Updates
February 9, 2018

Vermont Legislative Update 2-9-18

An analysis from DRM's Government & Public Affairs Team

Vermont Legislative Update Quick Links

Green Mountain Care Board Defends Budget Before House Panel

Health Care Advocate Opposes Scott Administration Cuts

Health Department Defends Cuts to Loan Repayment Program

Ayer Proposes Hospitals Pay for Universal Primary Care

Panel Passes Two Prescription Drug Bills

Reporting of Disciplinary Actions

State to Explore Interstate Medical Licensure Compact

Orders of Non-Hospitalization Under Review in Senate

Transportation Fund Fee Proposed for Electric Vehicles

Right to Repair Bill Likely to Advance

Lawmakers Look at Tax Implications of Economic Development

House Panel Reviews All Payer Model Program

Debt Collection Bill Back on the Table In House Committee

Green Mountain Care Board Defends Budget Before House Panel

Green Mountain Care Board Chair Kevin Mullin and Executive Director Susan Barrett presented the GMCB 2019 budget to the House Health Care committee on Wednesday. Mullin said he supports the Scott Administration request for the GMCB to reduce its budget by $755,000. To reach the target he proposes to eliminate three currently-filled limited service positions, reduce the Office of Health Care Advocate budget, and reduce contracts for health insurance rate review.

Legislators are critical of the proposed cuts. Chairman Rep. Bill Lippert, D-Hinesburg, said the GMCB is an independent board, but subject to executive branch budget requirements. It is within the purview of the legislature to accept or modify a submission. Mullin acknowledged that current staff would be expected to take on additional work based on the staff cuts. He defended the cuts to the HCA saying fewer people would be requesting services because the health insurance exchange is now operating more smoothly.

All policy committees have been directed to have their recommendations to the House Appropriations Committee by Feb. 15.

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Health Care Advocate Opposes Scott Administration Cuts

Chief Health Care Advocate Michael Fisher told the House Health Care Committee on Wednesday that the $110,833 cut to his budget would force him to cut over 1.5 of their seven advocates at a time when Vermonters are attempting to navigate a complex health care system and much uncertainty prevails at the federal level. Fisher said having the HCA active in both regulatory and policy making decisions enables them to bring the consumer voice to the table and to identify systemic issues.

Fisher said his office also opposes the following recommended cuts

•    Elimination of state cost sharing reductions for Vermont Health Connect members that lower the amount of individual deductible and out-of-pocket costs.
•    Removal of the primary care case management fee paid to providers as an incentive to coordinate extra services needed for complex cases.
•    Elimination of GMCB positions . (“It is important to have a staffed regulator and the proposal undermines that.”)
•    Reduction in Disproportionate Share Hospital payments, which are payments made to hospitals that serve a large number of Medicaid and uninsured individuals.

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Health Department Defends Cuts to Loan Repayment Program


Vermont Department of Health Commissioner Dr. Mark Levine provided an overview of his department’s $154.8 million recommended budget. Levine said his budget maintains funding to the University of Vermont Area Health Education Center to promote rural health educational opportunities, to support physician recruitment, and to foster academic detailing (peer-to-peer educational outreach designed to improve prescribing practices by physicians.) The budget also proposes to eliminate the state-funded loan repayment program, which is intended to provide financial incentives to recruit and retain providers in rural and underserved areas. This cut amounts to $667,000.

Rep. Sarah Copeland Hanzas, D-Bradford, questioned Levine on the cuts to the loan repayment program. She said that last week the committee heard from the federally qualified health centers that the loan repayment program is an important recruitment and retention tool for member organizations. Levine said there is insufficient data nationally to assess the effectiveness, and in Vermont, few awards are going to providers in underserved areas.

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Ayer Proposes Hospitals Pay for Universal Primary Care

The Senate Health and Welfare Committee took extensive testimony this week on a bill that would establish a publicly financed universal primary care system. Committee Chair Sen. Claire Ayer, D-Addison, proposed this week that hospitals pay for universal primary care with revenue generated in excess of the budget approved by the Green Mountain Care Board.  She acknowledged that a larger, more stable source of funding will be needed to pay for UPC, but the excess revenue from hospitals could be used to cover some program expenses.

The current draft calls for a financing plan that will detail which taxes would be used to pay for it and a blueprint for how the program could work. Although the majority of providers believe in the concept, the details of how it will actually work and how it will be funded are a concern.

On Friday, the committee heard from the Department of Vermont Health Access Deputy Commissioner Michael Costa that it is unclear what DVHA would be evaluating and the department lacks the expertise to implement such a system. Costa also raised a concern that there is a potential of running afoul of federal regulations on the administration of the tax. Under current regulations, states may not use provider tax revenues for the state share of Medicaid spending unless the tax meets three requirements. They must be broad-based, uniformly imposed, and cannot hold providers harmless from the burden of the tax.

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Panel Passes Two Prescription Drug Bills

The Senate Health and Welfare Committee unanimously advanced two prescription drug bills on Wednesday. The first bill, S.164, would look at the feasibility of creating an unused prescription drug repository program. The intent would be to allow health care facilities to take unused prescription drugs that meet all quality standards and repurpose them at a very low cost.

The second bill, S.175, would allow the state to import prescription drugs from Canada, create a state bulk purchasing program, and require health insurance companies to provide information to the Green Mountain Care Board about the impact of prescription drug spending on premium rates.

The bill directs the Agency of Human Services to design a wholesale prescription drug importation program. AHS would either designate a state agency to become a licensed drug wholesaler or contract with a licensed drug wholesaler to import the drugs.

The bill requires that contracts between a pharmacy benefit manager (a third-party administrator of prescription drug programs) and a pharmacy not prohibit or penalize a pharmacist for disclosing information regarding the cost of the drug, the availability of any therapeutically equivalent alternative medication, or any alternative method of purchasing the drug (including paying cash) that would be less expensive to the individual.

Hospitals and the federally qualified health centers were successful in obtaining language that would require the agency to seek appropriate federal approvals or waivers that enable all covered entities enrolled or 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 manufacturers to provide outpatient drugs to eligible health care entities at significantly reduced prices. Director of Health Care Reform Mary Kate Mohlman told the committee that the administration is concerned about the obligation this creates, but will not hold up the bill.

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Reporting of Disciplinary Actions

The Senate Health and Welfare Committee took testimony on Thursday on S.243, a bill that proposes to broaden the requirements for health care institutions  to report disciplinary actions. The bill is being promoted by the Board of Medical Practice. BMP Executive Director David Herlihy said as the regulatory body and safety net for the public the board needs access to all disciplinary actions, regardless of whether an action is formal or informal, in order to do a thorough investigation of charges of unprofessional conduct to determine if charges are substantiated. He believes health care institutions are underreporting.

Rutland Regional Medical Center General Counsel and Compliance Officer Jon Wallace said he opposes the bill because it will likely increase workforce shortages, decrease transparency around unprofessional conduct, and be less safe for patients. Wallace said the board never informed hospitals that there is a perceived issue with underreporting. It was only after the bill was introduced that they engaged in conversation with hospitals. He believes this can be rectified without legislation.

The Vermont Medical Society opposes the bill. VMS President Dr. Trey Dobson said he understands the board’s intent to clarify when employers are required to report disciplinary action. However, attempts to modify the language were leading to additional complexity and uncertainty for physicians, medical staffs and employers regarding what the reporting obligations would be.

Additionally, VMS feels strongly that the term “disciplinary action” should be linked to physician behavior that could reasonably be found to be unprofessional conduct or put patient safety at risk. In contrast, the current language is broad and could capture many situations that do not rise to the level of disciplinary action. Dobson said it is important to the culture of quality and safety that physicians, medical staffs and employers have the ability to work on written improvement plans that are not considered discipline that must be reported. He said referrals to the board are not taken lightly by physicians and can have career-long consequences, such as needing to report the investigation to credentialing entities and future employers.

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State to Explore Interstate Medical Licensure Compact

A Senate Committee is investigating whether the state should join the Interstate Medical Licensure Compact. The Senate Health and Welfare Committee on Thursday took testimony on S.253, a bill that would allow the state to enter the agreement, which currently includes 22 states. The aim of the compact is to make it easier for physicians to obtain licenses in multiple states and to strengthen public protection by enhancing the ability of states to share investigative and disciplinary information.

The committee heard from a number of physicians in support of the compact. Physicians said this will expand access to care, streamline the licensing process for physicians, and facilitate multi-state practice and telemedicine for those physicians and states that choose to participate.

Psychiatrist Dr. Robert Emmons is opposed to the bill. He said physicians must pay hefty fees to participate and these costs are passed on to patients. He also expressed concern about a loss of due process – if a physician’s license is suspended or revoked in one state then the same sanction automatically goes into effect in all other participating states.

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Orders of Non-Hospitalization Under Review in Senate

The Senate Health and Welfare Committee on Friday started their work on S.203, a bill that would create a study committee to look at current law governing orders of non-hospitalization, which are court orders that contain conditions that a person named in the order must abide by or face the possibility of hospitalization or re-hospitalization. A report provided to the Vermont Department of Mental Health by the Treatment Advocacy Center addresses the issues and provides recommendations on how to reshape the ONH process.

The bill calls for a limited-time study committee that will look at the strengths and weaknesses of ONHs and the potential of a pilot project that seeks to redress any weaknesses and build upon any existing strengths. Committee Chair Sen. Claire Ayer, D-Addison, said she has heard from several sources that ONHs are largely ineffective in helping patients maintain adherence to treatment.

Department of Mental Health Deputy Commissioner Morning Fox said the department supports the bill.

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Transportation Fund Fee Proposed for Electric Vehicles

Electric vehicle owners would pay a premium of four cents per kilowatt hour at the charging station to help fund roads and bridges under a bill under consideration in the House Transportation Committee. The recommendation comes from the Agency of Transportation and has a reasonable chance of being included in a bill making miscellaneous changes to transportation law.

Under the draft bill, the right to sell electricity would be expanded beyond the electric utility industry and private entities would be allowed to charge competitive rates for charging a vehicle. A variety of pricing mechanisms could be used. The four cent premium, meant to mirror the gasoline tax, would be included in the price charged by the utility and remitted through the tax department. To facilitate putting the plan into action, the Public Utilities Commission would open a docket related to electric vehicle charging infrastructure and establish rules for utilities and vendors.

In a presentation before the committee on Friday morning Senior AOT Environmental Policy Analyst Dan Dutcher told the committee that the electric vehicle charging plan is about preparing for the inevitable and getting the inevitable to happen as soon as possible. Dutcher’s remarks were followed by a presentation by Energy Policy and Program Analyst Dan Potter on the state of the electric vehicle market in Vermont.

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Right to Repair Bill Likely to Advance

A bill that would require original equipment manufacturers to make repair manuals, software updates and other diagnostic information available outside of their authorized repair centers is likely to advance in some form, but the proposed bill also elicited caution from the Senate Economic Development, Housing and General Affairs Committee on Friday morning.

The committee held an open discussion on a number of pending bills and agreed to move them all forward, but they were wary of the complexity of the Right to Repair issue and tentatively agreed to move ahead with a trimmed down version of the bill, S.180, while authorizing a study of the broader consequences. The study would produce recommendations for next year’s legislature.

On Wednesday the committee had heard from supporters and opponents of the bill. Local electronic repair shops and a national organization formed to push for such legislation said it was needed to allow local vendors to compete. Trade associations representing OEMs said it would threaten data security and force companies to reveal proprietary information. Sens. Phillip Baruth, D/P-Chittenden, and David Soucy, R-Rutland, were charged with making a recommendation next week.

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Lawmakers Look at Tax Implications of Economic Development

The House Ways and Means Committee took a dim view on Wednesday of Scott Administration proposals that would make selected changes to tax policy to promote economic development. The reaction came during a summary prepared for the committee and presented by Joint Fiscal Office Analyst Graham Campbell, who is in his first year as an analyst for the legislature.

Among the ideas advanced by the governor is one that would make the existing Research and Development Tax Credit partially refundable, a program to encourage communities to upgrade aged housing stock by incenting homeowners to invest, and changes to the Vermont Economic Growth Initiative. The governor has also proposed to exempt military pay and a portion of social security benefits from taxation.

Campbell’s presentation focused only on the money and he had few details about what was being proposed in economic development bills that are now pending in the House Commerce and Economic Development Committee; but the lack of understanding played to a receptive audience of a committee that is traditionally wary of forgoing tax revenue. Ways and Means will consider the measures after they are referred by other committees.

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House Panel Reviews All Payer Model Program

The House Committee on Health Care continued its discussion of the All Payer Model Accountable Care Organization program this week, holding several hearings to review the first year of  implementation of the model. On Thursday, the Green Mountain Care Board, joined by the Department of Vermont Health Access, gave a comprehensive overview of the Accountable Care Organization system.

GMCB and DVHA framed the need for the shift to the APM simply, stating that one of the main problems with the current health care system is that “the cost of health care is too high and unsustainable.” Act 54 of 2015 and Act 113 of 2016 allowed the state and the GMCB to first explore and then enter into an APM Agreement with the federal government and OneCare Vermont, an ACO, to address this problem, by “integrating care, moving away from a fee-for-service model to a capitated payment, and having the providers take financial risk.” The use of the model, they said, ensures “high quality service and a focus on population health while addressing cost.”

More explicitly, the model utilizes a capitated payment system, with providers assuming financial risk if treatment costs greatly exceed the payment received for the patient (or groups of patients), but also sharing in savings if costs are contained and care quality measurements are met. In the first year of the program, all risk rested with OneCare, but in the second year, some of the financial risk shifts to participating providers and hospitals.

Vermont Association of Hospitals and Health Systems Vice President of Government Relations Devon Green told the committee that nine Vermont hospitals are currently  participating in the OneCare network. Six are taking on full risk for costs that may exceed payments and three  hospitals are limiting their liability by participating in the Medicaid-only program. For hospitals, Green said that the ACO program promotes practicing in a coordinated care delivery system focused on primary prevention, offers a predictable funding stream, promotes administrative efficiencies such as elimination of prior authorizations, and satisfies Medicare payment requirements. Green did note some threats to hospitals under the new system, including unpredictable risk associated with a new model of payment and care.

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Debt Collection Bill Back on the Table In House Committee

After being struck from last session’s omnibus consumer protection bill in conference committee, H.482, a bill that amends consumer debt collection rights and requirements, is once again the subject of consideration as a stand-alone bill in the House Commerce and Economic Development Committee.

Stating that the bill would  allow debtors to “protect their subsistence to avoid becoming a greater burden on state services,” Vermont Legal Aid’s Jean Murray spoke in support of the  proposal to protect more of a debtor’s income from collection.The bill would also shorten the statute of limitations on credit card default claims, and allow for the suspension of interest on judgments if the debtor is unable to pay. The bill discussed in the committee on Thursday is the result of  several drafting sessions held off-session and appears to include most of the original proposed changes to current law. Lenders argued last session that these would make it more difficult to collect on credit card defaults.

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