Vermont Legislature SmartTranscripts:

[Speaker 0]: Welcome back everyone. So we have Commissioner Groves with us from Department of Remote Health Access and ready for your budget presentation. Take two.

[Commissioner Groves (Department of Vermont Health Access)]: This morning, we'll give you an overview of Veeva, both our admin and program budget, some of our one time funding requests, hopefully, if time allows, some key accomplishments from this past year. As the secretary laid out earlier this morning, budget process was a joint kind of done by the joint executive leadership team and really kind of focused on our priorities around housing and substance use and mental health, health care affordability, sustainability and quality. With that, we really shared that one agency, the shared responsibility. These were hard conversations that we had. But we came together because we realized each one of our departments plays a significant role in the health care. For Diva, our mission values, you may have seen these that have not changed. Our mission and values have not changed. But what has changed is that I've been here for, what, a year and a half now? And so I figured we'll shake things up a little bit. I listened. I learned. I came to stakeholders with an open mind before making any sort of changes and really felt like, where should diva go in the changing landscape that we see both federally and at the state level? And for us, really thinking about three priorities that are outward facing. Those are champion member centric excellence, really thinking about how do we serve Vermonters, striving to put the members first in everything that we do, thinking about the policies and the programs and how that impacts the members, and really guiding our operational decisions there. Second is promoting a high quality provider network. Coverage is not enough. We know that we need access to providers and making sure that we have an enrolled provider network that has and so one. And then the third one is advancing population health and quality improvement. Thinking about the whole health of a person, not just the medical bills, but just how do we ensure members have access to preventative care, like checkups and screenings, and then making sure that the providers have the tools that they need in order to serve our beneficiaries. The last two are really inward facing in terms of making sure that we can accomplish those three. That's strengthening our operational infrastructure and system modernization. And that's how we operate behind the scenes. And the last one is, finally, none of this happens without the people that work for Kiva. And so while it may be our last priority, it probably is probably our biggest one, ensuring that our staff are trained, that they're building leadership, and that they feel like they have a place to work and stay, and that they are supported. Diva serves a unique role in the month's Medicaid program. It serves both as the Medicaid managed care and also has four Medicaid program functions. And this dual identity allows us to directly align our policy, financing, and care delivery in ways that other states here have separate managed care health entities as well. Different. So it requires Diva to balance regulatory oversight with operational accountability, ensuring that Medicaid not only meets the federal standards but functions effectively as a health plan serving local monitors every day. And then so turning to our budget, for those who want to follow along in our budget book, that will be we'll start on page 47 of of the book. And I want to point out that the numbers reflected in the PowerPoint represent the totals across all the Diva sections in the ups and downs. So what you'll see is a more accurate number. But we can also dive in. We can also go to the ups and downs spreadsheet if we need to. And just as a reminder, the agency was managing about a $7,400,000 shortfall. So this is what shaped the aspects of the budget. We have not proposed new initiatives beyond what are required by federal and state law. And we are recommending several reductions to that. So in terms of staffing, this reflects the impact of the PAY Act. It's the annualization of the eight new positions in VCCI who go out for justice reentry. So they are the ones who go out to the depressions and meet the patients who are eligible and help plan care before they come out and coordinate that post afterwards. And then the benefits and then the vacancy savings, Diva's current vacancy and turnover time is running just over 5%, which which is above the 3% level that we currently have budgeted for.

[Speaker 0]: Is this is this the position or the program that we got an eleven fifteen waiver for last year?

[Commissioner Groves (Department of Vermont Health Access)]: The VCCI. Yeah. The sessions. Yes.

[Speaker 0]: To support people before they're released from corrections and then supportive around services afterwards. Okay.

[Commissioner Groves (Department of Vermont Health Access)]: Any other question?

[Speaker 0]: So there's only you have 1.10.61 here, general fund 137 gross. That doesn't on your slide in your book, you have been reversed. Is it supposed to be 1.37 general fund, 1.61 gross?

[Commissioner Groves (Department of Vermont Health Access)]: It is. I know you that is correct. And I think that's because of some interdepartmental transfers that you're seeing a lower gross.

[Speaker 0]: Okay. Thank you.

[Commissioner Groves (Department of Vermont Health Access)]: Turning over to contracts. One of the things that we did as an as as an agency that the secretary mentioned earlier, we're making those kind of difficult decisions of looking at efficiencies. And one of the contracts of the Vermont Legal Aid Medicare Assistance Advocacy Program contract, and where the contract is meant to recoup Medicare funds for dual eligibles. However, over the years, we have consistently paid more for that contract than what we have reached from when we have gotten back from Medicare. For instance, our return on investments in 'twenty four was 60%. In 'twenty five, it was down to 15%. And right now in 'twenty six, we're running through the December. We've gotten around 47%. So we're constantly we're consistently paying more in that contract than we're actually benefiting from.

[Speaker 0]: Go ahead, Lori.

[Rep. Lori Houghton]: So I guess my question is, do we know why that is? Is

[Speaker 0]: it whatever?

[Rep. Lori Houghton]: I don't know what it could be about. But do we know why? And if we don't do it, what's the negative effect of not being able to recoup any Medicare funding?

[Commissioner Groves (Department of Vermont Health Access)]: So we'll still be able to recoup Medicare funding because Diva internally has a Connect Ornation of Benefits unit that does some of its work, too. It does the work, too, as well. Alicia, do you want

[Alicia (DVHA staff)]: to speak more to the why? Sure. I think there are a few reasons that I've heard about, and I'm not deep subject matter expert here, but I think there have been increasing challenges over recent years with the greater presence of Medicare Advantage also affecting how providers are able to interact with building and recruitment processes. And I think that if the contract were to continue, that's something that we would certainly work on in conjunction with the vendor. But as the commissioner noted, it is an area that we would identify when we were reviewing our full slate of contracts where we were not equaling our expenditure with the recoveries that we've seen in the

[Rep. Lori Houghton]: last several years. And are you concerned that with most of Medicare Advantage leaving Vermont, that why won't continue to be an issue? I think it's possible. I don't think I want to speculate too much. And were they notified of the cancellation and did

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: they provide any feedback?

[Alicia (DVHA staff)]: It has not been canceled. The proposal of the cancellation? We did not discuss the proposal of the cancellation in advance because it was part of the executive privilege with the governor's development of the budget proposal.

[Speaker 0]: The

[Commissioner Groves (Department of Vermont Health Access)]: next set of contracts is an increase of $27,000 General Fund. These are

[Speaker 0]: contracts to

[Commissioner Groves (Department of Vermont Health Access)]: help support our chief medical officer. We have two contracts, one for mental on the mental health side and one to handle kind of pre authorizations for us. And so that's just an increase in that of those two contracts that we have for our medical officers. The next set is for our IT systems. We have the MMI INS, which is the Medicaid Management Information System, which is our core claims processing contract, and that has updates and maintenance. The second one is our cost center contract with Maximus. And then the HEDIS contract, we are recommending discontinuing our HEDIS measure, which is our quality measurement. Helps with our quality measurement calculator quality measures. The MDWAS, the Medicaid Data Warehouse Analytical Solutions, now has the ability to provide those measures. So in looking at where we are, where there were duplications in our efforts, this is one of the contracts that we can cancel.

[Speaker 0]: Talk about the MMIS updates and maintenance. This is up. What is the whole contract?

[Commissioner Groves (Department of Vermont Health Access)]: Allison, do you have the whole contract?

[Allison (DVHA staff)]: No, I don't have it at my fingertips, but we can take

[Speaker 0]: a look and apply it.

[Commissioner Groves (Department of Vermont Health Access)]: We can get that number for you.

[Speaker 0]: Okay. Let's yeah. Let's do that. These perenniales show up everywhere, in VAA, in budget. Just wondering what we're getting. Leslie, did you have

[Rep. Leslie Goldman]: Yeah, I'm just a curious about the HEDIS contract. Those measures are frequently used sort of beyond us to get insurance. I'm not exactly sure, but I know they're used as important. So does the MDWAS provide the exact same service outside of AHS?

[Commissioner Groves (Department of Vermont Health Access)]: So MDOS will be able to calculate those.

[Rep. Leslie Goldman]: I'm wondering about the external world. Does it serve the same purpose?

[Commissioner Groves (Department of Vermont Health Access)]: Yeah. So for the state, it's able to calculate the HEDIS measures, and we're able to send that out. We use this HEDIS contract to report out to the Fed, people like the Fed. So that is one of the things with the MD was, we're now able and that was what this contract was doing, was just calculating the quality measures for us. And so with MDWAS, we are now able to do that internally, and therefore, we don't need that contract anymore.

[Rep. Leslie Goldman]: But does the MDWAS data provide the same information externally through the Feds and other places that we need to do TDIS measures that we have been using?

[Commissioner Groves (Department of Vermont Health Access)]: Yeah, it allows us to part of the functionality of MVWAS is to provide reporting to the Fed and external

[Rep. Leslie Goldman]: other partners. Yep. Thank you.

[Speaker 0]: I'll ask real quickly back to VLA. You have it that you're canceling their contract. What what is their contract through at this point?

[Commissioner Groves (Department of Vermont Health Access)]: It's through to remember when it's through. I think it's a it's a five year contract in which we procured it last in 2025. So five years will be held twenty thirty, twenty twenty nine.

[Speaker 0]: So we just renewed it?

[Commissioner Groves (Department of Vermont Health Access)]: Yes. By statute, we have to have this contract, and we did not know whether this was going to go into the the government proposed budget. And so we had to have a contract for this year, for 2026.

[Speaker 0]: Go ahead, Lori. So if

[Rep. Lori Houghton]: it's in statute, do we need policy language to take it out of statute? Yes. Is that being recommended to us?

[Speaker 0]: Yes. Is it in the budget?

[Alicia (DVHA staff)]: It's in the budget. Yes, it is in the public department. Language, okay.

[Speaker 0]: Can you

[Rep. Lori Houghton]: just let me know? Yes. Go

[Speaker 0]: ahead, sorry.

[Commissioner Groves (Department of Vermont Health Access)]: And then turning to the ADS held budget contract that we have, we have the MDWAS, which is annualized for maintenance and operations. With the Deloitte contract, we discussed this in the VA testimony. We have the Oracle licenses, which has an increased cost. And then again, we have another MMIS game all contract there as well.

[Speaker 0]: Can you just remind us what MDWAS is, what MMIS is, what are we getting for this?

[Commissioner Groves (Department of Vermont Health Access)]: What is this? Yeah, so MDWAS is the Medicaid Data Warehouse Analytical Solution. So this brings together other data sources in Medicaid data. And it's one as a data lake. And then also has the functionality to run reports for our business offices, for federal requirements, for other reporting requirements as well, as well as being able to have a developed dashboard so we can dive in and look at our populations and see what's going on, what the services are, what their costs are. And this adds on to our kind of more gives us the addition the value add up being having an analytical component that we'd that we would really need.

[Speaker 0]: Is this stacked on top of another system? Is this guess my other question is because it's when did it go live?

[Commissioner Groves (Department of Vermont Health Access)]: So we have pieces of it going the analytical pieces going live, I believe, last year. At the beginning of or at the end of last year, we had the analytical pieces going live. And so this is also in partnership with the Office of Health Care Reform in their health data unit as well, where they have done the design and implementation. And now we're taking over the maintenance and operations of that.

[Speaker 0]: Have we done anything with the data we've gotten yet?

[Commissioner Groves (Department of Vermont Health Access)]: I think it's still it's still new. I think some of the staff our staff are currently being trained there. We have run our kind of PMSs, which is what we report to the feds. We have done that, and we have sent that over to the feds and have seen and gotten a good response back from CMS on that. So we are seeing a return in in our investment on on MDWAS, and we'll continue to see that.

[Speaker 0]: Okay.

[Commissioner Groves (Department of Vermont Health Access)]: And then you had a question about MMIS. Right? Yes. What is it?

[Speaker 0]: Yeah, and how does it interact with MDWAS?

[Commissioner Groves (Department of Vermont Health Access)]: Yeah, so MMIS is our core claims processing, and then also in other functionality as well. But that's how we process providers' claims to us and when we pay that amount in simple terms.

[Alicia (DVHA staff)]: State Medicaid programs are required to have an MMIS and then the claims data from that MMIS are connected to that Medicaid data warehouse. And so that's one piece of the data that's going into it so that they do have a close relationship. And I believe one of your earlier questions was about the costs of the MMIS updates and maintenance on the prior slide, a portion of that relates to the work that the MMIS vendor has had to do to move its data over the data warehouse and support that effort.

[Nolan Langweil (Joint Fiscal Office analyst)]: Brian.

[Rep. Brian Cina]: Did you call it a data lake? Yes. Once the data lake is fully open for boating, so to speak, whatever, open for access, can you in real time be monitoring the health of Vermonters in the Medicaid system? Could there be regular I'm not saying we would necessarily want the public to see this, although it wouldn't be the worst thing if it included everyone, because it's not fair that only one portion of the population we would know this for. But imagine if there's a dashboard where it can show what's the current rate of heart disease, what's the current rate of depression in the claimed lake or whatever. Is that possible to be tracking? Yeah,

[Commissioner Groves (Department of Vermont Health Access)]: and those are some of the clinical dashboards and COTS dashboards that we've already established. They're out there and they're for internal use. We can see them.

[Rep. Brian Cina]: Yeah. See, that's cool. I think if everyone was included, I would advocate for being public, but I don't think it's fair if only 30% or whatever of the population's health info is is out there, it just doesn't seem right. But it would be cool if we could all just monitor that and then we could like, you know, how do we all work together to get our depression rates down? The other thing is my perennial question whenever technology comes up, which is how might artificial intelligence be integrated into this at some point to improve the functioning of of of Diva?

[Commissioner Groves (Department of Vermont Health Access)]: Yeah. And that don't think we've we've thought about how how to integrate AI.

[Rep. Brian Cina]: Do you I'll I'll let it go after this. But do you do you work at all with the division of AI in ADS or with the AI director?

[Commissioner Groves (Department of Vermont Health Access)]: There may be some conversations within our Medicaid enterprise program, conversations that they're having there,

[Rep. Brian Cina]: but I am not aware. I think the reason I ask is, and then we can move on, is I wonder if in the future there might be ways that ADS, through its support of Diva, might help figure out ethical ways to use AI to process data, share data, and apply data. Thank you.

[Speaker 0]: Oh, can I have some information which you won't have here, but I would like in the future? So, the contract with Deloitte, how long is that? When was that done? 2022? '20 Whenever. It would be nice to know what the original contract was and how much we have spent so far up to this point with Deloitte on that. Chopper, did you have a question?

[Nolan Langweil (Joint Fiscal Office analyst)]: Yes. Where did where was Diva located? Where? People coming back to work.

[Unidentified DVHA staff]: So Diva's located in Waterbury in the Complex. In the complex.

[Nolan Langweil (Joint Fiscal Office analyst)]: Okay. Why didn't it go back in there?

[Commissioner Groves (Department of Vermont Health Access)]: Because of space. We did not have enough space for Diva to return. As part of VDH moving into the complex, we gave up some of that and moved into the Pilgrim Park location. Or we will be moving into the Pilgrim Park location in February, either February or March.

[Speaker 0]: Did you want to address that? We haven't gotten to that yet.

[Commissioner Groves (Department of Vermont Health Access)]: Oh, no, we didn't.

[Speaker 0]: Topper was giving us a preview. Oh, yeah. We're

[Commissioner Groves (Department of Vermont Health Access)]: on that page, but thanks, Topper, for the intro. Also, in our operating expenses, you will see the new lease space for $159,000 general fund. That is for the new space over in Silk Hill Farm Park, so just across the street from the complex in Waterbury. And I think, Leslie, last time you had a question of who we were contracting with, and it's the Malone Superior LLC.

[Rep. Leslie Goldman]: Thank you for including that. Could you just I'm not sure what the gross and the general fund, what's the gross, where's that other money coming from?

[Speaker 0]: Is that federal money? Yeah. You get a match on rent or leases? Why?

[Nolan Langweil (Joint Fiscal Office analyst)]: Rent, I think, is part of admin, so it can be

[Rep. Leslie Goldman]: So they're coming from a different part of their budget?

[Nolan Langweil (Joint Fiscal Office analyst)]: Rent's usually admin, so it's still a bunch of some of it can be manageable, but things to be magical under the admin piece and not under the regular mask. It's probably a mix. Yeah, it's a mix. It's fifty-fifty, and it's unread from other areas, so it's kind of a mix, which is why it's not perfectly 50. It's there. So we have to allocate. You allocate the work. The work that's being

[Commissioner Groves (Department of Vermont Health Access)]: done

[Nolan Langweil (Joint Fiscal Office analyst)]: by HAPPEVA, or Medicaid specific, B-fifty, but if there's work that's done that's outside of the waiver, they're all in the pure general fund, then they can't match the admin to that. They have to allocate their time when they do the outside of the resources. But imagine if you were using your home right, and you were saying, okay, this is time that I'm billing for my work and the time that I'm doing my watching TV, right? You can

[Rep. Brian Cina]: But when you declare on your taxes expenses, you wouldn't say 100% of the expenses because you're not using it 100%

[Nolan Langweil (Joint Fiscal Office analyst)]: of the time for work. So it's kind of like that, it's a waiver and not waiver. So things that are waiver, we can match on things that are not up there. Lot of the Medicaid that we do that are state only, so

[Rep. Brian Cina]: Is the rent is like that too?

[Nolan Langweil (Joint Fiscal Office analyst)]: Can

[Speaker 0]: I ask you a question? Did the fact that there is a federal match on it play into the decision that it was TEVA as the one particular office that was moved?

[Commissioner Groves (Department of Vermont Health Access)]: I'm not sure. I was not aware of those conversations then. I think I see

[Rep. Brian Cina]: your point, though. There might have been an advantage to having Diva be the one if there's a federal match. It would be nice to know if that's the reason why, because then maybe that would be less sass.

[Unidentified DVHA staff]: I think other federal match too.

[Commissioner Groves (Department of Vermont Health Access)]: I contact BG Atson and AOA if there's a Didn't

[Rep. Brian Cina]: we already go through this with you? Sorry. I feel like we had this we tortured you already on this. Sorry. But

[Commissioner Groves (Department of Vermont Health Access)]: I do have it's in our ups and downs. So $159,000 is the general fund. There's a federal match of $200,000 or $203,000 And then there is a global commitment investment fund. So that's how we get to the $4.41. So there is a match, it's coming, as Nolan said, it's coming from different places.

[Speaker 0]: I don't want to keep harping on this, but I would like to ask the question, what was the goal of returning to the office? What was the reasoning for why state employees needed to return to the office? Or what was given, Mr. Fraser?

[Commissioner Groves (Department of Vermont Health Access)]: Yeah. So the reason we're returning to office is because of to promote in person has a unique factor of collaboration. And so that you may not get on a virtual in the remote setting. And so that is the reason why we're moving in. Because to enhance that personal interaction and the collaboration between that, that there may be conversations that you may not have over in a virtual setting.

[Speaker 0]: Would that lead to efficiencies? They they may. Yeah. Are those efficiencies reflected in this budget anywhere?

[Commissioner Groves (Department of Vermont Health Access)]: I don't I mean, I wouldn't

[Speaker 0]: say Collaboration. Are they reflected in the budget as savings?

[Commissioner Groves (Department of Vermont Health Access)]: I'm not sure if we would have collected or shown those in the budget as efficiencies because we're not sure of what they would be yet.

[Speaker 0]: Go ahead, Brian.

[Rep. Brian Cina]: Just two other questions about this. One

[Commissioner Groves (Department of Vermont Health Access)]: is,

[Rep. Brian Cina]: I feel like it's maybe more of a reflection back that when you said that bringing people together, I'm wondering this without expecting an answer because it's probably something you couldn't answer easily, but could it be improving the health of the workers to not be isolated as well? In other words, the social determinant of inclusion and social contact and being in an office together, that improvement in the health of workers then improve the functioning of the

[Commissioner Groves (Department of Vermont Health Access)]: agency? Guess, who knows, right? I I think that would be some speculation. Don't know if I could answer that.

[Rep. Brian Cina]: Yeah. And then can you explain the Pilgrim Park thing? Is that just the name of the Pilgrim Park. Is the name they're building, Pilgrim?

[Commissioner Groves (Department of Vermont Health Access)]: Yeah. The campus over there is called Pilgrim Park.

[Speaker 0]: Recurrent copies to date.

[Rep. Brian Cina]: I know. Just having images of, like, people in black hats burning witches and, like, grinding out natives.

[Speaker 0]: You know? Doesn't feel well. Yes.

[Rep. Brian Cina]: Anyways, sorry. Any

[Commissioner Groves (Department of Vermont Health Access)]: other questions? All right, moving on. So what we know is we know that there are significant impacts that HR one will have to our administration budget. It has significant changes to our Medicaid eligibility in terms of the eligibility based on immigration status, more frequent determinations for the new adult population, and the community engagement, or sometimes referred to as a birth requirements for that particular population. Eva is estimating that we'll need 12 new physicians for the eligibility unit to meet the new requirements. And this will be reassigned from the population pool, which we're requesting about 510,000 general fund for that. There are also changes to our our noticing that will be needed for the more require for printing more for the notices and being the ongoing mail, and that's expected to cost $290,000 which the general share is $72,000

[Speaker 0]: Leslie, and then I have a question.

[Rep. Leslie Goldman]: Just for clarification, are you saying that 12 new physicians are being reassigned from elsewhere? Did I hear you say?

[Commissioner Groves (Department of Vermont Health Access)]: From the population, from the state's physician pool. Yes.

[Rep. Leslie Goldman]: Okay. So no new, but you're calling new, but they're actually reassigned. Yeah. Thank you.

[Speaker 0]: We have a proposal from various nonprofit organizations that do various outreach work with populations for several million dollars to help sort of become the navigators. And I'm wondering how you felt as though, I wonder if you feel as though they would enhance your ability to do this work, if they would impede. I'm looking for your feedback on whether that would be helpful for us to fund so that organizations that are working with individuals could serve as these eligible To community partners to do outreach outlet I don't think they're even proposing outreach. I think they're proposing becoming able to work on eligibility to make sure things are all right. Go ahead, Lori.

[Rep. Lori Houghton]: So there are I don't know

[Speaker 0]: if you've seen the proposal.

[Rep. Lori Houghton]: But the organizations like the parent child centers I forget some of the other ones. But the organizations that are already dealing with this population and that they could help facilitate ensuring that people know they need to do these retirements, helping them fill out paperwork, understanding that once they can't help actually sign them up for Medicaid, but can they help ensure that people are staying on Medicaid, which would then also help ensure that we're getting the federal dollars from Medicaid.

[Commissioner Groves (Department of Vermont Health Access)]: I would defer to Addison for that question.

[Addison (DVHA Deputy Commissioner)]: Sure. Addison, Deputy Commissioner. Thank you for the question. We actually have a meeting, I think, later today to go over that proposal. I don't think we've fully analyzed it yet, but upon first look, it appears to be something that's akin to our in person assister program and attaching some dollars to individuals who get certified as assisters in community partner organizations. We are absolutely dependent on those assisters. They're a huge part of our eligibility program and providing application support in person. It's a huge part of this implementation and just our general work. So I think we'll need to get back to you on a position on that particular proposal. But if it's leveraging what already exists and attaching some dollars to it, it definitely is worth looking at.

[Speaker 0]: I have

[Rep. Lori Houghton]: a question for you. Will we spend any time outside of the process diving into how they're gonna handle these eligibility stuff? Like or I could ask Addison out. Like, what's the process? How are they gonna make sure that they have the right process set up to ensure that they're reaching out to people in the forms and all of that stuff?

[Speaker 0]: Is that something that we should, like, do a little later when they've developed it a little bit? Do. Do that possibly before the session ends?

[Rep. Lori Houghton]: I guess I just do have one question specific to the forum costs. And this is coming from personal experience in working with the QHP. And there was a point where you all thought that my child was eligible for Medicaid, but she wasn't. But anyway, that led to getting a lot of forms. We would get two packets of forms in each day in my mailbox saying two different things. And we can do this offline. But I'd love to understand why there's an additional need for for the notices and how that impacts what people are actually seeing in the mail. Is it causing more confusion? So we can do that offline, but I do wanna dive into that with us too, Mandy. And then sorry. One other question on the you said you're taking the 12 new positions from other places. So why do

[Rep. Leslie Goldman]: we need more funding? Yeah. I didn't get there, but that was my

[Commissioner Groves (Department of Vermont Health Access)]: Trace?

[Alicia (DVHA staff)]: Yes, so some of the positions would be coming from our proposal at DMH to reduce 12 positions for Prabhat Psychiatric Care Hospital, because we proposed both from '25 to 21 beds. So you'll see it down in their budget, but then up in Steve's budget. Okay.

[Rep. Lori Houghton]: So is there a net increase or is it net neutral?

[Alicia (DVHA staff)]: I have a hold list because there's also for DOC, for pretrial supervision. I think I should set double

[Rep. Lori Houghton]: hold That'd be great. You.

[Addison (DVHA Deputy Commissioner)]: May I briefly address the noticing question? Yes. Just wanted to clarify that this estimate here is solely for the newly required notices under HR1. So I think I've been in the committee before to talk about this implementation. It represents a close to 30% increase in the overall eligibility transactions that we will have to process per year. And so on the noticing side, that estimate aligns with what the new notices that are required for additional redeterminations, work requirements, etcetera. Just wanted to clarify that.

[Speaker 0]: Thank you. Let's blow up. Great.

[Nolan Langweil (Joint Fiscal Office analyst)]: I just

[Speaker 0]: want remind everyone we have ten minutes left.

[Commissioner Groves (Department of Vermont Health Access)]: Okay. Moving very quickly. The school based services will be moving to DIVA as the secretary had mentioned earlier in her testimony. This is the AOA will retain the responsibility for alignment with the policy. And so with that, Diva is requesting as one new position for the Diva Business Office. There is the electronic health record and the random moment study systems virtually implemented in October. And those setup costs will be covered by a grant, but however, we'll need ongoing maintenance support beyond that. And then we'll be Diva will also be taking over the payments to the school districts, in that transfer.

[Speaker 0]: Is AOE have a reduction in staff?

[Unidentified DVHA staff]: I'm not.

[Speaker 0]: Qualify for the new position at Diva?

[Commissioner Groves (Department of Vermont Health Access)]: I was I don't know, but Ashley Berliner has been the one who has been tackling the school based experience. She can come in and do it.

[Speaker 0]: Alright. And we're we're gonna take some testimony on this also.

[Rep. Brian Cina]: Yeah. Letting you open up.

[Nolan Langweil (Joint Fiscal Office analyst)]: Yeah. We'll answer to you.

[Commissioner Groves (Department of Vermont Health Access)]: Yeah. Turning to our program budget for baseline changes, the caseload and utilization, we're seeing an up of 14.93 of the general fund. What we're seeing is while HR1 has played a significant role in the caseload calculation this year, especially for the new adult and general adult eligibility groups, there's also an increase in the general adult PMPM spend from FY25, which needs to be reflected in the new PM. So while we're seeing a decrease in the caseload, the PMPM is higher and does not offset that kind of decline in that. The other thing to hear is the Medicare buy in. This is increasing because of the caseload forecast and an annualized rate increase from the Feds that it's causing that.

[Speaker 0]: Which line are you on? You talking about the increased Rx prescription?

[Commissioner Groves (Department of Vermont Health Access)]: No, I'm not there yet. Oh, you're not there? I'm not there. Do you want me to jump? Okay. I'm just offline too.

[Speaker 0]: You're just offline too, okay?

[Commissioner Groves (Department of Vermont Health Access)]: For the Medicare callback, that is the Medicare prescription drug payment. That's the callback we have to give to the Fed. It's a result of associated cost there. We generally try to absorb that fallback cost, but this year it's just too much that we have to. There is no offset. The annualization of the Medicare Savings Plan expansion, that amounts to the seven month expansion for the Medicare Savings Program, which we expanded that to 150% of federal level. The FQHCs and RHCs are a required rate increase.

[Speaker 0]: I'm sorry. I'm confused because your slides are not referring to anything you're talking about. I think you might have lost missed a slide.

[Commissioner Groves (Department of Vermont Health Access)]: Yeah. We could go back a slide. I apologize.

[Rep. Leslie Goldman]: Thank you, because I was like,

[Speaker 0]: I thought it should have helped me. Well, I'm looking at the slides on our There is no slide for these.

[Commissioner Groves (Department of Vermont Health Access)]: Yeah. That would happen. Are you

[Speaker 0]: talking to the HR one impacts the Diva admin budget?

[Commissioner Groves (Department of Vermont Health Access)]: Are you on the on the Diva?

[Speaker 0]: I'm the book.

[Commissioner Groves (Department of Vermont Health Access)]: You're in the book now. That will start on page 49.

[Speaker 0]: You have nothing in your slides on trend and baseline changes.

[Nolan Langweil (Joint Fiscal Office analyst)]: There should be a slide. There were a slide yesterday. I

[Speaker 0]: think there was a slide yesterday. Yeah. Oh. And it happens to be $56,000,000. You're missing the slide on that. So you clearly don't have a slide on it. So if you could just talk us through it a little bit slower.

[Commissioner Groves (Department of Vermont Health Access)]: I will go slower since you do not have the slide, and I I do. Okay. So with the and I gave my Oh, here. No. It's I did not realize I was going to need this today. Part of that slide is the consensus for the caseload utilization. That is

[Nolan Langweil (Joint Fiscal Office analyst)]: a not

[Commissioner Groves (Department of Vermont Health Access)]: the correct number in the budget book, but the slide should say, if you have the slides, it would be 14.93 of the general fund, 35.48 of the works. And so as I a part of that increase is that the while there was an while we were seeing that decrease in eligibility for the new adult and general adult population, the PMPM for the general adults was increasing. And so we are seeing it because there have been increases in the PMPM, it's not offsetting the decrease in the case load.

[Speaker 0]: Do we know why utilization is increasing? We've got MDWAS now, so we should know, shouldn't we?

[Commissioner Groves (Department of Vermont Health Access)]: We have not looked into the utilization of what are the cost drivers of that. Okay.

[Speaker 0]: The

[Commissioner Groves (Department of Vermont Health Access)]: next one is the Medicare Buy In program. This is the federal We've got slide back slides.

[Speaker 0]: Okay, the buy in.

[Nolan Langweil (Joint Fiscal Office analyst)]: Do want to say that the case load utilization, that is a GFO has bought into it. The trends are, first of these are projections, so we can't talk to why that's happening, but just wanted to highlight that GFO agrees with the census and based on the transfers.

[Speaker 0]: Absolutely, I don't dispute the consensus that it is, I'm just wondering if we're looking at why.

[Commissioner Groves (Department of Vermont Health Access)]: So, think I was at the Medicare Buy In. That's the federal government that allows the states to use Medicaid dollars to buy into the for the dual eligibles for Medicare. The caseload sees gradual increases. This year, we are basing this on the caseload forecast and the annualized rate increase from that. So that will be 0.7 of the general fund. The third line is the Medicare Part D clawback. That is the Medicare prescription drug, the Part D portion of what we have to do back to the feds for the prescription drugs. This reduced stake, so it requires us to reduce them, and this is the associated cost of of paying them the feds back. The third and the other line is the annualization of the Medicare Savings Plan. So this is what it's cost for the seven months to expand that program there. There is the requirement of the FQHC and our rate requirement that is a 2.7 adjustment for '27. I'm just making sure the sign is not there. Then finally, there is the applied behavioral health coding correction, which I know we'll dive into that at 02:00.

[Speaker 0]: I think tomorrow maybe?

[Nolan Langweil (Joint Fiscal Office analyst)]: Oh, it's today.

[Speaker 0]: Oh, it's in today? ABA. We're diving into that later.

[Commissioner Groves (Department of Vermont Health Access)]: I'll briefly go over that, and that's part of the cost savings. And then lastly, the family planning rate. Diva was unable to implement the appropriated rate increase with the legislative intent of drawing down that enhanced act.

[Speaker 0]: Is there in the language section of the budget? Is there suggested language to make it implementable?

[Commissioner Groves (Department of Vermont Health Access)]: There is not language session, but there are discussions on how to make that. So we're still having discussions on what is needed if the committee is thinking of moving this forward.

[Nolan Langweil (Joint Fiscal Office analyst)]: Okay. Go ahead.

[Rep. Brian Cina]: Can you remind us of family planning rate, what that is about?

[Alicia (DVHA staff)]: Last year, there was an appropriation to DIVA for 85,000 new general fund with the intent that the ninetyten match that is available for family planning services would allow that to be grossed up to $850,000 worth of increased rates on family planning services. What are that?

[Nolan Langweil (Joint Fiscal Office analyst)]: That's what I don't remember.

[Alicia (DVHA staff)]: Well, is part the challenge in implementing anything. There is currently, for the way that Medicaid has operationalized its official ninetyten match eligible family planning benefit, a list of procedure codes and a list of diagnosis codes. When provided by certain providers, the claim will trigger a ninetyten match rate. I apologize. I'm going to get really technical. The challenge that we have is the different codes that are on that list live across a variety of our different fee schedules, and all different providers can bill those codes. It's not just providers of family planning services. So for example, there could be something like an evaluation and management code, sort of general code for an encounter with a provider. It becomes a family planning service when it's done by a certain type of provider or a certain diagnosis that a member has. But when that same service is done by any other provider, it is not a family planning service. And so we cannot force the dollars into the ninetyten match construct. And so we have to have more conversations about what is possible within our system in order to make sure that we are targeting dollars to what we would consider family planning services, while not also creating a pretty significant upward pressure on the budget for the same services when not done in a family planning context, meaning for a specific diagnosis or by other providers.

[Speaker 0]: May I ask, first of all, how long has this ninetyten match been in existence?

[Alicia (DVHA staff)]: I believe we have had that option for several years. I would need to look specifically.

[Speaker 0]: If I said close to 20, would that be accurate?

[Alicia (DVHA staff)]: I don't know. I will have to.

[Speaker 0]: Okay. I'm sorry. This is administered by Gainwell. The system is Gainwell. Does Gainwell have contracts with other states? Other I mean, they're a national claims processing contractor. Do they do this for anyone else?

[Alicia (DVHA staff)]: Our national contractor, each state has its own version product. And our particular Game Well product is about 40 years old. So other states have newer products that are, say, more nimble than ours is. And so making changes does take a little bit more effort to make sure that the resulting process is aligned with the intent.

[Nolan Langweil (Joint Fiscal Office analyst)]: Okay. I

[Speaker 0]: would hope that you could implement this as intended, as our intention, legislative intent. It's been a while, this isn't the biggest problem in the world to solve. Let's move on. Sorry.

[Commissioner Groves (Department of Vermont Health Access)]: Next slide.

[Speaker 0]: It's coming.

[Commissioner Groves (Department of Vermont Health Access)]: Okay. The there is one rate increase for the Northern Eastern Family Institute for the hospital diversion program. This rate increase proposal is targeted towards that one specific youth hospital diversion. It had a required rate review, and thus an increase is a result of that. This is something that came out of our joint conversations as part of the executive leadership team. The next set of items are kind of policy changes for the budget reduction. There is the per diem of the emerging department stays. We are recommending discontinuing this per diem amount for mental health extended stays in the emergency department. This starting in July 1, this rate was first implemented in July 2022 as a temporary crisis response, And the utilization has since declined significantly. We have also had the Clinical Utilization Review Board weigh in on this policy. And they have also recommended discontinuing this due to this minimum uptake. And this should have little to no impact on the hospital providers. The next one is the discontinuation of the dental incentive payment. We recommend eliminating these payments. These were intended to encourage private dental provider practices to accept Medicaid patients. However, with the modest payment amounts have not resulted in measurable increases to access for Medicaid for dental access. And given that limited impact, we're we're recommending that the payments are no longer effective.

[Speaker 0]: Incentive payments, are these on top of the increased reimbursements that we did a few years ago?

[Commissioner Groves (Department of Vermont Health Access)]: These are on top of any sort of, like, dental payment that we that we have. So, yeah, so this is an addition to.

[Speaker 0]: It would be nice if we could get it's a I mean, have that it has not resulted in measurable increases. It would be nice to know if we could know what the increases have been and how de minimis, I guess, those things have been.

[Rep. Leslie Goldman]: I the last technical correction.

[Speaker 0]: Yeah, I just, you know, I feel like I realize that all the departments came together and worked collaboratively on this within AHS and that hard choices were made. I know hard choices were made, but I think as we sit here trying to make good decisions, we need the same information that you had when you made those decisions. And so if we could flesh out some of the data and the reasoning behind why certain programs were eliminated and or decreased, that would be really helpful to us as we move forward making decisions.

[Alicia (DVHA staff)]: Go

[Speaker 0]: ahead. I'm sorry.

[Commissioner Groves (Department of Vermont Health Access)]: The I will say, I mean, I think this will be hard to kind of look at because there's there's kind of we're looking at a whole system of changes that may have influenced why dentists have or have not participated. So I think we'll need to kind of think about how to present that data back to you. The last one is or not the last one. There, we are recommending an increase to the prescription co pays of two or four preferred $4 for preferred and $8 for non preferred. The current co pays are one and three, which have been placed for many years without any change there.

[Speaker 0]: Why are we doing that?

[Commissioner Groves (Department of Vermont Health Access)]: It was the executive leadership came together, and we had to make hard choices of how to lessen the budget shortfall. This is one of the things that we have ran by Art that DivaHeads contribute to as a proposal that we asked our pharmacists to weigh in on. And this is one of the things that they have recommended.

[Speaker 0]: Is the amount that people pay in co pays, is that also I don't know how we describe it, that we have to basically share with the federal government, just like the Because premiums for VHAP that people pay doesn't a certain portion of that have to go with the federal government? Yes, no?

[Commissioner Groves (Department of Vermont Health Access)]: I'm not sure, but I can

[Speaker 0]: copay is also included in that?

[Commissioner Groves (Department of Vermont Health Access)]: I'm not sure.

[Nolan Langweil (Joint Fiscal Office analyst)]: We bring it back to you.

[Speaker 0]: So we're cutting people's benefits. And when I say cutting their benefits, we're increasing their cost sharing to save the general fund a little bit of money. And in the meantime, we're sending the federal government more money.

[Commissioner Groves (Department of Vermont Health Access)]: I would have to let me get back to you on whether we send money back to the feds on co pays.

[Speaker 0]: Is there a rationale for the four to eight? Four and eight? Think inflationary thing there?

[Commissioner Groves (Department of Vermont Health Access)]: There is a rationale for that, and I cannot remember what the reason was. But I can get that to you when I answer the co pays. I will also say that there is a 5% co pay cap, so beneficiaries cannot go over that co pay cap. And so that's something else that we have there. The next item is utilization management. This is the Diva Clinical Unit has been engaged in several initiatives related to efficiency and system alignment, looking at clinical best practices in areas of DME, durable medical equipment, looking at special rate agreements, coding reviews, and other items. The estimate that you see is based on a reduction of a point 25% in the acuity adjustment that is applied to the consensus process for this intended outcome.

[Speaker 0]: Yes, go ahead, please.

[Nolan Langweil (Joint Fiscal Office analyst)]: We've got some clarification about the co pays. Apparently, if you don't actually have co pays anymore, the only type of co pays So we don't apply the premiums anymore, only for Oh, that's what I Only for B1. B Yes, and

[Speaker 0]: we have to share what we collect in premiums.

[Nolan Langweil (Joint Fiscal Office analyst)]: Yeah, believe so. It used to be.

[Speaker 0]: And I'm wondering if we also have to share what's collected in co pays.

[Nolan Langweil (Joint Fiscal Office analyst)]: And

[Commissioner Groves (Department of Vermont Health Access)]: then the last one is the base funding reduction, and that is the 4.7 PMPM that was for the ACO. And because we no longer have the ACO that sunsetted at the end of last year, we're asking to reduce our base funding by 2,010,000.00. Alicia, do you want to are there any questions there?

[Speaker 0]: Is this to the hospital global? Your narrative seems to be referring to hospital global budgets. Is that what this is? Because the slide from AHS indicated that it was

[Alicia (DVHA staff)]: elsewhere. It is not elsewhere, which is why it represents a reduction to the base funding.

[Commissioner Groves (Department of Vermont Health Access)]: I think what the narrative may be saying is that while we are getting rid of the PMPM payment, there is still a population based model in the hospital global budget that it will still continue.

[Speaker 0]: Okay. Would really like to know who this is going to, or now no longer going to the chief secretary?

[Alicia (DVHA staff)]: The $4.75 per member per month went through the ACO and was distributed according to their contracts with participating providers. I believe across the system, was primarily going to primary care providers, but also some of the funds were available to other community providers as well as part of the broader population health model that women care had. In terms of specifically the and how it split across those providers, I'm not sure that's something we would have to talk to One Care about. Okay, so I just want

[Speaker 0]: to say, this is not blueprint. It's not the Medicare blueprint. It's not the Medicaid blueprint. It's that Medicaid management fee that has been around forever and ever, that was $4.75, that then when the ACO came into existence, was being paid out through the ACO. Is that the one that we're talking about? There's so many per member per month things to keep track of. I'm trying

[Alicia (DVHA staff)]: to figure out which one it is. Yes, think there was something that had existed before our ACO contract that was discontinued for the last several years. We have had the $4.75 per member per month going to the ACO, and they have fully distributed that to providers according to their own contracts. But just so we're clear, this base funding reduction is a cut to primary care.

[Speaker 0]: Okay, moving on.

[Nolan Langweil (Joint Fiscal Office analyst)]: A $2,000,000 cut?

[Speaker 0]: 5,000,000 gross. I don't know, my glasses, I'm sorry. Yes.

[Rep. Brian Cina]: Out of the general fund, which leaves 3,000,000 federal dollars on the table.

[Nolan Langweil (Joint Fiscal Office analyst)]: Next.

[Commissioner Groves (Department of Vermont Health Access)]: The next slide is just one time funding for HR1. These are system changes that need to be in place. The expected range is to be $5,000,000 but about $2,000,000 is we're able to be awarded through the HR one fund from the Feds to offset these costs. We're that the remaining costs be matched at 90%. The estimate will be refined and updated over the next There's also a specific outreach activity that will also need to be funded. And we're hoping that the 340,000 gross costs can be covered by the HR one grant from the feds. But we're waiting for CMS termination to see if those costs would be covered.

[Speaker 0]: When we talk about system changes, what are we talking about? Like, physically, like like IT systems?

[Commissioner Groves (Department of Vermont Health Access)]: Or are we talking about just how we change doing business? Mostly IT systems. Addison, you want to give?

[Nolan Langweil (Joint Fiscal Office analyst)]: See her.

[Addison (DVHA Deputy Commissioner)]: Yeah. So this gets at testimony I gave earlier this session around eligibility implementation. We have three kind of major work streams that have to be implemented during 2026, and they all have a direct impact on our eligibility system itself. So there are functional IT changes that need to happen this year.

[Speaker 0]: Okay. Alright.

[Commissioner Groves (Department of Vermont Health Access)]: And then the last one time requested funding is for the provider stabilization for the two for $2,000,000 to assist in supporting providers. And we have we did a report on the stabilization funds that we saw that come in this year. That's the link on the slide.

[Speaker 0]: So last year, I think you put 10,000,000 in Correct. To which it was promptly asked for and most of it distributed. And last I knew you still had several grant applications pending. And we think with all the changes that are coming in the next year, that $2,000,000 is going to be enough to hold in a provider stabilization grant fund.

[Commissioner Groves (Department of Vermont Health Access)]: This is what has been put into as the proposed government recommendation. Yeah.

[Speaker 0]: I think I have a question. Yes. So

[Rep. Leslie Goldman]: how does this impact does h one required to do this impact low income verandas? I'm not sure that you can answer. No, I think I'm not getting it right. I'll come back. All

[Speaker 0]: right. We need to get moving on, maybe if questions come up, we might have we might have time this afternoon because you're coming back in, and we could ask at that time when we finish up that testimony. Thank you, Commissioner Erich.

[Commissioner Groves (Department of Vermont Health Access)]: Have a good week. Thank you, everyone.

[Speaker 0]: Alright. We are moving on to three mountain chair boards. Are they in a room or outside? Oh, they're all on Zoom. Kate. Hi, Michelle. Hi. Good to see you both. So, we received a report back, what was it, January 15, I think? Yes. And this was legislation that we did two years ago, I think. And I thought that it would be a good time to get an overview of our first report on this. Really excited to have you.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: Yeah. Thank you for the opportunity. I'm Catherine O'Neill, Director of Prescription Drug Pricing at the Green Mountain Care Board. And I have with me today Michelle Louenges Lozano, who is a health policy analyst on our team. And we also have with us today Jane Horvath, who is one of the contractors that we contracted with, who is our policy expert and is available here to answer questions when we get to that part. We have, I'm going to say, about a fifteen minute presentation for you, if that's okay. I know that you're a little behind schedule, but we should be able to get it all in if if that's alright with you.

[Speaker 0]: Yes. Thank you.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: And we apologize for that. Oh, no worries. No worries at all. So I think you can see I just switched the screen to Act 134 of 2024. So, yeah, so just really quickly to start from the beginning, Act 134 passed in the 2024 session and it directed the Green Mountain Care Board to explore and create a framework and a methodology for implementing a program to regulate prescription drug costs in Vermont. We were directed to research promising federal and state strategies for lowering prescription drug costs, also to look at the board's existing authorities and impacts on Vermonters access to medication as well as cost impacts across Vermont sectors. So, quick overview. In December 2024, we executed an analytic contract with OnPoint Health Data along with Horvath Health Policy to help us conduct an in-depth analysis and a national landscape review to develop evidence based policy recommendations, which we're here to talk about today. And for those recommendations to look at addressing drug spending in Vermont. So the policy recommendations, reports, and data dashboards, they're all the result of this one year long collaboration. So I've linked here for you the three reports that we produced. There was a preliminary report that was due, an interim report in May 2025. And then we just submitted to you the final report in January 2026. These reports describe current activities and initiatives in states across The U. S. As well as at the federal level and offer evidence based project options for your consideration. We also produce three data dashboards. These are links to those data dashboards. You can link to them right from the Green Mountain Care Board website. And there's a lot of great stuff in there. So I encourage you to do so. These dashboards illustrate potential cost savings as well as analysis of trends in spending and utilization of prescription drugs in Vermont. And when I'm done, Michelle's going to walk through just high level briefly some of that analysis. Also through this past year, I want to, remind you all that the Green Mountain Care Board did implement, some regulatory levers. Act 55 of 2025, restricts Vermont hospitals, except those designated as independent critical access hospitals, but all of the rest from billing insurers more than 120% of a drug's average sales price for drugs that are administered in the facility. And that restriction, those caps are underway

[Nolan Langweil (Joint Fiscal Office analyst)]: in

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: the hospitals now. Act 55 also requires Vermont hospitals that participate in the 340B drug pricing program to report on their participation. That's happening right now as well. So, in considering new opportunities for reducing the cost burden of prescription drugs in Vermont, we took into consideration that Vermont's small population and the limited legal authority of a state to directly regulate drug prices. It favors what we're going to share with you today, cost containment strategies that are voluntary and market based. So this means that success would depend on broad participation from in state stakeholders, purchasers, providers, pharmacies, employers, health plans, consumers, etcetera. What do we mean by this? Well, this slide just gives you a brief summary of the policy recommendations that we outlined in a little bit more detail in our final report to you. But in summary, we've got five key policy recommendations. The first is that Vermont should consider implementing alternative purchasing models through two organizations, Civica Rx and Cost Plus Drug Company. We'll talk a little bit more about what we mean by that in just a minute. I'll just do this summary first. And so also we think that Vermont needs to continue to monitor the activity and the success of prescription drug affordability boards that are in place in other states, not to implement one today, but to watch for the impact that those boards are having as well as the cost effectiveness of the activities in those other States. So it's still a possible opportunity for Vermont, but we're not recommending today to establish a prescription drug affordability board. So, and then third, we recommend distribution of a new drug discount card. I know that you're already looking at this in the ArrayRx program opportunity. Why we make that a recommendation is because Vermonters use discount cards now. And the organization ArrayRx, which I know you're learning a lot more about, we just think, you know, it's a better program or it's a better organization because it has privacy their privacy and consumer protections, as well as there's a slightly better reimbursement rate, which might be a little bit more palatable for our local pharmacies to consider. General though, you know, the use of discount cards is definitely a recommendation that we would make. We recommend the establishment of a new advisory committee and, sorry, a new advisory committee, which would attach to the first recommendation around a new purchasing model system, because we know that it's very important that all of the elements of the pharmaceutical supply chain and the experts in Vermont in those areas need to be a part of that process. And finally, the last recommendation is around, you know, establishing a robust price transparency program. That of course isn't a policy solution itself, transparency supports policy solutions. And so we do recommend that. We're gonna focus right now here today on that first recommendation, establishing an alternative payment model for Vermont. So I'm gonna turn this over to Michelle so she can walk through some of the data and what led us to this recommendation. But just briefly, I want to share that the analysis that we did this year was done with support of our analytic contractor, OnPoint Health Data, which conducted the analysis and developed the dashboards that you can take a look at. They're available on our website and linked on our slide. They used vCures for the analysis. They imputed data that's missing from the self insured plans because not all self insured plans are required to report into V Cures and they applied inflation factors. But an important note that I want you to, keep in mind is that V Cures does not have rebate data. So projected savings that you're going to see is based on the allowed amount prior to any application of any rebates. So now I'm just going to let Michelle walk through some of the data and then I'll come back and wrap it up.

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: Good morning, everyone. And thank you, Kate. I will now turn to recent trends and Vermont's prescription drug spending between 2018 to 2023, just to help contextualize a bit the scope of this challenge in the state. Alright, so this chart here shows how prescription drug spending in Vermont has grown across all payers since 2018, with retail pharmacy spending reaching nearly 1,200,000,000 in 2023. It's important to note that we're now in 2026, so in all likelihood cases, we have surely surpassed this point. Medicare represents the largest and fastest growing share at nearly 5,000 per member per year spending in 2023, but spending is rising across commercial and Medicaid as well as statewide. And analyzing V Cures data, we see that there is a disconnect between what we use and what we spend. The chart on the left shows us that across all payers, generics make up an average of 82 of all prescriptions filled, but as seen on the right, it is brand name drugs that account for nearly 86% of total spending. This is especially clear in Medicaid, where a relatively small share of brand prescription drives a large share of costs. In short, spending growth is being driven by prices, not prescription volume. Next, we'll take a closer look at Vermont's top 25 prescription drugs focusing on where spending utilization and cost growth are most concentrated between the years of 2018 to 2024. All right, so first looking at total spending in 2024, it's no surprise that again the costs are highly concentrated in branding drugs. Humira alone accounted for nearly $80,000,000 in spending followed by Eliquis at about $58,000,000 and Ozempic at roughly 47,000,000 Biologics such as Enbrel and SKYRIZI rank highly as well, reflecting the high cost of treating chronic inflammatory conditions. Measured and a thirty day supply of the prescription utilization across all payers was largely driven by generic drugs. The most widely used medications were cardiovascular therapies such as atorvastatin, calcium and lisinopril. Mental health medications also ranked prominently with high volumes for Citralen, bupropion and more. It's important to note that these mental health medications are just a little bit more highly filled among Medicaid members as well. Next slide. Finally, looking at price growth over time, the largest increases occurred among certain brand name drugs between 2021 and 2024. When looking at thirty day price equivalents, Kisqali increased by about 140% in price and Hemlibra by roughly 129% in price despite very low utilization among both of these. Other drugs across immunology and mental health also saw increases of 20 to 50%, showing how price growth rather than volume can still have a significant cost impact. So because generics make up most prescriptions in Vermont, we'll start by looking at opportunities to lower generic drug prices. In doing just that, we analyzed how a cost plus pricing model compares to current Vermont spending for commonly used generic drugs and where it could reduce costs across payers. Okay, so the first, the cost plus drug model would be a voluntary cost control approach that uses transparent pricing. Specifically, it would be a manufacturing cost plus a 15% margin. In practice, Vermont could leverage this model through a rate setting reimbursement approach. Public and private health plans would reimburse at the cost plus price for a defined set of generic drugs and provider networks could be limited to pharmacies willing to stock those drugs and bill at the cost plus rates. This creates a consistent statewide pricing signal while allowing participation to remain voluntary. Based on current utilization, eighteen eleven generic drugs are already used by Vermonters in the state, and they could be covered under this model. In 2023, retail pharmacy spending on these drugs was about 32,900,000.0 across all payers, with the largest share in Medicare. If this were to be adjusted for inflation, that spending is projected to have roughly been 36,400,000.0 this past year in 2025.

[Speaker 0]: A couple of questions, Michelle. Go ahead, Leslie.

[Rep. Leslie Goldman]: This is just a clarifying question. On your third bullet, it says it would cover about 1,800 drugs. Do you know what the denominator is?

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: I do not know. That would depend on the list of drugs that are found under Cost Plus website. We can gather that for you. Our subcontractor would know that for sure, but we just don't have that on hand.

[Rep. Leslie Goldman]: It would just be, is it 10% or 90%? Just curious.

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: Oh, actually, that reminds me. When I looked at a past statistic in 2023, it accounted for approximately, I believe, nineteen point four percent of all medications used, generic medications used by Vermonters.

[Rep. Leslie Goldman]: So it covers about twenty percent, about twenty percent is what you're saying? Exactly. Thank you.

[Speaker 0]: So what you're you're using the cost plus model, but you're not suggesting using cost plus. You're saying that Vermont could sort of start its own cost plus and for generic drugs. Would this bypass like the PBM?

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: Jane, I'm not sure if you want to try to answer this one.

[Jane Horvath (Horvath Health Policy, GMCB contractor)]: Sure. Cost Plus has expanded into different parts of the pharmaceutical market. They are a generic manufacturing company and a public benefit company. They are also a wholesaler now of their products. So it would be buying from cost plus through their wholesaler, basically, and that the the wholesaler can then get the product at that price into the state of Vermont. And it wouldn't bypass PBMs, but it would. The whole thing works around that the cost plus is typically the lowest cost product in the market, and that is their goal. So to the extent when it comes in, the price is transparent. So the pharmacy would bill based on that, the health plan or the PBM would pay based on that cost plus. So there's no rebates going on. It is what you get. It's just straight up pricing.

[Speaker 0]: All right. Thank you.

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: Building on that, the slide shows the potential savings if those same drugs, so the 1811 that we just mentioned, were priced under a cost plus model in 2025 across all payers estimated annual savings would total 23,600,000.0 representing an average 65% reduction in spending on the cost plus list. Medicare accounts for the largest share of savings which would be approximately 14,100,000.0 followed by commercial and Medicaid plans. These estimates reflect pricing changes only and assume no change in utilization. May I ask when you keep referring to Medicare and then Medicaid, are you including in for dual eligibles, are you who get their prescription coverage through Medicaid? Are you including that total in

[Speaker 0]: the Medicare dollars or the Medicaid dollars?

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: I think that would be more a question for our subcontractor, if we're completely honest. But Kate, do you have any other questions?

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: Yeah, don't know that, Chair Black, for sure, but that is a question that we can ask them. It's gonna, I think the answer would be that they are accounted for in one bucket or another, but I would have to ask them or look into the detailed methodology.

[Speaker 0]: Okay, thank you. That would be great.

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: Next, I'll turn to Civica Rx. It's another market based approach that focuses on lowering the cost of essential generic drugs, particularly in hospital settings. So Civica Rx is another market disruptor in the generic drug space and offers transparent cost based pricing and focuses on producing generic medications that are commonly used in hospital and patient care where shortages and price volatility can be easily disruptive. Civica has its own manufacturing and distribution infrastructure which allows it to supply hospitals with essential drugs at consistently low and predictable prices. I think I would just go ahead and maybe you would have the same question that you had for Cost Plus. In this scenario, we would also be directly with Civic Rx. It's really just purchasing their generic medications for inpatient hospital setting. And next slide, Kate. So in Vermont participation in Civic Rx would be voluntary and primarily focus on inpatient hospitals. The state could support participation by facilitating Civica Rx membership for these facilities to encourage use of Civica's lower cost products such as its generic insulin. Health plans and PBMs could align reimbursement with Civica's published prices. This approach would complement the cost plus drug model by targeting a different part of the drug supply chain, particularly inpatient and hospital administered drugs.

[Speaker 0]: So I understand, I mean, so essentially if we're talking about inpatient prescription, inpatient pharmaceuticals, does this assume that the hospital, which would be billing as part of their inpatient, that their prices would reflect what they've their acquisition cost? I mean, because ultimately, the hospital is the one that's getting paid and billing for it from the insurance.

[Nolan Langweil (Joint Fiscal Office analyst)]: I

[Speaker 0]: guess what I'm saying is would this be reflected then in their prices?

[Jane Horvath (Horvath Health Policy, GMCB contractor)]: Do you want me to

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: You switch to can take a stab at it.

[Jane Horvath (Horvath Health Policy, GMCB contractor)]: So the hospital is billed pretty much on a global basis based on whatever the patient is in for. So it's bundled payment. And these are all generic products. For Civica, were started by a bunch of hospital systems and a couple foundations to really deal with the issue of inpatient generic products that go into shortage a lot, but they are critical to inpatient care like saline solutions and things like that. So it was to stabilize the market and stabilize the pricing and the access. So hospitals would presumably get through CIVICA because they to the best of our knowledge, Vermont hospitals do not participate in Civica, and they could, and save money on their inpatient side. These are, again, generics, and it is a bundled pay a bundled billing and a bundled payment. So the generic drugs wouldn't necessarily be pulled out, but it, you know, it would help lower their costs or at least help minimize any cost increases that happen in the sector because, again, these are a lot of generic products. But importantly with the Civica, they have stretched their business model into outpatient insulin. So and they now have outpatient insulins on the market that again they would they have their wholesaler and it could come into the state, into the pharmacies and other places where people purchase their insulin. And again, it would be a very transparent price. It would be a low price. Pharmacies would bill based on that Civica price for the insulin. It's part of the deal. If you get the Civica insulin, you must sort of abide by their pricing constraints, which is you can only have so much of a markup if you use their insulins. So pharmacies would bill based on that and insurers would reimburse pharmacies based on that. And it would lower the cost for consumers just as cost plus would lower the cost for consumers at the point of service.

[Speaker 0]: Okay, thank you. I think that and hopefully it would lower the cost of the bundled payment, which one of the don't help. Thank you.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: Okay, so thank you, Michelle. I'm just going to bring it home for us all. So what we just described here is we've said a couple times now, they're voluntary programs. And it means if adopted in Vermont, health plans would agree to reimburse at the cost plus and Civica prices. We don't think that there should be any administrative burden for plans to say track participation. We do see alignment of financial incentives across the marketplace with this model. And as Jane said, and I'll just say again, what we like about this is pricing is transparent. And so I will point out though that, you know, in our thinking through this, in the event that pharmacies would see reduced margins, you know, we want to recognize that plans could consider adjustment to compensate for that. And there is a potential for 340B profits to be a little bit reduced, but it wouldn't eliminate the profits entirely. There is that, know, think about as a consideration. Is that a question for me? I'm sorry. I didn't know.

[Speaker 0]: Think we were. We're fine. Yeah. Thank you.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: So, so just real quick aligning stakeholders around cost plus and Civica participation, we think it could provide Vermont with a pragmatic scalable process to reduce prescription drug spending without reducing or, you know, certainly maintaining access. We know that this approach has to be multidisciplinary and you know, it in of itself is, you know, could be effective in bringing down the costs of generic drugs. The real big spend is in brand name drugs. And so, you know, this is a compliment to any other potential opportunities that there may be in addressing expensive brand drug costs. So to that end, super quick. Unlike the generic market, the path for Vermont is less clear for brand name drugs. We do want to continue to monitor the various approaches that we see developing and changing in the marketplace across The US. And an example of some of those approaches here on your slide. And I do want to just touch really briefly on the maximum fair price analysis that we did because in Act 134, the statute specifically asked us to investigate the impact in any opportunity for expansion of CMS's maximum fair price drug price negotiation program. So we did conduct a repricing analysis to look at what the savings could be. And if if we were to if we were to be able to negotiate prices or use the negotiated prices expanded into the commercial and Medicaid market, we can see that there is a potential for dramatic savings. And the yellow bars on this chart, illustrate, some of those savings for the highest spending drugs. Could

[Speaker 0]: you remind us what the maximum fair price is?

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: It's a federal program out of CMS where they negotiate with drug manufacturers lower prices on certain drugs. And 2024, they negotiated down the cost of 10 drugs. And then in 2025, I think it was 15. I think they just announced another set of reductions. And so it's the amount that the Medicare program will pay for these brands, you know, this certain set of brand name drugs. So what would it look like? And we in other states are looking at, you know, what would it look like if we were able to expand that to, you know, reduce the amount that we would pay for drugs in the Medicaid and in the abortion market.

[Speaker 0]: I'm gonna stop

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: there and let Jane jump in. Yeah. Thank

[Jane Horvath (Horvath Health Policy, GMCB contractor)]: you. I'd say that the Medicare program with these negotiated prices just started 01/01/2026. So it is like brand new in the market, and it it is pretty complicated. So a state sort of overlay on this administrative system that CMS has set up between manufacturers and pharmacies and payers would have to slip in there. And it's just not clear yet how that would work, which is sort of why we don't have a recommendation. There's what, six weeks under our belts, I guess, of this program, and it's a pretty major program.

[Speaker 0]: This is sort of an aspirational, if we could, something would be done. Okay.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: Yeah, it was, it was, I think a useful exercise to look at what an expansion within Vermont would look like in the Medicaid and commercial market. But it is point of theoretical exercise. Because there are, as Jane said, there are challenges to program expansion, but not least of which are recent federal law changes that permanently exempt a number of drugs from negotiation. You know, it's a big bill. Orphan drugs are very, very expensive and there's a lot of complicating factors in there. And the new law really limits, you know, exempts them from negotiation. So, it limits some of the highest price brand drugs from even the ability to be negotiated. We've talked a little bit more about that, but I won't right now. But I do want to say that, you know, drug manufacturers are starting to provide price concessions voluntarily, and we're seeing that. And direct to consumer efforts are expanding. And so, as Jeanne said, this is the Medicare fair price program. The negotiated prices have happened over the course of a year and a half, say, but the actual implementation of these payments, these pricing structures just started, and so, the savings through the MFP program might not be as dramatic over time. So, it might not be as exciting to look to expand it, in other words. There's just a lot that's changing in the marketplace that means let's watch, but we need to see how these changes impact the potential for savings.

[Speaker 0]: I think Leslie, did you have a question?

[Rep. Leslie Goldman]: I do. On slide 25, you talk about the big picture, which is interesting to me. And you were talking about aligning stakeholders. And I'm wondering you see leading this conversation.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: Yeah, that's a great question. I love it. I would love to see my position and Michelle's position be you know, able to continue in this space to move us forward. And I think that that just, you know, it brings up a question of, you know, where Vermont wants to go, what we want to you know, what are our priorities around this and and, you know, where do we see this work going forward? I think that the Green Mountain Care Board does have the capacity to establish an advisory committee. It has done so in the past. This would be new and different. The, you know, if there is a collective interest in this and know that, you know, over the course of the fall, as we were framing this and standing it up, we did meet with stakeholders to understand, you know, to like, kind of vet this a little bit. And it's all brand new. So, there's interest, there's intrigue, there's curiosity, there's some concern. And I think that, you know, one of the next steps is to, you know, if we're going to do something like this, is to bring stakeholders together, with an intent to try to solve this problem, to move forward with a program like this and address the issues for Vermont.

[Speaker 0]: Okay. Yeah, go ahead. Yeah, ahead. Sorry.

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: Oh, I can. Oh, sorry. No, no, don't worry. I was just going to quickly add to Kate's point is that, for example, if we were to try to work with cost plus, this doesn't mean that the eighteen eleven drugs would be all covered. We would actually need a group of stakeholders to come together to form a list of medications that we would want to get covered. This was seen, I believe it was the University of Pennsylvania Medicine that they contracted with Cost Plus, and they made this list together. But it wasn't just them too, right? Like for example, know like it and I know it's possible to get a group of stakeholders together because that's what we've been doing these past few months and making and preparing for this presentation. This would include interest groups such as pharmacists, people from insurers, payers, you know Blue Cross, Bruce Shields, and really experts like Jane here as well. We know it's possible and we know it can be scary, I think, for other people having such a new program. So we do need their expertise to help develop it, but it's also to be as transparent and focus on communication between everyone involved. There's no lingering questions of a program like this were to move forward.

[Speaker 0]: Would you need any sort of legislative in your

[Rep. Leslie Goldman]: who leads like you can set up an advisory committee without statute?

[Speaker 0]: Or do you need to align stakeholders? You don't need our permission.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: Well, so that's right. But there we need I think for us to move forward, it would be important to know that there's collective interest in doing so. And so I don't know if statute is needed. We didn't we're not making we didn't write legislative language into this because it doesn't necessarily have to come out of statute, but we need authority to do this work. Our positions are at the Green Mountain Care Board. And if it's a priority of the Green Mountain Care Board, if it's a priority of the legislature to assign this work to the Green Mountain Care Board. You know, we've gotten the our two positions were written into Act 134 to get us this far, to get us to the point of making recommendations. If these are palatable recommendations of interest, then, you know, we do need to have a conversation about the next steps. Where does this fit? How does this fit within the priorities of the state? You know, is this work best done at the Green Mountain Care Board or is this work best done in another agency, perhaps? Our positions exist and they exist at the Green Mountain Care Board, I think, for a reason to get us started here. And so, forward, I do think conversation needs to happen. I don't if it necessarily needs to be in legislation, but Michelle and I do need direction, like as staff.

[Speaker 0]: I was just wondering if you're limited. Are you and Michelle limited service positions? Our positions are not limited service positions. Okay.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: And there is a funding source that funds this work through, I think it's out of AHS, the fiscal office knows a lot about this, but it's the evidence based advertising and education fund, which is actually a manufacturer's fee that, you know, I'd love to have more conversation about that fund and how we collect the fees and ensuring, you know, adequate collection of those fees and the quality of that and how the funds are used. But I know that, you know, so yes, we're permanent funded positions and we have an allocated dedicated funding source.

[Rep. Leslie Goldman]: So I'm just wondering, can we expect to hear from the Human Care Board, your report? Yeah. I'm looking at Diane, she's across the room with me as opposed to your little box. I just don't want it to be on the shelf, right? So where does this go and who's leading the next steps?

[Speaker 0]: I think we'll have a conversation regarding with, we'll probably start with Diane.

[Rep. Leslie Goldman]: Thank you. That's all I wanted to know. Thank you.

[Speaker 0]: Chair Black, may I ask a question of

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: the committee? Sure, of course. What do you think?

[Rep. Leslie Goldman]: Great question.

[Speaker 0]: I have to tell you that I think I got really excited. I've read your report when it came in, but I think I would have gotten excited when we had Charlie Becker from the Healthcare Advocates Office when he was doing his presentation on ArrayRx. I don't I really quite understood the cost plus model. And so I was really excited about that. Additionally, I've been, well, I'm dumb. Forget it. I went to a conference on prescription drug affordability this past fall, which has gotten me really thinking around our whole supply chain and how we, the whole market, Like the pricing, the manufacturer's pricing and what's involved in that and the coverage and the difference between The US and the rest of the world. And it was just, so yeah, I was excited for your report because I've been thinking about it a lot and I really like this model. Anyone else? What does the rest of the committee think? I don't want to know. As of

[Alicia (DVHA staff)]: right now. I didn't hear, I'm sorry. It just sounds great as of right now.

[Speaker 0]: Allen, what was your

[Rep. Allen "Penny" Demar]: I think we're going need a whole thing of Rx cards before we go to the office or the pharmacy.

[Unidentified DVHA staff]: Know it says hospital, but it's got to have some impact on array effects if we continue with that. It's got

[Speaker 0]: to have. So

[Rep. Allen "Penny" Demar]: how do you do it?

[Speaker 0]: We're just looking for short

[Rep. Leslie Goldman]: term and long term. Short term

[Speaker 0]: and long term. The thing that I like about both of these is the transparency. I mean, at the market that we live in right now, nobody knows what they're paying, why they're paying what they're paying. There's no transparency in it. And it's so multi layered and so interconnected and vertically integrated. And I like just the transparency of it.

[Unidentified DVHA staff]: I'm for all this, except it's gonna be very confusing to a lot of citizens.

[Speaker 0]: I don't think citizens would actually know that this is happening behind the scenes. It's in fact Hopefully not. Yeah.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: I think that's oh, Jane, go ahead.

[Jane Horvath (Horvath Health Policy, GMCB contractor)]: So that's a really good question about the discount card, the ArrayRx card. Yeah. So what this is all about is procurement and supply chain. And so the ArrayRx can work with the supply chain, basically. ArrayRx is like a payment mechanism. The pharmacy agrees to charge only so much for these products. The discount card benefits pharmacy because it sort of drives some volume to the pharmacy and things like that. ArrayRx, it can work, and I don't think it'll be confusing. It can be overlaid on top again because this is the product coming into the state via Civica and their wholesaler and Cost Plus and their wholesaler. All the drugs come into Vermont through wholesalers of one type or another. These are just dedicated wholesalers that are keeping the price transparent, doing transactions, financial transactions that are consistent with the goals of cost plus and Civica as opposed to these big national or global wholesalers. So I think it'll work. I don't think it would be confusing. They would work together.

[Speaker 0]: This is more chaining the medications, not the end purchasing by the consumer. Going be a while. Yes, go ahead.

[Alicia (DVHA staff)]: What I think I'm appreciating is the interlocking aspect of all the pieces together. If we have transparency, we have it in the hospital and in all the other ways drugs need to be accessed. It seems like you have a more comprehensive interlocking system of saving

[Commissioner Groves (Department of Vermont Health Access)]: on

[Alicia (DVHA staff)]: at least generics. I don't quite understand the impact of the main brands in all of this, but thank you for your work.

[Speaker 0]: Yeah, and I was not aware that in HR1 there were things that were exempted. Surprise, surprise. What a shocker. Okay, thank you. Thank you so much. Really appreciate you coming in with us today and sharing this. And we will have conversations and thoughts going forward. And thank you for all your work on this.

[Catherine O’Neill (Green Mountain Care Board Director of Prescription Drug Pricing)]: Excellent. Thanks very much.

[Michelle Louenges Lozano (Green Mountain Care Board health policy analyst)]: Thank you so much. Okay.

[Speaker 0]: We