Senate panel backs amendment to S.190 restoring 250% QHP cap, orders working group on Medicare cost-sharing for rural hospitals

The Senate Health and Welfare Committee on Thursday considered an amendment to S.190 that would restore a 250% cap on qualified health plan (QHP) hospital reimbursements tied to the Medicare adjusted base rate and direct the Green Mountain Care Board to create a working group to study federal Medicare cost-sharing rules affecting critical access hospitals.

The amendment, presented by the committee chair, would keep the 250% cap that the committee previously approved but change the rate basis back to the Medicare adjusted base rate. It also directs the board to convene a working group—including board representatives, the Department of Financial Regulation, critical access hospitals, insurers that offer Medicare Supplement (Medigap) policies, and the Office of the Healthcare Advocate—and to deliver recommendations and projected impacts on patients, hospitals, Medigap premiums and the state budget by Jan. 15, 2027.

"This is a really big issue for some of our most vulnerable seniors," Elena Baraboo, director of policy at the Green Mountain Care Board, told the committee. Baraboo said the problem is not hospital revenue levels but that, under current federal rules, some Medicare beneficiaries can pay far more out of pocket because coinsurance for outpatient services at critical access hospitals is calculated from hospitals' list charges rather than the Medicare payment rate. She said those "egregious" instances occur in roughly 4% of cases.

Advocates and hospital representatives urged different responses. Mike Fisher, an advocate who spoke in public comment, said the "status quo stinks," estimating roughly $30,000,000 in excess charges paid by rural seniors and disabled Vermonters that flow to the federal government rather than to Vermont hospitals. "We think that this also affects Medicaid through state dollars," Fisher added.

Devin Green of the Vermont Association of Hospitals and Health Systems told the committee the association supports a working group approach but warned that hospitals are already operating with limited administrative capacity. "We can only do one big thing at a time," Green said, urging caution about using the hospital budget process as the mechanism for resolving the federal coinsurance issue.

Committee staff described a carve-out in the draft amendment that would bar the Green Mountain Care Board from using its hospital budget review authority to address the Medicare cost-sharing issue in fiscal year 2027 budgets. Proponents said the restriction is time-limited reassurance to critical access hospitals that the transition to reference-based pricing and other payment shifts will not be used to force immediate changes to patient cost-sharing through the board's budget authority in that budget year.

Opponents raised concerns about precedent. Baraboo and other board representatives cautioned the committee that restricting the board's regulatory tools could prevent the board from acting if it develops a workable solution; Baraboo said the board is seeking more hospital data and does not support a blanket ban on its ability to respond if an effective, legally consistent remedy is identified.

The chair said the amendment is meant as a one-year, narrowly tailored measure and that she would carry it to the Senate floor. No formal vote was recorded in the committee hearing.