries to the earlier point to build build the program proposal and, you know, evaluate its viability with the federal government. So that's what we would do this year with, you know, technical assistance resources. And then we'd be coming back next session with the budget and the program parameters that you I think many states actually put those into law and to legislation and then make the decision about whether to move forward together.

[Lori Houghton, Member]: Okay. So the decision would be made then. Okay. Thank you.

[Kaj Samsom, Commissioner, Department of Financial Regulation]: We couldn't proceed truly without Yep.

[Alyssa Black, Chair]: I wanna hear. Thank you. Okay. Anything else on this? And Addy, just so I'm clear, were really just testifying because you are on our list. You were just really testifying on this one piece, right? Didn't want to weigh in on prior auths, all sorts of other things. No, thank you. But I will

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: just say to the earlier point on the language, again, it's just giving us authority, which is a requirement to even, know, take the first steps to submit the application, which we need. I think we do have some feedback on the language that's in the bill because we can't get the pass through money is limited to the premium tax credit. There are no cost sharing reduction payments that we would get as pass through funds. I would just suggest an amendment or a slight revision to that language. Okay,

[Alyssa Black, Chair]: great. Good to know that now. Thank you. Brian, do you have a question?

[Brian Cina, Member]: I do, although you may not be able to answer today and that's okay. It's something that I'm flagging, is that as we consider this bill, we're also looking at a bill related to private equity investments in the healthcare system. And we did hear along the way that private equity is involved in the reinsurance, that private equity firms are actually behind reinsurance efforts sometimes. A question I would have for us to consider is, is our private equity bill going to complicate reinsurance in this bill if we decide to go down that path?

[Kaj Samsom, Commissioner, Department of Financial Regulation]: I think not because, private equity is in in global reinsurance. And, Addison, please jump in if I'm wrong. But, typically, you don't see outside reinsurers involved in these waivers. It's state state based. It's federal money and state money. And, you know, does that does that conform with your understanding, Addy?

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: Yes. I agree. And what we're this state based reinsurance would be run by DFR or DIVA.

[Jessica Barnard, Vermont Medical Society]: So

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: we're not talking about an outside entity being involved.

[Brian Cina, Member]: It would be the insurance company.

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: Oh, the qualified health plan issuers in the individual market would receive the payments.

[Brian Cina, Member]: But I mean, like, who would be the reinsurance company? Like, in reinsurance, doesn't like an insurance

[Kaj Samsom, Commissioner, Department of Financial Regulation]: It it wouldn't be a private company. It would be essentially a reinsurance program run by the state.

[Brian Cina, Member]: Like, Diva would would it would be similar to how Diva provides Medicaid as direct insurance to people. Diva would provide reinsurance to the insurers. Like Diva would be the reinsurance agency. I might be saying the language wrong, but do you get the concept like that Diva would be reinsuring the plans of Blue Cross Blue Shield and MVP?

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: Yeah. I don't wanna say it would be DIVA, but it would be the state. And I I think Joe mentioned this. There there was a long standing reinsurance program at the federal level under the Affordable Care Act for the first few years. And it was run by the Centers for Medicare and Medicaid Services, CMS. So this is a government based reinsurance program.

[Alyssa Black, Chair]: All right, thank you. Thank you, everyone. Let's have Devin or Jessa, whichever one wants to.

[Brian Cina, Member]: Rock paper.

[Alyssa Black, Chair]: I'm gonna let you guys decide. Devin, why don't you start? He didn't

[Devin Green, Vermont Association of Hospitals and Health Systems]: lie on his side.

[Brian Cina, Member]: I

[Alyssa Black, Chair]: did, and then I looked down at my itinerary. Okay, that one's first.

[Addison Stromlow, Deputy Commissioner, Department of Vermont Health Access (DVHA)]: Let

[Alyssa Black, Chair]: me just get up here. Are we waiting for?

[Devin Green, Vermont Association of Hospitals and Health Systems]: We're waiting for my PowerPoint. Sorry. I

[Alyssa Black, Chair]: didn't know what was gonna happen. So

[Devin Green, Vermont Association of Hospitals and Health Systems]: it wasn't as ready.

[Francis "Topper" McFaun, Vice Chair]: We'll do

[Brian Cina, Member]: an exercise. Okay. That's it.

[Alyssa Black, Chair]: So you can like twelve. Great.

[Devin Green, Vermont Association of Hospitals and Health Systems]: Thank you, everyone. Learned a lot today, I will be enjoying those carpal tunnel exercises

[Alyssa Black, Chair]: for sure.

[Devin Green, Vermont Association of Hospitals and Health Systems]: I'm Devin Green, Vermont Association of Hospitals and Health Systems, and I'm here to talk about H five eighty five. Section 10, high dollar claims. I think I share the sort of I have questions about the claims and putting a number to it, And I'd want to hear more from the insurers and whether this would increase administrative burden, or would it be worth it? Would it be worth the increase in administrative burden in doing this? I'd just like to learn more about it. And I also have the same question about inflation and how that would work going forward. The prior authorization piece, I similarly would at least like to wait until the 2027 survey results that come out before eliminating it altogether. First, I think hospitals have just figured this system out, and so we would like to let it run. And to sort of go back on that at this point would be really difficult. And then second, I think we found across both independent and hospital owned providers or hospital affiliated providers that private authorizations are a huge source of burnout, and they can also lead to bad patient outcomes. For those reasons alone, I would want to have them in place at least until 2027 and reassess then. And now we get into site neutrality. So the first thing I do wanna point out is Vermont has been working on this for a while. There was much work done on this in 2016 and 2017. The Green Mountain Care Board issued a comprehensive report. That report found not necessarily that hospitals were gobbling practices up, but that practices actually wanted to be hospital affiliated due to because they didn't because providers didn't want to be a small business necessarily. They wanted those billing functions and everything else taken care for them. And so there was evidence there that a lot of providers are affiliated for those reasons. And it's a very the Green Mountain Care Board was supposed to work out something with insurers at that time in terms of site neutral payments. I'm not sure where that ended up, and it would be interesting to get an update or just hear what happened there. It would also be really interesting to get an update on this comprehensive report. I think that would help inform any site neutral decisions that go into place. I believe that has been put into the primary care bill in the Senate, so we would support that. Hospitals have we completely understand that the prices are too high. We have actually there are some hospitals that have offered to reduce their prices, and there have been constraints around this, either from the insurers saying, well, mechanically, this is hard for us to implement. So billing complications, we have also heard from our hospitals that the rate cap won't allow the hospital to lower drastically in one area and then, you know, increase maybe by a little bit more than the cap in another area to offset that a little bit. So there's complications there. And then, I think hospitals are very interested in value based contracts and working in that area. And instead of this sort of, like, everything across every one approach, I would be in favor in exploring, like, a mixed approach. I actually really like your idea, chair Black, around the reference based pricing for the exchange and then letting hospitals and insurers negotiate value based contracts in other areas. So you're incentivizing people to go into the exchange. There's some innovation happening with other insurance plans. Overall, the Green Mountain Care Board has the caps on our budget and to limit growth. So I think it would be worth having a bit of diversity in how we approach this. I talked about hospitals being willing to drop prices in some areas if they could increase prices a little bit in other areas. You'll see from here what I'm trying to illustrate with this is why they would want to do that. Our inpatient prices are generally pretty low. And it's been pointed out to me by Blue Cross Blue Shield and others that it's really the outpatient commercial rates that are super high and that something needs to be done there. So I worry that with site neutral going to all outpatient, that that would be essentially a nuclear option for hospitals because there would be no way to bring those inpatient prices back up. And essentially, we wouldn't be able to survive to provide that acute care.

[Francis "Topper" McFaun, Vice Chair]: Excuse me. Yes. We wouldn't be able to provide

[Devin Green, Vermont Association of Hospitals and Health Systems]: acute Acute care, like in hospital care, the brain surgery. And I do wanna just remind folks that hospitals are different than outpatient settings. And so one of the things I think about in this space is we all know from last year's testimony that a uncomplicated labor and delivery can be performed in an outpatient setting. If you make that the same price for the outpatient setting as the hospital, and we're still in a fee for service world, those birthing centers at the hospitals are not going to be able to survive. That is going to be very difficult for them to try to make up that revenue to have all the things they need to provide the more complicated care for labor and delivery. So we are open 20 fourseven. We have social workers. We have housekeeping. We're, you know, essentially, like a a we have all the things that you need to reside there because you are residing there for some time. IT infrastructure, security, lab techs, regulatory compliance, training and teaching, and and also the 6% provider tax, which only applies to hospitals. That will be reduced in the coming years, but there's a problem with that too. So we did come up with an analysis, a really brief, and this is gonna change as we dive more into it and we understand the details of this, but essentially, we took the American Hospital Association's analysis of a med pack, report where they said that there's a differential of about 17%, and this is all for Medicare, and we applied it to our hospital commercial services. And essentially, what oh gosh. Sorry. I have some things covering. What we came to was a loss of about 205,000,000 $206,000,000 to hospitals statewide. As you can see here, that would be the impact to our margin. We'd have a $2.00 $9,000,000 negative operating margin, And this would be the impact by hospital. And I would strongly suggest that if we go forward with this bill as is, that every hospital come in to go into detail on this impact because it will be huge.

[Alyssa Black, Chair]: What did you base the rates on again?

[Devin Green, Vermont Association of Hospitals and Health Systems]: It was a twenty twenty three seventeen percent. Basically, MedPAC did a report in June 2023, and the American Hospital Association used that report, and they did on-site neutrality in Medicare. The American Hospital Association used that report to determine the cost to hospitals and came up with a number of, like, a 17% differential to get to site neutrality in Medicare. We applied that to our own commercial net patron revenue to get this number. We think the number is going to be higher because we know that the difference in commercial rates is probably higher than Medicare. So

[Alyssa Black, Chair]: you're saying you took the Medicare, essentially what the Medicare rate is, and you asked yourself the question if we changed, if we received the Medicare rate from all of our commercial, Or what was it as a percent of Medicare? It

[Devin Green, Vermont Association of Hospitals and Health Systems]: wasn't a percent of Medicare, sorry. It was an analysis of getting site neutrality between Medicare prices on outpatient. Okay. And the independent outpatient versus the Medicare hospital, I believe, was 17%. That was the difference that they found. So in order to get site neutrality in the Medicare space, you would have to do a 17 cut to hospitals. We took that 17% and put it to our commercial payer.

[Alyssa Black, Chair]: Sorry. What's there?

[Francis "Topper" McFaun, Vice Chair]: Sorry, I I chived.

[Alyssa Black, Chair]: I think I sneezed yesterday at exactly around the same time. I'm at home.

[Brian Cina, Member]: My sneezing reflex is attached to the clerk's bell.

[Devin Green, Vermont Association of Hospitals and Health Systems]: I don't wanna I I just wanna flag this for you because just to make a note of implications to hospital, net patient revenue does have an impact on our provider tax and what we collect there. Here, it looks like it would be potentially a $30,000,000 impact. And that's on the 6%. I would have to go back and do math on what it would be like with the cuts coming forward. But it would be tough because there'd be further loss of revenue for Medicaid, and that would sort of increase the Medicaid differential, and it would have an impact as well. I did want to highlight that hospitals are really working hard on this issue. We have an affordability action plan. Thanks to you all and to the Green Mountain Care Board and the work that you did and the work that our hospitals did, we eliminated $230,000,000 from our budgets for 2026 in operating costs. And we are committed to eliminating a $100,000,000, $50,000,000 in 2027, and $50,000,000 in 2028 in operating costs. We think that that's a good bridge. We know folks are frustrated that reference based pricing hasn't happened yet, but we are committed to continuing to do the work, reduce our operating costs, and save this money going forward. And we'll also work with transformation and continue that work. So we just wanna acknowledge the good work that's been done. I would also say that I don't see this I see this constraining agreement in Care Board's ability to do reference based pricing, and I would advocate for more flexibility there. Oh, and the reinsurance. I'm supportive of it.

[Brian Cina, Member]: Don't know

[Kaj Samsom, Commissioner, Department of Financial Regulation]: if you

[Devin Green, Vermont Association of Hospitals and Health Systems]: actually wanted my I mean, I don't know if it's my lane, but it just sounds like it is an option that will help things. So and I'm happy it's probably not my lane, but I was asked to speak on these section on these sections, so that's why I went there.

[Alyssa Black, Chair]: Anything you wanna say about the sections from this morning?

[Devin Green, Vermont Association of Hospitals and Health Systems]: I am all set for now. I may have more as I talk with my members more about this, but so far we've been focused on these issues.

[Alyssa Black, Chair]: Brian, did you have a question? You

[Brian Cina, Member]: said, I might not get the exact quote, something like, the site neutral billing might complicate the amount of care boards efforts with reference based pricing. Couldn't we do reference based pricing for all providers this way that the Green Mountain Care Board could give hospitals a little bit more if that's what you need for your overhead, but then make sure that the independent practices are getting a fair amount versus it's kind of like equity versus equality.

[Devin Green, Vermont Association of Hospitals and Health Systems]: Yeah. And you did that with Act 68. They have that ability.

[Brian Cina, Member]: Like they can already do that with

[Devin Green, Vermont Association of Hospitals and Health Systems]: Cannot Yeah. Already do

[Alyssa Black, Chair]: Okay.

[Brian Cina, Member]: So without any further legislative action, that's a tool available for creating more affordability? Yes. Okay,

[Francis "Topper" McFaun, Vice Chair]: thank you.

[Alyssa Black, Chair]: Thank you, Devin. Thanks.

[Brian Cina, Member]: Is Jessica a lab witness during this time, or is there more we can?

[Alyssa Black, Chair]: She is, although we have two more sections.

[Brian Cina, Member]: Okay, I'm only asking so that I control my

[Alyssa Black, Chair]: I am wondering if, Kai, I know that you've been excited to spend your entire day with us, but I'm wondering if we could take up those other sections later and we'll find a time. I'm getting fried. She's sending someone to look at our room. Okay.

[Brian Cina, Member]: It's not only hot, but there's an accumulation of particulates that make it.

[Jessica Barnard, Vermont Medical Society]: I

[Brian Cina, Member]: know.

[Jessica Barnard, Vermont Medical Society]: All right, Jessica Barnard with the Vermont Medical Society. I will do my best to keep everybody awake for a few more minutes before we all asphyxiate in here. Thank you for hearing from me this afternoon. I really appreciate it here on behalf of our physician and physician assistant members. I will, with the chair and committee's indulgence, speak very briefly about some of those sections from this morning, just to say that we really appreciate your lines of questioning, asking for more data about really what will the impacts be, because it feels like with many of these, there will be winners and losers. And I hate to put it in those terms, but it really, it will help, I think, some rates lower for some people, but there will be increases for others. And finding out where that balance is in terms of the overall rates of coverage in our state, which obviously as providers, we support universal coverage and is important to us, not only for the well-being of our patients, but also for the survival of our practices. So we would look forward to more data on really how these would play out and play out together. We do definitely have concerns with the concept of catastrophic plans, again, realizing perhaps some coverage is better than no coverage. But if patients aren't clear what they really cover, and they think they have comprehensive coverage, and that it may cover some things and it turns out it doesn't, or they still had extremely high out of pocket costs, we do question, in all cases, is it better than nothing? Given that not that these are what we ever advocate for or first line, we do have things like FQHCs with sliding scale, the hospitals all have financial assistance policies. So what are the pros and cons of catastrophic coverage on top of that? On the section around defining a high value claim, this is under the proposed changes from Act 111. I do want to point out to the committee and I actually I know Jen may have pulled it up already, but I didn't catch the whole Act 111 language. Is nothing I want to just remind the committee, because not all of you were the ones who were writing and working on this bill. That is about prepayment reviews of claims. So a provider gives you a survey, you go in for a visit, it's billed to the insurer. This is when can the insurer, before they've even started working on the claim, ask for more documentation or paperwork or question the provision

[Francis "Topper" McFaun, Vice Chair]: of the

[Jessica Barnard, Vermont Medical Society]: service? The language is also clear. There is nothing preventing them from a post claim payment audit. They can always go back and say, this looks suspicious. We think maybe you did something wrong or you didn't bill correctly. They can always go back and look at it after the fact. The intent of this section was really to get at when can they hold it up before it's even been paid and ask for documentation at that stage. So we still support the language as passed. We're not entirely clear why adding this in helps in one direction or another. Though, again, happy to hear from the payers how this would make a difference. I will be pretty direct and say we do not support the changes in section 11 around rolling back the flexibility or the double negative, rolling back the reduced prior authorizations. I submitted with our testimony a first. So a first request in Act 111 was for a survey of providers before the changes went into effect about the impact of prior authorization on their practice, both the clinicians and their office staff. And the numbers are staggering in terms of the number, in my view, the number of prior authorizations per week. Twenty one point four, fifteen hours. That's just the clinical time. And then the staff time, the administrator time, fifty two hours of provider time, and twenty seven additional hours of staff time on prior authorization. This is an administrative burden, not just for the clinicians, but for all of the staff in the office, the nurses who are often the ones sitting on the phone waiting for the answer from the insurance company. And I thank the chair for bringing up the perspective, really, of why we're working on this is the patients. These are delays in patient care. This is waiting for an answer of when they can get their service done. The bill intentionally was limited to procedures and imaging. This does not reduce the ability of plans to have prior authorization for pharmaceutical claims. So that's still in place. One of the big reasons that there was a request in the bill or the additions of the bill of further analysis after the fact is there's really two different perspectives on does prior authorization save money in our health care system or actually increase expenses in our healthcare system? Not only all of the administrative time, but we heard many stories from primary care providers, for example. If they have to get a prior authorization for a head CT scan of a patient who comes in with intense headaches or a head injury, and they can't get that done from their office, they send that patient to the emergency department because they don't have prior authorizations from the emergency department. So then you've got the emergency department visit and the imaging visit. And I do think we can analyze this. It may not be perfect, but I do think we can look back after this has been in place and see where at least are the trends leading. And I would say, if we don't see an increase in costs, even if we don't know exactly why, to me, that's a huge win. We're not seeing an increase in services, and we're getting a reduced burden on providers, and lower barriers to care for patients. So if we're not seeing a big increase in costs, if that's even the only conclusion we can come to, I think that's actually a great success.

[Alyssa Black, Chair]: Do you have a recollection of what percentage of prior authorization requests were approved anyways? It is quite high, actually. DFR, Sebastian presented all of those charts to you. They track all of

[Jessica Barnard, Vermont Medical Society]: that on the DFR website. I haven't gone back and looked recently, but it sort of depends at which stage you're looking at them. But sort of by the end, quite, I want to say, in the '90s, but don't quote me on that. We could get those keywords in the '90s, yeah. But part of the reason the ultimate success is also so high is that not everybody appeals and either patients don't know they have that ability, providers can't stay on the phone for hours and hours to get the peer to peer, which is kind of one of the stages of review. So there's the ultimate number, but also the falloff between that or the people who give up. So happy to go into more detail, but I would say, again, we're talking about, in my frank view, basically, if we were to accept the language in the bill that we're saying that patients who get their primary care at hospitals, we're okay with them facing more delays in care, and we're okay with those providers being more burned out. And personally, I'm not willing to accept that answer. So I will be fighting to keep the language as it is until we have any more data at least showing us that it's been a failure or we should not. We will be redoing this bill calls for providers to survey our members again in this coming up summer, July 2026, once it's been in place for about a year, and then the full more analysis by the insurers in 2027. And then I'll also remind the committee that the governor also issued a message when he signed the bill asking for DFR and Green Mountain Care Board to analyze the impact as well. So there will be actually, I would think a number of analyses of how this bill has gone. I

[Alyssa Black, Chair]: forgot that.

[Jessica Barnard, Vermont Medical Society]: Yes. With some pretty good like, with some details of what things like utilization and other impacts that he wanted looked at. Brian, did you

[Alyssa Black, Chair]: have a question or was that an I was stretching. I was stretching. Yeah. Sorry. Doing your exercises.

[Brian Cina, Member]: My hands vary.

[Jessica Barnard, Vermont Medical Society]: Too much sitting. I know. Sorry. I'm almost done. Section 12 on-site neutral billing is an area we definitely have some, again, more questions about the impact. Unfortunately, not to disagree with the witness earlier this afternoon, but I'm not sure it is quite so simple in terms of the impact on even on independent practices, because I think a bit like reference based pricing, it all depends on what the site neutral payment is set to. Is it an increase? Is it a decrease? What is it? Which Medicare fee schedule? There are multiple Medicare fee schedules. What is it targeted at? What services is it targeted to? Actually, I'm glad Devon brought up the prior analyses by the Green Mountain Care Board of site neutral payments, and would certainly encourage you to look at those or hear from the Green Mountain Care Board about those, because it doesn't always They were looking at and they did some analyses, for example, of primary care codes, and it's not necessarily always the impacts you would expect or the rates you would expect if you're including also FQHCs, distinguishing between critical access hospitals and academic medical centers. There's a lot of currently different fee schedules. And so the impacts can be very different on those providers, depending how you organize this and do it. As Devin mentioned, primary So there's the Senate Primary Care Bill. There's also H-six 80 in your committee, which does call on the Green Mountain Care Board to update those reports. And I think that would be really helpful to start looking at what has been done with the commercials to get closer to site neutral already, and how does it impact different provider types, looking at what I guess I would say the four categories, academic medical center, critical access hospital, FQHC, and independent. Because again, that could really hit different providers differently. And the timeline question. I think like reference based pricing, we would want to make sure we get this right. We want to make sure the impact is what your intent is, and what time would be necessary to get that input and really do this carefully. And I think that it's not clear in the bill when these would be in effect or go forward. And I think was those were the topics I wanted to hit.

[Francis "Topper" McFaun, Vice Chair]: Right. So

[Brian Cina, Member]: you were referring to the impact of site neutral billing?

[Alyssa Black, Chair]: Yes. What

[Brian Cina, Member]: was it called, site neutral? I'm sorry, I don't have to bill for me.

[Alyssa Black, Chair]: Site is billing. I got it right. You

[Brian Cina, Member]: were talking about the impact of site neutral billing on independent practices of physicians. From your perspective or from, I should say from BMS perspective, because you represent not just yourself, but this professional organization of physicians, does the action that we took on reference based pricing address the problem sought to be addressed by site neutral billing?

[Alyssa Black, Chair]: I think it

[Jessica Barnard, Vermont Medical Society]: does. I'm also trying to kind of parse out what is the Venn diagram of what we do, or is it a Venn diagram or is it actually entirely the same thing? Think I do see it goes a step further, I think, potentially, of saying it should be the exact same price for everyone, but I'm actually not sure that is nuanced enough to get it right. That's my concern. It sounds very nice and easy, again, does that allow the flexibility to make sure we're helping and not hurting the providers we're trying to help and not hurt? So that is a different I think in my mind, that is one difference, is it saying, sits at one rate across the board. It's also a little more clear in the intent that it immediately moves forward with hospitals and non hospital providers, where in my view, the way the reference price pricing bill, it was a little more staggered, like start with hospitals and then look at expanding to other providers. Maybe I'm wrong, this is maybe more Jess's view than I hadn't talked to a lot of our practices about this, but it would be sort of a new thing for the Green Mountain Care Board to get into setting rates for independent providers. And I don't know exactly all of the data the Green Mountain Care Board already has or should need to make sure they're doing that correctly. Do they have information currently about what rates those providers are being paid? What does it mean for those practices who are private independent entities to have the board now setting their rates? I think there are probably pros and cons and complicating factors, and we want to make sure that it's working correctly and So

[Brian Cina, Member]: is your understanding, though, that the current plan would be to implement reference based pricing for the hospital settings and then explore how that might work for other settings physicians work in, site neutral billing would just do it for everyone at once, and that's concerning, that's the concern that Yes. And just one rate

[Jessica Barnard, Vermont Medical Society]: as opposed to allowing potentially there are some variations.

[Brian Cina, Member]: That speaks to my last question, which is because I know people want to break is from your understanding, is the overhead for physicians in a facility higher than in an independent practice or a primary care setting, such that they would need to be picked, the hospital would need more, physical billing wouldn't work. I

[Jessica Barnard, Vermont Medical Society]: think there's been some good analyses, and this is where I actually think the language in May, one thing it is correct about is there are some services where it's more equivalent than others. I think you could look at some services. And again, I'm not saying this is wrong, but for example, an x-ray. Is that something where we think really it's okay to have it be the same and makes more sense? And I know like MedPAC, as Devin mentioned, at the federal level has done a lot of work on what are appropriate services where this would be a more appropriate path to take. So I don't think it's an overall yesno question. I think it depends on the service. And I also think it depends, to the chair's much earlier question, are we also talking about facility fees or not? Because on top of the if we're talking just about the professional service and certain professional services, site neutral may make more sense. And then maybe for some facilities, there's also a facility fee on top of that to cover the overhead. So it's which rate are we talking about and which services?

[Brian Cina, Member]: This is something that the reference based pricing effort could attract.

[Jessica Barnard, Vermont Medical Society]: I believe they could look at

[Alyssa Black, Chair]: all of this. And remember, we gave the Green Dot Care Board the authority to set a floor when it came to Of the provider. Hospital. So they were not setting the rate. They were just setting the floor. That's helpful. That's helpful. Okay. Thank you everybody.

[Sharon Gutwin, Physical Therapist and owner of The RehabGYM]: Thank you. You.