Vermont Legislature SmartTranscripts:

[Martine Larocque Gulick, Vice Chair]: You're live. Good morning everybody. It is Thursday, April 16. This is the Health and Welfare Committee. I am Vice Chair of Martine Larocque Gulick and our Chair of Senator Lyons is not feeling great today. She's here with us on Zoom, and she will be chiming in as needed throughout the day, but we'll be running the show here as best we can without her presence in the room. And we're starting today with the H577 bill, which is an act relating to establishing the Vermont prescription drug discount program. And we have Charles Becker here, he is on Zoom, to talk to us about the bill.

[Charles Becker, Staff Attorney, Office of the Healthcare Advocate]: Good morning, Vice Chair Gulick. Can everyone hear me?

[Martine Larocque Gulick, Vice Chair]: We can, thank you.

[Charles Becker, Staff Attorney, Office of the Healthcare Advocate]: Perfect. So again, good morning, Vice Chair Gulick, Madam Chair at home and members of the committee. For the record, I'm Charles Becker, staff attorney with the Office of the Healthcare Advocate. Thank you for inviting me to testify today about H577. The HCA supports H577 as passed by the House. We would support this committee moving the bill forward without further amendment or perhaps with one very narrow adjustment I will mention near the end related to monitoring the program for its effects on pharmacy viability. As you know, h five seventy seven would allow Vermont to join ArrayRx, a multi state prescription drug discount program. The basic idea is simple. It would give Vermonters access to another set of negotiated prescription drug prices, whether they have insurance or not. That matters because prescription drug pricing is fragmented and often irrational. A single drug will have many different prices, including a manufacturer list price, a PBM negotiated price, a pharmacy cash price, and an acquisition cost that may be dramatically lower than any of those prices. And that kind of system, access to another negotiated price can have real value for consumers. We believe the savings potential here is real. I shared this example in house healthcare. I take a generic medication for a chronic condition. Under my high deductible insurance plan, I would pay about $1,800 per month for that medication until I got through my deductible. Yet pharmacies can acquire that same drug for roughly $50 Through ArrayRx, the price appears to range from roughly $73 to $110 depending on the pharmacy. To me, that shows that ArrayRx can bring the consumer price much closer to the actual acquisition cost of the drug. My example is just one example, but it is consistent with broader evidence. In January, the Green Mountain Care Board submitted a prescription drug affordability report to the general assembly. As I note in my written testimony, that report found that Vermonters could save $23,600,000 on generic drugs under a cost plus reimbursement model, representing about a 65% reduction in prices. What is cost plus? Put simply, cost plus means reimbursing pharmacies based on what it actually costs them to acquire the drug, plus a small margin and professional fee, rather than relying on the many opaque pricing formulas that exist today. Importantly, ArrayRx is not a cost plus model, it's not. But from the consumer's perspective, the prices ArrayRx offers can still look much more like acquisition cost based pricing than the prices many people see through their insurance at the cash register. And that is exactly why this bill matters. It would give uninsured Vermonters access to more affordable prices, and it would allow insured Vermonters to compare the ArrayRx price to their insurance price and choose the better option. That is why the HCA supports this bill. There are two additional points I want to make briefly. First, the House made an important improvement to the bill by clarifying that when an insured Vermonter uses a discount card to purchase prescription drug, that spending must still count toward the person's deductible and annual out of pocket maximum. That language should absolutely remain in the bill. Without that fix, many Vermonters would face an unfair choice. They could use insurance, potentially pay much more at the pharmacy counter and get credit toward their deductible, or they could use the discount card, which bypasses their insurance, save money immediately, but get no credit toward their deductible or out of pocket maximum. That kind of trade off would discourage people from using the program even when it offers the better price. The House addressed that problem in a practical way. It put the counting principle into stat statute and required insurers to make available a form and a process for consumers to submit eligible discount card spending for crediting. I recognize that a manual process like that may create barriers for some Vermonters. Ideally, this would happen automatically at the pharmacy counter, but current systems do not appear to support that. The house language reflects present operational realities while still moving the law in the right direction. Second, I want to acknowledge the concerns raised by the Vermont Pharmacists Association in the house. Their testimony raised legitimate questions about the broader pharmacy reimbursement environment, including ArrayRx's reimbursement methodology, and the possibility of low margin or even negative margin transactions. Those are serious issues. Financially viable independent pharmacies are also a consumer benefit, especially in rural communities, and pharmacies need adequate reimbursement. At the same time, H577 has a consumer affordability bill, and on balance, we think the consumer benefit of the bill likely outweighs the potential risk to pharmacies. But, and this is the the narrow potential tweak to the language I wanted to suggest to this to the committee, if the committee believes an additional safeguard is needed, the HCA would support narrow language directing the treasurer to monitor the impact of Vermont's participation in ArrayRx on pharmacy viability and to end participation if losses tied to the program are demonstrated. Our main message, however, is simple. H577 has passed by the House as a step forward for prescription drug affordability, and the Senate should preserve the House language on counting. Thank you, and I'm happy to answer any questions.

[Martine Larocque Gulick, Vice Chair]: Senator Benson. Good morning.

[Senator John Benson, Member]: Charles, on that suggestion, did you actually send the language and the location in the bill that you would recommend that piece be added to the list of the Or to us. Or to us, Jackie.

[Charles Becker, Staff Attorney, Office of the Healthcare Advocate]: I could certainly do that. I don't have the bill open before me. I know there's already maybe one or two sections in the existing language that require the treasurer to report to the legislature on the number of Vermonters who have signed up for the program and the amount of savings that they've achieved. So it would go in that general section and it would be another paragraph that says, and also the treasurer should, and whatever mechanism would be available for doing so, monitor whether or not pharmacies are achieving adequate reimbursement. Certainly there must be some way for ArrayRx and their PBM Navitas who are processing these claims to determine whether or not in aggregate, the pharmacies that are participating in the program are achieving a margin.

[Martine Larocque Gulick, Vice Chair]: Hey, Charles, if I could check back just to make sure everything's going okay.

[Charles Becker, Staff Attorney, Office of the Healthcare Advocate]: Okay.

[Martine Larocque Gulick, Vice Chair]: Yeah, did you hear that? Good check. Yeah. Okay. I think we got it. Okay. Senator Morley.

[Senator John Morley III, Member]: Charles, Senator Benson asked the same question I was gonna ask, but the application, so say somebody has insurance and they'll refer an account against their deductible, but they can go to the treasurer's website. Do they, How do we handle that?

[Charles Becker, Staff Attorney, Office of the Healthcare Advocate]: So my understanding of how this would work is if a consumer determines they could get a better price using ArrayRx for a covered drug. So there is going to need to be consumer education about how to use this program appropriately. Consumers are gonna need to know that they're buying a covered drug, a drug that's covered under their plan. Otherwise, of course, that's not gonna be counted. And they're also going to need to make sure that they're following their health plans, utilization management. So for example, quantity limits. And there are ways that they could do that. For example, by asking the pharmacist to run this through my insurance first. And if the insurance returns an approved claim, that means the drug is covered under the plan and you're following the quantity limits. Then the consumer could ask the pharmacist to run the claim through ArrayRx. If there's a better price, they could opt to use ArrayRx. Senator Gulick, did I see you have a hand up?

[Martine Larocque Gulick, Vice Chair]: Suzanne, our next witness is gonna get into the mechanics.

[Senator John Morley III, Member]: Okay. Good. I just don't wanna say this.

[Martine Larocque Gulick, Vice Chair]: Yeah. Yeah. Yeah. That'll be great to hear from Mary Blob. So Charles, is that are you good at this point? Is everyone good with you?

[Senator John Morley III, Member]: I am.

[Martine Larocque Gulick, Vice Chair]: Okay. Yeah. Thank so much for your testimony. I appreciate it.

[Senator John Morley III, Member]: Thank you.

[Mary Block, Deputy Commissioner of Insurance, Vermont Department of Financial Regulation]: And we have Mary Block, the deputy commissioner of insurance and department in the department Financial Regulation, to talk to us maybe a little bit more about the mechanics and how it's gonna work. And Courtney actually can be able to put it on that too, so we can trust. Mary Block, Deputy Commissioner of Insurance, Department of Financial Regulation. DFR also supports the bill. Prior to passing out the House, we worked closely with Lunch Council, Blue Cross, the HCA, and the treasurer's office to develop the language that as it sits right now, and so that we were all comfortable with it. The deductible issue we all felt was important. We have a rough sketch of how it's worked in past when we were going through COVID. I don't know if you all remember, you could go to the pharmacy, buy a COVID test, and go to your insurer and present that as a claim to get reimbursed. It's a similar sort of process, right? So Blue Cross or Cigna or MVP will have a form on their website so the consumer can use to submit the claim to their insurer, and then the insurer will look at it and make sure it's covered and reimburse them, whatever, or count that towards a deductible or a support for the case may be, or they're out of pocket maximum if it's a QH. You know, are having, obviously, to rely on consumers, and that's part of the work that treasurer's office will need to do from an education perspective, because the biggest issue with a drug start like this is all the vaping, right? Every, every Vermonter is eligible for it, but every Vermonter has to go out and say, I want this. And I know in Connecticut, the uptake has been somewhat of an issue. They've had a small uptake so far. They're about to, I believe, engage in an educational campaign to get people used to it. When I was literally testifying when was in the house, just before I was texting my sister-in-law, was in Connecticut saying, Do you know about this? She wouldn't. So that's the work that we'll have to do to make sure that our monitors are aware of it and use it. I think Connecticut added an appropriation to try to get Yes, to they did. They also had the deductible language that they added to their bill. They actually went out without the deductible language first and then they added it later, so we used that language. Added it as a model, some of the language we developed here. So from our perspective, every opportunity we can get from Montrose to save money is a good opportunity, and so we feel the support of Bill and believe that the insurance all support the Bill as well. Given the nature of pharmaceutical pumps and intrathecies, it's just another way to deal with those issues. To Charles' point about extra language, I know he's gonna send something over, and we'll take a look at it when it gets over. I would suggest that we put language in to monitor it, but the answer not necessarily to stop the program, but instead to find a solution or stop the program so that, you know, if there's another way to deal with the pharmacist issue, we can still keep the program and deal with that issue. I agree. Got it. That sounds good. Yeah. Yeah. Or just the or even just the information and then the legislature Can figure out that thing. I'll figure out how to fix it. Yeah. Okay. Great. Any other questions from there? Or should I say commissioner? Commissioner. Thank you. I'm not

[Senator John Benson, Member]: sure you're necessarily, but, like, first, answer is what I'll ask the question anyway is, you know, what I heard on how some of this is gonna operate is ask the pharmacist. And I know pharmacy's codes in the state. Like if my district will counter end up, they got one now. You go in there, there's always a line of five or six people. So if we ask the pharmacy staff, it's roughly double the analysis for everybody who comes up for every prescription, it's gonna put a burden on the pharmacist. Plus, it's lunch. Right? Potentially, so I'm just curious what the conversation has been with the the pharmacist and how do they see this working, and are they really gonna be able to do this?

[Mary Block, Deputy Commissioner of Insurance, Vermont Department of Financial Regulation]: They I know they have to, They were expressed during the house testimony. I believe ArrayRx has a website or an app that you can use to sort it up, what the drug cost would be under ArrayRx. So, Lauren, GoodRx does the same thing. They actually have that as well. You can look up what the You'll hospital will know at that time whether or not you wanna even ask that question. And then you could obviously ask the pharmacist what your insurer would cover and do that comparison. But, yes, they think the pharmacists do have concerns that they weren't expressing. You know, I agree with Charles that those are concerns that go beyond the scope of ARX. They are concerns generally with independent pharmacies in Vermont, and so not doing this program, I don't think is gonna solve those problems. Are bigger problems. No, I understand what Yeah, those are bigger problems, unfortunately, that we need to address.

[Senator John Benson, Member]: They just wanna exacerbate that you're with us and then lose. Yeah.

[Mary Block, Deputy Commissioner of Insurance, Vermont Department of Financial Regulation]: All right. Your first answer is we've heard testimony before again as to how it was affecting some pharmacies. I don't recall either. I noticed that I was in the Midwest State. And that was early, but think that was highly successful.

[Martine Larocque Gulick, Vice Chair]: Maybe we can get some data on that. Okay. Thank you, Deputy Commissioner. Appreciate it. And we have a very clear legislative and government relations committee a two shift for a minus.

[Courtney Harmonis, Blue Cross and Blue Shield of Vermont]: Thanks very much. Mary and I were talking about who would be fastest, so we'll be talking. Or win the race. Win bet. Did

[Martine Larocque Gulick, Vice Chair]: For

[Courtney Harmonis, Blue Cross and Blue Shield of Vermont]: the record, Courtney Harmonis, Blue Cross and Blue Shield of Vermont, I did send Melissa a written testimony and also two letters of support, some earlier in the session from Blue Cross. One that went to house ways and means, one that went to house appropriations. A couple of things for committee to be aware of and some things that I certainly hope that you see us leaning into a little bit more this session. As Vermont's only nonprofit, help ensure our mission is to make healthcare work better for all Vermonters, not just the third of Vermonters that are members of our plans, all Vermonters, and indeed, our statutory obligation is the same. So when the treasurer's team came to us with this opportunity early, and I would like to also mention that one of the few folks that came to us early with, what do you think about this idea? How could we make it better? What concerns do you have? It makes our support for a concept like this that much easier, and it allows us to be able to sit in this seat and say that we think that this is not only appropriate, but immediate relief at the point of sale that Vermonters desperately need an immediate help. No surprise, we went through talking about Act 55 last session, and with that, a quarter of every premium dollar is spent on prescription drugs. And people often, and I'll say the healthcare advocate has done a really nice job of talking about this and doing this testimony. Vermonters sometimes have to make decisions about whether or not they will look at their prescription, or buy groceries, or pay their mortgage, And I think that ArrayRx and the plan that the treasurer's team has put together will help provide some immediate relief, honestly, for people that need it most. And we don't see any reason why anything would need to be changed. Our CEO, Betsy Roberts, stood with Chair Lyons and Chair Black and the Treasurer a couple of weeks ago, voiced our support for this programming, this initiative. So I don't need to go too far in-depth about how great it is or how much we support it. I think we've done that already. To Senator Morley's question, Folks, we have a built in discount program into our prescription drugs, folks don't have to show a card, when they go to their pharmacist or to their pharmacy, it's automatically deducted. So one of the perks, and we've talked about this in testimony in Senate Finance last week, one of the perks of our affiliation with Blue Cross of Michigan is significantly reduce blood costs. And so one thing about ArrayRx is you can't double dip. So we're not necessarily overly concerned folks are gonna use ArrayRx instead of our plan. We feel really good about our plan and our discount. What we do know is two thirds of Vermonters are not covered by and this will be really beneficial. For plan members, if I go to a pharmacy and I do use a RayRx card to buy my prescription drugs, folks can actually submit that directly on our website. And so we're prepared for that. Literally just talked about it in a team meeting yesterday. If the spill goes through, like we think it should, our team is ready and willing, should folks feel like, and there may be opportunities. I'm not gonna say it'll never happen. There may be opportunities where our plan members get a better deal with the RAID Rx, and in that instance, we're ready and prepared to seek those claims, put them towards deductibles and out of pocket maximums, if the health care applicant suggests it.

[Senator John Morley III, Member]: Yeah? I think she

[Courtney Harmonis, Blue Cross and Blue Shield of Vermont]: gave you a chance. What's that? She beat I

[Martine Larocque Gulick, Vice Chair]: got excited. Saw a lot of the children, supported him. That's something behind me. I think they were pretty close. Okay.

[Senator John Benson, Member]: Thank

[Martine Larocque Gulick, Vice Chair]: you very much. You're welcome. Appreciate it.

[Courtney Harmonis, Blue Cross and Blue Shield of Vermont]: Thanks. Thank you, of course. We

[Martine Larocque Gulick, Vice Chair]: have Colin Vermeer on. We sue. He is the Associate State Director for Advocacy and Outreach at AARP. Hi, Colin.

[Colin Hilliard, Advocacy Director, AARP Vermont]: Good morning. Can you hear me okay?

[Martine Larocque Gulick, Vice Chair]: Yes. We can. Thank you.

[Colin Hilliard, Advocacy Director, AARP Vermont]: Great. Thank you, vice chair Gulick and members of the committee. Apologies. I cannot join you in person this morning. My name is Colin Hilliard. I'm the advocacy director for AARP Vermont On behalf of our nearly 38,000,000 members nationwide and, 110,000 members here in Vermont, we appreciate the opportunity to express our support for this bill and the benefits it will have for older Vermonters. Prescription drug prices in The US are among the highest in the world, and for older adults and others on fixed incomes, increasing prescription drug prices can lead to difficult decisions and fatal outcomes. According

[Martine Larocque Gulick, Vice Chair]: to

[Colin Hilliard, Advocacy Director, AARP Vermont]: a recent AARP survey, eighty two percent of adults 50 and older report taking prescription drugs regularly. Yet a 2024 report from the CDC highlights that accessing these drugs isn't always simple. About one in five older adults do not have insurance coverage for prescription drugs. And even those with the prescription drug plan, for them paying for medications can be expensive, and as a result, some older Americans are skipping doses or delaying refills to save money. Just this last year, we did our Vital Voices survey of Vermonters 45 and found that eighty four percent of adults mentioned being able to afford prescription drugs was an important financial and retirement issue financial and retirement issue. That's just as important as being able to travel independently. Prescription medication doesn't work if you can't afford it, and h five seven seven offers a way for the state to take action to lower cost for consumers. AARP Vermont strongly supports bulk purchasing because it's a smart, proven way to lower prescription drug costs. By joining forces with other states, we can amplify our negotiating power, reduce administrative waste, and create real savings that strengthen Medicaid and other health programs. These savings can lower help lower premiums and out of pockets cost for Vermonters making essential medications more affordable and accessible for everyone. And furthermore, this program cannot come at a more critical time with the loss of the ACA premium tax credits, that's impacted thousands of Vermonters ages 50 to 64. Many of these folks have become uninsured and un underinsured in recent months, and so access to the free drug program, discount card program would provide real financial relief. Lastly, I wanted to mention that AARP Vermont, has the resources and unique ability to help ensure that the, information about this program reaches older Vermonters. This is something that we've done, previously in other states when when, programs like this have passed, specifically Connecticut. And so if passed, we plan to be a partner with the treasurer's office to raise awareness about the program with our members. We've learned a lot from the successes that the AARP Connecticut colleagues have have had, and we look to leverage that to ensure that older Vermonters have the information they need to to fully take advantage of this program. Thank you.

[Martine Larocque Gulick, Vice Chair]: Thank you, Paula. Any questions from the committee? I have I have one which is just that it does sound like the Connecticut program has been successful, but it also sounds like the uptick or uptake, I should say, has been pretty low. So are you able to look at that example, learn from it and do something differently in the state of Vermont so that we have a higher uptake?

[Colin Hilliard, Advocacy Director, AARP Vermont]: Thank you for that question. I think one of the things that we learned that I've heard from our Connecticut colleagues is that, you know, when they first passed this, it did not include the language where you could count the spending to your deductible. And so kind of having to to come back a second time and and reeducate folks that that was now an option, was something that we heard that kind of created a lot of confusion for for their members, especially, older folks. So, I think the fact that that is included in this in in the bill here right off the bat is something that that is really positive, and and I think will, help clear that up. I'd I'd also add that, you know, we've heard a lot from, our members across across the state, on this one. This has been really one of the most popular bills that that we've been educating our members about this session. And so we've we've built kind of a list already of folks that we know that are interested in in this program, one for themselves, but also letting their their friends and neighbors and and folks at their senior center know. We've heard from folks in over 115 towns, believe, in all 14 counties. So leveraging that, we know we'll be able to be a strong partner in getting the word out.

[Martine Larocque Gulick, Vice Chair]: Wonderful. Thanks, Paula. Appreciate that.

[Colin Hilliard, Advocacy Director, AARP Vermont]: Thank you.

[Martine Larocque Gulick, Vice Chair]: For. Okay. Great. Thanks. Thanks a lot for being with us. Take care. We are exceptionally on time. It's 09:30. Ciao. Are going to spin the Madam Vice Chair, before I even leave. Yes. Can I just check-in and see if there's interest in having me draft a small piece of language that does what was being suggested around monitoring the effects on pharmacy? I would like to have that. The second hand stuff, the program, or just, you know, Notify. Yeah, look at it. They have an annual report, I'm just gonna put in any of your work. Wonderful. Is that a good combination? Great,

[Senator John Benson, Member]: thank you. I wanna ask for some suggestions. I can just see if that can be used for themselves. They have the same guess, but it's it's worked well as opposed to being able move the development. You're gonna

[Martine Larocque Gulick, Vice Chair]: be back with suggested solutions. I'm not sure if they are the entity to come up with the solutions, because I think as you've heard, it's a more systemic problem. But I defer to that. I'm just looking for the data and then we would work with stakeholders to come up with some solutions. Yeah. That's great. Thank you. Okay, next is eight fourteen, which is an aggravated neurological rights and the use of artificial intelligence technology in health and human services, which is kind of a science fiction ass film. Really interesting. We have Bob here from the Director of Policy and Legislative Affairs Attorney General's office to talk to us about this bill. Welcome.

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: You for the record, So your pronunciation was far more accurate. Okay. Assistant attorney general, thanks for having me here. I actually don't have a lot to say. It's under age eight fourteen. We are a member the attorney general's office is a member of the existing AI council advisory council, and I think that's part of the reason the s eight fourteen is originally drafted. Think it was much more expansive. This announcement would be brought down to adding a couple members of the AI Council in Hispanic charge. So I'm happy to answer questions about the AI Council. From our perspective, we obviously have, in our consumer protection division, focus on real desire to see enhanced data privacy, AI controls to protect among consumers. Is the forefront of a lot of consumer protection. We see AI as a major danger to the scam world. And the the confidence of both data privacy and AI really allowing scammers not just to kinda send you that phishing email that we used to get years ago, the Nigerian prince or whatever it was, but really have a granular detail about people so that those scammed emails, those scammed contacts start looking a lot more. That's not the spectrum. That's kind of our angle on it. We sit on the council in part for that consumer protection lens in part because of our expertise in engagement with data privacy and AI. You know, again, I would defer to ADS really on kind of how the council operates. It's really an internal part. It has been an internal to state government policy shaping body. This bill would appear to stand from here. We don't have a policy question on that.

[Martine Larocque Gulick, Vice Chair]: Right. My sense is that sections one through four are more purview of this committee and that section three really should go down to institutions and what's their full name now? Institutions and No. No. I would do something. Oh, really? Okay. Well, they're dealing with technology.

[Courtney Harmonis, Blue Cross and Blue Shield of Vermont]: Oh, no. That's right. We

[Senator John Benson, Member]: did take technology as type of.

[Martine Larocque Gulick, Vice Chair]: That's what you do in a two year budget with no. Okay. Well, think you are. Yes, ma'am. So we'll probably send it down the hall. So you you're not necessarily commenting on sections one and the four, which is more sort of a bigger aspect.

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: It's not not core to our work. Obviously, these are great principles and policy decisions for this project.

[Martine Larocque Gulick, Vice Chair]: Fantastic. Well, thank you. Oh, sorry.

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: No. Launched there. Are you seeing any AI issues right now or issues being brought to

[Senator John Benson, Member]: the attorney general's office with AI?

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: That's a good question. I think sometimes it's hard to know if AI is in the background of the complaint or not. I think there's a lot of AI, as I said, being used in scam fraud roles, but I'm not I'm not aware we have brought certain pieces of litigation against companies that use AI in a way that we think is fraudulent and deceptive. I think that's a little different than your question, which is, like, are people using AI to perpetrate fraud? Correct. So, you know, you've you've seen any cases you have learned from that. I mean, again, we're bringing them against sort of some of these big companies that are using AI in the way that we

[Senator John Benson, Member]: think it's both on both airlines so

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: it's contrary to our law. That said, I'm not sure we're getting and I'm happy to check with our consumer assistance program to hear kind of what's coming in from that side. I think that the real world that is gonna be these scammers just, you know, having being far more surgical and far more critical looking in what comes across you, right? In that text that suddenly uses your first name and checks in on your hometown.

[Martine Larocque Gulick, Vice Chair]: Right. Good dog, that's what I'm seeing. Yeah. Like, is it weird that You

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: bought the drugstore. And it the data in this not your committee's work, but the data is that data privacy is a real piece of this because a lot of the data packages that relate to all of us are out there.

[Martine Larocque Gulick, Vice Chair]: It was a new story this week about a gentleman invested with this woman on a high, and, you know, supposedly made $70,000,000. His son is getting very suspicious. He says, you need to get out of here. And he lost his life savings, but they're not even sure the woman was a real person. Then his son found several pictures of her on different places on the net. They think she may well be a plot. She's not.

[Senator John Benson, Member]: You're gonna be busy over the.

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: Not to be sci fi about it, but that's a static image. Right? Yes. It's just a picture.

[Martine Larocque Gulick, Vice Chair]: Nope. She was moving and talking.

[Bob [Last Name Unknown], Assistant Attorney General (Vermont Attorney General’s Office)]: See, I do think that is a big part of the future too. It's as soon as that AI starts getting, you know, the video channel, I mean. Yeah. Yeah. And I think AI has an upside to it, which is some of those tools are gonna be available for detection and and impatience. It is the next I think this body is gonna be addressing that. I just have to believe it's coming session or two or by end number two because we gotta think I don't think, candidly, I don't think the feds are gonna jump in on it as much as states are gonna want to and we're closer to the ground in terms of what's happening to our

[Martine Larocque Gulick, Vice Chair]: our people. Bill on symptomatic images, which is what's there. Okay. I'll try to do with mental health treatment that we just did, you can't lose it. Can't be teenagers, you can get on,

[Senator John Benson, Member]: but you're

[Martine Larocque Gulick, Vice Chair]: talking to an AI created image. And you're talking to a younger person who thinks is, it and it's a machine. And it may or may not give you good information. Did put something in to Google Lens and they didn't recognize it. Sent me, you know, it said, if you find out what it is, please let us know. Been

[Senator John Morley III, Member]: a challenge. And I completely agree, and I I hope we get to a place where we can focus on how to how to. That space is the incredible technology. That's not the actual.

[Martine Larocque Gulick, Vice Chair]: Benson, did you want to say? I've already testified on this one, I think the general sense right now is that one, two, and sections one, two, and four are within our review, and three, which is the board, should go down to institutions the advisory council. Sorry. So, just because that is their that's what they are doing down there now. So, but I it's not on our agenda today to talk about sections one, two, and four, so I don't know if we should do that or not. Senator Lyons, if you're listening, do you want to weigh in on that?

[Senator Virginia "Ginny" Lyons, Chair]: No, I think if there's time, I think it's a great idea to have a conversation about the bill and the those sections. Yeah. So if there you know, I think it's a good discussion when you think about what we're potentially putting into statute about human rights, really. Right. What is it that we're protecting? Yeah. I would definitely discuss this.

[Martine Larocque Gulick, Vice Chair]: You. We need to do that. Jessa, did you talk about sections one, two, and four? I did. I did. Do you feel like coming back up to the table and giving us some reminders? Sure. Just, like, maybe telling us what one, two, and four do? I I was just saying, just wanna say, okay. Do you want do you wanna do you wanna hear from was it doctor? Okay. That would be fine. Check 734. I

[Senator Virginia "Ginny" Lyons, Chair]: guess for me, as I look at the bill overall, the key is ensuring that we have guardrails so that when decisions are made, they're made by human beings. One, and they're not being made by computer enhanced.

[Martine Larocque Gulick, Vice Chair]: Right. This will doesn't do that. That's 816. This is 814, which is the neurological rates. A little bit different.

[Senator Virginia "Ginny" Lyons, Chair]: Oh, that is 816. Thanks.

[Senator John Benson, Member]: Yeah. That's a

[Senator Virginia "Ginny" Lyons, Chair]: I wrote it down on my 814, but that's a big concern for me.

[Martine Larocque Gulick, Vice Chair]: Yes. Definitely. Wait. I don't know why. Go ahead.

[Senator Virginia "Ginny" Lyons, Chair]: Yeah. Okay. No. Let Jen go through a little bit, and then we can have a discussion.

[Martine Larocque Gulick, Vice Chair]: One thing I had written down when we were taking notes was that we might need to define the germs as generalist artificial intelligence. So, John Cardiops, Pledge Cited Council. I think some of these are much bigger conversations that may be, I wasn't here when you took testimony, think. Have you heard from the Agency of Digital Services on itself? No. Recall. So I think that's gonna be critical to your understanding of what's in it, what's emerging, and how it affects state government, which is their purview for the advisory council, and the extent to which you need to create definitions or, I I think one of the things that all of the attorneys working on issues relating to artificial intelligence and still have been trying to do is ensure that any definitions that come out are consistent across all contexts, so that even as you drill in and regulate at a more sector based level, we're not using conflicting or inconsistent definitions of Southeast terms. And so I'm certainly not in any position to probably come up with a definition of generative AI. I don't want to do that without some expert guidance, which may start with the ADHD. Well, think, yeah, so this is maybe down the hall, that would be there. It may be, I know it's coming up a lot in the data privacy context in the Commerce and Economic Development Committees. So I think the issues are moving a lot. This bill did not go to any committee other than House Healthcare and House.

[Senator John Benson, Member]: In my notes today, it's the first in the country of this kind of bill.

[Martine Larocque Gulick, Vice Chair]: I think for the neurological rights, it may be. So maybe it makes sense to just remind us of what in this bill, and I think you all have it, so I'm gonna assume it seems like extra effort to go on with that. So, I'm just gonna remind you that this bill starts out with legislative intent around protecting human rights, using artificial intelligence in a way that is beneficial and minimizes risks, promoting ethical and responsible use, preventing harm, and improving the experienced alters in the system, improving healthcare. Section two is neurological rights. It recognizes individual rights around mental and neural data privacy, freedom of thought, non discrimination, in neurotechnologies, the ability to change an individual's decision about the use of neurotechnologies, protections from neurotechnological interventions of the mind and unauthorized access to, or manipulation of your brain activity, and protection from unauthorized neurotechnological alterations in mental functions.

[Jennifer Carbee, Legislative Counsel (Vermont Office of Legislative Counsel)]: There is no enforcement mechanism in here, so these are sort of aspirational rights at this point, most inactionable rights. Where would they go? Would it go into statute? And if so, where? Is supposed to be codified, not the intent piece, that is intent But force of the bill as yes, this would establish a chapter with really just one section in it for now, but the potential for more. This was a much broader bill as introduced in the House. A lot of the language came out and went into the directives for a report from the AI Advisory Council. So, of this is reflecting what was in the bill as it introduced. It started out with the neurological rights and then created a lot more provisions around what that looks like and enforces. Not what came to you. Section three is the Artificial Intelligence Advisory Council and changing some membership and appointing authorities there, including adding some members with experience in healthcare, public education, public finance, and then extending the lifetime of the AI Advisory Council, which is currently set to expire at the June year, 2027. This would extend that until mid June two thousand and thirty. And then section four is directing the Advisory Council in coordination with the director of the Division of Artificial Intelligence, I believe, is involved in the council, and in consultation with interested stakeholders to look at the guidelines from national professional organizations regarding the use of artificial intelligence in healthcare, human services, education, public participation in public finance, research existing and potential uses of AI in public participation processes and public finance. We create opportunities for public education and engagement, the development of artificial intelligence policy, and then to report back to the general assembly in January with recommendations for any additional statutory changes needed to further the purposes of this act, at this point, the purposes of this act are somewhat narrow, including protections for neurological, do you have No, it's okay. Protections for neurological rights, protections related to neurotechnologies, and proposed definitions for relevant terminology. That's one of the pieces about coming up with definitions and having that be done through this report. Guidance on the use of generative artificial intelligence by regulated professions, and regulating the use of artificial and augmented intelligence in health insurance utilization and review processes. Summarizing additional ways the government can promote ethical and responsible use of AI in health and human services and education, proposing pilot projects that improve public engagement and public finance, using ethical and responsible AI technology and identifying any reasons to further extend or remove the sunset on the AI advisory council. That is what he's been doing. Okay.

[Martine Larocque Gulick, Vice Chair]: Awesome. I'll speak with senator Lyons, but I do think we should go down the hall. I think they need to sort out the definition of artificial intelligence, generative versus augmented versus artificial. And I also think they need to work on the membership on council. And I think you are asking the council to look at definitions. So you may want to have that community weigh in on asking the council. But again, you may want to hear from the agency of individual services in here because they do have a couple of individuals whose focus is artificial intelligence in state government. Just to add on that, I mean, nice to use. This is a vault.

[Senator John Benson, Member]: And there's probably questions we don't don't want to ask. Yeah. Right. And so I look at this bill. They do restructure it and set it up very similar to what we did with the internationally trained provincial square. You have a process here but we're also charging and it's in there a little bit for this commission that's being set to really look at over the next year what's going on in other states. Is this adequate? Isn't it adequate? What should be added? Change to come back next year with kind of like recommendations before any changes because I think that just me is this is such an evolving territory that for us to think that we're going to sit down here in the next couple hours and have it all probably isn't gonna happen.

[Martine Larocque Gulick, Vice Chair]: Yeah, it is evolving, but we also know that countries like Chile have enshrined it in their constitution, that your neurological data is yours, doesn't belong.

[Senator John Benson, Member]: And I'm just saying it gives us a way of providing more information and more analysis like charging this position with

[Martine Larocque Gulick, Vice Chair]: So are are you suggesting language change to section four?

[Senator John Benson, Member]: I don't know if we I I guess I'd wanna go back and look at what chart is, see whether or not we think that should strengthen the.

[Martine Larocque Gulick, Vice Chair]: We can look at well, I think you're you've got other things on your calendar this morning. But we have time. We have get better time appointments. Well, I have to be at thirty. Okay. So I don't. I'm gonna have a few, can I say anything?

[Senator John Benson, Member]: But you know, we laid out Peace Award of internationally trained congress, specific places that they needed to check.

[Martine Larocque Gulick, Vice Chair]: The difference is that other states are doing that and other states have done this. Correct.

[Senator John Benson, Member]: Can't, I agree with But it's working, looking at other states, seeing where the problem is process, or is there other countries that It's have

[Martine Larocque Gulick, Vice Chair]: a little intact. Aren't Spain doing it?

[Senator John Morley III, Member]: You know what I One thing that you said, Senator, I like these, I think it sounds like to me the community commissioner or whatever is gonna look

[Senator John Benson, Member]: at some definitions because there's some things to be aware that I

[Martine Larocque Gulick, Vice Chair]: think Lincoln statute, artificial intelligence is defined. It it not a related term is defined. Related term. Yes.

[Senator John Morley III, Member]: So, like, one that just I look at it And

[Martine Larocque Gulick, Vice Chair]: it is defined for a particular sort of for a particular context, I think, in setting up the division of artificial intelligence.

[Senator John Morley III, Member]: Yeah. The latent system, like you said, is gonna be very critical, but I just struggle with augmented intelligence.

[Senator John Benson, Member]: I don't know what that means, Jenny.

[Martine Larocque Gulick, Vice Chair]: I'm like, if you're gonna, like, Google definition and stuff, if that's something

[Senator John Morley III, Member]: because if you're gonna put the well, somebody's gonna work on these definitions. Like, they're gonna change about what is artificial intelligence? What is cognitive intelligence?

[Martine Larocque Gulick, Vice Chair]: So again, I would encourage you to know the Agency of Digital Services. Yeah. Yeah. Yeah. Think that this really is Their purview, I think. Their purview of expertise.

[Senator John Morley III, Member]: And

[Martine Larocque Gulick, Vice Chair]: they're gonna give you much better information with them. I can. So, under current law, there's a definition of artificial intelligence systems, and it's specifically for use in the chapter on the Division of Artificial Intelligence in the Agency of Digital Services. Here is the definition. As used in this chapter, you can see the chapter is Division of Artificial Intelligence. We're in Title III, so we're in the executive branch. Artificial intelligence systems means systems capable of perceiving an environment for data acquisition and then processing and interpreting the derived information to take an action or actions or to imitate intelligent behavior given a specific goal. An artificial intelligence system can also learn and adapt its behavior by analyzing how the environment is affected by prior actions. You also may have a definition in the building you're working on with Katie, H816. So Matt may provide a definition of artificial intelligence. There are a couple of different bills moving in different paths right now on artificial intelligence, so the authorities are keeping in touch. Far as So speaking of, here's where also the council statutes. So that's the definition. The governor's most division of artificial intelligence. It's a charge. It's to review all aspects of official development systems developed, employed, or procured in state government. It's administered by the Director of Artificial Intelligence. Talks about its powers and duties. It has an annual report that includes the extent of the use of AI systems by state government and any short or long term actions needed to optimize that usage or mitigate their risks. Impact of using AI systems in state government on the liberty, finances, likelihood, and privacy interests of Vermont residents. Any necessary policies to protect the privacy interests of Vermonters from equity, diminution caused by employment of artificial intelligence systems by state government. Ensure Vermonters are free to unfair discrimination caused or compounded by the use of AI in state government. Address the use or prohibition of systems that have not been tested for bias or have been shown to contain bias, and address security and training on AI systems and anything else that the division is appropriate. So that's the division. Then we have the AI council. We're

[Senator John Morley III, Member]: gonna have to provide

[Martine Larocque Gulick, Vice Chair]: advice and counsel to the division with regard to, or the director with regard to a division's responsibilities, and also to engage in public outreach and education on AI. Here are all the members, can't see them all in the because we've skipped over. We're not making changes in the bill to the Secretary of APS or Designee, Secretary of Commerce and Community Development or Designee, of Safety, ACLU. So there's already an artificial intelligence advisory. There is, the bill's making changes to it, it's not establishing it. Talks about the chair, qualifications. Let's say there is, oh, there is established. Yep, and it's not overlying. Members are drawn for diverse backgrounds and to the extent possible should have experience with artificial intelligence. Consultation, it directs the council to consult with any relevant national bodies on artificial intelligence, including the National Artificial Intelligence Advisory Committee established by the US Department of Commerce, and its authority to be launched. Wonderful. And the chair has her hand up. Oh, there are lines.

[Senator Virginia "Ginny" Lyons, Chair]: There, I'm muted. Yeah, so I figured this was really helpful to go through the definition and then to remember what we're talking about here, which is a direct link with one individual and the individual's neurological connections. So remember, we saw the the headphones and the other adapters that could collect information individually, and then so how that is used to influence behavior or whatever else. The fine line for us is that some of the neurological information is critical for healthcare. And so the extent to which it's used and how do we protect that for individuals. So when you think about the rights, individual neurological rights, we're talking about protecting our brains and our how we're influenced by others. And in our case, it's within the health care environment. Yeah. And that's what I was talking about earlier. I was saying guidelines and guardrails here. So, no, I think I think the bill is a good bill. It's just really difficult to get our arms around all of it. As as you said before, things are happening so fast.

[Martine Larocque Gulick, Vice Chair]: So Yeah.

[Senator Virginia "Ginny" Lyons, Chair]: Anyway, that's all. I'll lower my hand.

[Martine Larocque Gulick, Vice Chair]: Thank you. Yep. Thank you, Jen. Sorry. Yeah. I'm glad you go.

[Senator John Benson, Member]: Right. It's in eight sixty. There is a definition.

[Martine Larocque Gulick, Vice Chair]: Right. So let me just put that back for a second because I reduced pulled her that

[Senator John Benson, Member]: in the statute.

[Martine Larocque Gulick, Vice Chair]: Right. That's, I mean, that's often how we do definitions, there may, at some point, may come a point to someone who would want to put definitions, case terms, and title one and have them apply across the statute. But there is, in the Bill eight sixteen that you're working on with Katie, there are definitions of artificial intelligence and generative artificial intelligence. So, yeah. Thank you. So I believe augmented intelligence is around sort of enhancing the individual's ability to do the functions that they are doing without acting on its own. So I think things like the so you're understanding that the recording of Recording. As right. Yeah. Yes. Transcribing is augmented. You're gonna need get a good question. I'll

[Senator John Morley III, Member]: just hit.

[Martine Larocque Gulick, Vice Chair]: Okay. And we've got five minutes for you, Jessica, and then we're gonna move on to the appointments. And, Jenna, this is the other side. FYI. That's all I'll be back. Sure, thank you for having me back. Joseph Arnold of the Medical Society. Let's see, my testimony should be posted back on April 9, I think, if my date is correct on what I'm looking at. I will just highlight two of our concerns. One is around section one, establishing the neurological rights, and the chair was starting to get at it, which is how does establishing these rights intersect with medical use and use already regulated by HIPAA?

[Jessa Barnard, Executive Director, Vermont Medical Society]: Our understanding is what some of the advocacy organizations are really trying to get at is sort of the unregulated consumer use of or access to neurologic data, but that's unclear in the way it's drafted right now. There's no limitation on how it's drafted. Those are quite broad terms and rights they are establishing, and we're just We had some concern about how that would intersect with, say, HIPAA and use by medical providers that's already regulated. Recommendation, section three, which is looking into artificial intelligence counsel, already tasks them reporting back regarding protections for neurological rights. So if you're talking about really kind of coming back with more robust data and information, our suggestion would be to sort of let that counsel do that work and really look at how countries, how other states are starting to regulate this. And then a comment I've got, I think you said, one of the sections, I think section four you said maybe it would still be something you'd be looking at around the advisory council. Our question is right now, the charge of the council seems pretty focused on state use of AI, but some of what's being asked for in this report on sort of the use in the medical field, social services, what are capital guidelines, seems to go beyond the scope, I think for good reason, beyond just state government use of AI, but other private entities out there. Like what guidance should there be for medical practices using AI or the educational system? So just a, I guess, question or comment is, is the legislature really looking for the council to go beyond just use by state government, and if so, that may be addressed in that charge. I think it would be really hopeful for some entity to be looking at those uses more broadly and giving us all some guidance on that, but right now, I think that would be a limitation of their existing charge. Yeah, that's a good point. So, those were major comments on the bill, so thanks for letting me recap. Appreciate it. Thank you very much. Wonderful.

[Martine Larocque Gulick, Vice Chair]: So, we will come back to that at a later date. For now, we have governor's appointments, which I don't know if Senator Lyons wants to weigh in on this, but I'm happy to read all the names that we have, and then some of them will have to come in for a hearing. Then others, I think, we just call or try to connect with to see if they're willing to continue.

[Senator Virginia "Ginny" Lyons, Chair]: Yeah. I I think that just look and see where where where folks are from. As you as you read their names off, somebody you might recognize who they are. And then you can make a choice about wanting to connect with each person, and then you'll be responsible for reporting them out on the floor.

[Martine Larocque Gulick, Vice Chair]: So I know. So Senator Lyons, is that the case even for someone like Owen Foster who will be coming in for a hearing? That's what we did before.

[Senator Virginia "Ginny" Lyons, Chair]: So there are people that we have in that list, I think, who we do not need to have in for another reappointment hearing. Okay. Rather, I think Owen falls in that category. But but the person who picks Owen should ask him if he wants to be reappointed. So so I don't know who else is on the list. So someone like Owen Foster, who's chair of the board, would be an underlying name in the calendar and reported verbally on the floor. Right.

[Martine Larocque Gulick, Vice Chair]: Senator Lyons, would you like to reach out to Owen Foster? Sure. Okay.

[Senator Virginia "Ginny" Lyons, Chair]: Probably when I get my voice back.

[Martine Larocque Gulick, Vice Chair]: When you get your voice back

[Senator Virginia "Ginny" Lyons, Chair]: I don't feel better.

[Martine Larocque Gulick, Vice Chair]: Someone else can do it, but it will come back.

[Senator Virginia "Ginny" Lyons, Chair]: Thank

[Martine Larocque Gulick, Vice Chair]: you. How about Rick Hildebrandt? He is the Commissioner of the Department of Health, and he's been in recently, but

[Senator Virginia "Ginny" Lyons, Chair]: And we told him that when he came in, do you remember we said this was his interview? That's An appointment interview.

[Martine Larocque Gulick, Vice Chair]: He's done. Okay. He's done. So he's good. Jenny Who's

[Senator Virginia "Ginny" Lyons, Chair]: gonna do him? Who's gonna call him?

[Martine Larocque Gulick, Vice Chair]: Rick, who's gonna call Rick? He lives in Clarendon Boulevard. Okay. Senator Benson.

[Senator Virginia "Ginny" Lyons, Chair]: Alright.

[Martine Larocque Gulick, Vice Chair]: Ginny Samuelson, secretary of the agency of human services. Would you like I

[Senator Virginia "Ginny" Lyons, Chair]: don't know that we need her in either. I mean, are old appointments. Yeah.

[Martine Larocque Gulick, Vice Chair]: Okay. Would you like someone to give her a call?

[Senator Virginia "Ginny" Lyons, Chair]: That would be good. Where does she live? To Shelburne?

[Martine Larocque Gulick, Vice Chair]: She lives in Shelburne, so she's your constituent.

[Senator Virginia "Ginny" Lyons, Chair]: Okay. I don't we'll see how many I get, but I'm glad Okay. To do

[Martine Larocque Gulick, Vice Chair]: Yeah. Okay. Sarah, teach out. The Green Mountain Care Board. I think Ann Cummings, senator Cummings, will do that. Thank you. My constituent for three years. Yeah. She wants to be.

[Senator Virginia "Ginny" Lyons, Chair]: So let me let me ask this question. Do you wanna have Sarah in for a short meeting?

[Martine Larocque Gulick, Vice Chair]: Do you have a Yeah.

[Senator Virginia "Ginny" Lyons, Chair]: Yeah. Let's do

[Martine Larocque Gulick, Vice Chair]: that. I would. Yeah. I'd have follow. I would mainly because we haven't seen her all year, and we used to see her all the time. And it'd be nice to hear updates on how things are going. If you could still call her.

[Senator Virginia "Ginny" Lyons, Chair]: Yeah. No. Okay. Senator Cummings can still be the person, but

[Senator John Morley III, Member]: we'll

[Martine Larocque Gulick, Vice Chair]: call her first. You're gonna have her in? Yeah.

[Senator Virginia "Ginny" Lyons, Chair]: We'll have her in.

[Martine Larocque Gulick, Vice Chair]: Okay, then I don't need to call her.

[Senator Virginia "Ginny" Lyons, Chair]: No. Okay. You can call her from the committee room.

[Martine Larocque Gulick, Vice Chair]: Alright. Sandy Hoffman, Commissioner of the Department for Children and Families. Oh. She lives in Essent. She's I guess she's my she's my constituent.

[Senator Virginia "Ginny" Lyons, Chair]: Why don't you do that?

[Martine Larocque Gulick, Vice Chair]: But will we have her in?

[Senator Virginia "Ginny" Lyons, Chair]: Question for the committee. She was in testifying recently on a couple of bills. So committee, what do you think?

[Martine Larocque Gulick, Vice Chair]: I would. Yeah. I would like to. Yeah.

[Senator Virginia "Ginny" Lyons, Chair]: Okay. Can do that.

[Martine Larocque Gulick, Vice Chair]: Yeah. For Sarah. Doctor. Susan Gulick, member of the board of medical practice.

[Senator Virginia "Ginny" Lyons, Chair]: Yeah. We don't need to have that person in, but someone should call.

[Martine Larocque Gulick, Vice Chair]: Brutland. Anybody?

[Senator Virginia "Ginny" Lyons, Chair]: Well, John Morley hasn't gotten anybody yet.

[Martine Larocque Gulick, Vice Chair]: Well, well, so what you do is you give them a call and you say who you are, and then you say, are you interested in continuing to serve on that point?

[Senator John Benson, Member]: Right.

[Martine Larocque Gulick, Vice Chair]: And then ask them a couple of questions about So this is '25. What do you like about it? What's the period? What's your background? '25,

[Senator John Benson, Member]: '27.

[Martine Larocque Gulick, Vice Chair]: Yeah. These are late. We're late. We admit that. And we also don't have to contact him. Paul lives in Plainfield. Public member of the board of medical practice. Oh, you got me good. Great. And Suzanne Jones, who lives in Mendon, physician assistant member of the Board of Medical Practice. Can do that. They all look attached. Yeah, okay, but we can't do any of these to get phone numbers. Right, So we will work on getting contact information. We'll use the interwebs to figure that out and just check out your office. If they don't, these people confirm, should send us. All right. So we are gonna go offline because we are not on again until 11:00 with H 09:38 and actively establishing the Vermont homelessness response continuum. Everyone good with that? Senator Lyons, are you good with that?

[Senator Virginia "Ginny" Lyons, Chair]: I'm very good with that.

[Martine Larocque Gulick, Vice Chair]: Okay. Great. Thanks.