Vermont lawmakers are seeking to implement new oversight measures on hospitals and limit how much they could charge for care, proposals that would significantly change how the state’s largest health care providers can operate.
The Legislature’s health care committees each voted by wide margins Friday to advance bills that would bolster the Green Mountain Care Board, a health care regulator, and strengthen its ability to oversee prices, obtain data and make changes to hospital governance.
Broadly speaking, the two bills represent an effort to rein in costs, increase financial transparency and shore up Vermont’s shaky health care institutions, Sen. Ginny Lyons, D-Chittenden Southeast, the chair of the Senate Committee on Health and Welfare, said in an interview Friday.
“The most important thing is we’re trying to get out of the health care crisis that we’re in,” Lyons said.
Many of Vermont’s health care entities are struggling to make ends meet, and patients are facing rising costs and long waiting lists.
The bills also reflect what Vermont’s Chief Health Care Advocate Mike Fisher described as an increasing concern about the University of Vermont Health Network’s role in the state health care ecosystem.
As costs rise and health care institutions become increasingly fragile, the network has drawn scrutiny and criticism recently for cutting services, moving money between Vermont and New York hospitals and paying out several million dollars in executive bonuses.
“I hear a great deal of skepticism from legislators about the way money is flowing through the health network, and about its impact on the health care system,” Fisher said. “And I think that’s apparent by the language that’s being considered.”
Annie Mackin, a spokesperson for the University of Vermont Health Network, said in an email that “Vermont has the most transparent and rigorously regulated nonprofit health care system in the country.”
The network also shares “the goal of making health care more affordable, and (recognizes) we are in an access and an affordability crisis,” she said.
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In the Senate
The sprawling Senate bill, 32 pages in its most recent draft, directs the Care Board to implement reference-based pricing, a cost-saving model in which the prices that hospitals charge private insurance companies are pegged to Medicare rates.
It would also direct state officials and health care leaders to draft a “statewide health care delivery plan” by 2029, including overall care goals, projected costs and resource allocations for Vermont’s health care system — and would allow the board to “correct any aspect of the structure of a hospital network or its financial operations” that does not align with that plan.
The bill would also require hospitals to submit more financial information to the Green Mountain Care Board and would compel hospitals to inform state officials and lawmakers before reducing or cutting services to comply with their budgets.
And the legislation would compel the board to scrutinize hospital executive salaries and bonuses and compare them to those of practitioners — provisions that come in the wake of news that UVM Health Network executives received $3 million in bonuses while cutting patient services last year.
Lyons, the Senate health committee chair, said Friday that she and other lawmakers were concerned about some of the network’s prices and financial practices.
“We want to begin to build a system that has greater fairness across the board, and that offers sustainability for providers, and will help patients be able to access the care they need,” she said.
In testimony in the Senate this week, Devon Green, an in-house lobbyist for the Vermont Association of Hospitals and Health Systems, expressed support for some payment reforms, but said the organization would still need more information about the plans.
She also opposed some provisions that bolster the Green Mountain Care Board’s mandate to obtain data from hospitals. In some cases, she noted, hospitals are already required to provide such information to the board — and in others, she said, the language in the bill would give the board ill-defined and overbroad powers.
“There are some initiatives like the work we are doing together to find a path forward on reference-based pricing that we view as progress,” Green said in an email Friday. “There are of course other aspects of these pieces of legislation that we remain concerned with. We will continue working with lawmakers, the Green Mountain Care Board, AHS and others to further strengthen these bills.”
In the House
The shorter House bill would allow the board to reduce the reimbursement rates paid out by an insurer to hospitals if the insurer “faces an acute and immediate threat to its solvency.” That new power would only apply to hospitals or networks with positive operating margins and 135 days’ cash on hand.
Last week, Vermont’s largest private insurer, Blue Cross Blue Shield, announced that it lost $62 million in 2024. That was the largest yearly deficit in three straight years of losses, Blue Cross administrators said, reflecting a 15.5% increase in its costs for claims over the previous year.
That will likely mean more double-digit increases in premiums for 2026, Sara Teachout, an in-house lobbyist for Blue Cross, said in a media call last week.
The bill would also allow the board to appoint an outside observer if it found that a hospital had “made a material misrepresentation” to the board or was “materially noncompliant” with a budget order.
Rep. Alyssa Black, D-Essex, the chair of the House Committee on Health Care, said that the legislation was “in response to a crisis that we are in at this very moment” in a brief interview Friday.
“What motivated it was the very real insolvency of the only health insurance domiciled in Vermont,” Black said.
Mike Del Trecco, the president and CEO of the Vermont Association of Hospitals and Health Systems, told House lawmakers Friday morning that he “can’t support” their bill.
“I deeply understand the gravity of the issues and the fragile nature of our delivery system, along with the affordability issues that we face, and I can assure you that our hospitals are working on these issues deeply,” Del Trecco said.
Reducing reimbursement rates, however, would effectively pull money from hospitals — and, Del Trecco said, “if we take it just from one source, we’re going to create a situation where we may put hospitals into jeopardy of failing and closing.”
But Owen Foster, the chair of the Green Mountain Care Board, told House lawmakers Friday morning that their legislation was a crucial tool in shoring up the state’s health care system.
“Vermont right now is like one big gigantic dysfunctional family that used to be wealthy, and now is not,” Foster told the committee Friday morning. “And we have real problems.”
Read the story on VTDigger here: Lawmakers seek to lower Vermont hospital costs, strengthen health care regulator.