Vermont Legislative Update 04-13-2018
An analysis from DRM's Government & Public Affairs Team
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Panel Makes Political Decision to Separate Drug Provisions: Both Advance
Concerned that prescription drug importation could stall in the House Appropriations Committee, House Health Care Committee Chair Bill Lippert, D-Hinesburg, on Friday announced his intention to add the prescription drug transparency provisions of S.175 to S.92, a bill related to interchangeable biological products. S.175 as passed only deals with prescription drug importation. Provisions related to bulk purchasing of prescription drugs were removed from the bill after concerns were raised by the Agency of Human Services that taking on both issues simultaneously was too ambitious. On Friday, the committee passed both measures unanimously.
S.175 directs AHS to design a program that would import prescription drugs from Canada. It requires the agency to seek appropriate federal approvals or waivers that enable entities eligible for 340B drug pricing to participate in the importation program to the fullest extent possible without jeopardizing their eligibility. The 340B Drug Program requires drug manufactures to provide outpatient drugs to eligible health care entities at significantly reduced prices.
S.92 passed the Senate last year and became the vehicle for the committee’s priority to strengthen the current prescription drug transparency law.
- Requires that when a pharmacist receives a prescription for a biological product, he or she must provide the lowest priced interchangeable biological product unless otherwise instructed by the prescriber;
- Requires that contracts between a pharmacy benefit manager and a pharmacy not prohibit or penalize a pharmacist for disclosing information regarding the cost of a drug, the availability of any therapeutically equivalent alternative medication, or any alternative method of purchasing a drug (including pay cast) that would be less expensive to the individual;
- Requires health insurance companies to provide information to the Green Mountain Care Board about the impact of prescription drug spending on premium rates;
- Requires the Medicaid office and each health insurer to provide to the GMCB a list of 10 drugs annually on which significant amounts are spent and for which the cost, net of rebates, have increased by 50 percent or more over the past five years or by 15 percent or more over the past 12 months;
- Requires the Attorney General’s Office to identify 15 drugs that appear on more than one payer’s list or on which the most money was spent. Manufacturers must provide to the AG justification for the increase in cost of the drug, all factors that created the cost increase, the percentage of the total increase attributable to each factor, and an explanation of the role of each factor. Manufacturers must provide a version of the information in a format approved by the AG that will made available to the public; and
- Allows the AG to bring a civil action against a manufacturer for failing to provide any information in the format or timeline required by the AG.
Committee Adopts Weakened Net Neutrality Bill
Following weeks of deliberation and testimony, the House Energy and Telecommunications Committee voted 5-3 on Thursday to approve an amendment that significantly weakens a Senate-passed bill, S.289, regarding net neutrality.
The amendment, offered by Rep. Laura Sibilia, I-W. Dover, was proposed by the Office of Attorney General. It requires the AG to review the network management practices of Internet service providers and, to the extent possible, make a determination as to whether the provider’s broadband Internet access service provides open Internet access. The AG’s office proposed the amendment as a way of avoiding near-certain litigation that would have resulted from the Senate-passed bill.
House Committee Takes up Strict Liability Bill
The House Judiciary Committee spent much of two days this week hearing testimony on a highly controversial bill, S.197, that would create strict liability for any harm resulting from the release of hazardous or toxic substances. The bill would also create an expansive and unprecedented right to medical monitoring for claimants who can claim exposure to – but not necessarily harm from – hazardous substances.
Environmentalists and trial attorneys argued that it is only fair that corporate polluters be required to pay for the harm their activities cause, even if it results from no negligence on their part.
S.197 is an outgrowth of homeowner exposure to the chemical PFOA in North Bennington. The bill was pushed through the Senate by Bennington senators Dick Sears (D) and Brian Campion (D). The local cause has been taken up in the House Judiciary Committee by Rep. Kiah Morris, D-Bennington.
Insurers testified that the bill could significantly disrupt the state’s insurance market by imposing a liability standard that does not exist in any other jurisdiction. With no experience to evaluate the likelihood and cost of claims, insurers would have little basis to establish premiums.
Business groups argued that companies would make investments in other states to avoid the unique risks the bill would create for Vermont operations.
DRM attorney Marc Heath presented the committee with perhaps the most frightening political scenario for lawmakers. Under the bill, he argued, a single property owner on one of Vermont’s polluted lakes (Lake Carmi, for example) could organize a class action to sue a single farmer for the large loss in value of lakeside properties. Because the lake pollution is caused largely by farm runoff, he argued the claim would have a high likelihood of success under the bill.
The committee is expected to take more testimony next week.
House Advances Provider Enrollment Bill
The House this week approved S.282, a bill that requires the Department of Vermont Health Access to screen and enroll applicants seeking to become participating providers in the Medicaid program within 60 days after receiving an application. The bill takes effect July 1, 2019. If the department is not able to meet the 60-day timeframe, DVHA will convene stakeholders before Feb. 1, 2019 to provide an update on its efforts and the barriers to meeting the deadline and additional resources it needs.
Committee Advances VITL Oversight Bill
The Senate Health and Welfare Committee on Friday passed H.901, a bill that holds the Department of Vermont Health Access accountable for the Vermont Health Information Exchange. The bill requires a work plan to be delivered by May that defines the goals that DVHA and Vermont Information Technology Leaders, the state’s legislatively-designated operator of VHIE, must achieve for continued funding. It requires the development of a statewide Health Information Technology Plan as well as a contingency plan that would be triggered if DVHA and VITL cannot implement the recommendations outlined in the work plan.
The committee eliminated a provision in the House-passed version of the bill that would have repealed VITL as the state’s only option to operate the Vermont Health Information Exchange. It now states the legislature’s intent to eliminate VITL’s exclusivity to operate the VHIE if the goals in the work plan are not met. VITL has been under scrutiny after a comprehensive and independent review of the program found that the information exchange is suffering from serious financial and administrative problems and failing at its core mission to make patient information available to providers.
The bill extends the portion of the health care claims tax that is dedicated to health information technology to July 1, 2019. This is a 0.999 percent tax on all health insurance claims paid by health insurers for their Vermont members.
The bill requires two reports. The first requires DVHA, VITL and the Office of Health Care Advocate to recommend whether individual consent to the exchange of health care information through VHIE should be an opt-in or opt-out policy. States that operate under an opt-out mechanism tend to have more patient records accessible to providers than states that operate under an opt-in mechanism. The second report requires DVHA and VITL to recommend ways to improve the utility and interoperability of electronic health records.
Panel Begins Work on Universal Primary Care
The House Health Care Committee on Thursday heard testimony on S.53, a bill that would lay the groundwork for a state-based universal primary care program. The bill as passed by the Senate requires the Green Mountain Care Board to study how to achieve universal primary care services through a combination of publicly-funded program and commercial insurance. According to the Green Mountain Care Board, the Senate-passed version of S.53 would cost $590,000 over two years for contract expenses and staff time.
GMCB Chair Kevin Mullin said the bill would require additional resources. He is concerned with the timeline to develop a draft operational plan by Oct. 15 given regulatory obligations of hospital budgets and insurance rate reviews that occur during the summer. He stressed that the board also needs to continue to focus on implementation of the all-payer model and the work of the accountable care organization, an alternative payment model that supports care coordination.
Department of Vermont Health Access Deputy Commissioner Michael Costa and Vermont Association of Hospitals and Health Systems Vice President Devon Green are opposed to the bill. Both expressed concern with a lack of alignment of universal primary care with other health care reform efforts. Costa said the bill could put those efforts and the all-payer model project at risk for failure.
The committee will spend time on the bill next week.
House Advances Prescription Drug Repository Bill
The full House this week passed S.164, a bill that requires a study of the feasibility of creating an unused prescription drug repository program. The intent of the legislation is to allow health care facilities to repurpose unused prescription drugs that meet all quality standards at a very low cost.
Committee Split over Automatic Renewal Legislation
The Senate Economic Development, Housing and General Affairs Committee appeared to be divided this week over a House-passed bill, H.593, that would require consumers to separately approve any contract provision that provides for automatic renewal of contracts that last longer than one year. The bill is strongly opposed by a variety of business organizations that sell products and services over the Internet. Traditional magazine publishers are also opposed.
The committee was scheduled to debate and decide the issue on Friday, but committee chair Michael Sirotkin, D-Chittenden, abruptly adjourned the committee for the day when two members left to meet with President Pro Tem Tim Ashe, D-Chittenden. Sirotkin said he was acting in protest, and that he needs five committee members to make decisions.
“Right to Repair” Bill Taken Up by House Panel
The House Commerce and Economic Development Committee this week began taking testimony on S.180, a “right to repair” bill passed last month by the Senate. As introduced, the bill would have required equipment manufacturers to make the same information, schematics, diagnostics and repair manuals that it provides to manufacturer-authorized repair shops available to independents.
The complexity of the issue led the Senate to amend the bill to eliminate any new requirement for manufacturers and to establish a Right to Repair Task Force to review and report on the issues involved.
Industry advocates argued that the bill as passed by the Senate pre-judges the outcome of the study. The committee will continue to take testimony on the language of the findings included in the bill and the scope of the task force’s study next week.
Rep. Browning Urges Study of Fossil Fuel Subsidies
The House-passed budget bill contains a $120,000 appropriation for a study of carbon cap and trade scenarios across the northeast states, but Rep. Cynthia Browning, D-Arlington, suggested on Wednesday that fossil fuel subsidies in Vermont should be examined first.
She told fellow House Committee on Ways and Means members that “we should focus on sun-setting the way that we have fossil fuels cost less. We need to give people clearer signals about the actual costs of fossil fuel usage in order to get them to change their behavior.”
Presenting a memo to the committee, Browning said that she has compiled a (not-exhaustive) list of $56 million in current tax exemptions that support fossil fuel use, and that the idea of the gradual reduction of appropriate exemptions needs to be incorporated into the carbon tax discussion. Among the items listed is an exemption of home heating fuel from the state’s six percent sales tax and reductions of diesel fuel taxes for railroad use.
Browning told the committee that she “finds it intolerable to talk about new taxes without looking first at how we subsidize the behavior that we want to discourage.”
The committee agreed to consider language that would increase the scope of the currently proposed de-carbonization study.
Panel Passes Green Mountain Care Board Priority Bill
The Senate Health and Welfare Committee on Friday passed H.912, a bill that revises the certificate of need process for hospitals and other health care facilities. It also would reconstitute the supply-focused Health Resource Allocation Plan (HRAP) with a State Health Improvement Plan – a more nimble assessment of unmet needs.
- Shifts review of routine replacement of non-medical equipment from the CON process to the hospital budget process; • Clarifies projects presumed to be expedited: repair, renovation, or replacement of building infrastructure and routine replacement of medical equipment;
- Streamlines the process by allowing the health care advocate, competing applicant, or interested party to waive the requirement for a public hearing;
- Adjusts monetary thresholds for inflation by increasing the diagnostic and therapeutic equipment threshold from $1 million to $1.5 million and increasing new health care service or technology annual operating expenses threshold from $500,000 to $1 million;
- Amends enforcement penalties by increasing the one-time violation penalty to $75,000 and capping continuing violations at $200,000. A “knowingly” standard was removed as too arbitrary;
- Adds a CON requirement that the applicant incorporate appropriate energy efficiency measures, if applicable; • Changes the Green Mountain Care Board’s authority to bill back the costs of certain regulatory activities to the entities it regulates;
- Requires that at least one member of the GMCB be a health care professional; and
- Requires the Agency of Human Services to provide recommendations for the regulation of freestanding health care facilities.
Finally, the bill contains more general language related to the HRAP that will help policymakers and regulators with analysis and decision-making in the context of the larger system of unmet need or gaps.
Panel Considers Study Rather Than Changes to Minimum Insurance Standards on Ride-Sharing Bill
After additional testimony this week, the House Commerce and Economic Development Committee appears less inclined to increase minimum insurance standards included in House and Senate-passed bill, H.143, that would impose new requirements on ride-sharing companies like Lyft and Uber.
The bill as originally passed by both chambers adopted a uniform law that has been approved with only minor variation in 48 states. Although the Commerce Committee was considering a proposal suggested by the Vermont association for plaintiffs’ lawyers that would increase the minimum insurance limits for drivers to a level higher than that adopted by any other state, the committee is now contemplating a study of the sufficiency of minimum insurance standards. The bill would retain the House- and Senate-passed minimum standards for ride-sharing companies.
A final decision will be made by the committee next week.
Charities and Schools Worried About Tax Credit Cap
President of the UVM Foundation Shane Jacobsen this week added his voice to a chorus of concerns over a provision in the House-passed tax bill, H.911, that would cap a state tax credit for charitable donations at five percent of $10,000. Jacobsen appeared before the Senate Finance Committee on Tuesday to discuss the foundation’s concerns with the bill.
The provision was included in a bill that aims to fix a $32 million state income tax problem created by tax changes at the federal level by enacting a new system for claiming personal exemptions and credit for charitable donations under Vermont’s tax code. The Scott Administration proposed most of the changes, but its proposal did not cap the tax credit. The House used money saved by the cap to expand a tax exemption for social security income.
Jacobsen said $138 million of $477 million recently raised under the Move Mountains Capital Campaign at UVM came from in-state donors, and that 90 percent of the dollars raised come from high-end donors. Capping the state-allowed credit “sends a message to Vermonters that the face value of the gift is not important,” he said. “This will negatively impact our philanthropic giving.”
The legislature is also considering a new income tax surcharge to fund a portion of education expenses now collected under the homestead property tax. The Finance Committee has not yet deliberated over any of the elements in the proposed bill.
Citizens Suits Struck From Water Quality Bill
In a move considered more of strategy than policy, the House Natural Resources, Fish and Wildlife Committee late Friday approved a version of S.260, a bill relating to water quality funding, that would eliminate a Senate-passed provision allowing private citizens to sue a potentially responsible party for enforcement of water quality laws. The citizens suits provision was opposed by the Scott Administration, and further consideration in the House might have killed the bill’s chances of reaching final passage by the end of the session.
The bill proposed by the committee creates another Clean Water Working Group charged with recommending ways to pay for on-going remediation of impaired waters. If the legislature fails to enact a new funding mechanism after the group makes its recommendations in 2019, a $2 per night water quality revenue surcharge on hotel room rentals would go into effect.
The bill also creates a new designation of “Lake in Crisis” to address specific pollution concerns with Lake Carmi, a small lake in Franklin County that has been subject to severe algae blooms in summer because of phosphorus deposits resulting largely from farming activity. The lake has become a rallying cry for clean water advocates. The designation carries funding from the state’s Clean Water Fund and more stringent regulations on land-based activity in the area.
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