Committee backs S190 to let Green Mountain Care Board start reference-based hospital pricing for 2027

The House Ways & Means Committee on May 19 voted to report S190 favorably after reviewing an amendment that would let the Green Mountain Care Board begin reference-based pricing for hospital fiscal year 2027.

Legislative Council attorney Jen Carbby told the committee S190 (as received from House Healthcare) directs the board to reduce hospital commercial reimbursement rates toward a Medicare-based benchmark and to use nonpartisan national data to guide that work. "This is S190 as recommended by the committee on healthcare," Carbby said as she walked members through the bill and a draft 2.1 amendment.

The amendment (draft 2.1) removes multi-year statutory caps that appeared in earlier versions and instead authorizes the Green Mountain Care Board to order hospitals to reduce commercial reimbursement for qualified health plans (QHPs) and VHI plans based on a percentage of a Medicare-adjusted base rate determined by the board for each item and service delivered. Committee members and staff said the change is intended to allow the board to begin reference-based pricing in 2027 without waiting for full rulemaking.

Representative Alysa Black, chair of House Healthcare, framed the intent as targeting savings to the most vulnerable markets: "take the amount of money that is being sort of pulled out already through the borders and let's concentrate on using that to reference base prices in these two vulnerable markets: the QHP market and the VHI," she said. Members asked for clarification that the amendment applies only to hospital fiscal year 2027; staff confirmed the authorization is for that year only.

The bill would also require hospitals to provide the board with information about clinical services they outsource and asks the board, after consulting hospitals and contractors, to report by Jan. 15, 2027 on outsourcing's effects on access, quality and provider-tax revenue — a principal reason Ways & Means took up the bill. Carbby noted the outsourcing review is intended to ensure provider-tax statutes accurately reflect patient-care expenditures.

Carbby also explained a provision on Medicare outpatient cost sharing that attracted sustained questions: federal law requires Medicare beneficiaries to pay 20% of the hospital charge for outpatient services, and when hospitals' charges are large multiples of Medicare payment (examples cited in committee discussion included charges 500% or more of Medicare), 20% of that charge can impose significant out-of-pocket costs on rural seniors. The bill would require critical access hospitals to identify outpatient services where charges are five times or more the Medicare-allowed amount, post disclosure materials, and file them with the Green Mountain Care Board by Sept. 1, 2026.

Members pressed whether the board would set prices plan-by-plan or item-by-item; Carbby said the board could be specific and set amounts for particular items if needed. Several legislators also questioned whether targeting by percent (for example, identifying outliers at 500% of Medicare) is the best approach rather than targeting by dollar value; presenters said current analysis tools more readily identify percent outliers and the percent threshold is a practical starting point to identify egregious charge outliers.

On a motion to find S190 favorable as presented, the committee recorded the underlying vote announced in the transcript as "740" (reported in the committee as 7 yes, 4 no, 0 abstain). The committee then straw-polled the draft 2.1 amendment; the straw poll result announced in the transcript was "650" (6 yes, 5 no, 0 abstain). The amendment (draft 2.1) is understood by staff to be a floor amendment.

What happens next: the bill was reported favorable by Ways & Means and the amendment will be subject to further consideration on the floor. The Green Mountain Care Board and other state agencies will be called on to provide additional technical detail and the Jan. 15, 2027 reports required by the bill will be key to understanding prospective impacts on premiums and provider-tax revenues.