Appropriations committee advances S190 with one-year reference-based pricing pilot and reinsurance authorization

The House Appropriations Committee voted May 21 to report S190 to the full House after adopting an Appropriations-version amendment that narrows some hospital payment changes to hospital fiscal year 2027, adds authority for a reinsurance plan and a section 1332 waiver, and requires reporting on outsourced hospital services and Medicare outpatient cost-sharing for critical access hospitals.

The amendment from Representative Alyssa Black would strike the multi-year statutory limits in section two and replace them with a session law granting the Green Mountain Care Board discretion, for hospital fiscal year 2027, to order hospitals to reduce commercial reimbursement rates for qualified health plans (QHPs) and VHI plans to a percentage of a Medicare-adjusted base rate. "We wanted to target these savings to the markets that are most vulnerable," Representative Alyssa Black said, describing the amendment as a one-year measure to let the board begin implementing reference-based pricing while it completes rulemaking.

Committee staff explained the replacement text removes the statutory percentage caps proposed for fiscal years 2028 and 2029 and instead allows the board to set hospital-specific percentages for 2027. The amendment also strikes a proposed increase in the cap on outpatient prescription drugs that would have raised the limit from 120% to 130% of average sales price, leaving the cap at 120% as enacted previously.

The bill, as amended, includes a new requirement that the Green Mountain Care Board collect information on services hospitals outsource to external contractors for hospital fiscal year 2027 and report by Jan. 15, 2027, on outsourcing'related effects on access, quality and provider-tax revenues. Staff said the reporting responds to instances where outsourced clinical services (for example, emergency-department staffing or certain radiology and lab arrangements) were billed outside hospitals and therefore may not have been captured in provider-tax calculations.

The amended measure also adds a reinsurance provision authorizing the Department of Vermont Health Access, in consultation with the Department of Financial Regulation, to seek a federal section 1332 innovation waiver to establish reinsurance and pursue federal pass-through funding tied to premium tax credits. "This was something that came from the administration," staff said; the draft presented to the committee carried no immediate fiscal impact in its committee form.

Committee members pressed sponsors and witnesses about consumer and hospital impacts, asking how the board would preserve essential community services while reducing commercial prices. Dr. Steven Luckler, identified in committee testimony as the CEO of UVM Health, told the committee the system faced large utilization- and revenue swings: "We are taking in close to half a million dollars more per day than what we had budgeted," he said, underscoring that utilization changes can drive sudden budget pressure.

Emily Brown, executive director of the Green Mountain Care Board, addressed the committee's questions on timing and implementation. She said the board has contracted a vendor and is moving forward on drafting rules for the new program and data tools: "We now have one on board and so we are able to officially start drafting our rules," Brown said.

On Medicare outpatient cost-sharing, committee members highlighted a federal rule that Medicare beneficiaries are liable for 20% of the amount a hospital charges for certain outpatient services at critical access hospitals (40 CFR-style language was not cited in committee). The amendment requires hospitals to identify outpatient services for which charges equal five times or more the Medicare-allowed amount, to disclose the federal cost-sharing rule prominently to beneficiaries, and to file disclosure materials with the Green Mountain Care Board before posting.

Procedurally, the committee folded the Black amendment into a House Appropriations committee amendment (striking multiyear statutory caps, removing the prescription drug cap increase, adding the reinsurance/1332 authorization, and setting the bill to take effect on passage), approved that amendment by roll call (transcript records the tally as "1100"), then voted to report S190 as amended (transcript records a second roll-call tally as "700").

Next steps: the committee chair said the amendment and the bill will be reported to the floor; the clerk and sponsor will provide the amended text. The committee scheduled two short afternoon bills (cannabis and Missag) to follow. The full House will consider S190 on the floor according to the legislative calendar and standard floor procedures.

Sources: Committee floor transcript of House Appropriations, May 21, 2026; statements to committee by Representative Alyssa Black, Emily Brown (executive director, Green Mountain Care Board), and Dr. Steven Luckler (CEO, UVM Health).