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H.482
IntroducedbyCommitteeonHealthCare
Date:
Subject:Health;hospitals;healthinsurers;GreenMountainCareBoard;
hospitalobserver
Statementofpurposeofbillasintroduced:Thisbillproposestoauthorizethe
GreenMountainCareBoardtoreduceahealthinsurer’sreimbursementrates
tooneormorehospitalsifthehealthinsurerisatimminentriskofinsolvency.
ThebillwouldpermittheBoardtoreduceahospital’sbudgetforthe
forthcomingfiscalyeartoaccountforthehospital’sbudgetoverageinthe
previousfiscalyear.ThebillwouldalsoallowtheBoardtoappointan
independentobservertooverseeahospitalanditsoperationsiftheBoardfinds
thehospitalhasmadeamaterialmisrepresentationorisoutofcompliancewith
itsbudgetandtheBoardbelievesthatappointinganindependentobserverisin
thepublicinterest.
AnactrelatingtoGreenMountainCareBoardauthoritytoadjusta
hospital’sreimbursementratesandtoappointahospitalobserver
ItisherebyenactedbytheGeneralAssemblyoftheStateofVermont:
Sec.1.18V.S.A.§ 9384isaddedtoread:
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§ 9384.REDUCTIONORREALLOCATIONOFREIMBURSEMENT
RATES;RISKSTOHEALTHINSURERSOLVENCY
(a)Asusedinthissection:
(1)“Hospital”hasthesamemeaningasinsection9451ofthistitle.
(2)“Hospitalnetwork”meansasystemcomprisingtwoormore
affiliatedhospitals,andmayincludeotherhealthcareprofessionalsand
facilities,thatderives50percentormoreofitsoperatingrevenue,atthe
consolidatednetworklevel,fromVermonthospitalsandinwhichtheaffiliated
hospitalsdeliverhealthcareservicesinacoordinatedmannerusingan
integratedfinancialandgovernancestructure.
(b)IftheGreenMountainCareBoarddetermines,afterconsultationwith
theCommissionerofFinancialRegulation,thatadomestichealthinsurerfaces
anacuteandimmediatethreattoitssolvencybecauseitsrisk-basedcapital
levelhastriggeredaregulatoryactionleveleventpursuantto8V.S.A.§ 8304,
theBoardmayorderareductionoftheinsurer’sreimbursementratestooneor
moreVermonthospitalsassetforthinsubsection(c)ofthissectionuntilsuch
timeastheamountoftheinsurer’srisk-basedcapitalexceedsthecompany
actionlevelrisk-basedcapitalthresholddefinedin8V.S.A.§8301.
(c)(1)TheBoardshallonlyorderareductioninthereimbursementratesto
ahospitalthatmeetsoneorbothofthefollowingcriteria:
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(A)thehospitalhasmorethan135days’cashonhandandhada
positiveoperatingmargininthepreviousfiscalyear;or
(B)thehospitalisamemberofahospitalnetworkthat,atthe
consolidatednetworklevel,hasmorethan135days’cashonhandorhada
positiveoperatingmargininthepreviousfiscalyear,orboth.
(2)TheBoardshallorderareductioninreimbursementratestoa
hospitalpursuanttothissubsectiononlytotheextentnecessarytoremediate
thethreattothedomestichealthinsurer’ssolvency.
(3)InnoeventshallareductionorderedbytheBoardpursuanttothis
sectionresultinadecreasetoahospital’sorhospitalnetwork’sprojecteddays’
cashonhandtobelow125days.
Sec.2.18V.S.A.§ 9456isamendedtoread:
§9456.BUDGETREVIEW
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(c)Individualhospitalbudgetsestablishedunderthissectionshall:
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(4)reflectbudgetperformancesforprioryearsreconcileanysignificant
deviationinrevenueduringthepreviousfiscalyearinexcessofthebudget
establishedforthehospitalpursuanttothissection,usingamethodology
establishedbytheBoard;
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***
(f)(1)TheBoardmay,uponapplication,adjustabudgetestablishedunder
thissectionuponashowingofneedbaseduponexceptionalorunforeseen
circumstancesinaccordancewiththecriteriaandprocessesestablishedunder
section9405ofthistitle.
(2)TheBoardmay,onitsowninitiative,adjustthecommercialhealth
insurancereimbursementratespayabletoahospitalatanytimeduringthe
hospital’sfiscalyearinordertoensurethatthehospitaloperateswithinthe
budgetestablishedunderthissection.
(g)(1)TheBoardmayrequest,andahospitalshallprovide,information
determinedbytheBoardtobenecessarytodeterminewhetherthehospitalis
operatingwithinabudgetestablishedunderthissection.Forpurposesofthis
subsection,subsection(h)ofthissection,andsubdivision9454(a)(7)ofthis
title,theBoard’sauthorityshallextendtoanaffiliatedcorporationorother
personinthecontroloforcontrolledbythehospitaltotheextentthatsuch
authorityisnecessarytocarryoutthepurposesofthissubsection,subsection
(h)ofthissection,orsubdivision9454(a)(7)ofthistitle.Asusedinthis
subsection,arebuttablepresumptionof“control”iscreatediftheentity,
hospital,orotherperson,directlyorindirectly,owns,controls,holdswiththe
powertovote,orholdsproxiesrepresenting20percentormoreofthevoting
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securitiesormembershipinterestorothergoverninginterestofthehospitalor
othercontrolledentity.
(2)(A)TheBoardmay,uponfindingthatahospitalhasmadeamaterial
misrepresentationininformationordocumentsprovidedtotheBoardorthata
hospitalismateriallynoncompliantwiththebudgetestablishedbytheBoard
pursuanttothissection,appointanindependentobserverwithrespecttoany
matterrelatedtotheBoard’srevieworenforcementunderthissectionifthe
Boardbelievesthatdoingsoisinthepublicinterest.Atthedirectionofthe
Board,theindependentobservermaymonitorthehospital’soperations,obtain
informationfromthehospital,andreportfindingsandrecommendationstothe
Board.
(B)Anindependentobserverappointedpursuanttothissubdivision
(2)shallhavetherighttoreceivecopiesofallmaterialsrelatedtotheBoard’s
reviewunderthissectionandthehospitalshallprovideanyinformation
requestedbytheindependentobserver,includinganyinformationregarding
thehospital’sparticipationinahospitalnetwork.Theindependentobserver
shallshareinformationprovidedbythehospitalwiththeBoardandwiththe
OfficeoftheHealthCareAdvocateinaccordancewithsubdivision(d)(3)of
thissectionbutshallnototherwisediscloseanyconfidentialorproprietary
informationthattheindependentobserverobtainedfromthehospital.
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(C)TheBoardmayorderahospitaltopayforalloraportionofthe
costsofanindependentobserverappointedforthehospitalpursuanttothis
subdivision(2).
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Sec.3.INDEPENDENTHOSPITALOBSERVERAUTHORITY;
PROSPECTIVEREPEAL
18V.S.A.§ 9456(g)(2)(authoritytoappointindependenthospitalobserver)
isrepealedonJanuary1,2030.
Sec.4.EFFECTIVEDATE
Thisactshalltakeeffectonpassage.
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