Senate Health and Welfare committee agrees to compromise amendment to S.190 setting 225% cap on QHP hospital rates

The Senate Health and Welfare committee agreed on a compromise amendment to S.190 that would define an "actual hospital specific Medicare reimbursement rate" and set a 225% cap on commercial reimbursements to qualified health plans (QHPs), while directing hospitals to sequence rate reductions under oversight of the Green Mountain Care Board.

The amendment, introduced by legislative counsel during the committee meeting, adds a new section (9459) directing hospitals to first target reductions in rates charged to QHPs and then, if additional reductions are needed, to reduce rates that exceed 500% of the Medicare rate or otherwise the highest rates relative to Medicare. It also clarifies that a hospital seeking to raise commercial reimbursement rates for particular service lines must do so through the board's budget-order process under section 9456.

"This is an amendment to S190," said Ben Carpy of the Office of Legislative Council as he described the changes to the committee. The text replaces earlier language that would have allowed hospitals to unilaterally show negative impacts on access or quality and seek increases; instead the amendment requires board consideration when a hospital proposes rate increases to preserve budget compliance.

Emily Brown, executive director of the Green Mountain Care Board, told the committee that the board supports using the hospitals' actual Medicare payment as the definition for the base rate to make implementation feasible. "We agree that having the definition be adjusted to what the actual Medicare rate the hospitals are paid makes sense," she said, and described the 225% figure as a placeholder while the board and stakeholders conduct further analysis and as work proceeds toward possible reference-based pricing.

Devin Green of the Vermont Association of Hospitals and Health Systems echoed that the 225% figure is provisional. "The 225 is a placeholder until we can figure out something that is manageable both for the QHP and the hospitals," he said, thanking board staff for the collaborative process.

Committee members indicated support for the compromise and the sponsoring senator said she will bring the amendment forward to the full Senate and collect member signatures. A member noted the bill is in the Appropriations Committee and that appropriations, "doesn't want to touch this with a 10-ft pole," prompting assurance that budget language and the committee's adjustments will be coordinated with Appropriations.

The amendment leaves the 225% cap in place "until such time as the Green Mountain Care Board sets a different rate," per the amendment text; committee discussion acknowledged the possibility that the board's future rate-setting or rulemaking (including any move to reference-based pricing) could change that parameter. The committee concluded without a recorded vote on the amendment itself and adjourned.

Key procedural and statutory references in the discussion included new section 9459 (hospital budget and rate sequencing), the board's budget-order authority in section 9456, and a cross-reference to 33 VSA section 185 as cited in the amendment text. The committee said it will continue analysis and stakeholder discussions before the amendment proceeds to the full Senate.

The committee also noted ongoing work on a separate amendment (S.193) with the Judiciary Committee and said members would be updated as that proposal develops.