A controversial proposal from Vermont’s second-largest hospital is in limbo, after regulators this week declined to vote on its request to raise its prices for services.
The board is expected to vote in a future meeting, but a date has not been set yet.
Rutland Regional Medical Center executives hoped to charge the higher rates as early as April 1, but the board’s indecision is delaying these plans.
“The longer this goes on, the less time we have to pivot,” Claudio Fort, the hospital’s chief executive and president, told the board.
Rutland Regional executives say inflation and surging personnel costs will cause a projected $7.6 million operating loss in the current fiscal year. The only way to balance the budget, they argue, is to raise service charges paid by commercial insurers by 9% on top of 3.6% regulators approved at the beginning of the fiscal year.
Fort warned that ignoring this request could result in painful cuts in essential medical services.
If the Green Mountain Care Board does approve the request, patients with private insurance would almost certainly face ballooning premiums next year.
The care board staff had recommended Rutland Regional get the full increase it requested, but board members were reluctant to cast a final vote this week because of the financial impact on patients.
“I’m not yet convinced there’s been no stone left unturned and this is the last resort,” said board member Jessica Holmes.
The alternative, Holmes argued, could be to persuade Medicaid – a government program that sets its own rates – to offset some of the rising costs of care by paying more for hospital services. That strategy could ease increases in commercial insurance premiums somewhat in the near-term. But any price hike on Medicaid would necessarily affect the state’s budget, and by extension future taxes.
If the board approves the midyear adjustment, Rutland Regional executives aim to negotiate new rates with private insurers. Commercial insurers can technically reject a midyear contract change, but a stamp of approval from the care board gives hospitals the upper hand. Hospitals, for the most part, tend to get the rate increases that the Green Mountain Care Board approves.
Insurers build those raises into the following year’s premiums, spreading the cost among their enrollees. The higher service prices — and the corresponding higher premiums — are the starting point for future rate setting.
Also this week, the University of Vermont Health Network — the largest hospital operator in Vermont — asked for a 10% price increase for two of its hospitals, UVM Medical Center in Burlington and Central Vermont Medical Center in Berlin. Together, those hospitals expect a $44 million deficit this year.
The first hearing on those requests is slated for the end of the month.
As of Tuesday afternoon, no other Vermont hospitals had filed requests for midyear price adjustments with the Green Mountain Care Board. The deadline for filing a request is May 1.
Read the story on VTDigger here: State board keeps Rutland hospital waiting on its proposed price hike.