BILL AS INTRODUCED H.245
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VT LEG #379293 v.2
H.245 1
Introduced by Representatives Olson of Starksboro, Donahue of Northfield, 2
Harrison of Chittenden, Kleppner of Burlington, Logan of 3
Burlington, Masland of Thetford, and McCann of Montpelier 4
Referred to Committee on 5
Date: 6
Subject: Health; Green Mountain Care Board; health care facilities; health 7
networks; hospital budgets 8
Statement of purpose of bill as introduced: This bill proposes to expand the 9
Green Mountain Care Board’s hospital budget review authority to include the 10
option to review and approve health network budgets. It would direct the 11
Board to investigate the impact on the public good of eliminating or reducing a 12
hospital’s or health network’s monopoly or significant market power in a 13
health care sector and take actions necessary to promote the public good. The 14
bill would also give the Board additional authority to affect health system costs 15
through its hospital and health network budget processes. 16
An act relating to hospital and health network budgets 17
It is hereby enacted by the General Assembly of the State of Vermont: 18
Sec. 1. 18 V.S.A. § 9375 is amended to read: 19
§ 9375. DUTIES 20 BILL AS INTRODUCED H.245
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(a) The Board shall execute its duties consistent with the principles 1
expressed in section 9371 of this title. 2
(b) The Board shall have the following duties: 3
* * * 4
(7) Review and establish hospital budgets for hospitals and health 5
networks pursuant to chapter 221, subchapter 7 of this title. 6
* * * 7
(16)(A) Investigate whether, in the event that a hospital or health 8
network maintains a horizontal or vertical monopoly or significant market 9
power in any health care sector in this State, the public good would be 10
promoted by eliminating or reducing the monopoly or significant market 11
power. If the investigation indicates that the public good would be promoted, 12
the Board shall take such actions that are within its authority as are necessary 13
or desirable to eliminate or reduce the monopoly or significant market power 14
and shall recommend to the General Assembly any legislation needed to 15
authorize actions that are outside the Board’s existing authority. 16
(B) The Board may contract with one or more outside entities as 17
needed to enable the Board to conduct an investigation pursuant to subdivision 18
(A) of this subdivision (16) and may assess the applicable hospital or health 19
network for the amount of the Board’s actual expenses incurred in conducting 20
the investigation. 21 BILL AS INTRODUCED H.245
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* * * 1
Sec. 2. 18 V.S.A. § 9376 is amended to read: 2
§ 9376. PAYMENT AMOUNTS; METHODS 3
(a) It is the intent of the General Assembly to ensure payments to health 4
care professionals that are consistent with efficiency, economy, and quality of 5
care and; that will permit them to provide, on a solvent basis, effective and 6
efficient health services that are in the public interest; and that are affordable 7
and will reduce cost increase trends to an appropriate level within a reasonable 8
period of time. It is also the intent of the General Assembly to eliminate the 9
shift of costs between the payers of health services to ensure that the amount 10
paid to health care professionals is sufficient to enlist enough providers to 11
ensure that health services are available to all Vermonters and are distributed 12
equitably. 13
* * * 14
Sec. 3. 18 V.S.A. chapter 221, subchapter 7 is amended to read: 15
Subchapter 7. Hospital Budget Review 16
§ 9451. DEFINITIONS 17
As used in this subchapter: 18
(1) “Hospital” means a hospital licensed under chapter 43 of this title, 19
except a hospital that is conducted, maintained, or operated by the State of 20
Vermont. 21 BILL AS INTRODUCED H.245
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(2) “Volume” means the number of inpatient days of care or admissions 1
and the number of all inpatient and outpatient ancillary services rendered to 2
patients by a hospital. 3
(3) “Health network” means a system comprising two or more affiliated 4
hospitals, and may include other health care providers and facilities, that 5
deliver health care services in a coordinated manner using an integrated 6
financial and governance structure. 7
§ 9453. POWERS AND DUTIES 8
(a) The Board shall: 9
(1) adopt uniform formats that hospitals and health networks shall use to 10
report financial, scope-of-services, and utilization data and information; 11
(2) designate a data organization with which hospitals and health 12
networks shall file financial, scope-of-services, and utilization data and 13
information; and 14
(3) designate a data organization or organizations to process, analyze, 15
store, or retrieve data or information; and 16
(4) designate one accounting entity and methodology to construct 17
financials and budget submissions for all hospitals and health systems, unless 18
the Board determines that an equally effective and efficient entity and 19
methodology is appropriate. 20 BILL AS INTRODUCED H.245
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(b) To effectuate the purposes of this subchapter, the Board may adopt 1
rules under 3 V.S.A. chapter 25. 2
§ 9454. HOSPITALS AND HEALTH NETWORKS ; DUTIES 3
(a) Hospitals and health networks shall file the following information at the 4
time and place and in the manner established by the Board: 5
(1) a budget for the forthcoming fiscal year; 6
(2) financial information, including costs of operation, revenues, assets, 7
liabilities, fund balances, other income, rates, charges, units of services, and 8
wage and salary data; 9
(3) scope-of-service and volume-of-service information, including 10
inpatient services, outpatient services, and ancillary services by type of service 11
provided; 12
(4) utilization information; 13
(5) new hospital or health network services and programs proposed for 14
the forthcoming fiscal year; 15
(6) known depreciation schedules on existing buildings, a four-year 16
capital expenditure projection, and a one-year capital expenditure plan; and 17
(7) such other information as the Board may require. 18
(b) Hospitals and health networks shall adopt a fiscal year that shall begin 19
on October 1. 20 BILL AS INTRODUCED H.245
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(c) Hospitals and health networks shall use the accounting entity and 1
methodology designated by the Board pursuant to subdivision 9453(a)(4) of 2
this chapter. 3
§ 9456. BUDGET REVIEW 4
(a)(1) The Board shall conduct reviews of each hospital’s and, at the 5
Board’s option, each health network’s proposed budget based on the 6
information provided pursuant to this subchapter and in accordance with a 7
schedule established by the Board. 8
(2) The Board may, at its discretion and in the interest of controlling 9
health system costs, establish methodologies for reviewing each hospital’s or 10
health network’s budgets based on revenue, based on costs, or based on the 11
setting of a global budget for the hospital or health network. 12
(3) Pursuant to its rate setting authority under section 9376 of this title, 13
the Board may establish reference-based pricing for hospitals or health 14
networks, or both. Any such reference-based pricing may apply with respect 15
to all public and private payers, to the extent permitted under federal law, or to 16
one or more payer segments, such as State employees, municipal employees, 17
or school employees, or a combination of these. The Board may determine a 18
transition period for implementation of reference-based pricing to permit 19
appropriate reductions, as determined by the Board, in hospital or health 20
network costs to accompany implementation. 21 BILL AS INTRODUCED H.245
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(b) In conjunction with budget reviews, the Board shall: 1
(1) review utilization information; 2
(2) consider the Health Resource Allocation Plan identifying Vermont’s 3
critical health needs, goods, services, and resources developed pursuant to 4
section 9405 of this title; 5
(3) consider the expenditure analysis for the previous year and the 6
proposed expenditure analysis for the year under review; 7
(4) consider any reports from professional review organizations; 8
(5) solicit public comment on all aspects of hospital or health network 9
costs and use and on the budgets proposed by individual hospitals and health 10
networks; 11
(6) meet with hospitals and health networks to review and discuss 12
hospital budgets for the forthcoming fiscal year; 13
(7) give public notice of the meetings with hospitals and health 14
networks, and invite the public to attend and to comment on the proposed 15
budgets; 16
(8) consider the extent to which costs incurred by the hospital or health 17
network in connection with services provided to Medicaid beneficiaries are 18
being charged to non-Medicaid health benefit plans and other non-Medicaid 19
payers; 20 BILL AS INTRODUCED H.245
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(9) require each hospital to file an analysis that reflects a reduction in 1
net revenue needs from non-Medicaid payers equal to any anticipated increase 2
in Medicaid, Medicare, or another public health care program reimbursements, 3
and to any reduction in bad debt or charity care due to an increase in the 4
number of insured individuals; 5
(10) require each hospital and health network to provide information on 6
administrative costs, as defined by the Board, including specific information 7
on the amounts spent on marketing and advertising costs; 8
(11) require each hospital and health network to create or maintain 9
connectivity to the State’s Health Information Exchange Network in 10
accordance with the criteria established by the Vermont Information 11
Technology Leaders, Inc., pursuant to subsection 9352(i) of this title, provided 12
that the Board shall not require a hospital or health network to create a level of 13
connectivity that the State’s Exchange is unable to support; 14
(12) review the hospital’s or health network’s investments in workforce 15
development initiatives, including nursing workforce pipeline collaborations 16
with nursing schools and compensation and other support for nurse preceptors; 17
and 18
(13) consider the salaries for the hospital’s or health network’s 19
executive and clinical leadership and the hospital’s or health network’s salary 20 BILL AS INTRODUCED H.245
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spread, including a comparison of median salaries to the medians of northern 1
New England states. 2
(c) Individual hospital and health network budgets established under this 3
section shall: 4
(1) be consistent with the Health Resource Allocation Plan; 5
(2) take into consideration national, regional, or in-state peer group 6
norms, according to indicators, ratios, and statistics established by the Board; 7
(3) promote efficient and economic operation of the hospital; 8
(4) reflect budget performances for prior years; 9
(5) include a finding that the analysis provided in subdivision (b)(9) of 10
this section is a reasonable methodology for reflecting a reduction in net 11
revenues for non-Medicaid payers reasonable reduction in commercial payer 12
rates to reflect actual and anticipated increases in reimbursements from 13
Medicaid, Medicare, and other public health care assistance programs; and 14
(6) demonstrate that they support equal access to appropriate mental 15
health care that meets standards of quality, access, and affordability equivalent 16
to other components of health care as part of an integrated, holistic system of 17
care. 18
(d)(1) Annually, the Board shall establish a budget for each hospital and, at 19
the Board’s option, for one or more health networks, on or before September 20 BILL AS INTRODUCED H.245
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15, followed by a written decision by October 1. Each hospital and health 1
network shall operate within the budget established under this section. 2
(2)(A) It is the General Assembly’s intent that hospital and health 3
network cost containment conduct is afforded state action immunity under 4
applicable federal and State antitrust laws, if: 5
(i) the Board requires or authorizes the conduct in any hospital or 6
health network budget established by the Board under this section; 7
(ii) the conduct is in accordance with standards and procedures 8
prescribed by the Board; and 9
(iii) the conduct is actively supervised by the Board. 10
(B) A hospital’s or health network’s violation of the Board’s 11
standards and procedures shall be subject to enforcement pursuant to 12
subsection (h) of this section. 13
(3)(A) The Office of the Health Care Advocate shall have the right to 14
receive copies of all materials related to the hospital and health network budget 15
review and may: 16
(i) ask questions of employees of the Green Mountain Care Board 17
related to the Board’s hospital or health network budget review; 18
(ii) submit written questions to the Board that the Board will ask 19
of hospitals and health networks in advance of any hearing held in conjunction 20
with the Board’s hospital or health network review:; 21 BILL AS INTRODUCED H.245
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(iii) submit written comments for the Board’s consideration; and 1
(iv) ask questions and provide testimony in any hearing held in 2
conjunction with the Board’s hospital or health network budget review. 3
(B) The Office of the Health Care Advocate shall not further disclose 4
any confidential or proprietary information provided to the Office pursuant to 5
this subdivision (3). 6
(4) The Board may adopt rules to incorporate certificate of need 7
determinations into the budget review process of a hospital or health network. 8
The rules shall retain the jurisdictional thresholds and required criteria set forth 9
in subchapter 5 of this chapter but may provide for a streamlined process that 10
reduces costs for the Board or the applicant, or both. 11
(e) The Board may establish a process to define, on an annual basis, criteria 12
for hospitals and health networks to meet, such as utilization and inflation 13
benchmarks. The Board may waive one or more of the review processes listed 14
in subsection (b) of this section. 15
(f)(1) The Board may, upon application, adjust a budget established under 16
this section upon a showing of need based upon exceptional or unforeseen 17
circumstances in accordance with the criteria and processes established under 18
section 9405 of this title. 19 BILL AS INTRODUCED H.245
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(2) A hospital or health network shall not increase its rates in response 1
to a revenue shortfall in the absence of exceptional circumstances, as 2
determined and approved by the Board. 3
(g) The Board may request, and a hospital or health network shall provide, 4
information determined by the Board to be necessary to determine whether the 5
hospital or health network is operating within a budget established under this 6
section. For purposes of this subsection, subsection (h) of this section, and 7
subdivision 9454(a)(7) of this title, the Board’s authority shall extend to an 8
affiliated corporation or other person in the control of or controlled by the 9
hospital or health network to the extent that such authority is necessary to carry 10
out the purposes of this subsection, subsection (h) of this section, or 11
subdivision 9454(a)(7) of this title. As used in this subsection, a rebuttable 12
presumption of “control” is created if the entity, hospital, health network, or 13
other person, directly or indirectly, owns, controls, holds with the power to 14
vote, or holds proxies representing 20 percent or more of the voting securities 15
or membership interest or other governing interest of the hospital, health 16
network, or other controlled entity. 17
(h)(1) If a hospital or health network violates a provision of this section, the 18
Board may maintain an action in the Superior Court of the county in which the 19
hospital is located or the health network is headquartered to enjoin, restrain, or 20
prevent such violation. 21 BILL AS INTRODUCED H.245
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(2)(A)(i) After notice and an opportunity for hearing, the Board may 1
impose on a person who knowingly violates a provision of this subchapter, or a 2
rule adopted pursuant to this subchapter, a civil an administrative penalty of no 3
not more than $40,000.00 $400,000.00, or in the case of a continuing violation, 4
a civil an administrative penalty of no not more than $100,000.00 5
$1,000,000.00 or one-tenth of one percent of the gross annual revenues of the 6
hospital or health network, whichever is greater. This subdivision (2)(A)(i) 7
shall not apply to violations of subsection (d) of this section caused by 8
exceptional or unforeseen circumstances. 9
(ii) After notice and an opportunity for hearing, the Board may 10
order all or a portion of the amount of a penalty imposed pursuant to 11
subdivision (i) of this subdivision (2)(A) to be withheld from the compensation 12
of the hospital’s or health network’s executive officer or officers responsible 13
for the violation and remitted to the Board in partial or complete satisfaction of 14
the penalty, as applicable. 15
(B)(i) The Board may order a hospital or health network to: 16
(I)(aa) cease material violations of this subchapter or of a 17
regulation or order issued pursuant to this subchapter; or 18
(bb) cease operating contrary to the budget established for 19
the hospital or health network under this section, provided such a deviation 20
from the budget is material; and 21 BILL AS INTRODUCED H.245
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(II) take such corrective measures as are necessary to remediate 1
the violation or deviation and to carry out the purposes of this subchapter. 2
(ii) Orders issued under this subdivision (2)(B) shall be issued 3
after notice and an opportunity to be heard, except where the Board finds that a 4
hospital’s or health network’s financial or other emergency circumstances pose 5
an immediate threat of harm to the public or to the financial condition of the 6
hospital or health network. Where there is an immediate threat, the Board may 7
issue orders under this subdivision (2)(B) without written or oral notice to the 8
hospital or health network. Where an order is issued without notice, the 9
hospital or health network shall be notified of the right to a hearing at the time 10
the order is issued. The hearing shall be held within 30 days after receipt of 11
the hospital’s or health network’s request for a hearing, and a decision shall be 12
issued within 30 days after conclusion of the hearing. The Board may increase 13
the time to hold the hearing or to render the decision for good cause shown. 14
Hospitals and health networks may appeal any decision in this subsection to 15
Superior Court. Appeal shall be on the record as developed by the Board in 16
the administrative proceeding and the standard of review shall be as provided 17
in 8 V.S.A. § 16. 18
(C)(i) Notwithstanding any provision of 3 V.S.A. chapter 25 to the 19
contrary, the Board may establish a process to reduce expenditures for a 20
hospital or health network that violates its budget order. The process shall 21 BILL AS INTRODUCED H.245
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include notice and an opportunity to be heard and provide an opportunity for 1
public comment. 2
(ii) A hospital or health network that seeks to reduce expenditures 3
for patient services in response to the Board’s budget violation order shall do 4
so in accordance with a compliance plan approved by the Board. 5
(3)(A) The Board shall require the officers and directors of a hospital or 6
health network to file under oath, on a form and in a manner prescribed by the 7
Board, any information designated by the Board and required pursuant to this 8
subchapter. The authority granted to the Board under this subsection (h) is in 9
addition to any other authority granted to the Board under law. 10
(B) A person who knowingly makes a false statement under oath or 11
who knowingly submits false information under oath to the Board or to a 12
hearing officer appointed by the Board or who knowingly testifies falsely in 13
any proceeding before the Board or a hearing officer appointed by the Board 14
shall be guilty of perjury and punished as provided in 13 V.S.A. § 2901. 15
* * * 16
Sec. 4. EFFECTIVE DATE 17
This act shall take effect on July 1, 2025 and Sec. 3 (amendments to 18
hospital and health system budget review) shall apply beginning with hospital 19
fiscal year 2027. 20