Vermont Legislature SmartTranscripts:

[Rep. Alyssa Black (Chair)]: Hi, welcome. It is House Healthcare again on February 26. We're pivoting back to May and we haven't been back in this in a while. And just to sort of level set the committee today, we're going to hear from the healthcare advocates office. Our legislative council, unfortunately, has to be in a couple of different places, so she may be in and out. And I just wanted to use today to sort of level set where we are with this bill. It was formed on our agenda for markup, but in full disclosure, we have nothing to mark up. So we're not going be marking up anything. So go ahead, Sam.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Good afternoon. I'm not Mike Fisher. I'm Sam Pajj with the Healthcare Advocates Office. Good to be with you all. And before I go through slides, please stop me at any time if you have questions. I know this is a technical, complex bill, so I'm here to answer your questions. And if I don't know the answer, I will tell you, but please stop me if you need to. So this is my plan for this afternoon. I wanna just do a quick refresher of what the goals of the bill are so we can be reminded and have that in our in really fresh in our minds. I also wanna share a couple stories from conversations I've had with legislative leaders and stakeholders in Oregon. And the reason for that is they passed the strongest corporate practice in medicine bill, SB nine fifty one, which this bill is very similar to, and our proposal is now very similar to. I also want to share a little bit. There was a new report from the American Medical Association on corporate practice medicine that was shared by the Oregon Medical Association with me, which sheds a little bit of light about alignment between our bill and where the AMA is also going. And I'm going to spend most of the time going through what our compromise proposal is. And I want to be very direct. We are very willing to work with the provider organizations that have concerns about the bill in good faith. We really want to work with you and really want to take a good first step this year. So that's my hope. Yeah, so happy to answer any questions about that. So goals. So really, a high level, a lot of this is about the basic concept that medical care should be provided by medical professionals. We really want to protect the rights and autonomy of medical providers. Really, what it says pretty clearly is we do not want corporations practicing medicine or telling our doctors or nurses how to treat patients. We want to protect patients, we want to protect providers from potentially exploitative ownership structures and transactions, and prevent negative impacts to health outcomes, quality and costs. I know it's been a little less than a month, but I want to of stoke folks' memories of Doctor. Zuri Song and Doctor. Sweeney Singh, Aaron Fuse Brown, who presented on a lot of the academic research about the potential negative harms of private equity ownership on health outcomes. And I want to stress that this is not a this research is focused on outcomes. It's not an opinion. A lot of these analyses, they looked at non private equity ownership models that were run by physicians, and they compared them with private equity run. And the data is really clear and consistent. It's higher cost to patients, higher prices, it's worse health outcomes, and the impact of providers oftentimes is very negative. There's a lot of moral injury, there's a lot of burnout. Doctors have gone to medicine not to make money, nurses want to treat patients they want it, and they don't want their decisions interfered with. And the last is really establishing rules for private equity in Vermont's health care system. What this bill does not do is say, no, private equity can't be here. It doesn't ban any type of investment. What it says is we don't want you guys controlling medical office decision making, provider decision making. So, just to kind of refresh our memory, this is from Doctor. Song and Doctor. Singh. So, I mean, this just looks at what happens when you compare private equity owned practices with non. You see an increase in charges and you see an increase in prices.

[Rep. Alyssa Black (Chair)]: Can I interrupt you? Of course. Do you have your slides? No.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: I sent them over email, but

[Rep. Allen “Penny” Demar (Member)]: do you want

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: me to stop and

[Rep. Alyssa Black (Chair)]: Send her a quick email maybe

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: with the Do you mind sending them live? Yeah,

[Rep. Alyssa Black (Chair)]: and then post them when you get them.

[Rep. Brian Cina (Member)]: That's fine.

[Rep. Alyssa Black (Chair)]: Thank you. I have a hard time seeing that.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Oh yeah, of course. Yep. Sorry, I must have got caught in the outbox or something. Also, this is a slide, again, from Doctor. Song and Doctor. Singh. This looks at what do physicians think about private equity. And by and large, they think it's worse. They'd rather be independent. They'd rather be a part of a nonprofit. Which, again, makes sense. They don't want their decisions interfered with. So I wanna turn a little bit to Oregon. So I've I've been talking with and I I owe a owe a great deal of gratitude to the majority leader's office. So I spoke with their staff there, and they shared some of their stories for why they passed nine fifty one. So a little bit of history. In the nineteenth century, they had a situation where mining and railroad bosses were hiring company doctors. And their task really was getting workers back as quickly as possible. So the priority there wasn't workers' health, but really we want to do what's best for the company. That resulted in a lot of real harms, That's a real conflict of interest. You're asking a doctor to look at the bottom line of a company and you're also asking them to treat patients. What do you do when those two things are in conflict with each other? So that was really the origin of the corporate practice of medicine doctrine, which says that medical clinics can't be owned or controlled by they must be owned by doctors or medical professionals, not corporations. And as you've seen, most states have some type of doctrine like this. Vermont has a limited doctrine in this area. Obviously, we think it's insufficient and needs to be strengthened, but that is most states firmly believe that corporations shouldn't be practicing medicine. It's not a controversial What's controversial is what to do about it. So there was a Supreme Court ruling in Oregon. I thought this quote was really timely. It said, The mass of the public would fall into the hands of quacks and charlatans when their most fundamental needs are at stake. And this is a quote from Oregon, from the Speaker of Majority Leader's Office. They said, His language may be dated, but the principle is timeless. A physician's duty to their patients will always be in tension with a corporation's duty to its shareholders. And what they said in their testimony on the bill is they said, We're falling back on precedent. Laws that exist across the country to prohibit the corporate practice of medicine should not lose their meaning just because private equity firms and corporate lawyers have found a clever way to evade them on paper. So what did Oregon's bill do? So it recertified their existing CPOM law. It added restrictions on non provider control. So, it prohibited what are called management services organizations, which are these outside companies that private equity firms work with oftentimes, and it prevents them from owning and controlling and managing clinical operations and scheduling. What it did not do, and just like Arbil does not do, it doesn't say you can't get investment from MSOs. It doesn't mean you can't have an MSO help you with billing or group purchasing. I recognize and agree with the concern. We do not want to prohibit a medical practice from being able to get services that they need to be able to spend more time with their patients. Like, my grandfather was a pediatrician for almost his whole life. My mom was a labor and deliverer for her whole career. Hearing from them about the bureaucratic headaches, I totally get, You okay? Hearing from them, I mean, they need support. It's a really complex so we do not wanna interfere with the ability of MSOs, and Oregon didn't either. So it does nothing to that. It voided, you know, these anticompetitive agreements. Noncompetes, nondisperagement, and nondisclosure agreements were void. That's very similar to what our bill does. And it also bans what are called friendly PC. That's the loophole that I can refresh your memory on, which is where management services organizations or private equity firms basically hire a doctor on paper to make it seem like they're practicing medicine. And then on paper, they're not violating the law, but they're not actually controlling the practice or practicing medicine, really. It's really the company and the shareholders that are doing the work. So what happened after the bill passed? So I think this is really interesting, and I really want to spend a little bit of time on this. So there was no adverse impact that they've seen so far on Oregon's health care system. Again, I hear the good faith concerns about, you know, will this we need investment in our health care system in Vermont. I fully agree. Fully agree. And so does Oregon. But what they did not want is the type of investment that could be predatory or exploitative. So they didn't see any of that since the bill passed. And that was forecasted. There were some real fears like, oh, we're gonna lose doctors, we're going to lose clinics, we're going to close. That has not so far happened. There was a positive impact on patient access, costs, and outcomes. And I think probably the most interesting one, there was actually a positive impact on the number of providers returning to practicing medicine. Because what happened in Oregon is there were a couple of high profile disasters where there was private equity and bought up some clinics and a lot of doctors left because they started turning the screws and burning them out. Putting a price on the moral injury, we talk a lot about mental health here, which is good. They left. They stopped practicing. They were so disengaged. When this bill passed, a lot of them came back. So the bill passed with broad bipartisan support, and it was supported by the Oregon Medical Association and hundreds of providers there. And I should say they're willing to speak to this committee too if you want to, as is the Speaker's Office. Both of them have been willing to speak to this committee if anyone has questions. So, I mentioned the American Medical Association. Obviously, I don't speak for them, but I can quote their reports. I thought this was really notable and this was shared. I want to give credit to the Chief Legal Counsel for the Oregon Medical Association for sharing this with me. So a couple of quotes from that report. By and large, at present, corporate practice and medicine laws are minimally enforced at the state level. It's crucial then that state laws attempting to strengthen CPOM restrictions come with a legitimate threat of enforcement. At present in Vermont, we do not have that enforcement piece, which is part of the reason why we want to pass this bill.

[Rep. Allen “Penny” Demar (Member)]: Hello? So, have we had issues in Vermont with the bad actors so far?

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: It's hard to know, because we don't have great, in my opinion, enough reporting and enough oversight in that area. It's hard to answer that question. We have not had a steward healthcare testimony from Audra Sprague. We haven't had a case like that, as far as I'm aware. But there's a lot more oversight that's needed. I I think there are some potential concerns that I would have if some of it seems like

[Rep. Allen “Penny” Demar (Member)]: Do we know how many private investors there is in Vermont now?

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: We do not, or I do not. I haven't seen any concrete data on that. So that's part of it. Then I can get to the reporting section. That's a great question. And I just want to highlight the last quote. Again, this is from the National American Medical Association. States looking to implement a modernized CPOM band, which what we are doing here you I shouldn't say what you are all doing or considering doing need, therefore, prioritize and invest in a mechanism of oversight for CPOM laws. And then just a couple more things. So, laws that aim to strengthen CPOM tend not to be ultra controversial among physicians. However, for these laws that have the desired impact, they must be accompanied by a meaningful threat of enforcement and one that does not solely or even primarily implicate physicians. So, I say this to highlight that just passing a doctrine is insufficient. It's not like it's a bad thing, but for it to have real meaning, what the AMA is saying here is it needs to have teeth and you need to have reporting. And that's what our bill seeks to do. I also want to share this quote. This is, mean, crediting Doctor. Robert McNamara. He was the president of the American Association of Emergency Medicine. He was very much involved in the highest profile legal case against a private equity firm in California, Envision Healthcare. And Envision left the state as a result of that lawsuit. And so, he shared this with me, and this is from the Council on Ethical and Judicial Affairs. This is the highest ethical body in medicine. It says, When contracting with entities, physicians should carefully review the terms of proposed contracts to assure themselves that the arrangement prohibits the corporate practice of medicine. So, at the risk of belaboring the point, is very clear that this is not something that the highest ethical body of medicine is saying we need to do something more about corporal practice medicine. So, I'm compromising. I'm extending my hand. That's my dog. I know this is intense stuff. Wanted to add a little bit of that. So, this is our compromise proposal at a high level. There's some more details that a little bit more detail, which have been shared with the providers and shared with the committee, and it'll be on the committee website. But I wanted to go through high level what we're proposing. We really want to meet the providers where they are and hopefully can come to some agreement about taking a step this year. So, I mean, the concern these are quotes from the letter that was shared and that I've spent a lot of time engaging with and attempting to respond to and come up with proposals for the committee. So there's a concern, prohibits an organization funded by capital investments from owning a healthcare facility. So what the proposal would be is that we're fine with all non private equity forms of for profit ownership, whether you're an LLC, whether you're a professional corporation that already exist under Vermont law. So that's that's fine. So then there's a concern, a justifiable one, about the impact to telehealth. I'm gonna admit, rep, Cina, about, you know, telehealth. Would this threaten the use of telehealth? And, you know, and and also hospitals and and other firms, you know, contracting with out of state staffing companies. You know, there are gaps. We're familiar with workforce challenges in Vermont. So what our proposal would be is exempt telehealth, also exempt nursing homes, exempt out of state staffing companies. But we would keep the prohibitions on these kind of, I would say, predatory or exploitative private equity specific transactions, like real estate investment trusts and hospitals, is what's happened in Connecticut and in Massachusetts. And that's where the firm buys up the land and then basically extracts the wealth from it and often bankrupts the hospital and closes it. So we're arguing that we should maintain that. So Massachusetts did that by the last year or two years ago.

[Rep. Alyssa Black (Chair)]: Can you remind us what sale leasebacks are as well?

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Yeah. So sale leaseback is basically like investing in stocks and then pumping it and then taking it out again. So it's basically getting at the conflict of interest with having a non physician owner having stock in it and then extracting wealth from it. And I should bring that Zuri Song chart of how the fees and the management fees. It's getting at that structure. So, around corporate practice of medicine, I heard very clearly and I can't speak for the provider groups that have concerns, but what I read in the letter is a real support for the concept of a corporate practice in medicine doctrine. So, I mean, it says it right here, We support the intent of the language, but this list is under inclusive and inpatient focus. This should be replaced with the language suggested by many of our organizations. And basically, what we're saying is, okay, we're willing to, again, willing to meet you where you are. We're willing to use the language that some of it was from California, some of it was from Oregon, and include some of the suggested language from 02/2005 and the committee down the hall on non solicitation, non competes, and also clarifying that providers can take on other additional employment. The big thing of importance for us is maintaining the prohibition on dual ownership interests. Again, that's the heart of what corporate practice of medicine doctrines are. I I can't speak for you all. The evidence clearly shows that we don't want doctors in these conflicted relationships, representing financial interests of a firm and trying to take care of patients. We want those to be independent. We want them to be able to independently practice medicine. So, there are a lot of concerns about recording. Again, I am super receptive to we are super receptive to trying to streamline it as much as possible. So there was a concern about multilayered detailed reporting requirements, admin burden, and not all smart providers have audited financials, which I understand. So, our proposal is you only have to report if you have current private equity investment or ownership. And if you don't, just tell us that. Just attest to it. And then I think a lot of the organizations, as far as I'm aware, in in Vermont don't have any of this. You know? So they would just be like, no. We don't have it. And then they would not need to report unless they were considering it or, you know, that change. And if you don't have audited financials, we're saying that's not required if it's not available. I, you know, I serve in the town of Moncton. We're going through a RFP for an audit. You know, they're expensive. I get it. So if it's not available, just do the best you can with the financial information that you have. And again, if you don't have any private equity involvement, all you have to do is say that. And that could be an email saying, nope, I don't have it. Maybe a little more formal than that.

[Rep. Alyssa Black (Chair)]: Do health care providers currently have any reporting requirements to anyone for anything?

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Great questions. Yeah, there some existing reporting, and this is no criticism of the bodies that organize this. It's just hard to find in different parts. So, I mean, the Green Mountain Care Board does an excellent job at public facing materials. So this bill contemplates having them basically just organize that, have it be a very public facing page where folks can see this clinic has this amount of ownership or this amount of investment in corporate equity. So and I thanks for the question. I do wanna highlight that this is existing language that I should have highlighted in my initial testimony. So this language is in there to recognize that maybe there are some duplicative elements. We wanna empower these different agencies to work together. So if there if there is duplicative burden I mean, this what this says is the board can share information reported with other state agencies, the AG, to reduce or avoid duplication in reporting requirements or to facilitate oversight pursuant to Vermont law. And there's also the agreement to maintain confidentiality as that's another, again, very valid concern from the providers not wanting sensitive information out there. And then the last piece, the board can consult with relevant state agencies and merge similar reporting requirements when appropriate. So this is, again, agreeing with the concern. We wanna make this like, I don't wanna I'm often the person in our office that leaves the hospital looking at a lot of this data. Like, I don't wanna look at data that's not valuable or that's duplicative, and I don't think anyone really does. So enforcement, there was a concern about subjecting small entities to audits and fines, which, again, I appreciate that. I'm recommending that we add some language, adding a little I guess discretion is probably the right word. So enforcement is only warranted if there's a material misrepresentation in information or documents provided to the board. This borrows from language that you all passed last year around some of the board's oversight authority and enforcement authority. I want to be clear about the private right of action. There was some added language in there. In version two, I'm proposing taking that out but maintaining the CPA authority that the has and then eliminating the audit authority because that was, again, a significant concern. I think that's important, but again, we're willing to compromise. I hope you're hearing very clearly that we're willing to work with the providers that have concerns, but we really think it's a paramount concern to pass something this year that's meaningful. A couple more pieces. I mean, so it says a lot of activities are in a legal gray area. Private rate of action means the daily work opens them up to lawsuits. So, I mean, again, this is just kind of re paraphrasing what I what I said already. So what does a bill do and what doesn't it do? And this is from before, so sorry to be repetitive, but I want to make very clear. It doesn't ban private equity, doesn't ban venture capital, doesn't ban MSOs, doesn't ban providers from taking out loans or getting investment. We're really after is the control. We don't want and again, this falls back on long standing corporate practice and medicine law that is uncontroversial. I think if you talk to any Vermonter and ask them, Do you want corporations telling you what medical decisions and dictating what your provider does? I would be very surprised if many people said yes. So, it also bans non competes and non disclosure agreements, which again, I think there's a lot of alignment between our proposal and what the providers are suggesting. So, proposed CPM language from some of the provider groups has a lot of this in there, and we're recommending taking the recommendations that they have from the other bill down the hall. So I did want to highlight some of the organizational supporters for the bill. I won't read the full list, but I do want to highlight that there are Vermont providers that very much support this legislation. And there are thousands of them across the country that I've spoken with throughout this process that very much support this effort. And many of these organizations were formed by physicians who have experienced the harms that can happen when you have deficient or insufficient regulation and laws. And the committee can hear from them anytime. Have many positions that are texting me every day, what's going on with this bill? I please, I'm itching to talk about my experience. So if there's a time that folks want to hear from them, happy to facilitate that. Again, just some more providers in Vermont that are very much supportive of the bill and also some health policy experts that I want to highlight. So, I did want to just break out I'm not going get it. But anyway, so this is my grandfather and my grandmother. They were big proponents and longtime Vermont providers. My grandmother worked at the Lund Home for many years and my grandfather was at UVM. He was the editor of pediatric magazine for many years. I want to really I'm inspired by their efforts, and they were adamant about the independence of providers. And both passed recently, but I wanted to honor them.

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

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: So, happy to take any questions. Pull back slides. But I guess the last thing I'll say, just maybe kind of in closing, is ask yourselves if this is the best we can do in Vermont. Is private equity control and corporations the best we can do? I really think we can do a lot better. And when you think about your loved ones, your family, your friends, do you want them to be taken care of by the incredible providers that we have in the state? Or are we okay as a state with corporations influencing provider decision making? So, you.

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

[Rep. Allen “Penny” Demar (Member)]: Right, say you've got some organization, clinic or hospital that's in dire straits and closing, And you have private investors come,

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: and

[Rep. Allen “Penny” Demar (Member)]: you bet them, you don't think that'd be an asset for providing, taking over that, that's going to probably close anyway?

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: It's a great question. I mean, you can invest in a clinic without controlling it. There are ways to be a minority owner or provide an injection of capital. And private equity is also not the only form of investment. There other mechanisms, there are other organizations that can do that. So, again, really what we are is putting parameters around the type of investment and control, not saying you don't want investment. So, that's a great question. That was something that the Oregon legislators really wrestled with a lot. And they talked to you. They didn't throw stones from rooms they haven't been in. They talked to investors, they talked to private equity companies. And there are firms, I don't want to paint with too broad of a brush, to your point, there are companies that want to invest in good faith and make some money, but also support. They don't need to control the clinic. They don't need to own it. So, I would say that's the type of investment we want to be attracting Vermont. And it's real, it's not immaterial. I guess I just want to broaden the scope of what is possible. I don't know if that helps answer your question, but

[Rep. Allen “Penny” Demar (Member)]: Well, can see when clinic or the hospital starts going under and that's not so far away, can see state dollars involved because we don't let investors invest.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Yeah, I mean, this doesn't prevent investors from investing. It prevents the firm from So controlling that's an important distinction that I would make. And as a state, we have to decide what we're willing to invest in and what we're willing to- in my opinion, is you sacrifice a lot by limiting the scope of what's possible to private equity ownership and control. There are many other ways to just look at the blueprint for health, look at how we funnel primary payments to support providers. There are other mechanisms that the state already has employed that I think could be broadened and supportive, we'd be all up in support for that. But we really need to, as much as we need to deter predatory and exploitative investments, we need to encourage healthy, positive, mutually beneficial investment too.

[Rep. Alyssa Black (Chair)]: May I make a point? Yes. There have been situations within the state, and I realize that your proposal is that we exempt them, but private equity investment in our long term care nursing home has not stopped the state having to come in and rescue to the tune of, I believe,

[Rep. Leslie Goldman (Member)]: $14 million in the BAA, this year. This year, 14,000,000 in the BAA with $5,800,000 in

[Rep. Alyssa Black (Chair)]: the general fund. That's fair dollars. And for the past four years, I think it's four years, three years, close to 40,000,000.

[Rep. Leslie Goldman (Member)]: 44, think, yeah. 44. So

[Rep. Alyssa Black (Chair)]: this does not stop the state having to use taxpayer dollars. In fact, I think it's been proven that it has driven up the cost of care, and then the state has had to come in and bail that. I'd rather really make that point that this Are there any states that don't carve out nursing facilities, nursing homes?

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Both states have carved them out, or they've added more oversight over the types of transactions. And I don't want to say that there is an oversight in Vermont. There is. So, I mean, it's compromise. Obviously, it's a change from our original position. I want to be very upfront and honest about that. I I think it's no secret that I have concerns about private equity ownership, and, I think folks on this committee are familiar with some of the negative outcomes that we've seen in Vermont from that type of ownership. But I think it's really important that we try to take a meaningful step forward. And I think there are other mechanisms to improve our oversight there and look at some of these real estate investment trust structures that are very prevalent in the nursing home field. So there's things that can be done there for sure.

[Rep. Leslie Goldman (Member)]: Leslie? I come from an area where a private equity firm owns local nursing home and then bankrupt and had to leave. Know for a fact that people who were residents in that area, they left to did not receive the care they needed. Let's just say that. They were abandoned for many hours over the day. So I worry, by carving out nursing homes, what oversight are we going to have over that kind of structure? Because they did take away staff, which is why people were abandoned. So I'm wondering I understand the compromise. Is there a way at least to have a registry or a way to and maybe that's part of the bill. Do we start getting our heads around where we're at?

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: And

[Rep. Leslie Goldman (Member)]: I understand that we have a long term care ombudsman. You never say that right.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: It's a hard word

[Rep. Leslie Goldman (Member)]: to say. But it's a complaint driven process. And people whose families are struggling are not necessarily going to spend the time and effort to make a complaint. They're going to find a new place for their loved one to be. So I'm hoping, I'd love to have a conversation anyway, about how do we have maybe unscheduled visits or some way of monitoring the care that's going on in nursing homes to at least start getting our heads around what's really going on. Because I really agree with our chair that putting more state dollars into this makes no sense to me. And we could be putting that money into all kinds of other things that we need to do.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: By exempting from this bill, we're just keeping existing oversight, which is conducted through AHS and Dale and obviously the long term care ombudsman plays a role in that. I mean, think you will hear us very clearly saying we need more transparency, we need more oversight. So that's where we are at this point.

[Rep. Leslie Goldman (Member)]: Yeah, I understand that Dale's not our purview, so I get that. And I understand also that people in the HS are really thinking about that, and I really appreciate that as well. So maybe you're working down the hall too, which is great. But I don't know if there's anywhere in this bill, five eighty three, all our bills have the same numbers, having a hard time, to at least put some guardrails around those pieces. I'd like to have unscheduled, or at least think about unscheduled visits to see how patients are. What's it like there?

[Rep. Alyssa Black (Chair)]: If we don't know, we don't know.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Yeah, and I'm not an expert in that area, but I think there is some level of well, I don't want to speak without certainty. So yeah, it's worth speaking to them and worth speaking to the long term crowd. It's been about what the existing process is, because that's not my deep area of expertise. But I share your concerns.

[Rep. Alyssa Black (Chair)]: I will send this to Tasha to post, so it will be part of public comment. But I did want to highlight that we actually did receive, or I received an email from the long term care ombudsman, they identified that there are seven facilities that they know are private equity owned, although there might be others that they're not sure of, but that those seven facilities accounted for 40% of the complaints that they received in FY25.

[Rep. Leslie Goldman (Member)]: I don't know how much of the money that public money went to them. I'm curious, I don't know if we have access to that information.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: I can get that, yeah.

[Rep. Leslie Goldman (Member)]: That would be great.

[Rep. Alyssa Black (Chair)]: Any other questions for Steve? Oh. I appreciate what you've delivered, but thank you.

[Rep. Allen “Penny” Demar (Member)]: You. I get a question.

[Rep. Alyssa Black (Chair)]: Oh, keep going. Allen's got another question.

[Rep. Allen “Penny” Demar (Member)]: I hate to pin the devil's advocate here, but we have

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: plenty of advocates. We

[Rep. Allen “Penny” Demar (Member)]: have a lot of investors in private equity all over our state and country. And help me understand this. We could not take advantage of these investors and money and put up guardrails and safety nets that they don't have complete control of that without turning them down with their money? I think it

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: would turn some people away that really part of their business model requires control. And I can tell you from I know a lot of people, like I have friends that work in the field in private equity. Are plan this is what happened in Oregon. There are plenty of private equity investors that were like, okay, these are the rules of the road. There are ways to make money, there are ways to invest. So we're not for the experience of Oregon, where it didn't have the negative impacts to investment. I think I'd be in a similar place to where you are, quite honestly. I would have anxiety about what impact that would have. But what it really did was it highlighted some of the I don't wanna say bad actors, but actors that their business model was more contingent on, you have to really own and control the whole thing, And private equity actors who were like, we can give you some capital. We can provide some investment here. This is what our contract is. We don't need to control the practice. We don't need to own the practice, but we have a stake in it.

[Rep. Allen “Penny” Demar (Member)]: Thank you. Yeah.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: It's a good question.

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

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Thank you.

[Rep. Alyssa Black (Chair)]: We're gonna have again, I see the Senate is still on the floor, and I know that our legislative council had to be in the Senate. So, Susan, do you want to come on? Sure. I think we're not, probably won't have Janice at Chittenden, but she's on the schedule, but

[Susan Ridzon, Health First (representing provider coalition)]: Hi, everybody. So there's a number of people out of town, out of the country, so you get me today. For the record, I'm Susan Ritson, I'm from Health First, an independent practice association. But I'm here today representing our informal provider coalition that includes Vermont Medical Society, VOS, the Vermont Healthcare Association, BiStage, and others. And I just want to say upfront, we absolutely agree that medical decision making is in the hands of clinicians. We also agree that we want to stop the egregious behavior, for sure. We don't want any of that. But we Sam presented some information, but the language matters, the words matter, and we haven't seen the draft of the bill to respond to with the changes. So it's a complicated topic, hard to do on the fly. We need to look at the legal language, because there has been somewhat of a disconnect of what we're told the bill means and what the lawyers say it means. Just want to close that disconnect.

[Rep. Alyssa Black (Chair)]: Seeing everything that Sam presented, is it fair to say that if the coalition saw language that met the goals that he presented as compromise, that the coalition would be in favor if the language was vetted? And that's sort of an impossible question. Is there consensus around the purpose, I guess is what I want to say.

[Susan Ridzon, Health First (representing provider coalition)]: I think it will depend on the particular organization and the legal interpretation of the language and how their current situation is structured. I can say from the Health First independent practice side, some of the reporting pieces that I saw are very encouraging to me, taking that big onus off of these smaller practices. But the rest of it, we really need to see the bill language and let the lawyers look at it. Okay.

[Rep. Leslie Goldman (Member)]: Are the

[Rep. Alyssa Black (Chair)]: goals does the coalition or does health serve? Is there a consensus that those are the goals that we wish to achieve? And if the language is constructed in such a way that everyone is comfortable that we meet those goals, is that something I that will be totally honest with you. I am the lead sponsor on this bill along with representative Bloomleaf. And we are running short on time. And as you said, there are many people who are not here. And frankly, again, we're running out of time and I'm not going to move forward and spend my personal time or my committee's time on something that I cannot receive verification that we all want to get to the same place. And that's what I'm looking for. Do you want to get and does your organization want to get to a new place where the goals laid out in Sam's presentation on what we want to achieve. Is that what they want to achieve?

[Susan Ridzon, Health First (representing provider coalition)]: I saw what the ACA office proposed less than 24 ago. This is a very complex topic with many tentacles to be able to respond on the fly is really just sort of impossible. Given the complexity of this topic. I think we, there are definitely areas where we agree on in terms of we don't want the egregious behavior, we want the medical decision making to be in the hands of commissions. But without seeing the actual language, really difficult to It's just not in good faith to respond one way or the other. I didn't ask about language. I asked about the concepts. Well, the goals.

[Rep. Alyssa Black (Chair)]: Do agree with the goals? There are many goals. You agree with all the goals?

[Susan Ridzon, Health First (representing provider coalition)]: I can't say that I do.

[Rep. Alyssa Black (Chair)]: No. Okay, well, ones do

[Susan Ridzon, Health First (representing provider coalition)]: you not agree with? Well, I don't have it right in front of me, I'm not prepared to speak to them today.

[Rep. Alyssa Black (Chair)]: Okay, but you're here representing the coalition because you're the only one in the building to speak. I'm gonna speak to you. Okay, then I'll bring you up afterwards, Devin, if that's As I said, I don't want to waste mine and the committee's time because on the fly, this is the legislature, everything's on the fly. We don't have That is true for us in everything we do. Well, I mean, yeah. And we also have a Senate. So I'm asking if language is put, are you willing to work in a coalition in the very near future to get language so that then you can possibly have more time once it returns, once it goes to the Senate?

[Susan Ridzon, Health First (representing provider coalition)]: Potentially. I mean, we did submit language that we thought would address the issue. So, in the spirit of that, certainly, if we're going outside of those bounds, it requires a conversation and the language. I'm not trying to be difficult here, Chair Black. I'm trying to state the reality of things are You know, it's a complicated topic. It is a complicated topic. And this is a topic that came about last session, and we would love a group collaborative conversation around this, but it's hard to do it on the fly.

[Rep. Alyssa Black (Chair)]: Since you brought that up, I would like to point out that age 71 has been on our wall for over a year and conversations that were had around age 71 with this coalition was, we just don't like the reporting requirements. That was the feedback on age 71, which is why we redrafted it over the summer and reintroduced it with a limited scope reporting. And so it's a little frustrating, but Okay, I'm just going to leave it at that. I'm going leave it at that. No, go ahead, Leslie. I have

[Rep. Leslie Goldman (Member)]: a question for you and also for whoever else is going to testify. As Chair Black talked about the amount of taxpayer dollars going to bail out nursing homes. What if we limited taxpayer money to bail out nursing homes? What would happen? And if the business model is impossible, which it's sounding like for the amount of millions that taxpayers are putting into support, we need to hear an alternative because I don't think taxpayers should be responsible for a terrible business model. And that's the question I am concerned about.

[Susan Ridzon, Health First (representing provider coalition)]: I don't feel qualified to speak to that particular topic. I think our colleagues at Vermont Health Care Association would be the best person for that. But it's a valid, valid question.

[Rep. Alyssa Black (Chair)]: Brian has a question. I also have a question to that point. Are you part of the coalition typically that comes in around budget and asks for rate increases from Vermont Medicaid for practices? We have, yes. Brian?

[Rep. Brian Cina (Member)]: I heard remotely you say that one goal that you agree I heard the chair ask if you, in the plural, your organization, which is something that makes it personal, if Moussettes, if you support the goals, I heard clinical decisions being made by the providers, an affirmative to that. I wanted to just be more specific about these other goals. Ensuring that medical care I'm going to read the goals from the healthcare advocates testimony just to see where there's alignment. Ensure medical care is provided by medical professions. Yes or no?

[Susan Ridzon, Health First (representing provider coalition)]: I can agree with that.

[Rep. Brian Cina (Member)]: Okay. Protect the rights and autonomy of medical providers.

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

[Rep. Brian Cina (Member)]: Protect patients and providers from potentially exploitative ownership structures and transactions.

[Susan Ridzon, Health First (representing provider coalition)]: Yes, and at this point I'm speaking on behalf of Health First,

[Rep. Brian Cina (Member)]: Okay. Prevent negative impacts to health outcomes, quality and costs.

[Susan Ridzon, Health First (representing provider coalition)]: Yes, and I would extend that to not just private equity, but the whole system. We have other things going on in our system that fall under that as well, I would say. And then there's

[Rep. Brian Cina (Member)]: one more that they listed at the beginning of their presentation, establish rules for private equity in Vermont's healthcare system.

[Susan Ridzon, Health First (representing provider coalition)]: The devil's in the details.

[Rep. Brian Cina (Member)]: Thanks for just being more specific. That's what I want to say.

[Rep. Alyssa Black (Chair)]: Other questions? All right. Devin, thanks for coming up on the fly. Sure.

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: I'm Devin Green, Vermont Association of Hospitals and Health Systems. I was not designated by the coalition to do this. It's a little off the cuff. But I just wanted to help Susan out a little bit. And I understand the desire to get goals out there, but I will also say that this has been a process where we have put forward So H71 is on the wall, and it had a very big regulatory framework involved. The change from H71 to age five eighty three was to get rid of that regulatory framework, which would allow the good actors in and just outright prohibit private equity, which was defined very broadly. It included for profit entities. So that was not a limitation to age 71 in my mind. That was an expansion. It didn't seem like it was actually addressing our concerns. And the reporting requirements in there were still quite onerous. We have put forward compromise legislation. We have tried to work with the health care advocate on that compromise legislation. We asked that they start in that space and we could go from there. And we did not get a positive response to start there. We were told that we were going to agree to disagree. So that's where we left it a couple weeks ago. It's hard for us to come in here right now and say what we agreed to when things have been presented as, oh, we're actually making this smaller when it was bigger. We need to see the language on the page to agree to something.

[Rep. Alyssa Black (Chair)]: Thanks. Hold on. If you can just give me one second. I wanted to read something. I'm not going to read it out loud, but I wanted to refresh my memory. I did see that the healthcare advocate's office had sent in possible proposals and suggestions, and I believe that was all sent. And there are many, many indications throughout that essentially say replace with the language recommended by the letter that the coalition sent.

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: But we don't like the definition of private equity, but that is we have heard the healthcare advocates say, here's the goal that we're trying to do. And then the words on the page have been much broader. Okay. Can you,

[Rep. Alyssa Black (Chair)]: as representing the hospital association, can you agree to the concepts and premise of what the bill should achieve. Is there anything in there that you are like, no, we will never agree to that without having language? If language can be crafted in such a way to ensure that it is doing what the concept is trying to do, is there anything you disagree with in the proposal?

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: To me, the concepts have stayed the same, right? Like, the concepts have not changed greatly.

[Rep. Alyssa Black (Chair)]: Do you agree with the concepts?

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: I don't know, because if the concept incorporates, like, hospital can't buy another health care entity, then I don't agree with that. Go ahead.

[Rep. Brian Cina (Member)]: I'm not very familiar with the details of the Oregon law, but that was used as an example. Has your organization or coalition reviewed that law at all or considered how that might be used back as a model?

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: In the summer and the fall, again, when we were drafting up our language that we put forward as a proposal. I haven't I would have to go back and look at it again. I think there's within our coalition, we discussed the language that we put forward for quite a while and went back and forth on it, and that's the language where we landed.

[Rep. Alyssa Black (Chair)]: Am I mistaken in that the language that you put forward was almost word for word the Oregon law?

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: I don't remember, I'll be honest. I would need

[Rep. Alyssa Black (Chair)]: to go back and check. Because it seems to me that every single time somebody has come in here, they said, Why don't you just do what Oregon did? Which implies to me that you all have studied the Oregon law and know the Oregon law pretty well.

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: I know we looked at California and Oregon law, and when we were looking at it back in the fall and December and January, we knew it pretty well, but I would need to go back and look at it again.

[Rep. Alyssa Black (Chair)]: Alright. Well, thanks for coming up on the fly.

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: Thank you. Thanks for having me.

[Rep. Leslie Goldman (Member)]: You have an answer about public money going to rescue private equity, because that money goes to shareholders, and that could go to shareholders, maybe not. And that's a concern.

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: I mean, nursing homes are primarily funded. I don't know if I should speak to it, because I don't represent the nursing homes, so

[Rep. Leslie Goldman (Member)]: I won't speak to it. Totally. But it's about private equity. It's about public money and private equity, not necessarily nursing homes, because they're methadone clinics too, which we know they go through. Right.

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: I will just say that the agency of human services has said that we need a thousand more nursing home beds, and we have certainly felt that crunch. And if we lose the nursing home beds we have now, it will have a negative impact on hospitals. But

[Rep. Leslie Goldman (Member)]: if we lose nursing home beds because they're being understaffed and the institution is not being supported, it seems from the values point of view, but it doesn't make sense to me. Doesn't accept bad process or bad policy. I mean, can we? Or is that what you're saying? Any bed is worth anything?

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: No, I'm saying, what's the solution that you're going to replace those nursing homes?

[Rep. Leslie Goldman (Member)]: That's a different conversation, certainly in another committee. What we're talking about here is

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: But without both, at the same time, we're going to be in a real It's going to be a crisis.

[Rep. Leslie Goldman (Member)]: It's a systemic problem.

[Rep. Alyssa Black (Chair)]: Do you think that organizations that are owned by shareholders, private equity, people who or entities that do not practice medicine in any way should be asking for public dollars?

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: All my folks are nonprofit, so I don't know. Okay.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: Go

[Rep. Brian Cina (Member)]: ahead. You mentioned nursing homes and the need for 1,000 beds as a pending issue that is rolled up in this decision around private equity and corporate ownership. I'm wondering if anyone could speak to the risk versus benefits of relying on private equity to provide that public asset of a nursing home, because we've seen in other states that they tend to liquidate assets. We even heard in Vermont that they're buying up methadone clinics and then cutting the counseling and then upping the dose to the maximum amount of methadone you can give someone and then forcing them to do urine screens every day. If that's the kind of practices they do when they prop up our healthcare system, I'm just concerned about relying on that for a thousand beds. And I know it may not be this committee, but I would say we need publicly owned nursing homes at this point, fast. But in terms of private equity, what are the risks versus benefits of that financing mechanism for supporting?

[Devin Green, Vermont Association of Hospitals and Health Systems (VAHHS)]: I'm not saying that we should have private equity come in and build a thousand nursing home beds. Although if it's a good actor, I'm open to it for sure. But what I'm saying is it just goes to show the need that we already have and losing more nursing home beds would be a huge problem.

[Susan Ridzon, Health First (representing provider coalition)]: And I will point out that private companies do pay taxes. So if it becomes a nonprofit or state owned, you're losing that piece of it. It's something to consider.

[Rep. Leslie Goldman (Member)]: Thank you, thank you.

[Rep. Alyssa Black (Chair)]: We are actually done for the afternoon. So, oh, I will put this out here publicly. It is my intention that we will be meeting very soon. There is interest in the committee, again, I'm not interested in wasting the committee's time. I'm not interested in wasting my time. And if there is interest in moving forward with this, then I'm willing to meet with all the stakeholders or the stakeholders that can join us on the fly and put language forward for the week when we get back after town meeting. If the committee has decided that this is not something they want to move forward, then I'm not going to waste our time or your time or my time. So can I get a read on whether or not anyone wants to move forward in any kind of form with this bill? I do. Do. Yes,

[Rep. Allen “Penny” Demar (Member)]: go ahead. Question. I do not want to push this through and do something we're going be sorry about. This is a rush job, we don't know what's in the bill, haven't talked to all the actors. I can't support this bill right now.

[Rep. Leslie Goldman (Member)]: This isn't the bill. This isn't the This

[Rep. Alyssa Black (Chair)]: is not the bill. I'm asking I think we're rushing this through. If we're able to reach consensus with stakeholders on some form of language, would people like me to pursue that and bring it forward that next week, which I understand you cannot support this bill now, obviously, but this bill will not be the next bill that you see. I don't want to waste legislative council's time. I don't want to waste anybody's time. So

[Rep. Brian Cina (Member)]: without I, saying language like others concerns, it's hard to say what I've agreed on. But if we can't come to some kind of consensus on how to move forward, I would ask that we pass a bill that requires folks to come forward with a plan for next year because that we can't just keep avoiding this issue, or we're gonna cross a threshold that we won't be able to come back from. But I also want to be respectful that people are reliant on that there's just all kinds of complicated business relationships involved here. It would be great if we could come back after cross not at the crossover, sorry, after town meeting day, and all the stakeholders would say, We came to some agreement on a version of the Oregon bill, and we hear that in three hours and we pass the bill, that would be great. But if we can't do that, then I would ask that the stakeholders be willing to engage in some kind

[Rep. Alyssa Black (Chair)]: of process outside of here and come back next year with that bill. So what I'm hearing is you would like me to continue the conversation.

[Rep. Brian Cina (Member)]: I would like us to do something on the issue, one way or the other.

[Rep. Leslie Goldman (Member)]: I think we put a lot of time and effort into it. A lot of people have put a lot of time, learned a whole lot about private equity that

[Rep. Alyssa Black (Chair)]: I had no idea about.

[Rep. Leslie Goldman (Member)]: It's scary. And public money, blah, blah, as I've said a million times. I think we should give it a last shot. And if we could agree at least to city language, taking it to the next level. And if we can agree on it, great. If not, then we'll go to next year, but whatever. But I think it would be great to make an effort to do something now.

[Rep. Alyssa Black (Chair)]: Daisy? I just am contemplating that it appears that health care providers got together and developed language and that there was a coalition of providers that did that, submitted a letter to us. They've come to an agreement. It seems there's the health care advocate that needs to work with that language. I'm just noticing there's a discrepancy the sides of disagreement, and I'd really like to see them work together.

[Rep. Allen “Penny” Demar (Member)]: That's all I feel. Should work together.

[Rep. Alyssa Black (Chair)]: Okay, So what I'm hearing is to keep going, Alyssa.

[Rep. Brian Cina (Member)]: That's what I'm hearing. Have a question. Yes. It's like a question for everyone. Is there anyone on the committee who opposes taking any action whatsoever to protect our healthcare system from predatory private equity practices. I'm just making sure, no, it's

[Rep. Alyssa Black (Chair)]: Stand up. No, I think it's a good question. I actually do think it's a good question.

[Rep. Allen “Penny” Demar (Member)]: I just want to do it right. Absolutely.

[Sam Pajj, Office of the Health Care Advocate (Vermont Legal Aid)]: That's what I'm getting at. I think

[Rep. Leslie Goldman (Member)]: that.

[Rep. Allen “Penny” Demar (Member)]: We'll have to live with the consequence.

[Rep. Leslie Goldman (Member)]: How many repeals have we seen?

[Rep. Allen “Penny” Demar (Member)]: How many other bills we've to work on?

[Rep. Brian Cina (Member)]: It's right

[Rep. Alyssa Black (Chair)]: need to

[Rep. Allen “Penny” Demar (Member)]: We jury things through. Bottom line is just, Starz Lueders now. There is no willingness on either part to come together and work on it, I don't want to waste my time on it. That's why I said that I want to see people working together. It's a big deal, let's work together and see if we can solve it. If we can't, we got other things to do.

[Rep. Alyssa Black (Chair)]: Debra, did you have your hand up? Yeah. I did. My understanding is that some of the language that was submitted has been brought about by Healthcare Outfit, I think they're already not wrong. I think it would be great to see what language we come up with. Thank you. Then I commit that I will do that. You for taking Thanks this for giving me the support. I appreciate it. Really. Yeah, Lori, Are you in support of me moving forward and working with stakeholders to see if we can come up with some sort of compromised language or what was the question you asked, Brian? Yeah.

[Rep. Brian Cina (Member)]: I said, is there anyone who has a problem with us moving forward in any way to protect us, our healthcare system from predatory private equity practices. A good

[Rep. Alyssa Black (Chair)]: way of putting that. Hard enough working with stakeholders.

[Rep. Brian Cina (Member)]: I'm excited to take the path forward.

[Rep. Alyssa Black (Chair)]: Okay, see, all right. So I have unanimous support in moving forward.

[Rep. Brian Cina (Member)]: He said as long as we do it right. That's what he said. Okay.

[Rep. Alyssa Black (Chair)]: Yes. Are they willing to do?

[Rep. Leslie Goldman (Member)]: Doesn't matter. They're being a Well,

[Rep. Brian Cina (Member)]: does matter, because if someone doesn't wanna do it, and we say that if we say everyone can't work together, we're not doing anything, then one bad actor can sabotage the whole process. I

[Rep. Alyssa Black (Chair)]: know I've been late since this conversation, but I'm not liking the way it's going right now. I think we need to have good faith for everyone that's in this room right now, including all of us at eleven at

[Rep. Leslie Goldman (Member)]: this table and everyone standing around us. And I

[Rep. Alyssa Black (Chair)]: think I received an indication from all parties that they are willing to engage in the conversation. Okay, thank you. We can go off of live, Lori. Wait, Deb, wait, no, Deb's got something. Can I ask a question about yesterday's because she's on the I know? I know. Although who would you want it to ask it to? Is that person in the room? Maybe. Oh, me. I'd like to know why we haven't heard from the healthcare sharing groups. And their testimony. If we're going to micromanage them, we need to be on their side of the Because they have not reached out to us in any way to offer any sort of testimony. And to be honest with you, there are various coalitions, trade organizations,

[Rep. Leslie Goldman (Member)]: all sorts of I'm even to hear

[Rep. Alyssa Black (Chair)]: all the 14 that we know of that are working in the state, but I think a general consensus would We have received no testimony from any organization that represents them. I'm putting it out there. This is public. If anyone would like to speak on this, frankly, anyone represents a coalition that H-one 102 has been on our wall since last year. I don't believe I do not believe we have received any sort of written testimony from anyone. Frankly, because we don't know who they are, I wouldn't even know how to contact anyone. But they can contact us.

[Rep. Brian Cina (Member)]: Can you know, yeah. If you want to find us something.

[Rep. Alyssa Black (Chair)]: I can find you some guidance, okay? Thank you. We're happy to do that. Also, you could probably contact the Department of Financial Regulation. They might have some information. But we've brought this up before. We had testimony last week on it, and we didn't receive anything from anyone. That's a good point. Thanks, Steph. Thank you.