Vermont H 482: An act relating to Green Mountain Care Board authority to adjust a hospital’s reimbursement rates and to appoint a hospital observer

Bill Text

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VT LEG #384191 v.1
No. 49. An act relating to Green Mountain Care Board authority to
adjust a hospital’s reimbursement rates and to appoint a hospital
observer.
(H.482)
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 18 V.S.A. § 9384 is added to read:
§ 9384. REDUCTION OR REALLOCATION OF REIMBURSEMENT
RATES; RISKS TO HEALTH INSURER SOLVENCY
(a) As used in this section:
(1) “Hospital” has the same meaning as in section 9451 of this title.
(2) “Hospital network” means a system comprising two or more
affiliated hospitals, and may include other health care professionals and
facilities, that derives 50 percent or more of its operating revenue, at the
consolidated network level, from Vermont hospitals and in which the affiliated
hospitals deliver health care services in a coordinated manner using an
integrated financial and governance structure.
(b) If the Green Mountain Care Board determines, after consultation with
the Commissioner of Financial Regulation, that a domestic health insurer faces
an acute and immediate threat to its solvency because its risk-based capital
level has triggered a regulatory action level event pursuant to 8 V.S.A. § 8304,
the Board may order a reduction of the insurer’s reimbursement rates to one or
more Vermont hospitals as set forth in subsection (c) of this section until such
time as the amount of the insurer’s risk-based capital exceeds the company

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action level risk-based capital threshold defined in 8 V.S.A. § 8301.
Notwithstanding any provision of 3 V.S.A. chapter 25 to the contrary, the
Board’s activities under this section shall not be construed to be a contested
case. Any person aggrieved by a final Board action, order, or determination
under this section may appeal as set forth in section 9381 of this title.
(c)(1) The Board shall only order a reduction in the reimbursement rates to
a hospital that meets one or both of the following criteria:
(A) the hospital has more than 135 days’ cash on hand and had a
positive operating margin in the previous fiscal year; or
(B) the hospital is a member of a hospital network that, at the
consolidated network level, has more than 135 days’ cash on hand or had a
positive operating margin in the previous fiscal year, or both.
(2) The Board shall order a reduction in reimbursement rates to a
hospital pursuant to this section only to the extent necessary to remediate the
threat to the domestic health insurer’s solvency. In determining whether and to
what extent to reduce a hospital’s reimbursement rates pursuant to this section,
the Board shall consider the competing financial obligations of the hospital and
of the domestic health insurer.
(3) The Board shall provide a hospital with the opportunity to request
relief from a rate reduction ordered pursuant to this section.

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(4) In no event shall a reduction ordered by the Board pursuant to this
section result in a decrease to a hospital’s or hospital network’s projected days’
cash on hand to below 125 days.
Sec. 2. 18 V.S.A. § 9456 is amended to read:
§ 9456. BUDGET REVIEW
* * *
(c) Individual hospital budgets established under this section shall:
* * *
(4) reflect budget performances for prior years and, if not already
addressed pursuant to subsection (h) of this section, account for any significant
deviation in revenue during the most recently completed fiscal year in excess
of the budget established for the hospital pursuant to this section;
* * *
(f)(1) The Board may, upon application, adjust a budget established under
this section upon a showing of need based upon exceptional or unforeseen
circumstances in accordance with the criteria and processes established under
section 9405 of this title.
(2) The Board may, on its own initiative, adjust the commercial health
insurance reimbursement rates payable to a hospital at any time during the
hospital’s fiscal year in order to ensure that the hospital operates within the
budget established under this section.

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(g)(1) The Board may request, and a hospital shall provide, information
determined by the Board to be necessary to determine whether the hospital is
operating within a budget established under this section. For purposes of this
subsection, subsection (h) of this section, and subdivision 9454(a)(7) of this
title, the Board’s authority shall extend to an affiliated corporation or other
person in the control of or controlled by the hospital to the extent that such
authority is necessary to carry out the purposes of this subsection, subsection
(h) of this section, or subdivision 9454(a)(7) of this title. As used in this
subsection, a rebuttable presumption of “control” is created if the entity,
hospital, or other person, directly or indirectly, owns, controls, holds with the
power to vote, or holds proxies representing 20 percent or more of the voting
securiti