Vermont Legislature SmartTranscripts:

[Sen. Virginia "Ginny" Lyons (Chair)]: We're live. So it is Senate Health and Welfare. Good morning. And it's Friday, January 23. We're looking at healthcare overview, continuing our work with Nolan and also with us is Ashley Berliner of the Agency of Human Services, Director of Medicaid Policy, who's here on screen with us, and a global commitment overview. So Nolan, thanks for being here. For

[Nolan Ihua, Joint Fiscal Office]: the record, Nolan Ihua, Joint Fiscal Office. Ashley, go ahead.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: Ashley Berliner, Director of Medicaid Policy for the Agency of Human Services. We're gonna need to sound up. Sound up. Can you hear me?

[Nolan Ihua, Joint Fiscal Office]: Maybe you can sit a little closer and we'll try to turn the volume up.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: Yeah. Can you hear me any better? That's great.

[Nolan Ihua, Joint Fiscal Office]: Much better.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: Okay. Ashley Berliner, director of Medicaid policy for the Agency of Human Services, and I would recommend East of Eden by John Steinbeck. Love for the record.

[Nolan Ihua, Joint Fiscal Office]: Yeah. That's a book I read every ten years.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: The reason

[Nolan Ihua, Joint Fiscal Office]: it's every ten

[Sen. Virginia "Ginny" Lyons (Chair)]: years Which one was it? East of Eden. Oh, wonderful. Yeah.

[Nolan Ihua, Joint Fiscal Office]: It's one of those books I read every ten years because every time I read it, it means something different. Something different.

[Sen. Virginia "Ginny" Lyons (Chair)]: Well, we should all be that. Let's do this. Forget

[Nolan Ihua, Joint Fiscal Office]: the DS payment reform. Read easy to read.

[Sen. Virginia "Ginny" Lyons (Chair)]: Let's all do this.

[Nolan Ihua, Joint Fiscal Office]: Ashley and I have been tag teaming our Medicaid 101 and Global Commitment presentation for many years now. Usually we do the Medicaid 101 and Global Commitment together, but we did the Medicaid 100 separate. And then when we look

[Sen. Virginia "Ginny" Lyons (Chair)]: at the Global Commitment slides, Ashley's like, wait, these are all my slides. So I'm just gonna set the stage,

[Nolan Ihua, Joint Fiscal Office]: but Ashley's actually gonna do all the talking. I'm just gonna pipe in here and there and I'll just change the slides when she tells me to. So let me pull up the presentation. Okay. Ashley, take it away.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: Okay. So if you have already gotten the Medicaid 101 and speaking to the new senators in particular, you have a foundation for what Medicaid is. Something that is absolutely foundational to the Medicaid program in the state of Vermont is called an eleven fifteen waiver. And what an eleven fifteen waiver does is it allows us to waive some, though not all, the federal laws governing a Medicaid program, including who's eligible and what services are eligible for federal reimbursement. Section eleven fifteen is the section of the Social Security Act that permits an eleven fifteen demonstration, so that's where that number comes from. And it's intended to encourage innovation. That is the underlining intent for why 1115s exist, why certain laws are allowed to be waived. States are permitted to manage their Medicaid program in different ways and then use the savings that are generated from that alternative management to reinvest in things like expanded coverage or expanded services. The federal government, the Centers for Medicare and Medicaid Services approves eleven fifteen waivers on five year terms, but they can be renewed. Across the country, one four principle of all eleven fifteen waivers is that they have to be budget neutral. So you cannot ever spend more money with an eleven fifteen waiver than you would have spent without an eleven fifteen waiver. They cannot cost the federal government more money. If you don't have an eleven fifteen waiver, it means that Medicaid is limited specifically to what's approved in the Medicaid state plan, which is mandatory and optional services and populations. Medicaid has to be strictly administered in compliance with Medicaid regulations, either fee for service or managed care. In Vermont, it would be fee for service because we do not have managed care in the way that the state plan would allow. In Vermont, we've had the global commitment eleven fifteen waiver since 2005 and are still operating under renewals of that waiver. Go to the next slide. So why do we have this? What does it do for us? We have an eleven fifteen waiver that does essentially two things. It gives us flexibility to do things differently and it gives us money to pay for more. The money side, it allows us to have federal financial participation, Medicaid reimbursement for populations and services that wouldn't otherwise be available under the state plan or through Medicaid law. And in Vermont, that's Marketplace subsidies on Vermont Health Connect up to 300% of federal poverty limit. It's a community rehabilitation and treatment benefit, which is for individuals who are above income limits for Medicaid but have a severe mental illness. We provide wraparound mental health treatment for anyone regardless of income in the state of Vermont. We have a V farm program which provides low cost pharmacy benefit to individuals 65. The Moderate Needs Program is for individuals that aren't quite at the nursing home level of care but still need some additional support. We have higher than Medicaid income limits for those services. So it's really an expansion service for our elderly population. We are allowed to pay for institutions for mental disease, which is essentially in Vermont, our state hospital, Bravo Retreat, and several of the substance use residential treatment facilities. Without an eleven fifteen waiver, states are not permitted to pay for institutions for mental disease, which means any facility above 16 beds that specializes in substance use or mental health treatment. We pay for palliative care for children who are at end of life, who wouldn't otherwise be eligible for Medicaid. We have a long list of investments which we'll get into a little bit later in this deck. This substance use disorder expansion benefit should be stricken. We actually were not able to launch this benefit, so I'm going to skip past that. Permanent supportive housing is a benefit that we stood up in 2025 that allows us to really provide wraparound supports for individuals who are most vulnerable, people with brain injury, people who are at nursing home level of care, people with severe mental illness or substance use disorder, people with developmental disability, they are eligible for additional services to help find housing and keep them in housing. So this is a pretty new benefit under our existing waiver. This slide needs to be updated, I'm realizing. I'm sorry, I'll just pull it too. And then also flexibility, allows us to basically administer our Medicaid program in a completely different way than we would have to if we didn't have an eleven fifteen waiver. It allows us to pay differently, like value based payments. It allows us to operate on the designated agency system and home health agencies the way that we do, because there's a statewide ness waiver that allows us to say, if you live in Chenden County, you go Howard Center, you live in Washington County, you go to Washington County Mental Health. That would not be allowed without an eleven fifteen waiver. It allows limitations or restrictions on freedom of choice, which is also coincided with that designated agency, home health agency restriction on geographic area. And then it allows us to make payments for the Medicaid program above the upper payment limit, which if the upper payment limit applied, it would restrict us to 100% of Medicare. So this is a really useful benefit. We are above the upper payment limit on nursing facilities. We pay much higher than Medicare and also above the hospital upper limit payment for Medicare. Really useful to have all of those. That was a meaty slide. Any questions on that before moving to the next one? I know a lot of you have heard this before.

[Nolan Ihua, Joint Fiscal Office]: The only thing I would add is that, and I used to have this somewhere, and I don't remember off the top of my head, it was a number of states that have these eleven fifteen waivers. And if I recall, it was more states had some kind of waiver than didn't. But we are, and Ashley correct me if I'm wrong, we're the only state that operates our full Medicaid program through an eleven fifteen waiver.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: Right, so most states will have an eleven fifteen waiver and it's like 47 states have a waiver. Most states have an eleven fifteen waiver that focuses on like maybe just pharmacy or maybe the new adult population or maybe just substance use treatment. In Vermont, to Nolan's point, our waiver covers absolutely everything, which makes us a real unicorn when it comes to eleven fifteen waivers nationally. And it gives us really optimal flexibility and federal financial participation for our Medicaid program. Vermont's Medicaid waiver is the envy of every Medicaid program in the country.

[Nolan Ihua, Joint Fiscal Office]: And my understanding is when it first was passed in 2005, it was during George W. Bush's administration, he was really pushing for block grants. And this was one of the closest things that came to a block grant because our Medicaid waiver has a ceiling, how much money we could spend. So it was win win for both sides. Now our waiver has significantly evolved in the last fifteen, twenty years from what it was. So the global commitment of 2005 looks different than the global commitment of 2025. And a lot has to do with evolving needs, evolving leaders, and all kinds of stuff.

[Sen. Virginia "Ginny" Lyons (Chair)]: And Senator Gulick actually had a question about changes and additions to this. Do you want to ask your question? Sure. Actually, we've been working the last couple years on trying to get doulas covered. I was wondering if there's anything happening in that area right now.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: So the eleven fifteen waiver is something that is a pretty it's basically a two year effort anytime you change it. It's a really massive administrative lift, so we try really hard not to amend it unless we have to. We are just now embarking on the start of our next renewal which will be our waiver expires at the 2027. So we're going to be spending twenty twenty six drafting our request to renew and then 2027 negotiating with the administration around our renewal. That is part of the answer to your question. The administration of a waiver renewal is just an enormous lift. There are lots of things involved in it that I'd be happy to go into at any point. On the dualist specifically, there are barriers to entry, whether it's a waiver or not a waiver on what a provider has to meet in order to receive Medicaid funding. There are certain credentialing requirements, certain expectations. I'm not the expert to talk about doulas. I know that we wouldn't need an eleven fifteen waiver in and of itself. It's really about how we're determining a doula is qualified to be an enrolled provider. We're happy to have experts come back and talk to you in more detail, because it's actually quite a nuanced issue related to credentialing and some of the requirements that Medicaid has, waiver or not, for doula enrollment. Okay, thank you Ashley.

[Nolan Ihua, Joint Fiscal Office]: To Ashley's point about just in the beginning starting phases, you'll see in the budget language, there's language that the legislature authorizes AHS to start negotiating. Fact, we actually have language that will be in this year's budget.

[Sen. Virginia "Ginny" Lyons (Chair)]: And that happens this year and then next year, if they submit?

[Nolan Ihua, Joint Fiscal Office]: Yeah, they'll be negotiating through this year, and in theory, the next one should start at the end of this one, is this one, so 01/01/2028, in theory would be the new waiver. Every time we've negotiated the new waiver, we often wind up getting a little bit less each time and not more.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: Well, I will correct that actually and say that we had a really rough negotiation in 2017 where we lost some serious ground. In 2022, when we most recently renewed, we made tremendous gains and still hold those today. It's very administration based. We expect that the next negotiation is going to be extremely painful.

[Sen. Virginia "Ginny" Lyons (Chair)]: Right, I've done, yeah, there's a lot to talk about here with what the federal government is doing, including the recent announcement of an investigation of how we use our money for federal dollars, where one of the states is targeting What we can hope. Or 14 states.

[Nolan Ihua, Joint Fiscal Office]: What we can hope is that, well, first of all, would say, I'll say this even on the record, I do think we have a good negotiating team at the HS who will work hard on this. And we just have to remain optimistic that we can make the case to this administration that what we're doing is Consistent. Consistent and good for health and cost effective.

[Sen. Virginia "Ginny" Lyons (Chair)]: We are cost effective.

[Nolan Ihua, Joint Fiscal Office]: Yeah.

[Sen. Virginia "Ginny" Lyons (Chair)]: All

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: right, thank you. That was good. This was all helpful. Keep going. Okay, so next slide. So this is really just a visual to help conceptualize the administration of our Medicaid program in the state of Vermont. I'm not going to spend too much time on this slide, but essentially our waiver allows us to set up Diva as a managed care like entity. So most states contract with a Kaiser or United or some other private managed care organization. And when you contract with a private organization like Kaiser or United, you actually are able to leverage flexibilities that you can't leverage if you're just paying fee for service as a state. What Vermont did that was so novel was actually set up itself in the form of the Department of Vermont Health Access as the managed care organization, which allows us to tap into a lot of those flexibilities that exist for the private organizations. We can leverage them with our own state agenda and our state priorities. So this slide really sets up the agency of Human Services is the single state Medicaid agency. It has core functions as such, notably eligibility, program integrity, and policy. And then the Agency of Human Services contracts with the Department of Vermont Health Access, who then has subcontracts in the form of IGAs or intergovernmental agreements with all of the departments, including AOE. So this is really just a visual of what that managed care construct in Vermont looks like and how the program is administered.

[Nolan Ihua, Joint Fiscal Office]: Next slide.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: Yep, thank you. This was one of my favorite slides. I just think it's packed with tons of information and it is a visual depiction of that first slide I went through, which is why do we have a waiver? What does it do for us? And if you'll see in the kind of top half of the page, there's a little green line wrapped around a bunch of boxes that says allowable without the waiver. And these are all of the populations that we could have, even if our waiver went away, we would still have these populations. The bottom half of the slide is with waiver only. If our waiver goes away, then everything in this bottom half of the slide goes away with it. We are not able to pay for these things without our eleven fifteen waiver. So again, that's B farm, mental health wraps, moderate needs, the marketplace subsidy, all of our investments, our ability to pay the Brattleboro retreat substance use residential or the psychiatric care hospital, we wouldn't be able to pay for things like end of life care for children and some

[Nolan Ihua, Joint Fiscal Office]: of

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: the permanent supportive housing that we're paying for as well. So just a visual depiction of a previous slide. Next slide. And then as promised, a little bit more information about what investments are. Investments are a really fun thing that is extremely unique to the state of Vermont, and it's one of the things that really does make it the envy of other Medicaid programs. When I talked earlier about the fact that Vermont operates a public managed care entity, this is where investments come into play. If you think about another state like California, they contract with Kaiser to provide healthcare to their Medicaid population. They pay Kaiser, let's say $100 per person per month. If it only costs Kaiser $90 per person per month, then that $10 goes into Kaiser's pocket. The state doesn't get it, it's just part of Kaiser's overhead, or sorry, profit. In Vermont, the way that this works is that $10 gets reinvested into the Medicaid program. So we get to take that $10 and instead of it just going to a company, we get to keep it and pay for really fun things like our investments. Our investments about $120,000,000 a year that we pay for roughly 70 investments that we get federal match for that we would not be able to get federal match for without this eleven fifteen waiver. It's everything from paying for the public health lab, paying for certain crisis hotlines, 211. There's a really long list, it's linked here and Nolan sent these out earlier today as well, they're posted on the website. But this is an area where have no ability to do it without our 11:15. There's no other state in the country that has something like this. And I will just flag, is the area that if you asked me what I was most concerned about in our eleven fifteen renewal coming up, this is it. This is what I'm most concerned about losing because it is so unique to Vermont and CMS has never allowed it for any other state. So we're going to be on the real strong defensive here protecting these eleven fifteen investments and making a case for why each and every one of them are needed. But it's an uphill battle as you can imagine.

[Nolan Ihua, Joint Fiscal Office]: If I could just double down on what Ashley's saying, and actually in the slide it says in 'twenty four there was $120,000,000 but actually in 'twenty five we had $130,000,000 in investments. So just to give you a sense, if we were to lose these investments, the ability to match, we would lose $76,000,000 in federal funds for these things. Which means that it would be unlikely to do most.

[Sen. Virginia "Ginny" Lyons (Chair)]: So a for both of you. How long have these investments been in place? There must be some younger than others or older than others here. Do you think that there would be any consideration of the longevity of some of these investments in the decision making about the waiver?

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: It's hard to get in the head of federal government and how they're going be thinking about this. I will say we have a better case for some investments than others in terms of the data that's available. We're working with the University of Chicago right now to create kind of outcome an outcome story for each and every one of these investments that are at risk so that we can go to CMS and say like, this is why it's important, this is working, and if you take it away, this is the impact. I don't think we're going to be able to have that story all locked up for every one of these investments by the end of this year, which is a concern. We just don't have the data available right now. I'm pretty concerned about it and I'm really concerned about the fact that we're paying for investments for things like the public health lab and other public health functions that traditionally are just the responsibility of the state. I think that's going to be a hard sell for CMS under this administration, even though it's clearly a need, it's something that we have to do. I'm a little worried about how they're going to think about using Medicaid dollars to pay for things that the state should be paying for on their own.

[Nolan Ihua, Joint Fiscal Office]: And also keep in mind too that this has been happening for twenty years, there's some investments that have probably been in the whole band, there's some that have come and gone. But what happened in, I think one or two waivers ago, the federal government was like, you keep doing the investments, but they were more specific in the terms and conditions about what can and can't be an investment in the categories. It used to be very broad and big, and we had a lot more flexibility, and now it's more specific, and some of people get sign off on those things, and the amount of money we can use investments for has decreased from a peak of higher than what it is now. So they've kind of come down, they've allowed it, but they've become a little bit more, I don't wanna use the word strict, more pointed about how we use And

[Sen. Virginia "Ginny" Lyons (Chair)]: I do have a question about that, because one of the things that's covered in the report that we got in the early fall was the home and community based services, which now are expanding because of our demographics. Is there any sense of the focus on those kinds of services? I mean, it's probably a question you can't answer. Well, home

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: and community based services can be covered outside of an eleven fifteen waiver, so we have

[Sen. Virginia "Ginny" Lyons (Chair)]: that They open for can. I guess my question is, in the coming decisions about our waiver with the federal government, are they focused on looking at, can they look at, will they look at our home and community based services, which are so really outstanding.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: They will absolutely be looking at our home and community based services. I haven't seen any posturing by CMS that they're going to go after home and community based services. They've actually been doing some things that have been beneficial around home and community based services in my opinion. So I am not really that concerned about home and community based services. I think some of the other things that are really unique to Vermont are going to be the things we're really going to have to focus and play defense on.

[Nolan Ihua, Joint Fiscal Office]: I think the team, the negotiating team is gonna do their best to try to make the case to this administration that what we are doing fits within the model of what they want, right? Making the case, like I said, that it saves money, that it has better outcomes, and I think to speculate, will they do this or will they do that, we just don't know. We can't. All we can know is that our team, the HS team is gonna make the case. Let's just hope that CMS agrees with what we're saying. What I will just again reiterate though, that is if they do not like global commitment or they try to do more cookie cutter type of waivers across states, or I would say cookie cutter, it will significantly change how our program is administered and what we can cover, and the state will be faced with some serious conversations about what stays, what goes, and it'll be hard. That's compiled with some of the changes or compounded with or in conjunction with some of the conversations we're gonna be having come 2028 around provider taxes and the loss of federal money. So this is gonna be all folded into the single conversation about, okay, under the new world, under the new vision, what does our Medicaid program look like? What can we afford? What levers do we have? That's be a very difficult conversation.

[Sen. Virginia "Ginny" Lyons (Chair)]: Scary. When, Yeah, so I probably, you said this already, Ashley, but when do you begin this negotiation?

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: So we have to submit a renewal request by December 31 of this year. So we're working starting now, 2026 is the year of the application drafting where we're going to be putting that case together that makes the argument that this is really good stuff and we have to continue it. 2027 is when we'll start negotiating with CMS. So that's when they pick up our application and we go through it piece by piece painstakingly and negotiate what the terms will be starting in 2028.

[Sen. Virginia "Ginny" Lyons (Chair)]: Thank you. Keep going.

[Nolan Ihua, Joint Fiscal Office]: That's it.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: That's it. That's it.

[Sen. Virginia "Ginny" Lyons (Chair)]: One more

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: point on the renewal that I just want to express. Usually when we go into these renewals, we're thinking about innovation and how to really push the envelope and get more innovative and more funding for Medicaid programs and more prevention and more population health. And this year is really a departure from anything I've seen before where we feel like we have a really, really excellent waiver here that lets us do a lot of good in Vermont and we're trying to maintain it. And so it's a little bit of a different perspective from the eleven fifteen renewals that we've done in the past.

[Sen. Virginia "Ginny" Lyons (Chair)]: Can I just offer some potential optimism? Yes, please. So this administration will be here forever and this law will be on the books forever and things could change maybe sooner rather than later. So, it's not like this is stuck for material. But time the administration makes a change and then it goes out and affects patients, It's huge. And then if the federal government changes, they'll need to go back and do it all over again. So it always takes there are some years of problems. No, get that. No, I agree. We can't be pessimistic.

[Nolan Ihua, Joint Fiscal Office]: Yeah, and not to counter that, but unfortunately for us being counters, we operate in the world we live in, not the world that we speculate may or may not look like in the

[Sen. Virginia "Ginny" Lyons (Chair)]: future. I can fantasize about a better future, but I hear you, I hear you.

[Nolan Ihua, Joint Fiscal Office]: I'm just saying, you know, this is the world that we live in and that we have to adhere to.

[Sen. Virginia "Ginny" Lyons (Chair)]: Represent a peer. Understand. I'm glad that you have false sense. Understood.

[Nolan Ihua, Joint Fiscal Office]: Just subscribe to my toxic authors. Toxic positivity. Toxic positivity. Toxic positivity.

[Sen. Virginia "Ginny" Lyons (Chair)]: Well, let's go. Are we, oh, we have one more slide here.

[Nolan Ihua, Joint Fiscal Office]: Oh, It's just my SPL packet I had everywhere because everyone always wants it. I will get you a new one when it's out. It might be out already. I haven't looked.

[Sen. Virginia "Ginny" Lyons (Chair)]: Okay.

[Nolan Ihua, Joint Fiscal Office]: But I will get you one when it's

[Sen. Virginia "Ginny" Lyons (Chair)]: clear as mud. This is all really helpful, think. It's really good. Every time we go through it and then you look at the detailed report that goes along with it and start to remember things you didn't remember or learn things that you didn't know you didn't know. Go ahead, Ashley.

[Ashley Berliner, Director of Medicaid Policy, Agency of Human Services]: And I am really optimistic. Wish the timing was different. I wish we had another year of where we were and didn't have to negotiate in 2027, but I think we have a really excellent team with really strong experience and we're going to be better positioned than a lot of other states in terms of defending our waiver. So I do want to just end on an optimistic note. I want reasonable expectations. But I think we're going to be well positioned and certainly going to be trying our best.

[Sen. Virginia "Ginny" Lyons (Chair)]: Well, I think we would agree with you around the table and thank you for the work that you've done to make that prediction or the optimism stay in place. I very much appreciate it.

[Nolan Ihua, Joint Fiscal Office]: I think we have, to echo Ashley, I think we have a strong case to make the case to the administration that what we are doing is in alignment in terms of cost saving and health outcomes with the vision that they're taking. And we can hope that they see it the same way.

[Sen. Virginia "Ginny" Lyons (Chair)]: Okay, questions? Any slides you wanna go back to? All right, that's great. This is great. Thank you very much. Appreciate your time. Yeah, this is good. Then we have, we finished a little bit early. We sort of expected that, and so we're going to move on. We have scheduled a joint meeting with Senate Transportation on healthcare transportation issues. Some of the reports that we asked for last year, there's one report that we haven't got yet on emergency medical transport. We'll see a couple of those reports, a long list of folks to testify and we'll be in Room 11 at 10:00. So we can go off live and we'll probably not come back here after Room 11 if I announce that we