Green Mountain Care Board signals move to monthly reporting, differentiated hospital benchmarks and transition to reference-based pricing

Matt Sutter of the Green Mountain Care Board told the House Committee on Health Care on Jan. 16 that the board is changing how it reviews hospital budgets to make oversight more timely and tailored to different hospital types.

"Hospital spending is ... a major driver of health care spending in Vermont, and it's increasing," Sutter told the committee as he reviewed the board's statutory objectives and the history of hospital budget review in the state. He said the GMC plans to publish a draft guidance earlier this year so stakeholders can review it before the board adopts guidance in March.

Sutter described operational changes the GMC has made or is planning: moving from quarterly to monthly financial reporting through the Adaptive system, developing early-warning solvency metrics (cash on hand, operating margin), and tailoring reporting and benchmarks to hospital types so that small critical-access hospitals are not subject to the exact same metrics as academic medical centers.

"We are no longer going to have the same benchmarks for all hospitals," Sutter said, adding the benchmark growth reduction will "factor in existing prices" as the GMC models a transition to reference-based pricing required by Act 68. He characterized the current year as a transition year for rate setting and said the board will need rulemaking and stakeholder engagement to implement the new approach by fiscal 2027.

Sutter also reviewed recent board decisions and their system effects. He said hospitals as a group came in under a previously set 3% benchmark, but the board's orders and other legislative actions reduced system revenues significantly. As an approximation, he said legislative caps and board actions removed roughly $230 million from the system last year when combined (outpatient drug cap, budget orders and prior-year enforcement).

On specific hospitals, Sutter said the board approved a funded budget for Brattleboro Memorial with a 2.4% cap because of solvency concerns and described the UVM Medical Center action as an approved negative 6.4% adjustment that equated to about a $90 million NPR reduction converted to commercial rate changes.

Sutter answered members' questions about H641, a bill on the committee's wall that would require a single independent auditor for all Vermont hospitals. He said centralized auditing could increase comparability but that implementation and hiring mechanics would need more analysis.

Why it matters: the GMC's shift to monthly reporting and differentiated benchmarks is intended to give regulators earlier, more granular insight into hospital solvency and to avoid unintended consequences of applying uniform metrics to hospitals with different payment and cost structures.

Next steps: Sutter said the board will release a draft product in the coming weeks with more detail on modeling and methodology and will engage stakeholders during the transition to reference-based pricing.