Vermont Legislature SmartTranscripts:

[Rep. Emilie Kornheiser (Chair)]: Good morning.

[Nolan Langweil (Joint Fiscal Office)]: Morning. Today

[Rep. Emilie Kornheiser (Chair)]: is some day of the week. The May 19. May it's May 19. It's 11:18, and we are here in the Ways And Means Committee Room on this glorious, very warm Tuesday. We have two bills in front of us that we are picking up. The first one is S-one 190. Scott, may I have a printed agenda when you get a chance? Thank you. And we are going to start off with Jim Carvey.

[Jennifer Carbee (Office of Legislative Counsel)]: Morning. Jane Kirby from the Office of Legislative Council. We are looking at S-one 190. I will put up on the screen. This is S-one 190 as recommended by the Committee on Healthcare. This is as it came over from the Senate, an act relating to the Green Mountain Terror Board reference based pricing and studying the creation of a published employee health benefit authority, although the name is going to change by the time we get to the end of the amendment. So this is a strike all amendment. It starts out with some provisions around reference based pricing, which you may remember from last year is the idea of having to do that in Care Board, set prices that are the maximum amount that providers may accept for healthcare services based on a percentage of some known benchmark as the reference, generally thought of as Medicare, although it may be there's flexibility for them to use something else that they reference as well. So the first addition to the existing statute is to direct the board to use reference based pricing to reduce hospital prices incrementally until they equal national median prices by hospital type by calendar year 2030, and to use high quality nonpartisan data. Then the language requires, and you can tell me how much detail you do or don't want. Some of the reference based pricing provisions are going have more relevance to this committee, at least sort of conceptually than others. Maybe summarize sections as well

[Rep. Emilie Kornheiser (Chair)]: and dive into, if that works. Sure. And is this the one that we have a major amendment? Yes. Okay. Yes.

[Jennifer Carbee (Office of Legislative Counsel)]: And so I think maybe we will look briefly at the language in those sections in this bill and then pop over to the amendment and look at the language in the amendment and then we'll go back into the bill. So the first two provisions on this page are starting to have hospital prices expressed as a percentage of Medicare or another benchmark, so that we're starting to think of things that way and allowing hospitals to use their actual Medicare reimbursement amounts as opposed to sort of a standardized amount, which we use somewhere else in the bill to start. Also requiring hospitals to get and use a unique national provider identifier number so that we can start to identify more readily what services are being delivered through hospital outpatient departments as opposed to the hospital itself. Sections two and three of this version are dealing with hospital budgets and budget review. We start off with the definition of Medicare adjusted base rate. So this is coming up with kind of a standardized Medicare payment amount that would be applied across the state for purposes of reference based pricing. And then Section nine, this would add a new 18 BSA 94.59. And this general concept of having limitations on hospital reimbursements. So what hospitals will get paid for providing services to people on qualified health benefit plans. Those are the exchange plans and plans covering school employees. These are plans offered through VIHI. That concept carries through, but the amounts are set differently. And the so, bill has came over to you from House Healthcare. This would have the Board, Greenmount Care Board, in establishing fiscal year twenty twenty seven hospital budgets, directing kind of a set amount, an amount equal to 3.5% of hospitals combined commercial net patient revenue toward reducing the commercial reimbursement rates for the qualified health plans and BHI plans based on a percentage of the Medicare adjusted base rate. In this version, we are talking about hospital that is not a critical access hospital, is not classified as a Medicare dependent hospital under federal law, and is not participating in rural community and hospital demonstration program. So it was only really for the prospective payment services hospitals. So limited set of hospitals, that concept goes away in the amendment that we're going to look at. So does this whole idea of directing a specific amount. And then the bill, again, came from House Healthcare would allow the Green Mountain Care Board in establishing fiscal year 'twenty eight and 'twenty nine hospital budgets to limit commercial reimbursement rates for the qualified health plans and be high plans to not more than 300% of the Medicare adjusted base rate in fiscal year twenty eight, and not more than 250% of hospital fiscal year twenty nine. This whole section is going out, so don't get too limited to any of this. It's going out through the proposal amendment. So this is the version that came over to you, so you should at least be aware of what's in it. Most of the rest of the provisions remain roughly the same from this version and the amendment, saying the carriers, tapping the amount that the carriers and BIHI can pay to the amounts that the Green Mountain Care Board sets and prohibiting balance billing, prohibiting hospitals from collecting more from the individual, from the patient than is allowed under these caps. And then if the hospital is required by the board's budget order to reduce its commercial rates more than what is done through whatever kind of, through not care board directed limitations for these two plan types allows, then the hospital will be directed to reduce its commercial reimbursement rates that are more than 500 of the Medicare adjusted base rate, or if they don't have any of those, their highest ones. It's looking at bringing down rates that are the highest in comparison to Medicare. And then it directs the Green Mountain Care Board and Department

[Nolan Langweil (Joint Fiscal Office)]: of Health

[Jennifer Carbee (Office of Legislative Counsel)]: Organization when they're doing their health insurance rate review to make sure that the qualified health plans and the Beehive plans have reduced premium amounts or reduced increases, but that these reductions in the reimbursement amounts are reflected in those premiums. So it's supposed to be directed to reducing those premiums, You're telling the regulators to make sure it is. Section three of the bill that came over from House healthcare, and this section would be deleted in the amendment we're gonna look at next, would increase the cap that was set last year on outpatient prescription drugs administered in a hospital setting, an outpatient or office setting at a hospital. It's currently 120% average sales price as the CAST. This would have increased it to 130% to give a little bit more money back to the hospitals. This section is coming out in the amendment. So I will stop here and pull up the amendment. And then we will go back to the other sections of

[Rep. Emilie Kornheiser (Chair)]: the bill. Thank you.

[Jennifer Carbee (Office of Legislative Counsel)]: Here is the amendment, and I'll go a little slower on this because I think it's more of what you're gonna be be talking about. Is that posted? Oh, I did not send that one to you. It is on the House Health Care website from Friday. Friday? And you want Jack 2.1. All right. So this is a five, one, two, three, four, five, six, seven members of House Healthcare. And it would strike out sections two and three and put section two and have no section three. So the new section two would instead of codifying this concept of limitations on hospital reimbursements for the qualified health plans and the high plans for fiscal years 2728 and '29, this would instead just have a standalone one year session mark provision just for hospital fiscal year 2027. It also takes out the definition of the limiting definition of hospitals. We're talking about all hospitals that the Remote Care Board regulates.

[Rep. Charles Kimbell (Ranking Member)]: Fiscal year is

[Jennifer Carbee (Office of Legislative Counsel)]: October to September. It's the federal fiscal year. Right, the reach, right.

[Rep. Charles Kimbell (Ranking Member)]: The reach

[Jennifer Carbee (Office of Legislative Counsel)]: is calendar year, but all of our general hospitals are on that federal fiscal year. So here, of that language that we're looking at with the 3.5% and the 300% of Medicare adjusted base rate, the 150%, instead, this would say, notwithstanding any provision of the, this is really the Green Mountain Care Board rate setting rulemaking requirements to the contrary. So the Green Mountain Care Board is still working on its rules for reference based pricing. So notwithstanding the requirement that they go through rulemaking before doing reference based pricing, legislature is authorizing for fiscal year twenty twenty hospital fiscal year twenty twenty seven authorizing the board. The board may order hospitals to reduce their commercial reimbursement rates for qualified health benefit plans and the VHI plans based on a percentage of the Medicare adjusted base rate determined by the board for each item provided and service delivered in Vermont for enrollees in these plans. So this is, instead of dictating the percentage, it is authorizing the Green Mountain Care Board to do reference based pricing for the qualified health benefit plans and the BIHI plans for hospitals for hospital fiscal year 2027. And then the rest of it is the same, directing the carriers and BIHI not to reimburse more than the percentage that the board identifies for the hospital fiscal year for someone enrolled in the BHI or exchange plans. Sorry, one second. Prohibiting balance billing. One

[Rep. James Masland (Member)]: second. Represent Masland? One second. So is this plan by plan, it's not item by item? Reference based pricing?

[Jennifer Carbee (Office of Legislative Counsel)]: They would be setting the amounts that hospitals, or capping the amounts that hospitals can charge for qualified health benefit plans and VHI plans for each item provided and service delivered in Yes, the last

[Rep. James Masland (Member)]: two it's the each item that I was curious about. So they can be quite specific if they think they need to.

[Jennifer Carbee (Office of Legislative Counsel)]: They can be quite specific if they

[Rep. James Masland (Member)]: think need Okay, thank you. Understood. This is for 2027 only?

[Jennifer Carbee (Office of Legislative Counsel)]: This is for 2027 only, yes. For hospital fiscal year 2027.

[Rep. Charles Kimbell (Ranking Member)]: Percentage can be 80% of your pills be 120%.

[Jennifer Carbee (Office of Legislative Counsel)]: The percentage of Medicare. Yes. Right, Medicare is sort of in general, at least historically supposed to be cost. So, we'll see if there's anything that's below 100. But this is part of the board looking at hospital budgets. Is this all hospitals? This is all hospitals. This is not limited. So, and the rest of it is basically the same. There was a piece in the version that came out of the house about hospitals being able to adjust other rates. This doesn't get into that because it's not lending those.

[Rep. James Masland (Member)]: And

[Jennifer Carbee (Office of Legislative Counsel)]: then it would strike out section three, which was the change in the outpatient prescription drug cap. So it would stay at 120% of the average sales price as in current law for the hospitals that are affected. And then the effective dates section changed because there was a whole piece around implementing Section three and now Section three of them. Shall I go back over to the Yes, please. Thank you. Bill? The rest of the bill that came over from House of Health Care is not amended, although then you'll see again when we get back to the effective dates.

[Rep. Alyssa Black (House Committee on Health Care)]: Section

[Jennifer Carbee (Office of Legislative Counsel)]: four relates to hospital outsourcing. And there's a provider tax element to this, which think is part of the reason that the bill is here. So this would say that for fiscal year twenty twenty seven budgets, the Agreement Care Board shall direct hospitals to provide whatever information the board requires regarding the clinical services that the hospital outsources to external entities. And then by 01/15/2027, the board, after consulting with hospitals and their contractors and assessing the impact of outsourcing on access to and quality and availability of care, will provide findings and recommendations on hospital outsourcing to various committees, including this one. And in addition, the board, in collaboration with the agency of human services, will report on the extent to which hospital outsourcing affects provider tax revenue and recommend any necessary changes to the provider tax statutes to appropriately reflect expenditures for patient care at Vermont hospitals.

[Rep. Emilie Kornheiser (Chair)]: And that, my friends, is the main reason this is here at Vermont. Right,

[Jennifer Carbee (Office of Legislative Counsel)]: I think it's this and the potential for impacts on the Ed Fund if there's downward pressure on rates for fee finance.

[Rep. Emilie Kornheiser (Chair)]: So ideally saving Ed Fund money ends this report.

[Jennifer Carbee (Office of Legislative Counsel)]: All right, section five is really the reader assistance setting. It kind of says it all. It excludes reference based pricing from the scope of healthcare professional bargaining that's otherwise allowed between the Green Mountain Care Board and healthcare professional bargaining groups. Section six codifies existing practice for appeals of Green Mountain Care Board orders. They do not have an internal administrative appeals process. So appeals currently and will under this would continue to go to the Vermont Supreme Court. Section seven and eight deal with a new health system performance tool that the Green Mountain Care Board would develop and maintain. Public interactive tool with information on health system performance, and it would update that tool on a regular basis. Section eight says that requirement to develop the tool is contingent on the board receiving sufficient funding from the federal government or another source for this purpose. I believe it was included in the Rural Health Transformation Grant application. Section nine deals with critical access hospitals and Medicare outpatient cost sharing. And I don't know if this committee has done anything on this topic, if you can join in the educational piece at the beginning here, it says, General Assembly and Green Mountain Care Board have recently become aware of federal requirement that Medicare beneficiaries have to pay 20% of the amount charged for outpatient services delivered by critical access hospitals, not 20% of the amount that Medicare pays. So this is based on hospital charges, which are often quite high and are used as the basis for negotiations with insurers and other payers. And so while the general assembly understands we can't invalidate this federal requirement, you're also recognizing that it has a significant unfair and negative financial impact on Medicare beneficiaries in the state's most rural communities, and that Vermont's critical access hospitals are some of the state's most financially vulnerable healthcare facilities. And so this section is trying to provide information to Vermont seniors and other Medicare beneficiaries about the federal requirement, while a working group of interested stakeholders tries to find appropriate and enduring solutions that don't undermine the financial sustainability of our critical access hospitals and that comply with federal law. So this requires critical access hospitals by September 1. I a question before I can make

[Rep. Emilie Kornheiser (Chair)]: sure I understand So

[Rep. Bridget Burkhardt (Clerk)]: if a hospital is charging 500% of Medicare, the payment for the senior would be based on 20% or 500 of Medicare, not on the actual Medicare payment.

[Jennifer Carbee (Office of Legislative Counsel)]: Right. And I think that the numbers in that example may mean that the patient is paying the full amount, the full cost.

[Rep. James Masland (Member)]: That amount may be significant.

[Jennifer Carbee (Office of Legislative Counsel)]: It may be significant.

[Rep. James Masland (Member)]: Yes, thank you.

[Jennifer Carbee (Office of Legislative Counsel)]: So this would have by 10/01/2026, each critical access hospital must do all of the following. It must identify all of the outpatient services for which the amount of the hospital charges equals five times or more the Medicare allowed amount for the service. Post prominently on its website and in outpatient departments of a hospital, a disclosure about the federal requirement that Medicare beneficiaries are responsible for 20% of the charge, that Medicare beneficiaries may be able to receive care with reduced out of pocket costs from other providers and how to contact the hospital's Patient Financial Assistance Department for more information. The hospital must file its proposed disclosure materials with the Agreement and Care Board for approval of posting. And then it asks to the extent the board engages in efforts to address the Medicare outpatient cost sharing issue in hospital fiscal year 2027 and ask them to consider any proposals from critical access hospitals and other interested stakeholders and ensure its actions are consistent with ongoing hospital transformation efforts and the Act 48 process. Finally, have the effective dates. So as in the amendment, we would just have the act takes effect on passage. This whole long section about section three would go away in the amendment. Any questions for John before I move on? Yep.

[Rep. Charles Kimbell (Ranking Member)]: Any reason in regards to what the hospitals have to do in advertising or reporting that they may pay 20% and not shall? It's a federal requirement. Right, so shouldn't it be shall?

[Jennifer Carbee (Office of Legislative Counsel)]: It says must, I'm not sure.

[Rep. Charles Kimbell (Ranking Member)]: It says May. Where are you looking? The next page 15, I believe.

[Jennifer Carbee (Office of Legislative Counsel)]: So it says, Most prominently, federal government that Medicare beneficiaries must pay Okay, 20 I'm sorry. It have been the must and the pay next year. They may be able to receive care with reduced out of pocket costs from other tribes.

[Rep. Charles Kimbell (Ranking Member)]: Nope, I just misread it. Okay. Any

[Rep. Bridget Burkhardt (Clerk)]: other questions for Jen? Okay, thank you,

[Rep. James Masland (Member)]: Jen. Do

[Rep. Charles Kimbell (Ranking Member)]: you have the vote on the committee?

[Rep. Emilie Kornheiser (Chair)]: Representative Flack is gonna open this up. Nolan, I think you're next unless you would rather.

[Rep. Bridget Burkhardt (Clerk)]: Okay.

[Nolan Langweil (Joint Fiscal Office)]: Not my fault. A lot happened over the weekend. I'm just kidding. For the record, Noel Lang on the joint fiscal office. I think Jen stole my thunder. That's okay. I think the two main reasons that the bill is here is, as she pointed out, one is that the impact, the potential impact on the Ed Fund, and two, there's a study on the impact of outsourcing services on provider tax revenues. So in short, in terms of the impact on the Ed Fund will largely depend on how the Green Mountain Care Board implements this provision of the bill and the actuarially predicted and eventual actual utilization of services by Beehive members at those specific hospitals. So we don't know how much those savings will be or how much it will impact the Ed Fund.

[Rep. Emilie Kornheiser (Chair)]: I'd also add that, and then the decisions that districts make about how to, whether to reduce their budgets as a result of cost savings or whether to keep their budgets the same. Yes, there's a lot

[Nolan Langweil (Joint Fiscal Office)]: of moving pieces before we see impact on the Ed Fund. And then in terms of the hospital outsourcing, like Jen said, directs the Green Mountain Care Board in collaboration with AHS to report on the extent to which hospital outsourcing affects provider tax revenue.

[Rep. Bridget Burkhardt (Clerk)]: Thanks. Any questions for Nolan? Thanks.

[Rep. Charles Kimbell (Ranking Member)]: Nolan, have you seen any trends in provider tax revenue because of outsourcing now?

[Nolan Langweil (Joint Fiscal Office)]: So the answer is it was brought to our attention I think about a year ago, and the Green Mountain Share Board has been trying to track it. It's so hard to tell like how much it has or hasn't impacted revenue. We won't know the impact until it's actually looked at because trends are going up, and then things change. So we don't know how much that flux is that versus other factors. So that's what the study is going to help us identify.

[Rep. Bridget Burkhardt (Clerk)]: So for impact on the Ed Fund,

[Rep. James Masland (Member)]: We can see something that we would have to put in the budget and

[Nolan Langweil (Joint Fiscal Office)]: It would be the impact on the Ed fund will be so the reference based pricing will reduce costs, including the VIHI. The issue is we just don't know how much the reduce costs, and then it gets into the whole, like, what are the total costs of the system? And then that eventually will be built into how many pennies are you adding to the, you know, it all depends on to Representative Kornheiser's point, depends on how districts decide to use it. So there's a lot of moving pieces.

[Rep. Bridget Burkhardt (Clerk)]: But we don't know when those moving pieces will occur.

[Nolan Langweil (Joint Fiscal Office)]: We know when they will occur if you pass the bill. We just don't know how it will actually, what those numbers will wind up.

[Rep. Emilie Kornheiser (Chair)]: When will they occur if we pass the bill?

[Nolan Langweil (Joint Fiscal Office)]: I think this will go into effect and it will be impacted in the next cycle of premiums. So they'll put it, January 1 is when the new plans go into effect. So this would, in theory, be affected in that year plan, but we don't know what that number would be.

[Rep. Emilie Kornheiser (Chair)]: So it could lower FY 'twenty eight budgets

[Rep. James Masland (Member)]: if Or

[Rep. Emilie Kornheiser (Chair)]: it works

[Nolan Langweil (Joint Fiscal Office)]: offset the increase. Yes.

[Rep. Bridget Burkhardt (Clerk)]: I'm still trying to get over the fact that we would charge 500, 700% of her, in some case, of Medicare for certain procedures. How long has that haven't been true or is that a gap that has been growing?

[Nolan Langweil (Joint Fiscal Office)]: That's a great question. I'm not a good expert to talk about the trends of hospital pricing, So I think

[Rep. James Masland (Member)]: that I would defer to the Green Mountain Care Board in terms of how long they've been seeing things. It's a great question though. Anyone else? Thanks, Nolan.

[Rep. Bridget Burkhardt (Clerk)]: Sarah Black. So I have gone back to

[Rep. Alyssa Black (House Committee on Health Care)]: my committee room three times to get the proper bills, and I have failed on all three occasions. So you want to ask me anything about other bills, I'm top down prepared, but I don't have 100 I think I wanted to so first of all, the oh, I'm sorry. For the record of representative Melissa Black, chair of House Health Care, I wanted to just touch on the claims tax piece. Through hospital budget orders and hearings for last year's hospital budgets, it kind of became apparent that various hospitals were outsourcing different types of services, different provider types, which, number one, it removes it from the regulatory process because they do have regulatory authority to regulate hospitals. But again, what the effect is on the claims tax. And of course, your question, it's very difficult to know since prices are going up. So claims tax is increasing and yet services are being removed that are being taxed. So, you know, it's which is why this study is inherent. Did I say provider tax? This is provider. Provider tax, oops, sorry. Provider tax, since hospitals are on that. Regarding the reference based pricing, this bill has had many iterations as it's moved through the Senate into the House. This is a reference based pricing bill. And I will just say that the language that was passed out of House health care, it was probably the fourth or fifth iteration of, Okay, if the Green Mountain Care Board, in their hospital budget orders, is going to be drawing money out of hospitals and approving their budgets, that those savings we wanted to target to the most vulnerable markets. And the most vulnerable market is really the QHP market and additionally, the VHI, as that is driving, it's a driver of education costs, as you all well know in this committee. QHP is qualified health plans. Qualified health plans. So those are the individual exchange, people who buy on the individual exchange, and also the small group, small employers who are not able to be self funded, essentially. As it worked its way through,

[Nolan Langweil (Joint Fiscal Office)]: it

[Rep. Alyssa Black (House Committee on Health Care)]: started becoming apparent that it was less and less about actual reference based pricing. It was more about trying to constrain the already statutory process that the Green Mountain Care Board has in hospital budget review and their budget orders. And when it left House Health Care, it was determined that we were inserting ourselves into a process which is well established, has been working, and it sort of lost the thread a little bit of what we were trying to do. And all we were trying to do is in Act 68 of last year, which was the reference based pricing bill that we did that passed, it was ordered in Act 68 that the Green Mountain Care Board shall essentially commence reference based pricing for hospital fiscal year 'twenty seven, which is coming up in October. Because the rulemaking process has taken so long, unfortunately, they weren't really able to implement reference based pricing for hospital fiscal year 2027. So they came to us, the legislature, to ask for authority to be able to start, which is what we intended. So the amendment that you saw presented essentially pairs it down to the Green Mountain Care Board in 2027 may start reference based pricing. And when they're doing their hospital budget guidance or hospital budget orders, that they can direct those savings to these two vulnerable markets. That's what the amendment does. Thank you. And thank you for the continued work on reference based pricing. It's Thank you.

[Rep. James Masland (Member)]: That's not something we've been working on for a while.

[Jennifer Carbee (Office of Legislative Counsel)]: Yes, absolutely. Thank you so much. I appreciate your thoughts. I'm a

[Rep. Bridget Burkhardt (Clerk)]: little concerned about the percent as a standard because it seems like the underlying cost, you're talking about targeting people who are procedures that are

[Jennifer Carbee (Office of Legislative Counsel)]: 500% of the market.

[Rep. Alyssa Black (House Committee on Health Care)]: Oh, are you talking, I'm sorry, you're referring to the Medicare cost sharing piece.

[Rep. Bridget Burkhardt (Clerk)]: Yeah, between, yes. Okay, different thing. I know, yeah, it's in this, but I wanted to go back to it because the concern I have about focusing on percent is that it would matter a lot if the underlying procedure is very high dollar, it seems like.

[Rep. Alyssa Black (House Committee on Health Care)]: This is an issue that House Health Care has been looking into. I will tell you, this issue came to the Green Mountain Care Board through a public comment. And it was sort of an unknown phenomenon that happens between Medicare and critical access hospitals and their designation. What we're trying to get at is for at least right now, we are trying to identify the outliers, and I could explain to you what is happening, and it would probably take me ten hours.

[Rep. Bridget Burkhardt (Clerk)]: I understand the challenge for medical access hospitals, but when we're talking about procedures that with commercial reimbursement rates exceed 500% of the Medicare adjusted base rate, If the underlying reimbursement for that or the price is a dollar, we wouldn't really care because then we would, but it would not be as significant as if the underlying procedure was $5,000 I mean, I'm just wondering, we know if the procedures or whatever you call it, that exceeds 500 percent or goes up to 700% more than the Medicare reimbursement rate, are those big ticket items or are they little ticket items? Do we even know? They're both. And so why didn't we target the ones that are frankly crushing payers? Not just by percent, but by dollar value.

[Rep. Alyssa Black (House Committee on Health Care)]: Well, I think you're referring to that the Green Mountain Care Board may sort of start ordering hospitals to start bringing down the cost of the most egregious rates. And 500 seems to be the level that everyone agrees that we just need to start identifying those. We don't even know what they are at this point. And it sounds like you're quite constrained, we're quite constrained in our ability to do anything about this. Yes.

[Rep. Bridget Burkhardt (Clerk)]: The piece of 500% from federal law.

[Rep. Alyssa Black (House Committee on Health Care)]: I think I'm conflating your question with two different sections. There is a piece in there around So, look, first I'll

[Rep. Emilie Kornheiser (Chair)]: back up. Representative Holcombe, what section are you talking about?

[Rep. Rebecca Holcombe (Member)]: I'm looking at It's section Scroll up again.

[Rep. Alyssa Black (House Committee on Health Care)]: Yes, Thank you. May I ask Legis Council?

[Jennifer Carbee (Office of Legislative Counsel)]: Yeah, absolutely. That's the one pertaining to the board can also start bringing down the high dollar things. I actually think what it's saying is that for hospitals, if a hospital is directed to reduce its budget by more than what is reduced by the QHP and VHIV reductions, then the hospital is supposed to focus on its commercial rates that exceed 5% of the Medicare adjusted base rate. So in your amendment that's on page three. Is

[Rep. Emilie Kornheiser (Chair)]: that what your question is about?

[Rep. Rebecca Holcombe (Member)]: That is it. My question is why we focus on the percentage as opposed to base data.

[Rep. Alyssa Black (House Committee on Health Care)]: So what they do right now is their order will be, you may increase rates on average 3%. So hospitals typically will take their entire charge master and they start raising rates on all their services so that it evens out to 3%. Something could be five, some could be one, they just have to be at an average of 3%. And rather than hospitals just increasing to meet budget orders or decreasing, because this year's budget order or guidance has come in at negative 1%, By just taking your whole entire charge master and reducing it by negative 1%, what this is allowing is hospitals or it's asking hospitals to identify what their highest charge claims are as a percent of Medicare and start moving those ones down the most. Because as we move towards reference based pricing, which in 'twenty seven, 'twenty eight, 'twenty nine, as we get to that, we're gonna need to start equalizing. So it's just asking, so instead of just raising everything across the board or decreasing everything across the board, let's start with the high dollar. So when we fully implement reference based pricing, it won't be such a shock to the system.

[Jennifer Carbee (Office of Legislative Counsel)]: Thank you. Appreciate it. A lot of fine paper sense. Representative Ode? So, I made some notes while I think while you were talking, if the Green Mountain Care Board takes money from the hospitals and savings must go to the most vulnerable, so does that mean the hospitals who have money have to share it with those? What's the vulnerable

[Rep. Alyssa Black (House Committee on Health Care)]: markets? So the Green Mountain Care Board is going to have their budget orders. They do this every single year, they go through a whole process and they say, and this year, their guidance was to reduce by 1%. I think UVM has been negative 3%. The hospitals have also committed to pulling savings out, and as they right size themselves. And all this bill is doing is saying, take the amount of money that is being pulled out already through the borders, and let's concentrate on using that to reference base prices in these two vulnerable markets, the QHP market and the BHI. So it's focused on reducing costs in those two markets? Yes. Thank you very much.

[Jennifer Carbee (Office of Legislative Counsel)]: Hospitals

[Rep. Alyssa Black (House Committee on Health Care)]: would need to take it out of their budgets anyways. And I'm not sure taking out of budget is really, they have their orders on how much revenue, and they cannot exceed their revenue caps. And whatever the orders come down on how much revenue they can collect, that money is going to be concentrated into this is how they're going to achieve it by focusing it on reference based pricing in these two markets.

[Rep. Emilie Kornheiser (Chair)]: Thanks, Alyssa. We have one more bill, and it's five to noon. So I'm wondering if And we have fairly limited jurisdiction, so I imagine this is a very complicated set of policy, and I would love if folks are to be able to follow-up with deeper questions about how it works with any of the lovely people sitting around, but outer. Yes.

[Rep. Charles Kimbell (Ranking Member)]: Real quick, Bill, that asked a question. What was the committee's

[Rep. Alyssa Black (House Committee on Health Care)]: Oh, So on the original bill, it was ten ten. On the amendment, it was seven forty. Thank you. Strong. Brief

[Rep. James Masland (Member)]: question for Diane, and she can answer after.

[Rep. Emilie Kornheiser (Chair)]: So she can ask it, you can ask her later then. Okay, I'll do that. Great, thank you. Thank you, Alyssa.

[Jennifer Carbee (Office of Legislative Counsel)]: Thank you. You still have I need to go to counsel. Okay.

[Rep. Emilie Kornheiser (Chair)]: I have a motion on S-one 190.

[Rep. Charles Kimbell (Ranking Member)]: Is it not the amendment offered by

[Rep. Emilie Kornheiser (Chair)]: We're going to do on the Black actually, the bill first, because the bill we have possession of. And then we'll do a straw poll on the amendment, because I believe it's a floor amendment. That's correct, anyone? Great. Look at me tracking details. Okay.

[Rep. Charles Kimbell (Ranking Member)]: So then I would vote, Madam Chair, that we bind S-one 190 as presented to us as amended by the health care committee. Favorable.

[Rep. Emilie Kornheiser (Chair)]: Thank you. Representative Kimbell moves that we bind S-one 190 favorable. Any discussion? On the underlying bill as it left House Health Care. And then we'll straw poll the amendment. So Yes.

[Rep. James Masland (Member)]: He said as amended.

[Rep. Emilie Kornheiser (Chair)]: I know, but it's not amended. It's not amended? It was amended when it came over. It's just s one ninety.

[Rep. Charles Kimbell (Ranking Member)]: S one ninety. Yep.

[Rep. Emilie Kornheiser (Chair)]: So the motion on the table is to find S-one 190 favorable. That is the bill that came over from House health care. I believe it was on a vote of ten-one. Is that what she just ten-one-zero. Ten-one-zero. Thank you. Any discussion on that? And then we'll straw poll the amendment after. Okay. Thank you. Representative Burkhardt.

[Jennifer Carbee (Office of Legislative Counsel)]: Well, thanks.

[Rep. Bridget Burkhardt (Clerk)]: Representative Branagan? Yes. Yes is representative Burkhardt. Representative Higley? No. Representative Holcombe? Yes. Representative Kimbell? No. Representative Masland? No. Representative Ode? Yes. Representative Page? No. Representative Wazak?

[Rep. Edward "Teddy" Waszazak (Member)]: Yes.

[Rep. Bridget Burkhardt (Clerk)]: Representative Canfield? No. Representative Kornheiser? Yes. We have voted the underlying bill favorable seven four zero.

[Rep. Emilie Kornheiser (Chair)]: Thank you. And then straw pulling the amendment that we do not have possession of that's on the floor that was explained to us. And I just want to take a moment to just be appreciative of the way reference based pricing is going to lower costs for the education fund. It's It's a really important piece of our cost savings universe. And I'm also looking forward to a new report. So Straub polling of the amendment. All those in favor of approving the amendment?

[Rep. Alyssa Black (House Committee on Health Care)]: This is draft 2.1?

[Rep. Emilie Kornheiser (Chair)]: Yes, draft 2.1 that we just looked at. All those opposed?

[Rep. Bridget Burkhardt (Clerk)]: So we have struck hold favorably six-five-zero on the amendment. Thank

[Rep. Emilie Kornheiser (Chair)]: you. Okay, S197. And also, people really don't need to keep jackets on if they're keeping them on from some sense of propriety. I certainly don't do it on my behalf. Or just put it on, whatever works for you, Mark.

[Jennifer Carbee (Office of Legislative Counsel)]: Great. Again, Jen Carbionthus of Legislative Council. This is S197, an act relating to, again, it starts with a title, it gets a different one at the end. As I came over, it is an act relating to payment reform for primary care. At the end, it will recommend changing that just to an act relating to reform for primary care. Starts out with legislative intent and some purposes, talks about the intent of the general assembly to invest in primary care and to establish a program of universal primary care that is successful and affordable for all Vermonters and will promote the public good. Purposes of the bill are to get information necessary to develop a framework for implementation of universal primary care, optimize the blueprint for health, determine whether the blueprint is an appropriate mechanism to use for universal primary care, and to explore other approaches to universal primary care and whether they may be more suitable than the blueprint in meeting Vermont's needs. Section two makes some changes to the blueprint for health, largely around some information gathering requiring health insurers to submit information to the agency of human services, so that the Blueprint can calculate the total cost of care within Vermont and look at implementing one or more payment models. And also make some modifications to the Blueprint, including expanding the potential quality standards that could be the basis for a practice to receive the Blueprint payments and to ensure that the health insurer payments are in amounts at least equal to Medicaid beginning in 2027. Right now, Medicaid is paying the most in per person per month basis. Section three has a report on blueprint payments to practices and primary care. And so has by 01/15/2027, the director of the blueprint in consultation with others reporting to the healthcare committees on changes to payment amounts or payment methodologies or both. They would be needed to transition the blueprints per person per month payments primary care practices to include a payment for the routine primary care needs of attributed patients, recovered by participating plans. The report is supposed to come up with definitions of primary care services and primary care provider, which are always a problematic start to anything involving primary care, because it's not full consensus on what should be included and excluded. Looking at different types of methodologies, recommendations on risk adjustment and attribution methodologies, various other aspects of methodologies, just trying to hit the high points a little bit for you. Provide an operational plan and timeline for implementation. Provide a description of ways that the Blueprint can optimize the delivery of services that are in its current initiatives and what that would cost and how much the per person per month spending would need to be increased to support that enhanced delivery. And then this is particularly where this committee comes in, recommend a process for moving to the healthcare claims tax, which is an existing statute, as the mechanism for funding the blueprint, which was the suggestion in the report submitted by the blueprint to the General Assembly in 2024 in accordance with this 2023 Act, including providing a potential timeline for implementation. And it requires the director of the blueprint to be available upon request during this legislative interim to provide updates to the Health Reform Oversight Committee.

[Rep. Alyssa Black (House Committee on Health Care)]: What's the report?

[Jennifer Carbee (Office of Legislative Counsel)]: This big report is going just to the healthcare committees. We had been starting some, there was a lot of work done very last minute on this. So perhaps if we'd started from the beginning, it would have officially come to this committee as well. We'd certainly make an amendment to this committee.

[Rep. James Masland (Member)]: Sorry, Nolan,

[Nolan Langweil (Joint Fiscal Office)]: yes. If I can just jump in. Please, go You might wanna actually create a new section. Reason I say this, I'm looking at it and it says, they're gonna show report to their committees regarding changes to payment amounts, mental health, new tests. So the process of moving to healthcare claims to tax. If you go to the beginning of it, it's the people who are doing it, director, blueprint, consult consultation, steering, in my opinion, they're not the right people to be analyzing the plate.

[Rep. Emilie Kornheiser (Chair)]: Okay, so, okay, let's talk about all of that. Okay, thank you.

[Rep. James Masland (Member)]: Yeah, Representative Matt. May very well go to Nolan, but it has to do with the We're aware in this committee a number of times we've dealt with healthcare claims taxes. And I was unaware there would be sufficient revenue, and maybe there is, to cover what would be the expense of this. It seems to me they're mismatched, but maybe they're correct, I don't know. And we can talk about

[Rep. Emilie Kornheiser (Chair)]: that when it only comes up. Okay, thank Okay, thanks. Okay, what else is it up here, Jim?

[Jennifer Carbee (Office of Legislative Counsel)]: Section four is a report from the Agency of Human Services on the baseline per person per month spend. What do we spend now per person per month on primary care services for Vermont residents overall and by payer? Section five directs the agency of human services to establish a target for the amount of per person per month spending on Vermont residents that should be for primary care services. How much should we be spending per person per month? And develop a transitional schedule that increases the target over time with a report back in January 2028 with the spending targets and transitional schedule, as well as adjustments that may be needed for payer specific differences. Section six is around the distribution of duties for healthcare regulation and healthcare reform. This is asking the Agency of Human Services, Fremont Care Board, and Department of Financial Regulation in collaboration with the Office of the Healthcare Advocate to evaluate what roles their respective organizations play in healthcare regulation and healthcare reform in this state, including certain programs and initiatives, and it would have them identify where they think each healthcare regulation and reform function should most appropriately be located in order to kind of be the most efficient and optimized collaboration and improve access to care, transform, safeguard hospitals, sustainability and ensure solvency. And then they're going to each report back by January on how they think that the responsibilities should be split up, including areas of agreement and disagreement, gaps and overlaps, and any legislation needed to achieve their preferred organizational structures. And then it would also again require them to be available to the Health Reform Oversight Committee for updates between now and January. Section seven directs the Agency of Human Services to report by 01/15/2027 in consultation with others on recommendations for ways to accelerate the appropriate transition of patients from hospital care to care in a community setting, and some additional information there. Section eight directs the Office of the State Treasurer and Agency of Human Services to collaborate with other Northeastern states to explore the potential for a regional universal primary care program that would be available to all residents of the member states and report back on that in January. And finally, Section nine requires health insurers not less than sixty days before they remove a prescription drug from their formulary to notify anyone who had filled a prescription for that drug within the previous year that they're not gonna be covering that anymore.

[Rep. Emilie Kornheiser (Chair)]: That's sort of like a little bit of an extra thing that was tagged on because this was a

[Jennifer Carbee (Office of Legislative Counsel)]: bill that was moving? In the Senate. It's been on since the Senate. Okay, thanks. We take effect on passage and they change the It's

[Rep. Emilie Kornheiser (Chair)]: a nice thing. I'm glad that that's there. I was just like, I lost the thread first. So, okay. Thank you. Questions for Jen. Very, and if we could keep them narrow to our jurisdiction given the hour, that would be much appreciated. Thank you. Sorry, Rep. You can talk

[Nolan Langweil (Joint Fiscal Office)]: to me.

[Rep. Emilie Kornheiser (Chair)]: Dalton, your turn.

[Jennifer Carbee (Office of Legislative Counsel)]: I'm going to go from Okay,

[Rep. Emilie Kornheiser (Chair)]: we're probably gonna need an amendment, but we'll

[Jennifer Carbee (Office of Legislative Counsel)]: I will pop back in and talk through it.

[Rep. Emilie Kornheiser (Chair)]: Thank you for being everywhere all the time.

[Nolan Langweil (Joint Fiscal Office)]: For the record, Noel Langwell, Joint Fiscal Office.

[Rep. Emilie Kornheiser (Chair)]: Okay.

[Nolan Langweil (Joint Fiscal Office)]: So it occurred to me after the bill passed that the group that's named, there's a list of things that go into that committee. And it's the blueprint for health, it's the steering committee. But when I looked at this particular piece, recommended process for moving to healthcare claims tax, to me, this group doesn't seem like the right group to be looking at. So if you're getting an amendment, you might pull this piece out and then have Blueprint for Health, Directory in Collaboration with the Tax Department, etcetera, shall look at this, something along those lines in terms of amounts necessary, whether it's appropriate to go to Representative Masland's question, and then have it come back to this committee as well. So, was my thought.

[Rep. Emilie Kornheiser (Chair)]: That sounds good to me. I think it should also go to the health reform oversight committee, Finance Committee. Can you work with Jen? Yes. Does anyone have Are there other fiscal things?

[Nolan Langweil (Joint Fiscal Office)]: No, that's pretty much it.

[Rep. James Masland (Member)]: Back to my question, Nolan, thanks for breaking back up, but there's sufficient revenue there to do what is Well, going to

[Nolan Langweil (Joint Fiscal Office)]: I think the question would be, is this the right mechanism, and what would you need to increase to,

[Rep. James Masland (Member)]: to Thank cover the you. That's a good question.

[Nolan Langweil (Joint Fiscal Office)]: I think the idea behind it is that currently, insurers pay practices for blueprints. This would be sort of, I think the thought is this would be in lieu of the practices paying practices, instead of doing that, they could do it through claims tax. So it's like in lieu of, not on top of, that part of the analysis.

[Rep. Emilie Kornheiser (Chair)]: Thank you. Any questions for Nolan?

[Rep. Charles Kimbell (Ranking Member)]: The analysis adds a report.

[Rep. Emilie Kornheiser (Chair)]: We'll report back. Do folks feel Any other questions for Nolan? Thanks, Nolan. I would like us to vote on the bill, then once we have the amendment, we can huddle to straw poll the amendment. Does that work for people? Okay. Does anyone need anything else before we vote on this 195?

[Jennifer Carbee (Office of Legislative Counsel)]: Yes? I understand these. This is

[Rep. Emilie Kornheiser (Chair)]: basically a study. A monologue study, and then at the end there's a notification provision for pharmaceuticals. Which is a lovely notification provision. Anyone? Okay. Can I have a motion on S197?

[Rep. James Masland (Member)]: I move that we vote favorably on one eighty seven if we received it. You. Representative

[Rep. Emilie Kornheiser (Chair)]: moves that we find s one ninety seven favorable. Any discussion? Seeing none, please call the roll. As representative Branagan, yes.

[Rep. Bridget Burkhardt (Clerk)]: I will vote yes. As to Representative Burkhardt, Representative Higley is not here. Representative Holcombe? Yes. Representative Kimbell?

[Rep. Charles Kimbell (Ranking Member)]: Yes.

[Rep. Bridget Burkhardt (Clerk)]: Representative Masland?

[Rep. James Masland (Member)]: Yes.

[Rep. Bridget Burkhardt (Clerk)]: Representative Ode? Representative Page? No. Representative Waszazak?

[Rep. Charles Kimbell (Ranking Member)]: Yep.

[Rep. Bridget Burkhardt (Clerk)]: Representative Canfield?

[Rep. Charles Kimbell (Ranking Member)]: Yes.

[Rep. Bridget Burkhardt (Clerk)]: Representative Kornheiser? Yes. We have voted a bill favorable 09/11.

[Rep. Emilie Kornheiser (Chair)]: Thank you, everyone. We don't have anything scheduled for this afternoon, but please stay attuned to all the things in case we have to do a thing. That is my thing. We also don't have anything scheduled for tomorrow morning yet at nine But please come to the committee room and check by, like, 08:45 because we might wind up with

[Rep. James Masland (Member)]: something scheduled at nine And then we'll still put a vote on this.

[Rep. Emilie Kornheiser (Chair)]: Then we'll vote on the amendment whenever the amendment arrives. Yes.