Vermont Legislature SmartTranscripts:

[Alyssa Black (Chair)]: Good morning, It is February 4. Sorry that we're a little bit late this morning. So we're gonna do, we're starting with five 83, and Jen has been working with various interest groups and has come up with some new language, and we're gonna walk through those changes.

[Jennifer Carbee, Office of Legislative Counsel]: Alright. Yes. Ready? Ready. Alright. Good morning. Jen Carvey from the Office of Legislative Council. I do have a new draft for you on h five eighty three. It's a strike all amendment. I have marked it up to show you changes from the bill as introduced. Most of the markup is in yellow. There's a

[Georgia Maheras, Bi-State Primary Care Association]: few things in blue you'll see

[Jennifer Carbee, Office of Legislative Counsel]: as we're going through that are really sort of lagging issues that need follow-up either because they were raised as concerns by a particular state entity or because there's just some inconsistencies or something that needs to be addressed. Most of it's yellow. So this is, as I said, h five eighty three, as introduced, it's an act relating to health care financial transactions and clinical decision making. Although this changes some of the frame from transaction limitations to health care facility ownership, and so I proposed changing the terminology accordingly. So you'll see that throughout. So the chapter, the name of the chapter would change from transaction limitations and clinical decision making to health care facility ownership and clinical decision making. Still putting in this new chapter general, starting with general provisions, some of the definitions you'll see come out in this draft are proposed to come out because the terms are no longer used in the bill itself. So I noticed as I was going through that the word affiliate, sometimes it was a little unclear to me whether it meant affiliate or affiliate. So I provided because it's used this way affiliate or affiliated entity because both of those terms are used. It's good strike, for example, the definition of change of control, because that was really coming up in the context of the material change transactions that are also coming out. The definition of healthcare entity I have highlighted in here. It's a healthcare provider, healthcare facility provider organization, benefit manager or health insurer. And I know DFR had wanted to think some more about whether the pharmacy benefit managers and health insurers made sense in this definition or whether this would put limitations on them that did not make sense in the context of their work. So I've just flagged this so we don't lose track of it. Similarly, this one is I really flagged this for me and have put this question out to a couple of folks. The definition of healthcare provider that we used in here ties into a definition in Title 18, sort of a definition section we refer to a lot, 9,402. But that is the definition that specifically carves out facilities and institutions. And as the term is used throughout this bill, I'm not sure that's always the intent. So I just wanted to flag that for follow-up. In the definition of healthcare services, there was a specific question about whether hospice was included. I said, I believe it is included in palliative care, but I also put it in here as a subset of palliative care so that we don't confuse the distinctions between the two, but make sure we're calling out hospice specific. On page four, this was just a, I think a typo in the bill either as introduced or in the model language I was using. So I had asked what a diagnostic equivalent was, and they said it should have been equipment. So change to equipment. Took out the definition of healthcare staffing company, because again, that is no longer included at least in this draft. We can always put things back in. I've renumbered accordingly. Struct the definition of material change transaction since that concept is no longer addressed in this draft. Just a little clarification in the definition of non disclosure agreement. So I'm now on page seven. Repeat one more. I'm gonna follow along. I was a little bit confused by the language in the bill as introduced that talked about a written agreement where people cannot disclose a policy or practice that a party to the agreement required the licensee to use in patient care. And then it had said other than individually identifiable health information, I found that confusing. So I clarified with one of the people who worked on the model language, it's really other than a requirement to maintain the confidentiality so they can disclose the fact that they couldn't disclose HIPAA protected information. Then I have on page nine fairly significantly amended the definition of what it would change here from private equity fund to private equity company. And this is pulling in some language from the Massachusetts definition. I think that's largely Massachusetts, maybe a little bit of California as well. So it would now say that a private equity company is a publicly traded or non publicly traded business organization, however organized, that collects capital investments from individuals or entities and purchases as a parent company or through another entity that the company completely or partially owns or controls, a direct or indirect ownership share or controlling interest of a healthcare entity or management services organization, provided however that this term does not include venture capital firms that exclusively fund startups or other early stage businesses. I added a definition of real estate investment trust, because that comes up in some of the new language and just listening as Massachusetts had done referring to the federal definition. And then I changed the private equity fund language to company language throughout and clarified that on line 10 here on page 10 is a health care provider since that's the term we use, not just provider. So those are the definitions. And then we get to subchapter two, which has changed in this draft from prohibited transactions to health care facility ownership. And this, I think you just have one section in it still, but it would be prohibited health care facility ownership structures. And so this is based on some of the testimony that you've heard from the Brown professors on Friday and some conversations I've had with them before and after. So this would say, beginning on 01/01/2027, and that date is just in there for purposes of discussion, so you could certainly change that. Beginning on that date, the following healthcare facility ownership structures are prohibited. And I'll also pause here to say some of this is trying to get an issue I think the chair had raised the first time we looked at the bill about sort of how do you impose penalties and enforcement if a transaction occurred that results in a prohibited entity, but it was just the transaction itself that was prohibited. And now you have this not unauthorized entity that exists. So this would prohibit the structures. So beginning on 01/01/2027, the following healthcare facility ownership structures are prohibited. First is an ownership or control directly or indirectly of the core business operations, management, or assets of a healthcare facility, or a combination of those, by a private equity company or a real estate investment trust. Number two is ownership of a healthcare entity by a for profit entity other than a professional corporation organized pursuant to provisions of Title XI or a professional limited liability corporation organized pursuant to a subset of those Title 11 provisions to the extent such ownership is permitted under federal law. So I'll just pause here on the professional corporations. This is where we have arguably existing corporate practice of medicine provisions in our corporation statutes that say if there's a business that is providing professional services that require a license, then the owner directors must be licensed to practice that profession. So this is saying we're prohibiting ownership of a healthcare entity by a for profit entity other than a group of licensees that are organized pursuant to state law to provide those services? The professional corporations can, yes. Like a medical practice, that's a, if you see PC or PLLC after the name of an entity, is a professional corporation or a professional limited liability corporation. And I will invite you to have witnesses tell you more about some of this language and the thought behind it and whether it is tomorrow. This is a place to start.

[Alyssa Black (Chair)]: Is this language we had heard from Brown about essentially MSOs that

[Jennifer Carbee, Office of Legislative Counsel]: have a licensed The friendly physician piece? Yes.

[Leslie Goldman (Member)]: Yes. That's

[Alyssa Black (Chair)]: Oh, yes.

[Jennifer Carbee, Office of Legislative Counsel]: Oh. That's why it's narrowing this construct to the All of the owners have to be

[Leslie Goldman (Member)]: So that's prohibiting that. Yeah. Yes.

[Jennifer Carbee, Office of Legislative Counsel]: That's my understanding from them. And I've sent them this language as of yesterday morning. So I had not I spoke to them again on Monday and talked through some of my questions about some of their proposals and and sent them the language, but I have not actually heard back from them on whether this is what you know, whether this fits with what they were recommending. And then the third one, again, based on some of the testimony you heard on Friday, is prohibiting a sale leaseback structure in which a health care facility sells its real property or another asset to another entity that concurrently leases that real property or other asset back to the healthcare facility such that the seller becomes the lessee. What I'm really doing here is using the term sale leaseback structure and then largely defining it right here. But I felt like that was clearer than just using the terminology. And then it takes out all the rest of those provisions. So the ones that you were hearing from about people having concern about whose debt becomes whose responsibility after a transaction, that's not in this Direct. And then in subsection B, it prohibits the Department of Health, the Department of Disabilities, Aging and Independent Living, and any other state entity from issuing a new or renewal license on or after 01/01/2027, to or for any health care facility with an ownership structure that is prohibited by subsection A. So they're not allowed to exist, but also the health department and Dale, who are the main parties I could think of who regulate or who license health care facilities in the state, they cannot issue a new or renewal license. Again, you'll want to hear from these folks about any concerns they have. This is the first time this language is seeing the light of day, so I expect it is not perfect. It keeps the language saying nothing in this section shall be construed to limit or alter any existing authority of the attorney general or other state agency. And then it gives kind of a a transition period saying health care facilities operating in this state on 07/01/2026 shall have until July 01/01/2029 to come into compliance with this section. And I've got some of the same sort of forbearance on penalties provisions later. Was wondering if

[Alyssa Black (Chair)]: you have an example of that so I can make it more concrete. What would be an example of that?

[Jennifer Carbee, Office of Legislative Counsel]: This piece? Of D. Of D. Yeah. Just if somebody exists now and they are in a sale leaseback structure that they would have to revise that ownership structure by the date.

[Alyssa Black (Chair)]: It's not retroactive, but it gives them a transition. Exactly.

[Jennifer Carbee, Office of Legislative Counsel]: Yes, it's not retroactive and it's picking a date certain for when people are operating that seemed relatively close to this current point in time. But again, all of these dates and provisions are subject to. Sub chapter three is Corporate Practice of Medicine. And I've made a number of changes here as well in part based on our existing provisions and learning more about the application of the existing provisions in Title 11 on professional corporations. Also just reorganizing some things in ways that seemed a little bit easier to understand or reducing the duplication around the provisions about the non compete clauses and non disclosure agreements, things like that. That's what you'll see coming up in this sub chapter. So the first section, we still have the prohibition on the corporate practice of medicine, but this is now referring to. So in accordance with 11 BSA chapters three and four, those are the professional corporations chapters And 11 VSA 4,011 gs, which is a professional limited liability corporation provision. And I'll just pause here for a moment to say, I know it looks strange to have two big chapters and then one little subsection. That little subsection in 11 VSA forty eleven gs is in the chapter on limited liability companies and says, and if you're a professional limited liability company, you have to follow everything in chapters three and four in addition to being a limited liability company. So that's why that reference is there. So in accordance with the existing professional corporation and professional LLC statutes and except as otherwise provided in section 90 five-thirty two, which is the one that says, actually some entities can employ licensees. It is unlawful for an individual corporation partnership or any other entity without a license under. And now we've got our list of the medical doctors, the allopathic physicians is 26 BSA Chapter 23. 26 BSA Chapter 28 Subchapter two is Advanced Practice Registered Nurses. Chapter 31 is Physician Assistants. And Chapter 33 is Osteopathic Physicians. These are our licensees who we defined in definition of licensee at the beginning of the chapter, but also specifically saying in here, It is unlawful for anyone who is not licensed as one of those licensed types to own a medical practice, employee licensees, or otherwise engage in a practice of medicine. B says, Notwithstanding any provision of subsection A to the contrary, an individual, corporation, partnership, or other entity without a license under one of those provisions, except Physician Assistance because they're not allowed to practice independently, that is permitted to employ licensees under Section 9,532 of this chapter, the next section we'll look at. So notwithstanding the general prohibition, there are some people and entities who are allowed to employ licensees. And for those people, they still shall not directly or indirectly interfere with, control, or otherwise direct the professional judgment or clinical decisions of a licensee, which shall include not and then I've just moved this from another section because it seems much more relevant here about what it means to control or direct interfere with control or direct their professional judgment or clinical decision making. So which shall include not controlling directly or indirectly. And I haven't changed any of these, but I can go through them if you want.

[Alyssa Black (Chair)]: Just so I'm clear. Basically, what we're saying is you're not allowed to own medical practice, but if you do, you can't control. Right.

[Jennifer Carbee, Office of Legislative Counsel]: We're saying in general, it's unlawful for an unlicensed person to own a medical practice, employ licensees, or otherwise engage in the practice of medicine. Except there are some who we list in the next section who are allowed to do those things, but they still cannot control the decision making of those licensed professionals. And then there's the list that was in the bill as introduced, which again, I just moved from a different section because it seemed hard to sort of reconcile the two pieces in different places with what it looks like or or some of the things it looks like to control control, interfere with, or direct. So for our purposes right now, I won't go through that same list because it hasn't changed. The only thing I flagged here is just we have this this legacy reference to something being specified by rule, but nobody really has rulemaking authority. And I'm not sure anybody in the state government we've heard from so far wants rulemaking authority. But we may wanna give some other sort of catch all, which is what this is. So 9532 is now who can, which corporate entities are permitted to employ physicians, physician assistants, and APRNs. And so this says, A medical practice organized for the purpose of practicing medicine shall comply, again, comply with the requirements for professional corporations set forth in 11 VSA Chapter three or four. And those apply based on the time of formation. So the law changed at one point, instead of getting rid of the old one, they just said, going forward, anybody who becomes a professional corporation has to follow chapter four instead of chapter three. So they must comply with the requirements for professional corporations and for professional limited liability corporations with the requirements of that one subsection. I'm going to stop.

[Leslie Goldman (Member)]: Go ahead. I just have a clarifying question, probably a kindergarten question. This applies to every entity in the state. So it would be from nursing homes to hospitals, to private practices, to any

[Jennifer Carbee, Office of Legislative Counsel]: This specific provision is related to medical practices. So sometimes we're talking about health care entities, sometimes we're talking about health care facilities, sometimes we're talking

[Leslie Goldman (Member)]: about medical practices. Medical practices are not nursing. Let's go up to the definition. I'm sorry.

[Jennifer Carbee, Office of Legislative Counsel]: That's okay. I think it's helpful to get that context. So medical practice. Is a corporate entity or partnership organized for the purpose of practicing medicine and permitted to practice medicine in the state, including there's various types of formations. So a nursing home is that, is it? I don't think a nursing home is organized for the purpose of practicing medicine, but I think we could get some clarity from other folks on that. I don't know that we specifically define the practice of medicine in here. Yeah, I So, think it's a good question, and we should get some some more clarity.

[Alyssa Black (Chair)]: Okay. Thank

[Jennifer Carbee, Office of Legislative Counsel]: you. And I'm just I'm gonna I am gonna just highlight it for myself so I come back to it. I'm gonna probably forget by the time we've gone through this whole thing. I already forgot. Alright. So we'll make this green. Sure. Alright. So here we are in ninety fivethirty two. The medical practice must comply with the requirements for professional corporations and professional limited liability corporations. They are one. Then we say, oh, and we took out some of these provisions around. So it says may employ and engage in the practice of medicine only if the following conditions are met. And I've changed the frame of this a bit, partly because one and two are actually already covered by the professional corporation statutes. So we don't have to specify that licensees, licensed practice medicine must hold the majority of each class shares entitled to vote or comprise a majority of the directors. But we don't have this one. So it does say notwithstanding any provision of 11 VSA eight forty to the contrary, which has to do with officers. And I believe that statute says just one officer, at least one officer of the professional corporation must be licensed to practice the profession. This would say, notwithstanding any provisions, back to the contrary, actually all officers, except a secretary and treasurer, if there are any, shall be licensees licensed in the state to practice medicine and allowing the same individual to hold two or more offices. Alright. So then b says, notwithstanding any provision of subsection 9531A, which is the general prohibition on corporate practice of medicine, the following entities may employ, and I broadened this from physicians to licensees who engage in the practice of medicine. And now we have the same list we were talking about the other day, and you may wanna add other people in here. That's fine. I didn't try to get into who you might want to add with one exception. So this has the federally qualified health centers, rural health clinics, free and referral clinics, non profit hospitals, hospitals and other healthcare facilities owned or operated or both by the state. I've taken out ambulatory surgical centers because the Brown folks recommended that as ambulatory surgical centers that are not part of hospitals are generally owned by healthcare professionals, by the licensees. So we didn't need to put it in here. What's a rural health clinic? It's part of the, I'm going to defer to Mary Kate, I think. But I think rural health clinics go along with the FQHGs or Georgia. Can I phone a friend?

[Georgia Maheras, Bi-State Primary Care Association]: Rural health clinics are defined in the same statute as federally qualified centers under the federal structure. They are actually predominantly owned by hospitals, however, but they have a very specific reimbursement and regulatory framework.

[Alyssa Black (Chair)]: Like a FQHC lite or type? Different. They're federally.

[Georgia Maheras, Bi-State Primary Care Association]: Adjacent. Adjacent. Have several in the state, NVRH as well.

[Jennifer Carbee, Office of Legislative Counsel]: All right. And then I've added long term care facilities licensed by the Department of Disability Aging and Independent Living because that seemed like a big one you had discussed in here. And school based health clinics, including student health centers at post secondary schools. And then in addition, again, notwithstanding any provision of that piece. So this employing licensees engaged in the practice of medicine. Now we have who may employ licensees who are not engaged in the practice of medicine. And I know this had come up with some concerns from some of the stakeholders around things like the Department of Health that has healthcare professionals who work there and health insurers that have a chief medical officer. So this allows the state of Vermont and its agencies and departments, health insurers that offer health insurance plans in this state, and then anybody listed in the first list also can employ licensees who do not practice. Again, this may need work. This is a place to start. Then we have 9533, which I have retitled from regulation of contracts between medical practices and management service organizations to arrangements, because the first one is about prohibition on straw ownership, which has nothing to do with contract or with regulating the contract. And so this keeps the language saying each licensee owner of a medical practice shall exhibit meaningful ownership of the medical practice. This is getting at some of that friendly physician, those concerns and just making it a little clearer and be that meaningful ownership is being defined here. And clarifying, I've added the word and because I found that sentence confusing about what the both referred to. And then I added this in just as a sort of a connection to something we have an existing statute. You don't have to keep it in here if you don't want. But I was thinking in our work last year on the legally protected health care legislation, there was language specifically added in the unprofessional conduct statutes about letting somebody's name or license be used by a health care facility if they are not actively engaged in supervising or in charge of the services being provided. So I put that same kind of construct in here saying a licensee owner shall not permit their name or license to be used by a management service organization or other person if the licensee is not actually in charge of, responsible for, or actively overseeing the treatment or other healthcare services provided by the medical practice. Jennifer?

[Karen Lueders (Member)]: Jen, just out of curiosity, where did natural entry path?

[Jennifer Carbee, Office of Legislative Counsel]: They are not within the scope of this bill.

[Karen Lueders (Member)]: Not within the scope at all. Even though they may have a building and five or six people do different things in that.

[Jennifer Carbee, Office of Legislative Counsel]: They're not part of how we have defined licensees. We can define licensee differently, but they were not part of the concerns that I understood were being addressed by the bill.

[Alyssa Black (Chair)]: Daisy, and then Brian's question. Similar question. Are entities like recovery homes covered in here? Like if they offer MAT? Again, they are

[Jennifer Carbee, Office of Legislative Counsel]: not on the list. We can add any entities. I only made the one change to the list, which is to put the long term care facilities and take off ambulatory surgical centers. So yes, you may want to put them on here, I also, you may want to think about whether there are services being provided in the state that do not comply with what this would require that are services you don't want to place limits on.

[Brian Cina (Member)]: I think you answered the question that I was going to ask, so I don't think I need to ask it. I think the comment would just be maybe we need to hear more about what might be other entities or I don't know what to call them, other components of the system that might be at risk.

[Jennifer Carbee, Office of Legislative Counsel]: Yeah. I think if there's certain types of ownership structures that you're comfortable with based on the type of services being provided and concerns about supply and access issues that there are not. And I'm thinking you heard last week about opioid treatment programs, which I understand from your witness, equity has a significant presence in the state, that may be something that we don't want to change. Then we may want to be clear about what is included and what is not.

[Brian Cina (Member)]: Does this protect them now?

[Jennifer Carbee, Office of Legislative Counsel]: I don't believe I think it depends who is practicing there, but I don't believe it does.

[Brian Cina (Member)]: Not universally. Right. Okay.

[Georgia Maheras, Bi-State Primary Care Association]: Right. I think this could

[Jennifer Carbee, Office of Legislative Counsel]: be problematic for them. And much of what is in here is really in here for you to make changes to based on your policy preferences.

[Karen Lueders (Member)]: Thank you.

[Alyssa Black (Chair)]: We heard from last week the trade association around online services. For telehealth? Yes. Telehealth. This doesn't really touch them at all. There not

[Jennifer Carbee, Office of Legislative Counsel]: There in the is a requirement for licensee owners to be physically present in this state. I can't remember where that is. That could be problematic for them. You may want to think about how you want to address telehealth.

[Alyssa Black (Chair)]: So if they hold a licensed practice in the state yet they're not actually located in state, and their organization, their company or entity is not in the state, they no longer be able to Would they have to adhere to this? I think

[Jennifer Carbee, Office of Legislative Counsel]: we have to look at I believe there is a requirement in here, and I don't remember, frankly, where it is at the moment about physical presence. Think it's actually in that meaningful I think about it. It's right in that meaningful ownership definition. So each licensee owner of a medical practice shall exhibit meaningful ownership of the practice, and meaningful ownership means that each licensee owner is duly licensed and present in this state. So I think as it is currently morbid and depending on the definition of medical practice, then this could create problems for them.

[Alyssa Black (Chair)]: Brian? And

[Brian Cina (Member)]: I don't know if you're the best person to answer this, so if not, we can hear from another witness. But what would be the consequence if we took an action that said that private equity could no longer own nursing homes or methadone clinics or other components of the system that they currently might have a huge stake in, what would be the legal ramifications? Like, would they have to liquidate those assets by a certain time? What would be the practical That's

[Jennifer Carbee, Office of Legislative Counsel]: what the dates in here are for. I mean, are penalties for an ownership structure after the transition period that is prohibited. So

[Brian Cina (Member)]: they would have to do it by a certain date or else?

[Jennifer Carbee, Office of Legislative Counsel]: Yes, as the way the bill is written, yes.

[Brian Cina (Member)]: And the bill does not provide for any pathway for public ownership. It just tells them they have to liquidate their asset?

[Jennifer Carbee, Office of Legislative Counsel]: Doesn't tell them what they have to do, it just says that certain ownership structures are prohibited.

[Brian Cina (Member)]: Oh, I see. They can do anything. They could shut it down, they could sell it, they could turn it into a gas station. Could do anything they want, run run

[Georgia Maheras, Bi-State Primary Care Association]: with laws.

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

[Brian Cina (Member)]: You might wanna consider that, but not obviously, is not the person to talk about that with this.

[Jennifer Carbee, Office of Legislative Counsel]: Alright.

[Brian Cina (Member)]: Thank you.

[Jennifer Carbee, Office of Legislative Counsel]: Sure. So we've got I didn't make any changes on the I don't think on the prohibition on dual interest ownership or interests, except there was a sort of a disconnected separate legal entity phrase here that I took off. Didn't really make any sense. Prohibition on stock transfer restriction agreements. There are existing in the, again, the professional corporation statutes, are limits on the transfer of stock of stock ownership. So if somebody is a member, a director in a professional corporation, and they are they want to sell their shares, they have to sell them to somebody else who is also licensed to practice that profession. So we're just piggybacking on that existing provision and saying, In addition to those requirements, and then the medical practice shall not transfer or relinquish control over the sale restriction of sale or encumbrance of the sale of the medical practices, shares or assets or the issuing of shares in the practice of subsidiary or affiliated entity or paying a dividends. And then notwithstanding the provisions of a very specific provision that seems to kind of open the door in the corporation statutes, it talks about transferring shares to a general partnership in which only one person has to be licensed. So notwithstanding that provision in the professional corporation statutes, in this medical context, any transfer of shares to a general partnership shall be only to a general partnership in which all of the partners are licensees. Just getting to different corporate structures here. Provision on restrictive covenants, I moved to combine so I combined the two sections the two provisions in different sections on restrictive covenants so that we're not sort of repeating the same thing in two different places. So that all gets struck and everything else remembered. I've, in many places, changed physician to licensee because there was didn't seem to be a a rationale for for limiting specifically to physicians. I have a question out about what the fees here are that licensees would be generating revenue other than from physician or licensee services. So I'm not sure if these will stay in here or not. And then just some clarifying changes like licensees of a medical practice, I changed to licensees employed by a medical practice. And again, changing physicians to licensees and also the shareholder agreement didn't seem to be modifying anything. 95.34 is where I put the prohibition on restrictive covenants, so I combined those two existing sections into a new one. And I had moved the protections around controlling or interfering with the clinical decision making to 9,531. So we're talking about the provisions in this section applying to licensees employed by or who provide health care services under contract with an unlicensed person. And then I just clarified as permitted under section 9,532. So for the non competition agreements, the provisions were almost the same in both places, except there was, I think, one place, there was this carve out about somebody who's a who is a member of the other party. Just saying except as provided in subdivision two, and then we're combining that this is non competition agreements between a licensee and employer or other person. And I specifically called out management service organization instead of having a separate analogous provision applicable to management service organizations, and then keeping this non competition agreement between the licensee and other person as valid and enforceable at the licensee or holder or member and has a fairly significant ownership interest. Did after talking to Coach Brown, I found all of the language about the nondisclosure agreements not affecting libel suits to be confusing and unnecessary, So which they agree with. So I took all of that out. So it's a much shorter provision now, which is not meant to imply that libel suits are now banned. It just seems sort of inappropriate. So the here's what I moved to ninety five thirty one. Let me skip that. Good news, we are up to page 24 of 33. A couple of times it's come up that Commerce and Economic Development is also looking at nonconvenient and non disclosure and stuff like that. Just to Yep. And I'm working with the attorney who's working on that to make sure that we're tracking where both bills are. I think theirs is moving more quickly. At least we'll have a sense for where theirs is. And if it doesn't meet the requirements, then we can not withstand that in here. Yeah. If you want. Transparency and ownership and control. This is the sections on reporting ownership and control of health care entities. I found it confusing to have the following information at the very end, so I just moved it up before. That's not a substantive change. It's just a readability change. Each healthcare entity shall report the following information. And because we took out the language around material change transactions, it's just an every two year reporting requirement. Most of the rest of this has not changed as far as what they are reporting. Took out the reference here to independent provider organization because we're not that's not a defined term, and it wasn't clear what that meant. And I confirmed with the brown folks that that that brown professor folks that that didn't seem to mean anything. Changing this to licensees and then taking out the references to the material change transactions. I don't remember why this is highlighted. I don't think it changed. Just oh, I mean, I I played with moving things around, and then I didn't accept to say to clarify that the exempt the the non applicability of the exemption to health care facilities, we just tried to make that a little bit more understandable.

[Alyssa Black (Chair)]: What if we need a full period? You've got things marked in blue that, like, we might want to do. Would would it be appropriate for you to mark something in blue that we might want to come back to? Like that you want to come back to, but like I think I want to come back to flag it for me.

[Jennifer Carbee, Office of Legislative Counsel]: These are for these are and I'm going take the highlighting off this, but that's not fair. Yes, this just so that we don't lose track of particular things we wanted to talk about.

[Alyssa Black (Chair)]: Can we highlight the at least every two years in the beginning of this right there?

[Brian Cina (Member)]: For future discussion. For future discussion.

[Alyssa Black (Chair)]: Yep. Okay. Thank you. Sure.

[Jennifer Carbee, Office of Legislative Counsel]: And then I've added in and trying to find the balance. I know there were some concerns about confidentiality, but also some some encouragement to you to make sure this information is public. So I specified that information, this is similar to language in the next section, is public information and not considered confidential, proprietary, or a trade secret. And keeping the same as in the next section, any individual health care provider's tax ID, which is also their social security number, would remain confidential. But I also added, based on the work you did last year around confidentiality of personal contact information for healthcare professionals, that any non business telephone number, email address, physical address, or mailing address of any individual healthcare provider would also be exempt from public inspection and copying and kept confidential. Next, we have the sharing of ownership information to improve transparency, and I just found the order they had it in confusing, so I swapped A and B. There is no substantive difference between those two. Trying to remember what it is that seemed like it should come later. It is oh, the the confidentiality piece. Yeah. I felt like it was better to say what's happening before we talk about what's confidential in it. So this, again, is the board posting a report on its website every two on a date certain in every two years. Do you want me to flag this Yeah. Date as well? Okay. We'll we'll do the whole date every two years. Agreement with the post on its website a report with respect to the previous two year period. Do this in for me. And then the only thing I did here was just add an and to this list. And I flagged in blue I know there was a question about the capacity of the GreenLine Care Board to analyze the trends in horizontal and vertical consolidation, so just put that in blue without changing it yet. It's just a consistency in language issue with the previous section. And there was nothing in here that was going to be providing any individual health care providers information, so I didn't add that additional piece. Next, I added in language that was in the NASP model, but was not in the bill as introduced, but was recommended by the professors from Brown for your participation. And this is an audit and inspection authority. I often this I picked both the Attorney General and the Green Care Board. So I authorized the Green Mountain Attorney General and the Green Mountain Care Board, authorized them to independently or jointly audit and inspect the records of any healthcare entity that fails to submit complete information pursuant to the subchapter, or if the Attorney General or Board has reason to question the accuracy or completeness of the information submitted. It also directs, and in this case, I picked the Attorney General as the primary that you can do partly because they're about to get potentially more money into the fund because I put in more penalties. So you can decide who you want it to be. But the attorney general, in consultation with the board, shall conduct annual audits, random sample of health care entities to verify their compliance with the subchapter and the accuracy and completeness of the information. And then here's the penalty part. And I use the placeholder numbers from the NASHV language for you to look at and make changes if you wish. So if a health care entity fails to provide a complete report under Section 9,541 or submits, that's the long list of information or submits a report containing false information, the entity would be subject to civil penalty as follows: For health care entities consisting of health care providers or provider organizations without any third party ownership or control that employ 10 licensees or fewer or have less than $10,000,000 in annual revenue or both, the penalty shall be not more than $50,000 as a placeholder for each report not provided or provided but containing false information. And for all other health care entities, that would be smaller entities. For all other health care entities, the penalty would be not more than and here, placeholder number is $500,000 for each report not provided or provided but containing false information. And the penalties would go into that health care, what I've now retitled the Healthcare Entity Ownership Oversight and Clinical Decision Making Fund, established a 9547, which is where the attorney general's office can pull from for their work under this chapter.

[Alyssa Black (Chair)]: Do we have a definition for what false information is?

[Jennifer Carbee, Office of Legislative Counsel]: No, this is just from the model language. So

[Alyssa Black (Chair)]: would this be like a material misrepresentation or would it be like a clerical error?

[Jennifer Carbee, Office of Legislative Counsel]: Well, I imagine if it is false information, it is information that's not true. If that is due to a clerical error, I would rely on the enforcement discretion of the attorney general's office to clarify and allow for correction, but you could ask them. Not sure it's worth their time and effort to go through a case to have a court say, please let them fix the error. Leslie,

[Alyssa Black (Chair)]: did you have a question now?

[Jennifer Carbee, Office of Legislative Counsel]: Okay. Alright. Finally, we have enforcement of the chapter. So here I've got I changed the title to violations and penalties since there's other enforcement pieces. You can see some more coming up. But otherwise, I don't think I made any changes other than changing the name of the fund and the cross reference. I also, at the suggestion of the folks from Brown, put in a private right of action that would allow any party to a contract, third party beneficiary of a contract, or other person injured by a violation of this chapter to bring an action into Superior Court for injunctive relief, compensatory and punitive damages, costs and reasonable attorneys fees and other appropriate relief. That is, again, based on the National Model language, but a much sort of simplified version that's consistent with our with similar provisions in our statutes. And then they changed the name of the fund but otherwise didn't make changes except clarifying that it's the attorney general who is collecting the funds, the sums and adding in the reference to the sums under the audit and investigation provision. And then I've given a transition piece, so saying the pen Go ahead.

[Leslie Goldman (Member)]: I'm just curious about that. It's sort of like the fund is starting at zero, but if the attorney general has to do work, but there's no money in there, And it's not until they're done with their work that the penalty would then be put in the fund. How does that work?

[Jennifer Carbee, Office of Legislative Counsel]: So I think you heard from the attorney general's office that they would have some startup money. I think they would want some startup money. I also think sometimes with these, I think what you did with DFR, for example, on the pharmacy benefit manager regulation, as they were able to within their existing funds during the first year, of stand up what was necessary with the expectation that they could backfill it with money's coming in. You would want to hear from them. You'll want to hear from them. I expect they will tell you they need money, but it does not provide money at

[Alyssa Black (Chair)]: the time. No,

[Leslie Goldman (Member)]: I'm just wondering to confirm that they have capacity to start it.

[Jennifer Carbee, Office of Legislative Counsel]: And as I said, I don't, I think they will tell you they do not. They will need mine.

[Brian Cina (Member)]: Brian, there's some questions I have.

[Jennifer Carbee, Office of Legislative Counsel]: I'm not quite done yet. You want me to get through?

[Brian Cina (Member)]: Finish. No, please finish. I didn't realize we didn't get to that.

[Jennifer Carbee, Office of Legislative Counsel]: Close. So we've got a transition and implementation provision sort of giving some forbearance for the first couple of years. So saying that the penalties for a false reporting and for any violations generally shall not be imposed, and the private right of action shall not be available until 01/01/2029 to provide health care entities with sufficient time to come into compliance with the requirements of this whole chapter. So and I'm setting it up, but allowing some some compliance some time for compliance. And then finally, as introduced, the act would take effect on 07/01/2026. I don't know if that's still the date you want. So, all right. Now I'm ready for the

[Alyssa Black (Chair)]: I'm not sure if it's

[Brian Cina (Member)]: if they're all questions you can answer, but I feel

[Alyssa Black (Chair)]: like your questions I want to put

[Brian Cina (Member)]: out, maybe to keep in mind, and then if any witnesses on deck today want to weigh in on any of these things, they can. But the concern is we're talking about a, number one, I think we need to hear more about the scope of components of the system impacted that we might want to include if we're trying to really protect our healthcare system. But I am concerned about pulling the rug out from under people without a good plan for transition and without any support. So here's some of the questions I'll throw out there that you may have, like you might say, No, legally that's not allowed, and then we'll just crush it right now. Or Jen might say, I need to look into that, or you might say, Ask these witnesses. That's why I thought it might be good to put it out there with you present. So I'll just ask a couple of questions then, and I'll just put them out there. One, can rural, what's that? Can the rural health, I might say it wrong, Rural Health Transformation Grant. Is that

[Alyssa Black (Chair)]: what it's called? That is

[Brian Cina (Member)]: what it's called. Can the Rural Health Transformation Grant potentially be used to help with this transition in any way? Even if the funds can't be used directly practices, could they be used in other parts of the system to allow the state to redirect funding into assisting providers with transitioning to a different model if they need to? Two, oh, I guess that number two is wrapped into that, which is what kind of assistance can we offer providers if they can't get the support from private equity, is there something the state can do? Could that include some kind of public ownership in practices versus private equity ownership? For example, could the state treasury use state retirement funds to invest in our practices and cut out the middle person of private equity? Because they're barely investing retirement funds into people's retirement funds into these ventures, perhaps we can cut them out and the state treasury could take a portion of the reserve like we do with the 10% for homes and put like, I don't know, 1% for healthcare or 5% for healthcare and reinvest state retirement or other money into these practices.

[Georgia Maheras, Bi-State Primary Care Association]: I don't know how have no idea this

[Brian Cina (Member)]: is way

[Jennifer Carbee, Office of Legislative Counsel]: outside of my healthcare landscape there.

[Brian Cina (Member)]: So there are questions for us to think about.

[Alyssa Black (Chair)]: Any more?

[Brian Cina (Member)]: No, that was it, I just dumped it.

[Alyssa Black (Chair)]: Those are great questions.

[Brian Cina (Member)]: Yeah, I dumped it out there. Thank you for letting me put it out. And then it's like, I won't ask every single witness these questions. It'll be out, but I wanted people to be thinking about this because if we're gonna create a transition and penalties, what are the incentives?

[Alyssa Black (Chair)]: Karen, and then, yeah, just to contextualize your questions, Brian, are you thinking of specific categories or types of entities?

[Brian Cina (Member)]: Think we should protect every possible component of the system, methadone clinics and nursing homes included, but I'm recognizing that if we do that without a plan to help them, we're just gonna put them in this impossible position. So that's why I'm like, maybe we create some interesting way to use state funding to create public ownership or public backing of our healthcare system if we're going to pull out the option of private investment or limit. I shouldn't say pull out, but limit because we're still allowing it. Sounds like we're just putting major guardrails on it that might undermine, pull the rug out from peoples. Does that make sense?

[Alyssa Black (Chair)]: Brian? Could

[Karen Lueders (Member)]: you just quickly explain what you mean by retirement funds?

[Brian Cina (Member)]: Yeah. So we heard from the treasurer of Rhode Island, was it? No, the comptroller, someone early on in, wait, maybe, no, wait, I might be confusing things. Heard from Brown, I know, last week. Yeah, someone or maybe Doctor. Song was the one who said it that when I asked what He had US retirement funds or something listed in the private equity queue on the screen, and I asked him what it meant, And he said, state pensions from around the country get invested by private equity funds into these ventures. So they're taking public money that's in a retirement fund and using it to actually collapse our healthcare system. And so what if we took them out of the equation and the treasurer, we could talk with him about this, because I haven't, but I know that he does this with housing, with the 10% for Vermont program. Maybe there's a way the state can our retirement money and invest it into our own healthcare system. And then instead of liquidating assets, the profits of any profit goes back into our public money.

[Karen Lueders (Member)]: Do you see what I mean? Yeah, do. I don't like the idea of using time and funds that people are counting on.

[Brian Cina (Member)]: Right, but they're already doing that. Yeah, okay. And I feel that. There might be another way. Maybe we use the state reserve. Maybe it's not the retirement motel.

[Alyssa Black (Chair)]: I'm talking about cutting out the middleman.

[Brian Cina (Member)]: Yeah, why don't we let people come in and make money off of making money with our public money? Like, it's not when we're struggling. Like, it doesn't make sense.

[Leslie Goldman (Member)]: So it's considered a good investment.

[Alyssa Black (Chair)]: Yeah. Karen? I just said one. I don't know if it's a technical question, Jen. Under 15, the definition of private equity company, page nine, it talks about the parent entity. Is there any configuration of ownership model in which the child company, for lack of a better word, could be, I don't know, hidden under this?

[Jennifer Carbee, Office of Legislative Counsel]: I mean, it covered somehow in this deck towards all the different layers, vertical layers of ownership? So I will defer entirely to people who understand much more about the structure of these companies. This is just the definition that was recommended to me by the professors who work in this area. But I think it is entirely possible that there are configurations that could get around this, and I don't know what they are.

[Karen Lueders (Member)]: You all being slammed?

[Alyssa Black (Chair)]: Rasit, do you have a question? I have a quick question. I'm really concerned when you're talking about telehealth and the proximity of being in state, out of state. I would hate to think that we're not realising every avenue for healthcare right now, and that concerns me, because I know a lot of people do telehealth, and I think we need some clarification on that.

[Jennifer Carbee, Office of Legislative Counsel]: Okay. Yeah, and this has to do with, just to give context, this has to do with the ownership, the licensee owners. It's on page 16. Each licensee owner of a medical practice shall exhibit meaningful ownership. Meaningful ownership means each licensee owner is fully licensed and present in the state and substantially engaged in delivering medical care or managing the medical practice or both. It doesn't mean that everyone employed by them has to be physically present in this state, but it could have limiting impacts. So I think you'll want to understand from others what this means for them and perhaps from people who were involved in creating the model language, how they see that working with telehealth. Thanks, Jeff. Daisy?

[Daisy Berbeco (Ranking Member)]: Yeah, I want to share your concern about telehealth and also just confused how we could regulate an entity that's not incorporated in

[Jennifer Carbee, Office of Legislative Counsel]: Vermont. We cannot. Mean, we're talking about licensee owners. I mean, we can to the extent they're providing services in Vermont.

[Georgia Maheras, Bi-State Primary Care Association]: If I were to say,

[Daisy Berbeco (Ranking Member)]: for example, for forensic evaluations, we contract with a company that's a national company and they do telehealth stuff. They might be partly owned by private equity, I don't know. And I wouldn't want us to lose a service just because they are. And how could we maybe frame it around conflict? I don't want to take this down that rabbit hole right now, but it's, yeah, I think that is an issue.

[Jennifer Carbee, Office of Legislative Counsel]: I do.

[Karen Lueders (Member)]: Would state call that to be a retreat too?

[Georgia Maheras, Bi-State Primary Care Association]: We're not going down the rabbit hole, that

[Daisy Berbeco (Ranking Member)]: way. I

[Karen Lueders (Member)]: think we're down the rabbit hole.

[Leslie Goldman (Member)]: But I think it's

[Georgia Maheras, Bi-State Primary Care Association]: an important

[Leslie Goldman (Member)]: point to think about. Don't want to

[Daisy Berbeco (Ranking Member)]: lose And it, I it is a rabbit hole, but I will say that I have been digging an awful lot lately in relation to work we've done with compacts, work around telehealth that we've done, and then in the context of what we're trying to do here, I also have had lots of swirling talks. I think this is something that we need to, and we will, as a committee, we'll sort of dive into what we're doing here. Yeah, think it may be worthwhile

[Jennifer Carbee, Office of Legislative Counsel]: to talk to people who are sort of promoting this construct about how do you balance concerns about ownership and private equity investments and control with access, exactly, with access issues. And how do they recommend striking that balance? Because I think the questions you're asking are certainly valid, and this does look to narrow the scope of who is practicing or providing services or owning practices or facilities that provide services in Vermont. And what impact does that have on access and which is a greater concern or how do you strike the right balance between the two?

[Karen Lueders (Member)]: All

[Alyssa Black (Chair)]: right. Any other questions for Jen? Good work. Amazing work, Jen. Yes. Bless it. I'm not sure this

[Leslie Goldman (Member)]: is a question for you, but we had this slide from the Brown people the other day comparing this bill to the NASHP recommendations. And now in the new version, since I'm just seeing it the first time, how does it cross track, do you think? Or how do we figure that out?

[Jennifer Carbee, Office of Legislative Counsel]: I don't know how to necessarily answer that. I think a lot of the provisions I'm reminding myself of what was in here. Think a lot of the provisions are in here that were in here have stayed in here. I think, you know, the big change, I would say, from the bill I was introduced to this burden is the is the change of the focus from transactions to ownership structures. And I don't know that that's specific I mean, that's not that slide, as I'm looking at it, is specifically around corporate practice medicine. So I don't think this bill the redraft has weakened corporate practice of medicine. And we have now in this one added private enforcement. So maybe you get check marks on all of them.

[Leslie Goldman (Member)]: That was sort of the question. Did we lose any check marks? I don't think we

[Jennifer Carbee, Office of Legislative Counsel]: lost any check marks. I'm just looking at this. But that one's specific to corporate practice of medicine, which is just sub chapter three and a bit of sub chapter five on enforcement.

[Alyssa Black (Chair)]: Thanks, John. Thank you for all your

[Jennifer Carbee, Office of Legislative Counsel]: You're

[Leslie Goldman (Member)]: not alone in that. All

[Alyssa Black (Chair)]: right, Georgia? Hey. And I just want to level set here, realizing that a lot of the people that we're speaking to today actually saw this language at the exact same time we saw all this language. So maybe we need to take that into our lens and filter as we're listening. And I do not intend that you're coming back to this field until next week. So hopefully throughout the week, interested parties will have time to digest it and get back. Great, go ahead.

[Georgia Maheras, Bi-State Primary Care Association]: Good morning. For the record, Georgina Harris, Vice State Primary Care Association. And thank you, Chair Black, for noting that. I wrote my testimony yesterday and last week. It's extraordinarily hard to follow Jen generally, but particularly right now. And you're a lawyer. Doing my best. So I'm trying to share my screen.

[Jennifer Carbee, Office of Legislative Counsel]: I might need to phone a friend. It

[Georgia Maheras, Bi-State Primary Care Association]: worked. Okay. I'm also joined by my colleague, Kayla Davis, who's the co executive director of Pattonville Valley Health Center in Arlington, Vermont. So she's on the line. I wanted to start off with a little bit of safety breath for all of us. You've seen this before, I believe. We have federally qualified health centers, and then by state also has members Planned Parenthood and the Vermont Green Referral Clinics all over the state, really getting into every nook and cranny. And that's because we want to provide access, as you were just talking about. I also need to tell you that in spite of all of the amazing work you and this body have done over the past few years to support our health centers, they are still incredibly financially fragile. So any discussion of access and ensuring access is maintained in our communities is really important, because it's not guaranteed. And unfortunately, the federal landscape is very uncertain for them. Just, again, a little bit of reminder around our health center. They are created in federal statute. It's a very clear statute that they have to provide services to everyone in their communities. It's not everyone who has an insurance card, it's not everyone who rides a bicycle, it's every single person who walks in their doors. And also, really, to make sure that they're paying attention to those who are most vulnerable. So don't just assume someone coming in has access to food, has access to good housing. Ask those questions and see what they need. The most important thing on this slide that I wanted to share is they have to have a governing board, so their boards of directors, where over 50% of the participants are patients. So all of the decisions and governance for a health center, those are driven by the people who get the services of the health center. You've seen this before, I won't go through it, but just the breadth and depth of services to our communities. Digging into a little bit of the applicability or some of the questions I have, I would say that when I was thinking about this testimony, I had a lot of questions. Gosh, I have a lot more now, unfortunately. Really, health centers are designated in federal statute. They are heavily regulated by the federal government. They have to do an annual data submission on their quality metrics and their finances. And in exciting news, the federal government tweaks those reports every single year just to make it a little harder to have to do for them. Every four years, they have a site visit where they have independent reviewers, both clinical and operational, coming in. And then alternating with those four years, they have to compete to maintain being an FQHC. So it's not like just you get it once, then you set it, and forget it. So they have to really demonstrate that they're continuing to meet the obligations. And those obligations are hearty. There's over 90 requirements. I've listed a summary of what those requirements are here and here, because it's a lot. But really, on this one, just want to make sure that it's clear, the third bullet from the bottom, that the governing boards have appropriate authority to oversee operations. And so not to put too fine a point on it, our health center boards have to approve hours of operations. They approve the CEO. They approve personnel manuals. They approve handbooks. They approve to a level of detail that is remarkable. In fact, some of our health center boards are like, I have to approve all of that? And then the federal government checks to make sure the board approved all of that. And they don't just approve it once. They have to approve every single policy once every three years, some even more often. So suffice it to say, if you're serving on a board for our health service, thank you, because it's a lot of work. But it's also a lot of oversight. I also wanted to note that sometimes we get additional guidance coming in from the federal government. And so just last month, the federal government sent this notice out to all health centers specifically around acquisitions and mergers, and said, basically, they can't do an acquisition or merger without getting prior approval from their federal regulator. But just in case you were curious, you can't do that without getting our prior approval. I don't know who made a mistake where in the country, or if this is just a general update, but a very clear reminder of the regulatory oversight. So there are

[Leslie Goldman (Member)]: a lot of acronyms on this slide? Oh, yeah, sure. What's an EHP? And then there's BPEC? Yeah, BPHC

[Georgia Maheras, Bi-State Primary Care Association]: is your primary health care. So that's the department within federal health and human services that regulates health centers. EHB is electronic handbooks, which is this, in my opinion, antiquated electronic system where health centers have to upload information. They're actually migrating it to a new system. You all know how well migrations go for technology. But that's just that technology. And H80 is just the reference they use internally within HHS for the health center program. I don't know why it's age 80, but that's just the number and letter they use. And HRSA Health Resources and Services Administration. I think I got them all. Sorry, I was just copying and pasting the exact notice and should have done an acronym check. Also on the oversight front, just yesterday, Rep Birdman, who's a congressman from Michigan, sent an email to all his colleagues in the House of Representatives noting how heavily FHCs are regulated. Why am I talking to you about why FQHCs are regulated, in addition to it's interesting to me, right? But it's because I think there could be a conflict potentially with the reporting obligations or the operational impacts,

[Jennifer Carbee, Office of Legislative Counsel]: and I

[Georgia Maheras, Bi-State Primary Care Association]: just don't know. We want to make sure we're not inadvertently making things harder for our health centers to do the work to care for our patients, or creating additional administrative burdens, just questions I have. To get to some of the sections, again, this slide was created with the old language, so sorry about that. Just want to be very clear that HRSA must be notified when an FQHC does a transaction of a service line, of a location. If a health center expands, they have to get fire approval. If the health center goes into a school, they have to get approval. If the health center gets a mobile unit, they have to get approval. The theme is they have to get approval. Any time they want to finance anything, they have to get HRSA approval. And then I have a lot of questions just around areas where the previous language and it seems still in the new language, there's silence. You all raise telehealth as a question. Our health centers are in an environment where they're using technology that is like, I'm using Office three sixty five to create this PowerPoint. Or they have an electronic health record. And so when there's silence, as an attorney, I always go, Oh, when there's silence, what does it mean? It could mean that it's an intentional exclusion, or is there flexibility? And actually, with those penalty levels, that's scary, that it's unclear what's happening in those areas. So I will wrap up and then turn it over to my colleague, Kayla. But in summary, I appreciate the opportunity to speak with you. Thank you for some of the clarifications that were in the new draft. I look forward to absorbing it a bit more and learning more, and would welcome the opportunity to come back and talk with you all. But really just want to make sure we're understanding the fact that there's oversight implications. Administrative burden is real, and it's a real challenge to our health centers. Think not this year, but last year, was on my soapbox about how I feel about prior auths. As a patient and as someone who works in the health care sector, I don't love them. But also, I want clinicians to be able to care for patients and not be doing the paperwork. And then what are those unintended consequences that we just need to think through and make sure that we're not inadvertently causing a disruption around something when it's a little bit groundbreaking, in terms of what we're thinking about doing.

[Alyssa Black (Chair)]: Questions? So you listed a long, laborious list of requirements for federal designation of being an FQHC. What does the state require currently of you

[Georgia Maheras, Bi-State Primary Care Association]: in order to do this? Health centers, and actually Kayla could probably speak to this more directly. So all our clinicians are licensed by the board of medicine or their respective boards, of course. If there's a building, we follow all of the laws around construction, etcetera, things like that. Obviously our whole centers do banks, so follow all the banking laws. So I think it comes in all of those pieces. But there's no state regulatory oversight like, say, hospital budgets, for example, because the federal government covers that in exhaustive detail. It seems to me that the reporting requirements in this bill

[Alyssa Black (Chair)]: are not nearly as onerous as what you're already doing for the federal government.

[Leslie Goldman (Member)]: I would not be in

[Georgia Maheras, Bi-State Primary Care Association]: the best position to speak for that, because I fortunately do neither set of reporting obligations. But it is a hefty amount of reporting to the federal government, for sure. And also, I'm not

[Alyssa Black (Chair)]: asking this question out loud, and I'm not sure I even want an answer to it. In my time in the legislature, my short time, I know that almost every single year, FQHC is coming to us in this committee and they ask for higher reimbursements, policies with working with DIVA to increase reimbursements, provider stabilization grants that have been issued to multiple FQHCs to save them to include last year several million dollars to one particular entity. And I'm just wondering, it seems like the reporting requirements don't appear very onerous, but if the state is asking for this information, maybe we're asking for this information in exchange for money that FQHD has asked us for. Like I said, I'm putting it out there. Maybe isn't there an obligation term? Don't answer the question. Can I build on it?

[Leslie Goldman (Member)]: Because you're asking, as I was mulling this over, what is our obligation in protecting the public from FQHCs making decisions to become operated by private equity. And that's the object of this bill. And I'm not seeing anywhere that the feds are necessarily thinking about that unless this January guidance thing we think does that. And if our job is to protect Vermonters and Vermont entities, why wouldn't this be a good thing? Get paperwork and onerousness and blah blah, but it's still not that bad. It doesn't seem that bad. And it feels like it's the right thing to do for Vermonters.

[Georgia Maheras, Bi-State Primary Care Association]: So I'm sorry if I was not clear. Because FQHC's governance structure requires actual Vermonters who are patients to be on their boards, That is one of the mechanisms to protect from something like a private equity or other takeover. Also, I did not say this, and I should have. FQHCs cannot be owned by another entity. And FQHC must be the parent company. So I think that's another layer of protection. In terms of what the federal government does and doesn't approve, they always look to ensure that there is local access and that the governance model of, again, having that community board is in place. I can't speak to specific decisions they may or may not make. We can certainly ask them questions. But I Honestly, I'm a little hard pressed to see how an FQHC, as an FQHC and meeting all of its obligations, could be owned by private equity. Like, just Because you have to be an FQHC as the parent, and an FQHC can't be private equity. It's for me to Are

[Leslie Goldman (Member)]: you asking for a carve out for FQHC since Bill? Like, what are

[Georgia Maheras, Bi-State Primary Care Association]: you asking for? Honestly, because there's a new language, I can't speak to what I'm asking for with the new language or not. And I apologize that I'm not in a position to do that

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: right I understand. And maybe you

[Leslie Goldman (Member)]: can help me understand if that's okay. I understand what you're saying about there being board members who are patients and members of community, but I don't see how that guarantees any board action. I'm not sure of that connection. If it turned out to be financially protective, I don't know whatever the right answer might be, that an FQHC gets involved with private equity, why a board like that might protect it from that.

[Georgia Maheras, Bi-State Primary Care Association]: I would just offer my experience. I have the benefit to meet with a lot of our health center boards of directors. And like you all, they really care about their communities. But I would posit that almost they will extend themselves to meet the community needs without revenue or without having a partnership that doesn't feel like it's the right partnership for their organization. Like, they will actually really just push to deliver the services across their communities. It just Perhaps theoretically, in a world, it could happen. I just don't see it with the board members I've talked to in Vermont. They're They're Vermonters, and they want to keep things here.

[Alyssa Black (Chair)]: I understand that you can't be owned by private equity. Are you concerned, however, that it would limit your ability to contract with MSOs? That's one of the questions

[Georgia Maheras, Bi-State Primary Care Association]: I have. So our health centers use group purchasing arrangements to get their staples order to be a cheaper deal, those sorts of supply things. They have different arrangements regarding electronic health records, MSOs as well. Don't actually I couldn't even think about all the ways private equity might be in different aspects of any business in the state of Vermont, not the least of which is an FQHC. And so I want to make sure health centers can continue to serve their patients, but also have access to tools that can do that. I mean, honestly, if they need an electronic health record to function, you can't bill. You're not allowed to bill Medicare without an electronic record, right? And what are the things that are in and out? And I also appreciate that we want to make sure there's no inadvertent problem like what happened in Massachusetts. No one wants that for the state of Vermont or for Vermonters. I think we want to ensure that

[Alyssa Black (Chair)]: those contracts don't exert control over how practitioners practice medicine.

[Georgia Maheras, Bi-State Primary Care Association]: Our doctors are very independent.

[Alyssa Black (Chair)]: All right. I'm

[Leslie Goldman (Member)]: sorry to be cynical, but I come from Windham County, Northern Windham County, and North Star decided to leave Bells Falls. So I don't have the confidence in if QHC is doing the right thing for a community. So that's sort of behind my understatement. So that's why I'm not sure why this is a bad thing. And I'm waiting to hear it. I know you're going to

[Georgia Maheras, Bi-State Primary Care Association]: look at it and come Thank you.

[Alyssa Black (Chair)]: Hi, I wasn't sure if you guys were sort of co testifying and I'm here supporting Kayla. Good

[Kayla Davis (Co-Executive Director, Battenkill Valley Health Center)]: morning, committee members. My name is Kayla Davis. I am one of the co executive directors at Battenkill Valley Health Center in Arlington. We're the youngest and the smallest FQHC in Vermont serving Bennington County. In the almost twelve years since our inception, we have grown from seven employees with one physician to 54 employees with five medical providers, a dental department, a psychiatric nurse practitioner, and five therapists. And we now serve more than 4,000 patients. Our ability to grow strategically and in response to our community's needs has only been possible with the access to debt financing. This has included mortgages, construction loans, cash secured loans, and lines of credit. The need in our community is still greater than we can meet, and our strategic plan includes the acquisition of additional space through debt financing and likely construction loans to renovate the space. We are also considering acquiring other practices, much like Rutland Regional Medical Center and Community Health Centers of Rutland did, in order to grow the primary care practices in that county, bringing those practices under our umbrella. And I also prepared with the previous language, so, I'm not sure if my sections still apply, but you'll get the gist. Section nine five two five point a two states that a transaction that involves financing the acquisition of a healthcare entity through the use of debt that will become an obligation of one or more of the healthcare entities that are a party to the transaction is prohibited. We fear the broad language in this section may impact our ability to grow into what we need to be to serve our community. This bill also imposes duplicate oversight on FQHCs, specifically sections nine thousand five hundred forty one and nine thousand five and forty two. FQHCs are regulated by the Health Resources and Services Administration of the U. S. Department of Health and Human Services. FQHCs are designed by HRSA with a built in safety net to block private equity from being able to take over. And I think this might answer, and I'm sorry you guys are so little on my screen, but the woman to my right of Georgia. Private equity requires control either through ownership, voting rights, or financial leverage. However, HRSA mandates that health center control stays with an independent patient majority board of directors. While we are Vermonters and we are honest and we do have good intentions, the structure that HRSA requires prohibits any control to happen outside of a board of directors. So if a board made a decision to bring in private equity, that decision before it could take place would have to go through HRSA for approval, and it would be denied. FQHCs cannot be owned or sold like a private company Anytime federal funding is used to purchase or improve property, the federal government gains a federal interest in that property. So you file federal interest, in the property with the town before you can do anything with that property, selling it, leasing it, the the federal government gets notified, because they have a federal interest in that property. Any dissolution or merger of a community health center requires that assets stay within the safety net system. HRSA only permits affiliations if they serve a legitimate health center purpose, and the health center retains ultimate control. So again, any merger, any contract, they're all approved by HRSA first and our board of directors. And and the language within those contracts must dictate that your patient majority board maintains ultimate authority. HRSA prohibits private enumerate and profit extraction. This means no part of an organization's net earnings can benefit private individuals. All compensation and contracts must be reasonable and defensible, And revenue must be reinvested in patient care. And ultimately, any change in control, even the change of the CEO, must receive HRSA prior approval or risk loss of grant funding. We undergo annual financial audits, which are submitted to the single audit clearinghouse, and ultimately can trigger investigation by the OIG. We undergo annual reviews of our clinical quality and outcomes data through the UDS report, which are all public. Anytime we expand a service line, add a new site, change our hours of operation, it must be approved by HRSA first, with assurance that the board has approved the change and will maintain ultimate control over that expansion. Adding another layer of oversight will be administratively burdensome and may at times create conflicts between regulators. While there are exceptions in certain sections of this bill for FQHCs, there are sections like 9533F4 where FQHCs are not accepted and the bill language, as written, cannot be conformed to given the structure of our organizations. For sections such as this, we hope the committee will consider leaning into the work of VOS, VMS, and others who have proposed language. The language in sections 9,534 C1 and 9,534 C5, as written, could affect an organization's ability to manage visit durations in the primary care setting and limit our ability to manage provider privileges. While we in no way want to dictate clinical decision making, there is a need to set productivity expectations to remain financially solvent and grant clinical privileges based on experience, skills, scope of practice, and licensure. This is the responsibility of administrators to ensure access and quality of care. And finally, section 95218E, the definition of health care services includes technology associated with providing those services to include electronic health records, software, claims processing and utilization systems. These are not services, they are tools. Our access to these tools cannot be limited by the potential for private equity in those companies. We depend on an electronic health record, Office three sixty five, group purchasing arrangements, etcetera. Without these services, the operations of our organizations will be paralyzed. And doing a deep dive into each of these business models is not administratively feasible. Our healthcare system is financially fragile, and access is extremely limited across our state. We are in a substance use disorder pandemic epidemic. We fear that this bill as written with overly broad language will further limit our ability to grow and will place duplicate regulations on our organizations. I want to thank the committee members who've asked questions that are so thoughtful in ensuring that this bill does not have unintentional impacts on access across the healthcare system.

[Alyssa Black (Chair)]: Thank you. And as we work through the language of the bill, I think we will have answers to concerns and worse, I keep using the word iterative. Bill is iterative. Go ahead, Leslie.

[Leslie Goldman (Member)]: I was just hoping that, Kayla, you could submit your testimony because you went by fast and I couldn't follow your sentence. Absolutely. Thank you.

[Alyssa Black (Chair)]: Any questions for Kayla? Karen? Hi, Kayla. At one point you mentioned you might be interested in acquiring other practices, and I'm wondering how you envision that happening.

[Kayla Davis (Co-Executive Director, Battenkill Valley Health Center)]: I'm not sure if you're familiar with the model that Rutland Regional Medical Center and Community Health Centers of Rutland underwent before I was in this position twelve years ago. But basically, they worked collaboratively to, to absorb private practices as providers were retiring in the community to ensure access at the same level within the community and as the hospital, divested primary care from their umbrella because it is, a lost leader, the community health centers was able to absorb those again so that the access to primary care, which is the least expensive, highest value care provider, was able to have a succession plan for those practices. So they came under the FQHC umbrella, those services remained, and even expanded. So Community Health Centers of Rutland is now the largest FQHC in the state, with sites all over the county. But basically we want to be able to create a model where we're serving every part of our county. We don't just provide medical care. Provide, as Georgia alluded to, we do, we screen everyone for social determinants of health. We have food pantries in both of our health center sites. We're making sure that people are enrolled in insurance. We host veggie van go. We're doing outreach in the community. In addition to having folks who are doing chronic care management to make sure people with diabetes and hypertension and chronic conditions are coming in every three months. Keeping them out of the emergency department, which is the most expensive care that you can receive or express care, which is wonderful and serves a need, it does not manage chronic conditions. So our goal is as the community, the landscape within our community of healthcare shifts, we can be part of the solution to maintain access and hopefully even expand it. Thank you.

[Alyssa Black (Chair)]: Thank you. Thanks for joining us. Thank you. You. All right, on Zoom, I think we next have Audra Sprague. Hi, Audra. Thank you for joining us. Happy birthday. Oh, and Audra, is it your birthday?

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: My birthday? No, it's not my birthday.

[Alyssa Black (Chair)]: You a happy birthday behind

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: It was my son's birthday.

[Alyssa Black (Chair)]: I didn't know you could see that.

[Leslie Goldman (Member)]: Well, happy birthday to your son.

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: That's so funny. I'm like I'm like, why would she pick October now? That's

[Alyssa Black (Chair)]: so funny.

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: How are you? Thank you so much

[Alyssa Black (Chair)]: for giving

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: us some time

[Alyssa Black (Chair)]: to introduce yourself to us and share with us your testimony.

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: So, my name is Audrey Sprague. I am a registered nurse. I worked at Nashoba Valley Medical Center, which was owned by, Steward Healthcare and subsequently closed by Steward Healthcare. And I was the, the president of the union, I had a lot of insight into the other hospitals that, were owned by Steward and what happened in, you know, their ownership time and their subsequent either being transferred to another company during the bankruptcy or closure. So I can tell you my experience with private equity and the other hospitals and what it's done to our region and our state, and it's it's changed the way I look at everything. Like, I honestly when I first started in health care years ago, I thought, you know, everybody, every healthcare worker, every company, they want to do their best. They want, you know, what's best for the patients. I think everybody assumes that when they drive by a hospital, that what is being done and staffed and supplies and how they're running it is all for the best of the patients. And that's changed. And it's not the case anymore when a private equity or even any for profit company comes in. It's about making profit a 100%. You know, I've seen it firsthand. And a hospital, in my opinion, shouldn't be anything that's invested in for anyone to make money off of. I get it's a business. I get it needs to, you know, maintain a profitable, quote, unquote, business and positive revenue, but not for other people to make buckets and buckets of money at the expense of the health care system in our area. I can explain to you how private equity kinda convinces hospitals to sell with all the experience I've had with it and the research I've done and different stories I've heard over the course of the closure process in the past few years. Because I think one of the women said that testified earlier that the hospital boards care, the administrators care about the patients. Lots of them have worked their way up, you know, have been there for years. I had been at our hospital for years. I wore on my badge every day my grandmother's ten year service pin when she worked at that hospital. Yeah. So, you know, they're very invested in it, but they've done nothing but try and try to keep it profitable over the years because it's very underfunded, and it's hard. So, you know, they're tired. And, you know, it's not like private equity boards and firms walk in and say, hey. We're here to extract all the value we can, and then we're gonna leave. You know? They come in with a very specific constructed plan and kind of presentation to say everything that the people that are running the hospital need to hear to address their fears, the exhaustion, the desperation they have because they don't wanna close the hospital. They don't want it to fail. They wanna keep it open. And so the private equity firms come in and play on all of that. You know, they say, oh, we will be partners, and we're not gonna be owners. And they talk about collaboration. They promise operational support. They assure the boards and the clinicians that the medical decisions will remain local. But in reality, the controls go almost immediately to a central corporate office and people that have nothing to do that have probably never stepped foot in the hospital that they're making the decision for. You know? They keep their tie the clinicians keep their titles, but they have no authority. You know? The decision on what's to be spent and on what and when, they don't have any say in anymore, and it happens very quickly. You know? Then it comes to a promise that we're gonna save your hospital. You know? They the hospital they're at is vulnerable because all of most small hospitals, even big hospitals these days are vulnerable. You know? They're facing labor labor shortages, declining reimbursement, the aging infrastructures of hospitals, and the private equity firm will position itself as a last lifeline. And the choice is framed to these boards that, you know, sell to us or your hospital's gonna close anyways. And maybe it will, and that's a discussion for another hearing about another bill on funding. But, you know, it's it's playing on their fears, and it's not a true statement of what the goal of these private equities are. You know? In reality, private equity firms have a plan of about four to seven years, and they wanna strip all the assets, and then they're gonna get out. You know? And all they want is to see what they can make money for. They talk about efficiency and which always means fewer staff, less people to care for the patients, pushing patients through faster, doing more with less. Sounds like it's a neutral statement, but in practice, less usually means less people to care for the patients. And health care systems have already cut down to the bone. You know? It's been years and years of doing these, you know, lean programs and, you know, getting as few people employed and get, you know, good patient care. And this is with boards and administrators who care about a place and aren't looking to just get every profit out of it. Know, they'll invest millions in your hospital when, you know, they're not investing millions. They're often using the investments that they're giving by funding it with more debt that they've put on the hospital, either by selling off property, selling off buildings, you know, then giving them new rent to pay. You know? And so it looks like they're investing, but it's really leaving the hospital less financially sound than they started. You know? It's you know, if you think about it, how an investor thinks that they'll be benefiting from investing in a new roof or a new generator, they won't. They hope to defer the maintenance until they're gone, and they don't have to do that part. You know? So, they also work hard to appear mission driven. You know? They highlight physician founders and CEOs that are physicians. And in Stuart's case, that was extremely effective for them. You know? The boards that are making these decisions to sell, they think, oh, they're one of us. It's a doctor. He understands medicine. You know, he wouldn't do anything to harm them. And maybe that's the goal in the beginning of the doctor that this firm hires, but over the course of time, it it changes, and I can guarantee that for you. You know, the good intentions and the good messaging don't change the structure of the business model that they have. You know, it is what it is. And, you know, then they'll assure you that they sorry about that. That they'll protect jobs, but in the fine print and services. But in the fine print, it's really for a limited time, subject to market conditions as long as it's financially feasible. You know? And private equity doesn't plan for decades. Like I said, you know, their window is about four to seven years because they know their business model can't sustain it much longer than that. And even if the promises are made with state and local administrators in the sale to get it approved, what they promise is often not kept, and there's nothing anyone can do to stop it. These are humongous firms with billions of dollars in backing. For an example, Stewart purchased Quincy Hospital, which was one of the first when they first bought all the hospitals, it was 10 hospitals that they owned. They bought Quincy Hospital in 2011. One of the stipulations of the sale was that they would keep it open for a minimum of six years. Once they finalized all 10 purchases in Massachusetts, they closed Quincy Hospital in 2014, just three years after they purchased it. They argued that census was declining, that it was no longer sustainable. But when you dig into what they had done, and you talk to clinicians that worked there over that three year period, they did a systematic strangulation of the finances in that hospital. They closed departments. They stopped having specialists go there so patients couldn't stay there. They had to be transferred to another hospital. So it looked like it was declining more rapidly than it was because Steward wasn't putting any resources in the hospital. So, you know, then they their big promise is that we're taking all the risk, and it's simply not true. When Stewart collapsed, investors didn't lose an emergency department. They didn't lose maternity units or access to care. The patients did. The nurses lost their jobs. The doctors lost their jobs. Entire communities. There's 26 towns in our region that were affected by it. And millions of people now over the whole 31 hospitals that Stuart owned were affected by this. And, you know, they're crippled they crippled the health care system in Massachusetts costing taxpayers millions of dollars to bail out the hospitals. You know, the CEO, Ralph Tilatorre, still owns his $40,000,000 yacht, and he still owns his big mansion and his big ranch, and nothing has happened to him, and everything has crumbled behind him. You know, once the private equity firms step in, it's like making a deal with the devil. It sounds dramatic, but I promise you that's exactly what it is. If they have any any reach at all, they will use it. You know? At Nashoba, these dynamics unfolded slowly, and then all of a sudden, it seemed all at once in the past in the last, like, four years. Staffing became unsafe. Equipment upgrades were delayed. Clinicians left because they couldn't practice there anymore. Or they made it so hard for them to practice there that they just, you know, couldn't deal with it. And there was years of warning to state administrators and government oversight agencies from all of frontline staff on all the hospitals that owned by Steward. And there was nothing they could do to do it, to stop it. They ultimately closed the hospitals. These corporations are making so much money that any fine imposed, on them, it doesn't matter. It's it's a drop in the bucket to them and not complying with whatever regulation is more profitable to them than complying with it. So they will pay the fine or they'll hold it up in court for years and years, and nothing ever changes because they just have a team of everybody to stop it and to get around it. And that's all they do is work to be able to make profit. You know? And once our hospital was closed and the community lost it, the ambulance transport times increased. The emergency departments all in our area are very overwhelmed. Getting appointments with specialists is months and months because we just don't have anywhere for them to go. You know? And it wasn't an accident. It was a predictable outcome of a financial model that prioritizes taking out the profit and leaving what's left with nothing, you know, not a sellable business or even a business that can sustain itself. You know, one of the first things that we noticed was that they removed, like I said, the local hospital's access to the accounts. They couldn't pay any vendors. It was all up to corporate what could be paid. And even down to the smallest thing, it sounds technical, but, like, little things. Like, we had a local landscaper that this company, I don't know, probably had five, six employees, had been doing the grounds for years and years. After Stuart took over, months would pass, and he wouldn't get paid. And then sometimes he'd receive partial payments and then nothing, but he kept mowing the grass. Like, this was the hospital he came to, and he kind of thought, well, eventually, they'll pay me, and he thought they'd do the right thing. And then eventually, he couldn't afford to do it. He had to he had to stop doing it. He'd had they owed him thousands of dollars. So the grass grew around our hospital in a functioning hospital to over two feet tall. And it was so bad that the FAA, threatened to revoke access to med flight coming and landing on our helipad. Stuart still didn't care, still didn't pay the bill, and our CEO who had worked his way up from, like, a phlebotomist there, had been there for years. And our ED director had to come out and mow the grass on a weekend themselves so that we could have med flight access so that we could not look like an abandoned building at that point when we were functioning. You know, they stopped paying vendors, like companies like Stryker that do all the implants for knees and hips, the lenses for cataract procedures. Like, so these patients were ready for whatever procedure they were gonna have that day, arranged transport, had fasted, had taken time off work, and were told that morning, oh, we can't proceed. We don't have the implant. Not because it didn't exist, not because it was on back order, or they weren't able to get it. It was clearly because Stewart had not paid the bills with the vendor and the vendor wouldn't supply it for us because we were so piled up in debt in what we owed them. Another more tragic example is Stuart Hospital owned St. Elizabeth's Medical Center in Boston. A mother ended up dying because a critical embolization coil had been repossessed by the vendor for nonpayment. Corporate knew that the device was needed. The nurses had literally brought it up time and time again saying that we don't have this. We need it. If somebody hemorrhages, you know, we need it. They chose not to pay the vendor. This new mother hemorrhaged after giving birth and ultimately died and leaving this baby motherless. It didn't matter. They played the odds and they lost in that aspect. But still today, that family, I just saw a documentary about it, that they haven't been paid a dime in the malpractice suit because Stewart's wrapped it up in court with all the bankruptcy and everything else. They stopped paying shredding companies. So bins overflowed of protected health informations, names, diagnosis, social security numbers. Staff were instructed to take it. We were told to take it, put it in trash bags, put it in cardboard boxes, and they would lock it up in different offices and buildings, until Stewart decided to pay that bill. And then after months and months of us stocking it in different offices, you'd go into different people's offices and there would be boxes of protected health information just sitting there waiting. None of these decisions ever improve patient care, not in the slightest. Don't improve safety, but what they do improve is cash flow to the people who are investing and the shareholders. You know, the real estate transaction that sealed was just illustrates their model from the beginning. In 2011, Stewart purchased just Nashoba Valley. I can't do all the numbers for the other eight or at that time, I think eight hospitals were still functioning. They sold they bought Nashoba with all the land, all of the functioning business, everything, the buildings for about $8,000,000. In 2018, seven years later, they sold just the real estate in the building to Medical Properties Trust for $94,700,000 and took all of that money out. They left our hospital with a what's called a triple net lease, which meant that we were responsible for the rent, the maintenance, and the property tax. Putting a new monthly payment on our hospital that we didn't have any mortgage, before to August a month. Like, I am not a financial analyst, but I can tell you that those numbers don't work for a hospital that's not making huge profits. You know, it's a small community hospital. From that moment on, there was nothing. I don't think that could have stopped. We didn't know it at the time, but that could have stopped the closure. They took $86,000,000 in that sale and didn't reinvest a dime back into Nashoba. They bought hospitals in Florida and just kept expanding. You know? They let the infrastructure crumble. We would have I remember sitting at the nurses' station in the emergency department, and above us was where they would do dialysis. And every now and then, all of a sudden, the dialysis the dialysate, like, the waste from it would start leaking through the ceiling because the sink would get clogged. And you'd have to be somebody'd be like, oh, that's gonna leak. We'd have to call maintenance. And it was time and time and time again. Like, and it was nothing that they ever tried to fix. From 2011 to 2024, when Stewart ultimately filed bankruptcy and left, they closed four of the 10 hospitals that they owned in just in Massachusetts and leaving the other six in terrible condition. Even though they are still functioning today, another one is in the process of ultimately closing and becoming just a stand alone ER. It's not mismanagement or bad luck. It's just how their design the model of a private equity is is designed to function. And that's you know, they took everything out of it. You know? They want free rein to do whatever they can to benefit the shareholders. You know? And, you know, nursing is often the first place that private equity cuts because and they don't care that it's a matter of patient safety, but hospitals aren't reimbursed for nursing They receive bundle payments regardless of how much how many nurses are on the unit. So same amount of work has to get done whether there's 10 nurses or 20 nurses. Costs less to have 10 nurses. So it's no skin off their back. If they have less nurses, it's saving them money. We're a cost center, that's all it is to them. So the less they can have, the better for them. Even though nurses know, everybody knows that decreasing staff increases infections, falls, complications, death, all of that. But they don't it shows up later on. It's not immediate. Me personally, I experienced effects as a staff with the cuts as nurses and working in that environment and also as a patient myself and a caregiver of my children who were in there. I can tell you a very personal story that on July 2023, my youngest son was diagnosed with type one diabetes. I brought him to the emergency room that I worked at and trusted every single nurse there. His blood sugar was 705, and he was in diabetic ketoacidosis, which is a life threatening complication of type one. The staffing cuts there had been long standing, and it was normal to only have two nurses overnight no matter what. And it was normal quote unquote, for patients to board in the ER for days. Meaning, they have they have been admitted, but there's no physical bed for them. My son required an ICU level of care because he was on an insulin drip and had DKA, which would usually mean if he was up in the ICU, the staffing would have to be one to one nursing for him at that time. There were no ICU beds. But let's be clear, when they say there are no beds, it means there are no nurses to staff the beds. There were physical beds open, but they didn't have a nurse. It cost them more money to have a nurse come in and care for him appropriately in the appropriate setting than it does just to board him in the ER. That night in the ER, there were 18 patients. Two of them were ICU level and there was only two nurses on staff. And not to mention the 18 patients were total boarders and all the other ones that were coming in and out, you know, with whatever little emergency, medium emergency that night. Those nurses did everything they could to meet all the needs of all the patients, but it's impossible if they couldn't. And so I had to take care of my son myself. I had to manage his trips. I had to manage everything for him. And because they didn't have the attention to do it and monitor him as closely as he needed. And you might think like, well, you're an ER nurse. Like, you work in the department. What's the big deal? But the big deal is that that night was the hardest night of my son's life and the hardest night of my life. He was diagnosed with a life altering disease and was critically ill, and he was terrified. And honestly, so would I. And because I had to be his nurse and focus on all the technical aspects of his care, it meant I couldn't be his mother. And I couldn't be there to comfort him. I couldn't be there I mean, all this time later, still chokes me up. And, you know, Stuart stole that from him. And for what? So that someone in a c suite could get a few extra dollars, you know? Like, studies show that the mortality rate increases by an average of fifteen percent for ICU patients aboard in the ED. And Stuart was fine with playing with that risk with my son's life. And that's how what our health care system has come to when it becomes money. And that's just one story on one day in one hospital. You know? It's just no matter what, nothing good for patient care comes out of trying to get profit out of it. You know? It's it's not a normal market. Hospitals are not making widgets or putting handles on buckets. There are, I'm sure, a lot of business structures that PE works great for, you know, but health care is not one of them. It's an essential infrastructure of public health. You know? When private equity representatives tell you that they'll save the hospital, you know, save them from who and for how long? They're not saving us from anything. You know? It's not a commodity. It's something that it's a public health anchor. You know? We regulate who can own utilities, who can own water systems and power grids, but and because you can't failure in those things are unacceptable. And health care deserves that same protection. You know? And right now, you have the opportunity to act before these experiences that I've had come into the state of Vermont. And it's essential to keep them out. I'm I'm telling you, it it pauses no good. I've never heard any health care worker, any nurse, or any patient that has said it is better at that hospital since it's become a for profit facility. It just doesn't happen. You know? And, you know, after listening to this testimony, if you decide not to pass the bill and allowing private equity in, you know, all these things that I've just explained will happen. And, you know, it was told and you can see it everywhere. And so I hope you pass the bill and I hope, you know, you get the strongest protection you can to keep them out of your state. Thank you.

[Alyssa Black (Chair)]: Thank you, Audra, and thank you for reminding us. People keep asking me why am I doing this bill because it's not really a problem in Vermont. I'm doing this bill because eventually it will become a problem in Vermont and I want to stop it before it happens.

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: 100%.

[Alyssa Black (Chair)]: I've got Leslie and then Brett.

[Leslie Goldman (Member)]: Thank you, Audra. Really compelling and emotional. And I appreciate your story about your son. I have the same story about my son. Totally relate. I didn't have to take care of him. So I'm grateful for that. I'm a nurse as well. I'm wondering in your experience, have you come across any impacts in the outpatient world? We heard from FQHDs today and I'm just wondering if you have any experience or no?

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: I mean, I can tell from the PTOT and anything that's a billable service. We had a diabetes clinic and we had a pain clinic and anything that was billable, it was get more patients in faster, spend less time with them. And it doesn't matter if they didn't a 100% understand the instructions or a 100% understand their new meds. Like, you've got, you know, a patient every 15. There was no time to spend if you needed it. There was no because spending the time with one patient, you're still getting the same x amount of dollars. So, you know, the faster you can get it through, the better. And I, you know, I always use the analogy at work. I'm gonna age myself terribly, but the Lucille Ball with the

[Alyssa Black (Chair)]: You know?

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: Conveyor belt of candy. Like, you can only wrap so many candies. Yeah. You can only wrap so many candies so fast without it starting to fall apart, but they want it as fast and as full as you possibly can. So I don't have any specific off the top of my head examples, but I can tell you that it was more a strain on all the healthcare workers because they would just wanna go faster and make more money. Thank you.

[Alyssa Black (Chair)]: Brian, sorry, was thinking, there was somebody else with a question.

[Brian Cina (Member)]: It was me. Yes. It still is. Still. So you just heard, think, Representative Goldman reference to our outpatient facilities, we've been hearing, I don't know if you've watched our testimony at all on the bill, but we've been hearing that in Vermont, nursing homes and methadone clinics are two of the components that have been targeted. What I'm wondering is, you talked about the wide range of harm and how it played out over time. Could you focus for just a second again on the early warning signs? Like if we're looking at, because we heard we're trying to prevent something, but my concern is it may already be happening and we don't see it yet. Like illness sometimes be occurring and you don't know it yet until it gets to a certain point, and then it's not stoppable. Cancer can be like that. So I see them akin to a cancer, a financial cancer, so to speak. They invade and then before you know it-

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: 1000%.

[Brian Cina (Member)]: Yeah, they metastasize. Yeah,

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: mean, it's

[Brian Cina (Member)]: a little dramatic. So what would be the early warning signs or symptoms that private equity is causing?

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: I think honestly, submitting like you were just talking before we started testifying was the not submitting the reports, not submitting the, you know, things that kinda say what's going on in that facility. And that was a big thing that Stuart did first couple times when Martha Coakley, who at the time was the attorney general, put some regulations on them for the first, I wanna say, like, two years, three years. And then after that, they were given free range, they just didn't report anything. And so there was no real way to monitor them and no real way to see the first easiest cut, like I said, is nursing. There's nothing billable most of the time on an inpatient, and I'm sure it's the same. I can tell you when I worked in a nursing home, I was an occupational therapist for ten years before I became a nurse. And for a short time, worked in a nursing home. And I remember and it may have changed because, like I said, it was almost twenty years ago. But, like, rehab in a short term acute facility, which is what they used to call them short term rehabs, but they were essentially they were nursing homes. There was not much rehab going on. That it was the reimbursement was based on how much therapy they could get. So if I came and I did my eval and I said, okay. They'll get a half hour of therapy a day. This lady is 99 years old. Like, you know, it's not like she's got a lot of potential to become, you know, much stronger and but this will maintain what she has. They would only get x amount of dollars. But if you said, oh, no, this patient can get three hours of therapy a day, the reimbursement was much higher. So, everybody was getting the highest level. Didn't matter what your rehab potential was. You were almost forced to say, yep, okay, and put them in these ridiculous groups that were just to tick a box of therapy time, which is why I quit there. But and the nursing so now they're you know, everybody meets the same rehab goal, which is crazy because that's not gonna happen, but they're getting the highest reimbursement rate and the lowest amount of actually non reimbursable staff. If you can somehow track that, you can see over time, like, oh, you're constantly not filling positions, not posting positions, or you just don't even have that as a basic staff level. Those are the things that are the easiest and the quickest to cut. So they're getting money in, and they're paying less money out. And then that's how you're seeing that's how the care deteriorates.

[Brian Cina (Member)]: Can I just summarize maybe some of the diagnostic tests we could use? Not to punute a metaphor, looking at treatment plan, patterns and treatment plans, looking at reporting habits, looking at billing patterns and utilization review of these facilities, and looking at their staffing and scheduling and patterns. Those are some things we could potentially look at that we can measure.

[Alyssa Black (Chair)]: I

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: I think it would be the easiest. I know in Massachusetts, I don't know about Vermont, they have a website, a patient care link, each hospital has to report their staffing, direct patient care staffing on each unit for every hour of the day. And you have the plans for ten years back. And then at the end of the year, they have to say, okay, this was our say for the ER, our average work hour per patient visit that our goal was gonna be. We were staff you know, we had to see 50 patients a day. This is how many hours a day we were gonna have staffing. But our census was higher or lower, so we ended up having a variance to that goal of whatever for, you know, it was now three point something hours of per patient visit. Or if it was an inpatient unit, the work hours per patient day. And you could see if they were dropping over the year if they're reporting it correctly. You know? Who knows if they're actually reporting it all correctly? But it was it's a public website you can go to that anybody can see. But it was a required thing that the hospitals have to report if you had that for places. I mean, maybe that would help and they have to then justify how off it was at the end of the year.

[Brian Cina (Member)]: The other question, which might not fit in your scope of what you saw, but it might, that's why I want to ask is, because you were describing the experience of a person on the ground providing direct service and what you witnessed around you. Intersects with that role, I'm curious about their acquisition of not only the facilities, but of the tools. During your testimony, I looked up a few common billing and EHR tools that I myself as a healthcare worker that I use and providers that we work, we know, some of the programs we know. And one out of the three I looked up is already backed by private equity. I was like, Woah. It's like my clearinghouses. So I'm like, Oh, great, great. So they're making money off of my billing. So I'm wondering if you saw how they handle those tools. For example, did they buy the EHR that the hospital was using as well? And did they also undermine the integrity of that? Are you aware of how they might extract some of the tools?

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: I don't know Okay. Specifically. I know that they designed medi we

[Alyssa Black (Chair)]: use

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: Meditech, and it was one of the oldest versions of Meditech because it was the cheapest. But I don't know about the billing afterwards. I know that they, you know, billed crazy amounts for some of the things that I thought, like, what afterwards when my son was there, I asked for an itemized bill because as a nurse in the ER, I don't see the billing. I don't see what happens afterwards. Yeah. And so I was curious. I'm like, could I get an itemized bill of what was billed to my insurance? And and the funny thing is I took care of them, and they still billed me for all the the infusion care and

[Alyssa Black (Chair)]: I was so

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: infuriated. I like, I can't believe they're going bill me for it too, even when I was the one I took care of. But I don't know anything really about how they did that.

[Brian Cina (Member)]: Thank you though, for being honest about that. We can ask other witnesses if we need to. Were

[Karen Lueders (Member)]: the hospitals in Massachusetts for profit or nonprofit?

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: Right now, mean? Are they When

[Karen Lueders (Member)]: when the private equity firm came in.

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: So before they were Stewart bought the 10 hospitals that they owned, I think the first five of them that they bought were the Keritas system. So they were owned by the archdiocese, and they were a Catholic hospital. So they were all nonprofit. And then they had to sell because of their financial issues with all of the stuff that was going on at that time. And so those I know were nonprofit. We were owned by myself at our hospital, and one other one was owned by a small for profit company called Essent before that, but they had almost no involvement in the four years that I worked there. They weren't private equity. They were for profit, but they were so small and you never heard anything about corporate. It didn't feel any different than when it was a nonprofit hospital. And the other ones, I'm pretty sure they were nonprofit, but I don't know.

[Alyssa Black (Chair)]: Any other questions? I really appreciate you joining us today and sharing your experience. Thank you. Again, this hasn't happened in Vermont and we don't want it to happen in Vermont.

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: Yes. That's all I can stress out of everything I said. I'd like just don't let them in. That's the only thing I can tell you because they will find a way around every regulation that you put. They just that's all they do. They sit there all day and, you know, try and figure it out, and they they do. They just have so much money.

[Jennifer Carbee, Office of Legislative Counsel]: So

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: but thank you very much. Have a good day.

[Karen Lueders (Member)]: Thank you.

[Brian Cina (Member)]: Thank you

[Alyssa Black (Chair)]: very much.

[Audrey (Audra) Sprague, RN (Formerly Nashoba Valley Medical Center)]: Yep. Bye bye.

[Alyssa Black (Chair)]: We're not right till 11:30.