 Okay, good afternoon. We'll call to order the Green Mountain Care Boards meeting of March 13th, 2024. We have a number of agenda items today. We have a presentation from Copley with, it'll be led by Matt Sutter, our Health Systems Finance Principal Analyst, and Russ McCracken. And we have Copley's CEO and CFO with us, Jeff Herbert and Joe Wooden. Then we have Fiscal Year 23 Actuals presented by Elena Barabee and Matt Sutter. We have one change to the agenda. We will not be going over the hospital budget guidance today. We'll do that. I think it's going to be next week. And I believe there's an opportunity for public comment on the guidance which has been posted. So if there's any comment, we'd love to receive it and then we'll go over the guidance. I believe it's next week or we'll notice it on the agenda. And then we have some old business that we noticed for an executive session relating to the board review of a head notice of funding opportunity application. And we plan to get to that around 4 o'clock. And I think that's it for the agenda. So with that, I'll turn it over to the Executive Director, Susan Barrett, for her report. Thank you, Mr. Chair. On public comments, just to say, as you just reminded everyone, that why don't you try going off camera? We're getting pretty garbled. Yeah. This has been happening with my teens lately. Is that any better? Significantly. Okay. So as I meant, as you mentioned, Chair Foster, the guidance for Y-25 is posted. And additional, the reporting manual is posted as well as some of the guidance around quality measures and measures inventory. So please check that out. We will come back to it next week. Alina, Director Barrett and her team have been working with a group of folks, which includes CFOs from Vermont's hospitals, the healthcare advocate, and VAWS, to gain input into this guidance. They've been working on this since last November. So we are looking forward to presenting that to the board and hearing your input and also hearing any other input from stakeholders. So please check that out and provide comments. The other public comment periods that are open are the community engagement work that is ongoing. Please share any of your comments regarding the Act 167 Hospital Sustainability Community Engagement Work. And then last but not least, we have an open public comment period on a potential future all peer model at the ahead model. So many folks have shared their comments and please share any comments you have regarding that. And then in terms of schedule, I want to remind folks that next Wednesday night, we have a primary care advisory group meeting and those are open to the public. And if you can't make that, it is recorded and available on our YouTube channel. So with that, I will turn it back to you, Mr. Chair. Thank you. We have meeting minutes from February 21, 2024. The board members have an opportunity to review those. I would like to move for approval of those minutes. Second. And all in favor, say aye. Aye. And that continues our streak of approving minutes. With that, I'll turn it over to Matt Sutter and Russ McCracken to introduce the topic of Cochle's mid-year budget modification request. Thanks, Chair Fawker. I will pull up the first slide of our presentation, which just has rules surrounding budget modification requests. And Russ will briefly discuss those. And then we will turn it over to Cochle to discuss their request and then return back to some staff analysis. So give me one second. I will pull up the presentation. Great. Thanks, Matt. I can talk to this slide. So Cochle is requesting an adjustment to their established FY24 hospital budget. The board has a, the board is guided in its review of that request by our statute and rule, the statute, which we've copied the relevant provision onto the slide here is 9456F, which says the board may upon application adjust the budget established under this section upon a showing of need based upon exceptional or unforeseen circumstances. So that's what we're looking at today. The hospital budget rule also has some factors to guide us here. This comes under section 3.401, which is a section of the rule that covers both adjustment and enforcement. But it has some factors for the board to look at. Those are the variability of the hospital's actual revenue, the hospital's ability to limit services to meet its budget consistent with its obligations to provide appropriate care for all patients, the financial position of the hospital in relation to other hospitals and to the health care system as a whole using the statistics developed from the information submitted in compliance with the Uniform Report Manual that the hospital submitted in its budget process. The board also look at the hospital's performance under budgets previously established for Copley and then any other considerations deemed appropriate by the board, including but not limited to other instances in which a hospital has less than full control over the expenditures limited by the budget. So those are factors set out in 3.401 of the rule. And then lastly, the board has an amendment and adjustments policy applicable to FY24 that was part of the FY24 budget guidance. That is more procedural and it sets out some requirements, which Copley has followed for submitting that request for its approve amendment to its approved budget. And that brings us to where we are today. So with that, I believe we're going to turn it over to Copley to discuss the request. Since this is part of a budget hospital budget review, I think it's appropriate that I swear you and Mr. Wooden and Mr. Everett. So if you could both raise your right hands, do you solemnly swear that the evidence you shall give relative to the cause and under consideration shall be the whole truth and nothing but the truth. So help you God. Yes, yes. Thanks very much. And we will turn it over to you for presentation and your request. Great. Thanks very much, Russ. Can folks see this in presentation mode? Yes. Okay, everybody can see it. I can't see your response. So great. We can see it. All right. Thanks very much. Sorry to be here. I sort of feel like we're becoming a problematic child. It's a funny reference probably to come up again. I don't mean to be that way. There's just sort of a systemic problem that continues to get worse. And we're basically here. There's a few drivers. One of them is not meeting our revenue expectations on net patient revenue. Although there is some approval on that and our operating margin continues to be of significant concern. I'm going to go over some of those slides. We're doing the best job we can to save money, curb expenses, run as tight as we can, but also to get credit for revenue. It's important in our process of coding and managing our billing process that, you know, we're trying to collect the revenue as much as we can. So let me just walk through a few of these. You know this. This is us for a small critical access hospital. I love this service area discussion because it's so unclear in a lot of health care. Health care is overly complicated. The definition of a service area is highly variable. So we consider like between 30 and 50,000 emergency department visits around for everybody more than we expected. There's our volunteers. They're all back, which is helpful in our donors. Donations are important. I just came before this meeting to our foundation committee and reminding them there's only three ways to keep us going, operating margin, which is the most important, borrowing money and then raising money. So we're doing the best we can to also raise money, looking at all three of those. This is our overview of services, which is important when we look to the future strategically. What do we need to do? How much do we need to tighten up or what can we potentially not afford to do? I do love that discussion always of what can we afford? We ask ourselves that. I know the state considers that. We all do that. The personal income is what can we afford? So these are the services I know through at 167 in the interviews. We're going to talk a lot about things like this. We're driven off of a strategic plan. We try to do three-year plans. You can't see the I'm not expecting you to read this, but the goals that are up top and in color for us are financial sustainability, quality, workforce, culture, and keeping care local. Finance is number one because that's our biggest concern. Unfortunately, it's sort of a bit raging quality is great to monitor that. And then I think the issues of workforce, culture, post COVID, during COVID, and keeping care local, I think we're going to always stick with those as I think they're pretty timely. When it comes to saving money, working together, being more efficient, and some of the details of our strategic plan are who the local folks are you working with to see if you can get efficiencies, cost saving, shared staff, and then what's the regional group that you're dealing with? So we're working together on a New England sort of collaborative health network of a bunch of rural hospitals and other providers that are independent. So that's exciting, hopeful to save money, shared staff, we've done a lot of work, a total completed over this year, quite a bit. Patients served by county. Copley is very different in the sense that we, you know, 60% of our business is sort of in our county, but a lot of it is outside. And some of it's pretty dramatic. If you look at patients by zip code, and to go from county to zip code takes some work, I'm reminded of that. We take care of a lot of folks. So if you look at the total of say inpatient, outpatient, and then total visits, those are just markers, 106,000 down below under other towns, 16,000 of them are from other towns, 179 of them, which is pretty high. So Morrisville is the number one at 22. The next one's 10, but other towns, it's a pretty, pretty large number, which is not only the list above, but everybody else. So it's nice to know people make an effort to get here. I think it speaks to our quality because we do have wait times and demand, as well as our other measures of quality. This is just a subset of only Waterbury office visits by county, which shows that at least for Waterbury, that's why we're working on a new facility, 86% of the people come from outside of our county. That's a lot to that particular office location. So I think we're trying to thoughtfully address demand and access. And what can we afford to address demand and access? Here's a chart about, I love this chart just to show our size and how important we are. We are all important as individuals and people and every organization is important. We do represent about 3% of the total budget. That's always floated between two and a half to 3%. So that's fine. We understand that we're one of the eight small critical access hospitals we've seen before. And then our perspective on sort of the payment methodologies, which I think are important as critical access hospital with HDS, which once used to be called tweeners, which is kind of funny. And then the University of Vermont and or Dartmouth Hitchcock, which is sort of another medical center that serves for donors. I think Dartmouth spends, give or take $400 million on Vermont care. That's the estimate that I was given. So our performance steps bar, it's the chart that is consistent. I live with this, our operating margin gain over the past nine years that it's played here. We've really been struggling when you sort of look at this. We did have that great year in FY 21, but that was a COVID relief year. Some organizations took over relief in one year. We did that because of the orders advice. Some of it spread it over a couple years, but I think it's important to understand that because a lot of those funds were specifically used because of COVID and where those demands are somewhat dissipating. So if you sort of take that out, here's a couple of stats that are helpful to look at. And that is for this timeframe, the loss in operations was about $8 million. And if you take out the COVID funding, which is not completely unreasonable, it's $14 million. So somewhere between $8 and $14 million. It's not just the dollar amount because that's all relative to whether you're talking to a much larger hospital like UVM, the network, or Rutland, et cetera. It's just an extremely high percentage. And we're looking at historic and pretty significant negative operating margin results. So it's not like there's one event or incident. So I know we did go to orthopedics. Outpatients made that significant move in FY 20. And it continued after that. And that was a good clinical move. It was important. I know that's kind of sweeping the nation. It started on the West Coast to do outpatient orthopedics, hips, knees, shoulders. We do now between 90 and 95 percent. And previous to that, we would have a one day, pretty much a one day stay. Now, when we did that, it is where people should go. It's expected. They're better healing. It's much more cost effective. We actually lose money. We've actually lost money because of that methodology. But I think it's important. So it saves the system money. It saves Medicare money, one of our lectures payer. But it does sort of take away that additional one day length of stay for keeping somebody. But our orthopedic physicians are extremely driven and have high standards. And so that's why we did it, just because they're so good at what they do. I wanted to go over this issue, which is near and dear to my heart, because I'm trying to understand why Copley wallows for decades with lackluster financial performance. And I think I've been putting this forward, this discussion about understanding pricing. Now, you know, some people probably don't want me to talk about this, because if you say average will have above half or below, but the prices in Vermont are pretty wild. So this is ourselves compared to the other 14 hospital hospital C does not have any data available, both on the Vermont as well as the federal comparison. So, but for the most part, we've got some pretty good data. The red circles are ones where we're higher. So if you look at the very bottom, you know, MRI joint of extremity without dye, lower extremity, very bottom one, there's only one hospital less expensive enough. So it's not that if you look across the board, it's a variable, but we're, we're certainly one of the lowest. And I've shared this before with it's pretty updated. We don't have anything newer than the FY 23 information, but some of these price differences are dramatic. I don't understand them. I think it's a systemic reason why an orthopedic specialty hospital, we do a large percentage orthopedic work, which is considered the sort of golden child of maybe making an operating margin. We do a ton of it. It's by far the majority of the intensity of the work that we do. And we still can't even break even. And I think it's fundamentally a price issue that we just can't afford. So some of the price differences are hundreds of percentages, almost close to a thousand percent higher. And some of the dollar amounts are pretty significant too. So, you know, another one, you know, we do something for about $1,500 and somebody else charges almost 6,000. That's a, that's a lot of money. So I wanted to just bring that up. The price comparison, I know when we talk about health care reform and many aspects about it, we always talk about what's the comparison group? Like we now, like I said, critical access hospital makes sense. You know, and yet when it comes to prices, are we are we going to sort of say that prices should be different for a PPS hospital versus a CH hospital? I don't think pricing based upon your payment methodology really makes sense that much. But that's just my proposition that, you know, when Vermonters look around and ask how much is an MRI, they've got an HSA account, they've got co-payments. This variation is really not helpful because it's the beginning of all discussions, I should note. You take the price multiplied by your volume, you get your gross, you know, your gross revenue, and then you multiply that by oftentimes 50% to get your net patient revenue. So your gross patient revenue multiplied gets you down to that. So here's Jeff and the team do a good job. They did estimates for 2024. They actually take each individual hospital and make an estimate based upon the approval through the Greenbelt Care Board to come up with a number. And still we're never going to catch up. It's kind of hard to catch up. I remember one legislator said, oh, you must be happy. You've got a price increase. And I said, well, if I charge $10 and they give me a 10% increase, I get a dollar and somebody's charging a hundred, they get $10. So I'm not complaining, but when you're talking about prices so low, the percent increase applied to it means everything because you get a dollar and somebody else has made $10 at the same price. So just wanted to let you know about this. This is an old pricing one we did years ago because we had some competition from Quest Labs down in New Jersey, Camden, New Jersey. And when we look at our prices compared to the other hospitals near us, the overall Vermont average, which is all the hospitals and our price in Quest, we do quite well. And of course, we need a lab because you can't have an ER without a lab. You need some diagnostic imaging. Even if you paired us down to an emergency department hospital, you're still going to need lab. You're still going to need diagnostic imaging. So the price studies that we do, and I would suggest other street price studies, they might be some minor discrepancies in our data, but we do our best to make sure that it's accurate. Here's the rate request approval process since 2004. I love this just because it speaks to how many times people got clipped who had the highest rates, the lowest rates. It's kind of interesting. Green Mountain Care Board came into place up above with the arrows since 2012. If you want a readable copy, let me know. But there's a lot to be told there in terms of copy and how well we have done over these almost 25 years or 20 years. The next one is, again, I don't think we've asked for enough in the past. That previous slide shows that nobody ever questioned what we asked for. And in some cases, this is the data from 2016. Even when we did ask for negative increases or zero, we got handed negative. So I don't think we've presented our case very well. And I will take that responsibility since I've been working here to try to do a better job of being honest, clear, asking for your audit or review to somehow make sure that this makes sense. But we've been struggling these past few years. And most of the years, the approval rate increases less for these seven years, except one year. And then you've seen this chart about you go back five, 10, 15 years. When you look at data over time, it makes a big deal. So in the very middle of the chart, over the past 10 years or 15 years, on average, we're getting 2% lower every single year. If you could get 2% more every year for 10 years or 1.7% for 15 years, how dramatic that is because that is a coupling effect. So but in terms of how expensive we are in this analogy, you guys have seen it outside of 2013, where we share the position with Chippin County, but for the most part we've been the least expensive, which is all good. Appreciate that. But we're just having a hard time making ends meet. That's probably an understatement. And here's a capital sheet that I'm going to click through this because I apologize. I didn't shut off all that. This looks at what is your budgeted capital versus actual and budgeted means we went through our board, went through the finance committee, which is pretty rigorous here at the hospital. The board is also and then went through the amount care board. But all these red lines are when we've underspent and through cutbacks. And again, I apologize for this slide. It shouldn't be this complicated. But for the most part, we've under spent like $12 million in capital. And that's a lot for us. So we've got deferred maintenance issues that are sort of raging. We have pipes break quite frequently. And we have a host of issues that when I talk to people about them, it's very humbling because I'm sharing and I'm happy to share some really dirty laundry about some of our facility needs. I'm not proud of that, but people should be aware of that. And then I think I really appreciate some of the comments from the budget hearing. The top line is, I guess, Copley is a bit challenging to evaluate. And I think that's true of a lot of individual hospitals, but you do want to look at the data. The commercial price has been so low for so long. There is still fairly low. I like the green one, but they are also really efficient. So I think they've been able to be very efficient operating a hospital with high quality in the contents of the low prices. I'm thankful for that praise. And it's not me. It's all the team that's been doing this for a long time. But I think some of the lower items, like I don't think the rate increases they've had over the recent years get them back. We're trying to claw back to something reasonable and make up for past sins. We have low administrative clinical salaries, which is great. And the middle one, there's great value in being a highly reliable organization that can safely deliver outstanding outcomes and high quality at low prices. And a race to match local prices is not sustainable for homeowners as a whole. I just have a problem with that because I don't know what that means, that we will never look at what are fair and reasonable prices because there are those that are very high and we're not going to address them. Any time we do comparisons, looking at maybe you guys using a hundred different indicators coming up this next budget cycle, you're always looking at comparisons. What makes sense? What seems fair and reasonable? What is the average plus or minus some percentage? So I think we really also, and wanting us to launch into perhaps looking at our prices and maybe considering that part of how you do health care reform. I like the last one, so I hope they can continue to focus on being high quality, great outcome on the knot. I'm not sure we're going to be able to do that. And I'm sort of a little bit desperate. I've asked for help at the last budget hearing in September, requesting that you guys review us at a frequency and rate much like UVM. I wanted monthly reviews, but haven't received that. But I think we're coming across what's the most important issue and I apologize because the health care system is very complicated. We literally get cognitive overload because of all the variables, buttons, dials and issues. But I do think the price is kind of fundamental and it should be understood by average people. And then your contractual arrangements with commercials, et cetera, are second. The prices I think should be there. So I'm just going to watch a few items too. He's got some slides, a good discussion. Yeah. So I'm going to talk about what we submitted back in February. What's coming up is not that we're into our new fiscal year. We're just basically expecting that by the end of the year we're going to project a loss in our operating margin. What's happening is at an 8% rating freeze. We're just not meeting our net revenue expectations, although the presented budgeted volumes are coming in for the most part out of our expectations. So to take and dig into what's going on, and again, this would be on a yearly basis, if we were to compare our actual expectations with the budget just using the 8% rating freeze and the volumes coming in at budgeted expectations. We are a little bit behind that on net revenue, about 1.5 million or 1.4% behind expectations. But when we look at what's causing that, we do have a new surgeon that has come on and they're ramping up. They started actually on October 1st. We're also, as an organization, we did go in 2022 and did a system conversion. So we are still getting through some of our AR issues which has been hindering our net revenue. If we take that and actually compare it to what was submitted, that would be the 15% net revenue or commercial rating freeze. Our shortfall would be at 7.9 million or 7.1%. Again, our volumes are coming in at a budgeted expectation. Sorry. Maybe I'm the only one, but I'm only seeing a blank interim rate request slide. I'm not sure if you're reading off of a larger slide that has all these. Thank you. Okay, perfect. Appreciate it. Sorry. I apologize. We don't actually have the detailed expenses or revenues. That's just in the actual requests that we submitted. So expenses are coming in below budgeted expectations, about 1.1 million or 1%. And again, our operating margin is behind expectations or actually being projected at a negative 2.7 million. So for the request, we're looking to have an additional 7% starting March. We requested that. That represents 7.3 million for seven months. We're also asking for a 5% increase or 5.2 million over the next seven months. This represents the lost revenue from October through February. And then an additional 7% or 725,000. And this is for unexpected nursing salary increases as well as our AG and AR. So those numbers get us back to the original rest of 15%. Yes. Those would get us back to the original. And taking that now, again, when we have these losses on operations for so long, what we've seen happening is our day's cash on hand has become a very big issue. When you take a look at this slide, our average for the five years is coming in at 83 days. Our 2022 drop down to 66 days. Our 2023 is actually at 42 days. And as of January, we are at 49 days. But one of the things that I wanted to communicate is in 23, when we did our cost report, again, we're a critical access hospital, we discovered, or we calculated that we would need to pay back in the 23 cost report to Medicare. The reason for that was our expected length of stays have increased. And also as compared to 22, our cost of care has come down. And so we had an overpayment that we have to prepare for. That overpayment is about 3.4 million. We expect to pay that in the month of April of this year. And what that will do is that will actually reduce our day's cash by 11, putting us down under 40 again, which is always problematic. I guess that's it. I know you've got the materials we sent back on February 7. So I appreciate the discussion and any comments or observations or issues. I don't know if you want us to leave that up or take down the slide. Any questions on the slides? Will we take it down? Why don't we, Mr. Sutter will present next. But I kind of want to do board questions now, just why we have this up. And then I have a number of questions and I don't know if other board members do. So why don't we do that now? Do any board members have questions? I had a couple of quick ones. Some of these are really pertinent to your questions and some are more out of curiosity. The first one is, are you seeing lower prices driving patients to you? Do you see a correlation between your low prices and patients coming? I think that's an interesting question. It's funny. I thought about this one earlier. Our quality is very good. One of the ways I measure that is because we have demand for services. You could say, well, that's very crude. Well, we have demand for services that is far outside of our typical service area. So it's not just demand for services for the ER. So we've got long waiting lists. We're trying to build as much capacity as possible. So we've got people that would like to come here and we do the best to accommodate them, but it's just not possible because we don't have the infrastructure to support it. So I don't know if people, some people do come here for low prices, but it's funny. The whole health savings count theory that came into play, I don't know, 10, 15 years ago, it somewhat works. It doesn't really work as much. So many people still are on their company sponsored plans and there's that natural divorce between being sensitive to issues as much as you would think that they would be. So we get some of that. We get some of that, but we're not having people say, wow, we should let you do MRIs without pre-authorization because you're so inexpensive. We don't have that happening. Who's ever controlling the screen? Could you make it so it's not, I'll say again, it's making me a little ill actually. Just awful. All right. I'm not controlling your screen. Am I? No. I don't know. What's the matter? Your bad hair day? What? I don't have any good hair days, Joe. That's the matter. The second question I had is the discussion on pricing. I just want to make sure I understand it. So you have pricing and then you have all your contracts. What is the best way for us to judge how affordable or low what you're getting paid is? Is it prices? Is it grand? What should we look to? I think we have a bunch of cognitive overload with the systems and dials in healthcare and it's easy to get lost and say, oh my gosh, what should we do? How do we handle it? But there's some fundamental themes and one of them is just price. Now you take our price we multiply it by, is that better on your? Everybody looking better? Yes. Okay. So the price is, you know, our prices for Medicaid, for Medicare, a lot of that stuff is fee scheduled and set. But on the commercial side, it's your initial price or if your private pay or if you have some other arrangements. But for the most part, it's the price multiplied by the contractual allowance and then that's your net patient revenue. So, you know, there's that whole black box that occurs after the charge or the price that you put on the bill. Do you know what I mean? So if you try to, what you're asking is, Joe, if you squeeze this side and that side and what does it look like in the end? But I would really hope that we would take some fundamental issues and say this one's got to work, you know, whether it's some issue of quality or access or sort of price. So I can't, I could give you some indication as to what each one of, well, I don't know if I can do this, Jeff, it probably kicked me out of the table, like what each one of our contracts are with each carrier. I know that becomes super sensitive to people. I think there was a bill proposed somewhere recently about saying, let us know what the relationships are with the commercials so that we can do that simple math, which is your price times your contractual allowance is your actual, what you're getting paid. But I can't come before you and, you know what I mean? I think we should know all that. I think you folks should know that because otherwise, you know, there's this black box that occurs. And then the price issues, people find it really hard to believe that, you know, something is 500% more expensive, you know, at one hospital versus ours. I don't know, Jeff, if you want to say anything. Yeah, Mr. Foster, one of the things that is out there, but it is, you know, so incredibly complicated as Medicare is trying to, you know, accomplish exactly what you're asking. And so there's a machine readable files for all of us as hospitals. You know, you have to be in the patient billing arena, unfortunately, to be able to dig into that file to understand, you know, is this a 1500 fee? Is this a UB fee? What is the CPT code? What does a DRG mean? I mean, they are incredibly confusing. And I don't think it's really, you know, being used by the public. It's being used by us as finance individuals, you know, when we want to understand where our rates are. Yeah, that's really what I was getting. So many other things in my head right now while we're doing this, such as our guidance coming up and all that. So it's just, Joe, you mentioned a little bit about like simplicity. So just trying to get a sense of what you think is the best metric, the best thing for us to look at to judge your pricing or what you're getting paid. And it sounds like the pricing is where we should be looking in your view, right? Yeah, I think the price, you know, again, you could maybe address pricing based upon the size of the hospital, but that gets a little bit weird too because we're all Vermont and we're together. So if you're going to get a colonoscopy, or if you're getting a lot of simple stuff and we don't do transplants or you know, stuff that UVM or others do, we don't even have prices on those because we just don't do them. But on the basic stuff, it should be, it should be kind of the same as, I don't know, plus or minus 100% difference. That's kind of, you know what I mean? That would be a huge improvement. But you know, it's just the building block of which everything just becomes perverted and odd in the end. You're trying to figure out who gets what and how they get paid, but you're going to start with the price. Okay. The only other question I had is, you had a chart of what percent of the hospital spend Copley is for the state. I think it was 3% and UVM network was 60%. And so a small increase or even a large increase for Copley wouldn't be very much an absolute dollars, which wouldn't translate to a large increase for insurers, right, versus a large increase for a giant chunk of the system would cost the insurers a lot more. So my question is whether or not you had any sense of what this impact would be on the insurers or insurers, I should say. Well, we sent them notice of we were required to. So we sent them notice. We haven't had any feedback or concern from them. I've talked to one of the insurers extensively. They really appreciate our very reasonable and low prices. They appreciate that a lot. But I don't have a calculated number on that. There is that 80-20 rule, and there's the fairness rule. I mean, like what seems fair and reasonable, not that it's an exact bright line. But we certainly don't have a scale to save as much money and manage maybe as efficiently because we're small and independent. But that's why we're trying to get the independent hospitals to maybe work closer together. So we're trying to figure those things out. But yeah, I don't know the exact commercial. People would like to send more folks to us. I mean, they would like to... I would love more permission and ability, but it's not just permission from you, but ability to sort of build more capacity so that you've got a really high quality, you know, low-cost orthopedic specialty hospital. I can't... If you gave me the money now, I'm thoughtful in how I spend so I wouldn't be able to do it. But we're on that road to try to make sure that we are doing a great job with good prices, not high prices. Well, thank you very much. I didn't have any other questions and thanks for the presentation and the request. I did have one follow-up question. So in your presentation, you mentioned part of the challenge is that the NPR is coming in low. What would you say the drivers are of that? Right now our volumes, what we submitted as volumes to the Green Mountain Care Board, were actually at those expectations. You know, when we came in, we asked for the 15%. With 8%, that's what's really driving it is we're just not able to get to that net patient revenue. It was kind of unusual. It's kind of unusual, Robin. We got an NPR opportunity that was driven off of our request for 15%. But we only got 8%. So there's like this big gap of like, well, you could drive your NPR up. It's like, well, there's no way we can drive it out because I don't have the staff. We didn't budget for that. We don't have the ability. It's not like we can turn on some mechanism and all of a sudden start generating more NPR. Thank you. Can I just clarify then, is the entire gap, I thought, I heard you say it's volume, but it doesn't sound like it sounds like utilization is coming in as predicted and the entire gap is the commercial rate. So it's all on the commercial side, the gap in NPR, and it's all driven by price, not volume at all. Not volume. Yeah. So we went with a $3 million goal for an operating margin given our history would be fairly reasonable. We can't even go to the market and borrow money easily because people look at our operating margin are just completely discouraged and say, why would I, you can lend you money because you don't have the ability to sort of pay that back in a healthy way. So yeah, most all of it is because of that gap is because of what we didn't get a chance to charge. We were going to make $3 million. We're now expected to lose $3 million. So we've got a $6 million swing from making what I think was a fair and reasonable operating margin to negative $3 million. So it went from positive three to negative three. That's how sensitive the matter is for us. And we try to submit honest budgets and I think we, you know, I think historically, Copley should have asked for more money. We're just so far behind on some of these prices. You know, I can't, there's nothing I can do. If you gave us average calculation on just part and I just looked at it, it's not exact, but it would be like a 50% increase. Like right now, just raise all of our rates 50%. That would still might get us to average. That would, that would be enormously helpful. But you know, I'm not, I'm not asking for a 50% increase, but this problem's not going to go away. Just, and I'm looking at services. So if we cut services based upon some of the studies and approach and what we have to do, I understand that, but I would like to proactively look through what we're learning in some of the outside consultants to say, well, what is fair and reasonable? I don't want to do it out of desperation. If we do, then it will be known like, okay, so these 2,500 procedures or services we did are going to go back into the marketplace. This was our price. This is what the average of the people near us. And then it's going to be really expensive when you see if we sort of cut some services like, oh my gosh, you're right. The net, the net differences you cut these 2 services and now it's like much more expensive from the state. And I'm not, I'm just saying we're trying to, we're trying to look at everything and I get, we all need to be really creative. We all need to be honest about how many services you need to provide. I know that, that sounds like heresy, but we can't be all things to all people. I think most of my questions were after Matt presents, but I had one question that you brought up, which was about your orthopedic practice migration to doing joints as an outpatient national trend, you know, standard care. But I remember back when we were looking at your ran prices in the fall that your, your outpatient ran prices are the lowest in the state where inpatient ran prices were below average in the state, but not the lowest in the state. So when you migrated from having inpatient procedures to outpatient procedures, my understanding is not only does the cost of that procedure go down, but then your, your relative, the price goes down, but your relative price goes down even. I'm wondering if you notice that your relative price goes down, went down even more, or if you, you know, what the actual financial impact on Copley was of doing the right thing for joint care. So that was kind of a, an interesting question. So we did do what was right. And, you know, we are finding that on to go back, you know, to an inpatient just isn't a viable option because the managed Medicare payers aren't, you know, they're basically not allowing a stay-to-stay as inpatient. But again, it was the right thing to do. And, you know, we did see where we're seeing it the most is in our cost report. That's why our average length of stay has gone up. And that's why we do, you know, have to pay back to Medicare. And that's where we're seeing it the most right now. Yeah, because we used to just have a lot of one day, almost like births, it would have one birth, one to two days. But like, you know, we had a lot of one day length of stay because of orthopedics, do the surgery, stay overnight, take care of you, make sure all the, you know, we're doing that on an outpatient basis, which is very exciting. And as a leader, I don't think I could have stopped it because the orthopedic surgeons, they're extremely, have intense personalities. They're very good at their job. They want to do the very best. And there's no way I could have stopped that. And they're right. They're like, we're going to do this just because we want to be really good at our jobs. And I told Jeff, well, we have no choice because, you know, they're doing it for the right reason. And it has nothing to do with their compensation at all. And it has nothing to do. They just, they're very driven. I appreciate that. Any other questions or thoughts? Don't think so. So why don't we turn to Mr. Sutter for the care board staff presentation, and then we'll do the HCA in public comment after. Sorry, go ahead, Russ. Sorry, if it's all right, I did have one clarifying question. Jeff, you referred to a $3.4 million overpayment that was going to have to be made this spring. Was that a Medicare advance payment or could you clarify what that was in reference to? Yeah. So each year, just like we all have to, in April, file tax returns, critical access hospitals have to file cost reports. At that time, Medicare looks at how much they paid versus how much they should have paid. And what our cost report is demonstrating is that we did get overpaid by Medicare, and we're going to settle up and that's the settlement. Was that something that you had budgeted for initially, or is that a change from the, I didn't see it referenced in the letter request, so I was trying to track it back. No, our auditors require us to do what we call an interim cost report. And so it was in an accrued in the actuals for FY23. So they make an estimate every year of your class volume, your acuity, case mix index, et cetera, et cetera, that given your volumes, we're going to pay you a per diem for one of your Medicare patients. And then you collect that per diem. And you make an assessment, as Jeff said, you have your auditors later. Really look at this to make sure that you understand how your future unfolds. So there's oftentimes an adjustment, either they overpaid us or underpaid us, and we try to estimate that. But sometimes the consulting auditor estimates are even off, and it's like, well, we budgeted, but we're still off. So as a small hospital, things can swing kind of dramatically. If your ER is much, your ER, the inpatient, is much busier than you would have expected, they're going to want some money back because they were paying you at a particular clip with a particular amount of set costs. So that's the way it kind of works. It's complicated, but it does work, and it makes sense that it's done all across America in critical access offerings. Really great question. I'm really glad you asked that. Thank you. Mr. Sutter, if you're ready. Yes, thank you. Can you see my slides? Yes. Okay, fantastic. Russ went over this, so I won't belabor some of the points that they already made. Just quickly go over their request to get 12.7 percent change in charge on top of the 8 percent that was approved. Their finance committee approved the request in January 26, 2024, and they submitted the request to us on February 7th with all materials received on the 19th. Here, you can see their approved NPR, FPP, and operating margin, and this is their projected, and they're projected with the rate. Excuse me. So currently, as I mentioned, oh gosh, I keep moving around. Currently, as I mentioned, it's going, they're projecting a negative 2.3 percent operating margin with the rate just over three. They're requesting this because the approved change in charge will not generate budgeted revenues given the utilization projections. So as they mentioned, the price issue and the operating margin that they're projecting will result in a day's cash on hand of about 37 versus almost 60 with the rate increase. This slide is a slightly more broken out income statement than the one before, but you can see the, in their income statement, they're applying this evenly across service areas, and the net results about a 6 percent increase over their projections in operating revenue. No changes in their expected operating expenses. So all of that additional revenue will just go to the bottom line, which I will show on their proposed balance sheet. The additional $6.3 million in operating income due to their proposed rate increase will follow the cash in investments, and then you see that at the bottom line here. Beyond that, just quickly, they presented something similar, but I just wanted to show since 2013, they're submitted approved change in charge in the corresponding operating margin in the black line for that year. So just with some history, obviously, I was out with the board at the time, but it looks like they were, they had a relatively high operating margin came in with reduced, the board reduced the rates, and their operating margin sort of has been negative, but for that FY21 with the COVID relief money. So moving to the next slide, I want to take a little bit more time to explain what we're looking at here. What I wanted to see was relative to other critical access hospitals, how has their growth and expenses and change in charge load. So I really want to be extremely clear, this is not taking a base. As the base, we're setting an index of 100 for all hospitals and just applying the percentage increase to charge and the percentage increase to operating expense just to see, just to compare a coply to the other hospitals. So on the left here, you'll see charge, operating expenses on the right, coply in blue, other critical access hospitals in red. What this is showing us is that, obviously, those rate cuts you can see in the downward trajectory here, but relative to other critical access hospitals, their charges have been catching up if we start from the same place. Meanwhile, their operating expenses have been growing faster than other critical access hospitals. Been growing at a faster rate, I should say. Obviously, as I mentioned, the growth in just relative charge and operating expenses doesn't tell the whole stories. Obviously, not all hospitals have the same price. So what we did was take the RAND 4.0 price and then using that as a starting point. And let me back up real quick. The RAND 4.0 price just reflects as a percentage of Medicare what employers and private insurers would pay for the same services at the same facility. So as a try to get some idea of their relative price compared to other hospitals, what we did was take the RAND 4.0 price in 2018 and then apply the changes in charge, the approved change in charge to that price to get kind of a general idea of the relative price. So with the rate, you can see, and I apologize again, the labels are very small, but coply is this blue line right here. So other than Mount of Scotland, they have the lowest RAND 4.0 price. If we apply their changes in charge since 2018 to that, they're now slightly above Porter using this method, but still the third lowest. And then this little yellow line right here is coply the projections with requested rate increase. So even if approved entirely, they would still be the third lowest if analyzed using this method. So just to wrap up quickly, just to give some potential options. Yeah. On the last slide again, I just want to reiterate that the method is not perfect. It's just a kind of a directional idea of where hospitals rates are in relation to each other. So just quickly to go over a handful of potential options. If we approve coply's amended budget as submitted, it would be a 12.7% rate increase, which would generate about 3% operating margin and leave them with nearly $60 days cap on hand. If we deny the rate increase, their margin will be around 2.8% with 37.4 days cash on hand. And then using the calculations, I think are fairly easy because there's no expenses are unchanged. So using what they submitted, I can kind of approximate the 5.5% rate increase, would generate about a 0% operating margin. So beyond that, we just have a couple of reference tables for you to look at the showing the relative change in charge for operating expense growth here. You can see the hospitals, each of the hospitals that I used to develop that. And the same thing for relative charge growth. And I guess probably the way to read this would be for each of these hospitals, like if we took, let's take the bottom one here, Gifford, in FY24, their charges could be expressed as approximately 136% of what they had grown from in FY16. So happy to take any questions this time. Hey, I'll open up to the board again for any questions for Mr. Sutter. Mr. Wooden. Thanks. I appreciate you letting me ask question. I just don't understand the difference between if you just said to about your hospital, give me your prices and you compare actual prices published and what you're going to get on a bill versus this RAND calculation methodology. I don't understand that difference between saying give us your, you know, here's a list, give us 100 prices on these 100 products versus this RAND methodology. So that's maybe something I could ask offline because I just don't know how that works to the average person who would look at a bill and say, what's on my bill and what did you get charged? Thanks. So I don't have any questions after this. One comment or maybe two little comments. One, I'm not ready to vote yet. I appreciate these options as things to think about and consider. There may be others, I don't know, but I would rather wait myself on voting. And the only observation I had is it's fairly exceptional circumstances to me that the Copley is where it is. And it sounds like there might be an opportunity for a minor impact on affordability to promote sustainability. I don't know what that means for me as to where I am, but that's just sort of something I'm thinking about. I guess actually, can we go back to that expense growth table, Matt? I guess this is interesting to me. So if I may ask the question of the Copley team. I found, you know, to be fair, I found the presentation of the relative prices and the price growth comparison over time to your peers compelling. And I think it's obvious that we can look at lots of different ways and see the prices relative to peers as low, whether we're looking at Rand or whether we're looking at the absolute prices. But I'm actually just wondering how you all benchmark and compare your expenses and your expense growth. To whom do you compare? How do you find your expense growth along the same ways in which you're comparing your price growth? Thanks. So the operating expense growth has been trying to address decades of shortfall in staff and services in this hospital. So it probably will be indicative of some of our spending around capital because we have got literally iron pipes in the facility that are so old and rusted. We had one break over Jeff's medical reference department a month and a half ago. So it's really been like we must spend this because we're not even like if we compared critical access hospitals, how many people do you have an IT? How many people do you have in the cafeteria? How many people do you have like that? That would make some sense and might be a good marker to say. So what does that look like? But we've had to spend the money because we just have not we've been so underfunded both in capital and in operation. So that's my answer. And at some point it can't be my job if I feel like the clinical folks are doing an amazing job. But some parts of the rest of the house is sort of falling down around our ankles and it's just like not even a good place to work because we just have brokenness and mold and problems and people not. So that is a price for us to get better. But I appreciate it. It might be higher given those other assessments but I understand that. I'm just wondering if that's something that you might be able to share with us if you look back over your you know looking at from 2019 to 2024. If there's a way for you to break down that there's been disproportionate amounts of expenses going to maintenance and things like that that would explain this. I think that might be helpful to the board. I often think of Copley and Porter very similarly in terms of size critical access hospitals you know service mix not exactly. But you know I think of you as cousins you know in terms of similar. And I and I thought it was interesting you know looking at the RAND pricing at least on that level very similar pricing between you know Copley and Porter very different outcomes in terms of operating margins in the last few years. And you know I don't know what the comparison is to expense growth. And I recognize that Porter is obviously part of a network and there might be economies there. I don't know. But it's just an interesting comparison to me. But I it would be helpful to me at least anyway to help me understand what's driving this expense growth over time. If you've a way to break down some of those expenses in the area than the categories you were you were describing. But I will say I you know to Owen's point you know sustainability may be really an important you know way more heavily here than affordability in this case given your low price level to start. So I find I found that evidence that you provided compelling. But it would be helpful for me to understand a little bit about the expense growth relative to peers. Yeah. Good question. I will look into that. I think there's been a philosophy here for a lot of years. And I'm not happy about expressing these things because it's sort of critical but sort of the road to success was achieved through expense reductions in austerity. You can do that for periods of time but you cannot sustain an organization by constantly just carving away and cutting back. And we've we've done that for a long time. So I could give you a tour and show you things that are pretty difficult and embarrassing for us. But it's like you know so happy to do that for anybody that would like that tour kind of show you some of the things that we're up against. But I appreciate the question. It's a good one about Porter and other critical access hospitals. So we're looking into that. Thanks. OK. Any other board member thoughts or questions? I'll turn it to the health care advocate. Good afternoon. Can folks hear me OK? Yes. OK. I just want to thank Copley for the presentation and also Matt for your presentation. To Copley I recognize you wouldn't have asked for this increase if you didn't feel like you need it. Our office is not opposed in principle to the concept of a mid-year adjustment. But it's as the statute clearly states we think it should be considered only in situations where the circumstances are unforeseen or exceptional. And at this point we don't think that Copley has met or demonstrated that standard. And we don't really from our perspective we don't haven't seen any evidence. And maybe this has happened and maybe Copley can speak to this. But we haven't seen any evidence that there been efficiency or cost reduction measures that were taken prior to requesting this rate increase. And I think from our perspective it would make sense to consider those levers before reaching for a rate request. And just a comment just to the board in general about the process. We think that the board should see these requests in a cumulative fashion. Meaning that whenever increases are granted they become a part of the base of future budget requests in the next subsequent years. And we worry that this creates a potential slippery slope that could result in decreased affordability. But also a process issue for sustainability of hospitals. It creates an incentive for hospitals to petition the board outside of the traditional budget process when the public is less engaged. And we don't think that that's a good incentive. Which I think is part of the reason why the standard is as high as it is. So those are concerns in mind. The U.C. recommends that the board reject this request. Thank you. Other public comment either raise the hand function. I just wanted to give an opportunity to respond if you'd like it. Mr. Woodner. Mr. Hebert. I think I pronounced your name Herbert before. So I apologize. But this is an extraordinary request for sure. It's not our ordinary process and there's a there's a pretty demanding standard. Did you guys have any thoughts that you wanted to point to specifically in terms of unforeseen circumstances and or exceptional circumstances? Yeah. I think it's been a theme that I've brought up. I think we have exceptionally low prices but it goes back for about 20 years. We can't seem to catch up. We continue to lose money and help, you know, you take COVID off the table. It's nine years in a row. Everybody loves the work that we do. We have superb, excellent OR capacity, OR staff, orthopedics and others, general surgery. So everybody loves us but it's not possible. I was on a conference call with the American Hospital Association with a bunch of CAHs, sort of east of the Mississippi. So there's a bunch of hospitals and we were talking about a number of services and operating margin and stuff and somebody got a hold of me after the meeting from another state and said, how is it possible that you could have a negative operating margin that consistently that low and for that long? How is it that you're still open for business? And I said that's a really good question because we are in distress and our days cash on hand are incredibly low. I would say that we are akin to Springfield although you didn't get the call in the warning or somebody to be so advert but we are, you know, we can't make this work outside of really sort of ripping us apart or I mean we just can't make this work and we're going to be as creative as we can but it's not a matter of just the prices today. Well, if you actually just as opposed to the random report, I mean you can say what's your growth rate in the past five years but it's really bottom line. What are your expenses? We have some of the lowest administrative clinical salaries out of any of the group and that was mentioned in the last report. We have a very low adjusted case mix index per discharge. We have, we're not expensive, you know what I mean, even though it might seem like well you've got a big increase. It's like my analogy of us charging $10 and somebody charging a hundred. Wouldn't you should be happy with a 10% increase? That's a lot. It's like my gosh, it's it's you're not getting it. 10% of $10 is a dollar, you know, 10% of $100 is 100. So you have to sometimes just look at those basic numbers. So I think we're getting pretty desperate. I don't know what that needs to look like to you or the public but I'm just telling you we're getting pretty desperate with cash, capital needs, staffing, got a union contract coming out, huge pressure because of, you know, other closer hospitals. So I can appreciate that concern. I do think people should have a fair and decent reasonable understanding of what it costs when they're going to get a chest x-ray or have some lab work done. I think it should be important to the advocate because it's hard for simple people to even make those assessments. That's all right. Thanks for letting me comment. No, appreciate you doing so on that. Okay, I don't think we have anything else on this topic. Matt, Russ, is that right? That's correct. I can let Russ. Yeah, that's correct. We do have a vote noticed for next week also. So we can, the board can take it up at that meeting and vote then. I would like to do that. I want to review the record a little bit in a testimony today and have a little more time to think about it. So we'll look at that next week and I apologize for using that date rather than today but I think it'll be worth the time. Okay, so why don't we go directly into the fiscal year 23 actuals presented by Ms. Melinda Baraby, our director of health systems finance and Mr. Sutter. And I believe Matt will be leading us in this presentation. So thank you, Matt. Thanks, Selena. But starting with an overview, I'm going to walk through some slides with a system wide analysis. And we're going to look at individual hospitals briefly. Just a couple high level points for each hospital. There's 14 of them. So and then we'll briefly discuss enforcement, what that might look like going forward and have the potential discussion around that. So I do have an operating of small income statement like this for each hospital. I won't discuss it in detail for each hospital, but just to kind of orient everybody, revenues are up here, expenses are below it. You'll have the gross patient care revenue, then deductions, but get net patient revenue, then we add fixed perspective payment to that, which gets us our NPR FPP. If you add other operating revenue to that, that's how we arrive at our total operating revenue. On the expense side, we've got salaries and benefits, all other operating expenses, provider tax, depreciation, memorization and interest, add all that up. You get the total operating expenses to get to the operating income. It's the difference between the two. And then the operating margin is that income divided by revenue. So system wide, it was slightly NPR was slightly over budget at 2.2% largely due to increased utilization. But the system operating margin came in under budget at 0.78% instead of what we budgeted around to. Even though we have a positive operating margin system wide, you'll see in the other slides the way it's distributed around the system varies significantly, hospital, hospital. This is kind of presenting the same information as the income statement, just graphing the operating income and margin and providing just like the variance between actuals and budget for NPR and operating expenses. And then actual to actual. Here you can see net patient revenue. And I apologize, it's probably showing the same thing just dollars and percentages. So really, we should just have the dollars as a label above. But just the relative breakdown in total NPR FPP by commercial payers, Medicare, Medicaid, and then uncategorized, which is dish. I'll speak to each hospital briefly in the next section, but I just want to illustrate what I spoke about before. So system wide for NPR FPP, we've got that 2.2% above budget variance. As you can see, it's not the same for every hospital at the high end, you've got Porter with a 10.5% in variance relative budget and then CBMC at the other end at negative 6.4%. Looking at the same thing, but on the operating expense side, you can see a 4.3% variance, positive variance relative to budget. There is variance between hospitals, but I would say less so than with the NPR. So to me, that suggests that there's experiencing more similar cost pressures than there are revenue issues or differences. So the impact of both of those of operating revenue and expenses is the operating margin. You can see it's improved from FY22. We do have a positive system-wide operating margin. However, like we mentioned before, it's distributed differently across hospitals in the system. So several are still struggling significantly. Just looking at operating margin. And so here's a, this is a waterfall graph, but I wanted to look at was operating income system-wide. So to orient you to this graph on the far left, that first bar is the total system-wide FY22 operating margin and it came in at negative $61 million for the year. Now each of these individual hospitals, that's the change in their operating income from the prior year. So just to give you an example here, Brattleboro says $1.94. That for this graph's purposes, it doesn't mean that they had a $1.94 million positive operating margin. It means they had a one point, compared to last year, they increased their margin $1.94 million. So Brattleboro and FY22 had about negative $3.8 million operating income. Now they're negative $1.9 million. The net result is at its positive. So looking across all the hospitals, you can see that the operating income is definitely, it's essentially all UV and then rolling. If you consider on a system-wide basis. This is a standard graph we've shown for a number of years now, but it's just comparing the NPR-FPP Tager against the compound annual growth rate against the 4.3% all payer model growth range target. So in prior year, in last year, more hospitals were hovering right around that line when you look at it cumulatively over the last five years. This year we're seeing them more hospitals exceeding that. So system-wide common financial highlights, they're continuing to face headwinds that they faced last year with workforce challenges, increased costs and capacity needs. System-wide operating revenues are up over 3% from budget. However, expense per growth has been greater. So reducing margins from that. In their narratives, hospitals are reporting significant pressures related to staffing and inflationary pressure on both general and medical expenses. The issues with travelers we're continuing to see. And in other discussions with hospitals, they're continuing report challenges with patient transfers being held up preventing patient discharges. Other things we're hearing about is obviously statewide levels, not just health sector, but housing issues are having an issue for hospitals as well. So quickly we're just going to jump to the individual hospital profiles. Like I said, we're providing a short income statement for each hospital, if you want to check, but I won't go through in detail each of these, except maybe just to point out, Brattleboro, we're seeing a slightly above budget NPR FPP, but expenses exceeding that increase. So NPR FPP was within a percent of their budget with a small reduction due to payer mix, which was offset by increased ambulatory service and outpatient ancillary care volume. They reported their expenses going over budget were due to fringe benefits from their health, self-funded health plan, an accounting change, their physician contracts, general and then general inflationary pressures and med surge supplies due to increased volume, joint replacements. And then on these slides, you can see they're operating margin graphed over here and then that percentage breakdown of total NPR by payer for the hospital. Here's CVMC, for that you can see their NPR FPP was 6.4 percent below budget, but in their operating expenses were 2.2 percent over. So major drivers of those revenue decreases were unfavorable bad debt and charity care, dish payments, and then increased utilization being offset by their payer mix and collection rates. On the expense side, they had basically being driven by traveler costs and supplies and drug expenses exceeding budget. Their operating margin is still very low and similar to last year's. Hoplity almost exact on their NPR FPP, just a 0.2 percent variance from budget, but their expenses were 4.5 percent over. If we look at what that means for them. So their NPR again, it's about what budget was, but the slight difference was largely a result of increased utilization and expenses coming in over budget due to continued reliance on contract labor. Gifford, we're seeing negative 5.5 percent NPR relative to budget and significantly increased operating expenses of 16.8 percent. So their NPR FPP, like I said, negative 5.5 percent variance, largely due to payer mix and reimbursement due to reclassification of their contractual adjustments between payers is what they reported to us. And they had an unfavorable cost report settlement as well. Expenses were driven largely by increased continued reliance on traveler staff, particularly in nursing and ancillary departments. They report generally favorable utilization, just kind of offset by other factors. Now Gifford also reported that they at the close of what they had significant challenges meeting their debt covenant obligation. So their debts are evaluated and reported on a consolidated basis and require a debt service ratio of 1.4 days cash on hand of 75. At the close of the year, the debt service ratio failed to meet that. They've since resolved that amicably via waiver and they're working towards compliance at the end of FY 24. Grace Cottage had a negative 2 percent NPR FPP relative to budget and 4.6 percent operating expense or increased operating expenses relative to budget. Their revenues, they were down but mostly they did have favorable 340b revenue, which mostly offset their NPR FPP variance. So they ended up with their total operating revenue of just 0.4 percent below what they had budgeted. Expenses like we're seeing with other hospitals are up by 4.6 percent driven primarily by reliance on contract labor. I will say for Grace, just as a reminder, they receive a significant amount of donations, which fall under non-operating revenue, which almost entirely offset their negative 8.9 percent operating margin. You can see that on the bottom below the line here, it's that 2.2 million dollars in non-operating revenue increasing their total income. Moving the amount of Scutney, they had a negative just under a percent negative NPR to budget operating expenses were about dead on. So they basically nailed it. Their NPR variance, the small variance was driven by changes in payer mix expenses about even with budget. North country saw negative 3.7 percent NPR relative to budget and just over 5 percent additional operating expenses, negative 8.8 percent operating margin. So their NPR had a negative 4.5 variance from budget. Their gross revenues were actually grew relative to what they budgeted. Just the deductions had grown faster, peers were driving there, and then expenses similar to other hospitals driven by contract labor costs and their other operating expense line. And I apologize. I know these are very repetitive. Northeastern Vermont, they had a 1.9 percent NPR variance relative to budget, but their trend continues operating expenses grew faster than that. However, with Northeastern, you can see their total operating revenue grew faster. Their other operating revenue caught up for that. So they budgeted a 0.2 percent operating margin. They ended up exceeding that slightly. And that slight fixed payments were responsible for driving the increase to NPR FPP. Their NPR was roughly even with what they budgeted. Expenses, again, major drivers include reliance on contract labor, salary increases for recruitment and retention, and then just supplies and total costs. Northeastern, just under a negative 3 percent NPR variance and 5.3 percent variance on the operating expenses. Drivers of their revenue include unfavorable pair mix trends, growth and low reimbursement by Medicare Advantage plans, their bad debt free care write-off succeeding budget also by 3.5 million. On the expense side, it's again contract labor, supply expenses directly attributed to operating room utilization and inpatient days, and then unfavorable wage growth. So inclusive of that, like retention strategies and overcome costs, new vacancies. In the quarter, they had the largest increase in NPR relative to budget of 10.5 percent. And then their operating expenses also grew by 7.8 percent. So like the net impact of that is they had improved operating margin of 5.67 percent. They came in at 7.56 percent. And major drivers of that above budget volumes and ED visits, lab tests, radiology procedures, they did report below budget surgical cases, however. On the expense side, largely driven by reliance on contract labor. For Rotland, they had about 4 percent relative budget, 4 percent increase in NPR FPP and a 4 percent increase in operating expenses. So their operating margin was essentially unchanged from budget. And major drivers of their revenue, they're reporting that reduced wait times resulted in increased utilization as the primary driver. Some favorable 340B revenue, they're saying due to conservative budgeting. And then that's actually a typo. Ignored my expense drivers. I'm sorry, that's a mistake. I don't have to fix that. That's a very different hospital. Southwestern Vermont, negative 2 percent NPR FPP variance from budget and a 4 percent increase to operating expenses relative to budget. So they had budgeted almost break even operating margin, 0.46 percent. They ended up at negative 3.77 percent. However, they're non-operating revenue. If you look at their total margin, they're non-operating revenue did help kind of offset this. Drivers of their revenue variants shipped in mid payer mix and which are coming as less commercial volume. And then expenses were over budget by 4.1 percent major drivers, contract staffing, employee benefits, and then general increased costs. Springfield submission remains incomplete. So what I'm showing here is what we currently as of this morning have in our system. For them, we're seeing about a negative 5.7 percent NPR variance to budget and operating expenses coming in roughly at what was budgeted. But again, that has not been submitted yet. So these aren't final. Also, I will I also want to make this caveat. Springfield's relatively small system wide. Their impact on the system is small. So the overall figures that we've shown have baked in these incomplete Springfield numbers, but in terms of like the overall figures, they shouldn't have that much of a material impact. It's just when we get final submission from Springfield, we'll have to read updates document. So there might be some small changes the system wide looks as well. For UVM Medical Center, we saw NPR FPP exceeding budget by 4.4 percent and operating expenses by 4.3 percent. And they budgeted a 2 percent operating margin, which is equates to about just under $40 million. They came in at just under $65 million. So a 3.1 to operating margin. Major drivers of this inpatient outpatient professional volumes exceeding budget on the revenue side. They were also approved for sole community hospital status, which resulted in higher Medicare pass through and 340 B payments. Expenses were over budget by 4.3 percent. Major drivers of this somewhat other hospitals, med surge costs. UVM also reported pharmacy and retail pharmacy and expenses associated with receipt of additional graduate medical education payments. So that's the individual hospital presentations. So I can quickly go through the enforcement policy for actuals. The board, and this is just taken from our enforcement policy, which you can follow in the link here on our webpage. So NPR FPP amounts as ordered may be enforced. And what triggers this possible enforcement is exceeding the NPR FPP requirement by 1 percent or more. So for each hospital, we established an NPR change in charge. And then for some hospitals and effective commercial rate, they were required to report on this at the end of January, which is what we were reporting on here. So next steps, consider which hospital we might want to consider a enforcement and then additional analysis the board might like to see in that. But that is the bulk of the presentation. I will quickly just run through additional kind of appendix material real quick and just to kind of describe what they are. We have five year NPR FPP results and dollars and then expressed as percentages. We have the same thing for operating expenses, expresses dollars and percentages, operating income, operating margin, total income and total margin, glossary for definitions and then I will open it up to any question or pass it back to the board chair. Thank you. That's fine. Thank you very much. I'll open up to the board members. Any questions or comments? I have a few just specific things. So with Gifford, you have an unfavorable cost report in the income. So it's because it's reduced in the revenue side of things because it's reduced revenue, they had to pay back money. So therefore it comes out of the revenue not as an expense. Yeah, I believe so. I will double check that. It's something I was just curious if that's the correct designation. And then for North Country, can you go back to the North Country slide on the... There you go. A negative non-operating revenue. Do you understand what their negative non-operating revenue is associated with? I will have to look to give... I'll give you more specifics, but in general those are... They tend to be investments, investment performance, but I will give you a more specific answer for North Country. They can also be... So for Grace Cottage, donations would fall in there as well. Yeah, it's just that it's negative in a year where there's a lot of people with positive non-operating revenues. So I was just curious if we can maybe get some specifics on that. Yeah, we will follow up. Thanks. That's it for me. Oh, and Dave, excuse me, Dr. Murman, Elena just reminded me it's contra-revenue. So your question... Your earlier question, yeah, it should be in the... It does show up in the revenue side. It's just a negative now. Great. Thanks. Any other board members? Just a quick comment. Thank you, Matt, for this. And you may have had it. And I might have missed it, but you were going over the 1% and NPR threshold. And I'm wondering if you have a slide that summarizes which hospitals have exceeded that threshold and by how much? I don't have it prepared. I do have a slide bill for that. It's not ready for prime time, but I can share it with the board. Thanks. That'd be helpful. Thank you. I just want to make sure I understood something correctly. So it might have been slide 4. It was the slide with the actuals from 2022 for the system. And NPR for the system in 2022 actuals was 2.6 billion. 23 actuals was 2.9. And that's an 11.1% growth system-wide in NPR. Actuals for actuals, yes. Right. And I think in 2023, the board approved a system-wide rate increase of like 10.1% or something like that. It was over 10% system-wide for fiscal year 23. I guess I'm just sharing the observation that an 11% increase in NPR is very, very healthy and very, very big. And a 10% plus rate increase system-wide is very, very big and very, very healthy. And yet these results are very, very concerning. I think by my count, it was like eight or nine hospitals with negative operating margins. So I guess I'm just feeling this is very troubling. Like we know everything is troubling right now, but that's a huge increase and a huge rate increase. And yet we're in a really tough spot with a large number of the hospital system. You might not have this now, but one thing I would be curious about is what the commercial population did from 2022 to 2023. We know we have an aging population. We know there's fewer and fewer people that are under commercial insurance. And I guess I'm kind of curious about what kind of impact that may have had on these results. And we can look that up at some other time. But that might be an unfortunate reality we have to think about going forward. There's no other board member comment or question. I'll turn to the HCA. Thanks, Chair Foster. Nothing really from us. We'll take a lot of time and digest this more fully. I mean, my initial knee jerk is these are concerning to be sure. And those overall increases, I think everyone's aware, it's almost three times what real wage growth is in the state. And wage growth has been quite strong. So I mean, this is concerning to be sure. But we'll take more time and review it. Thank you. And public comment via the raise your hand function. Walter, how you doing? I'm okay. Much because I've been working seven days a week for a month. Point to Sam's wage growth in Vermont has not been exactly start inspiring. I haven't had a wage increase for four years at one of my jobs. So we're these figures are disconcerting, of course, but wages will never keep up with them. Thank you, Walter, for attending and for your comment. Any other public comment? Chair Foster. Yes. This is Tom. I think looking at this slide and thinking about it for a few minutes brings me back to something that you made, a point you made earlier about a big change in a small hospital has little effect in the overall system. But a small change at a big hospital can have a big effect over the whole system. And we saw large increases in the big network in Matt's slides that may be pushing the 11.1%. But our smaller systems continue to struggle because a 10% increase for them as to our guests from Copley as to their point, a 10% increase isn't that much. So I think it's I'm eager to dig into this particular slide a little bit deeper. But I think the point that our visitors made and the point that you made helped to explain a little bit of this what we're seeing where there's an apparent big growth in the entire system. But many of the players in the system still struggle. So I want to keep thinking about that. Thank you. Patrick Rooney, please go ahead. Thank you, Mr. Chair. Patrick Rooney from Mount Hospital Association agree with the sentiments that have been provided thus far on the very sobering components of what has been presented today. I would like also to add that in 2022, there was about $95 million in one time money that came into the system that actually kept the margin from becoming even worse. I mean, we had $22.5 million in GME advancements to the medical center, thanks to the state of Vermont, $22.5 million in additional dish, thanks to the state of Vermont, and almost $50 million in what was really the last tranche of one time COVID funds. So when you look at where the system is in 23 versus the operational hole that they were digging out of that was without those one time funds closer to $156 million, it certainly adds to the cliff that they had to climb out of. So the whole operationally in 2022 was much, much worse than even the accounting results here show. I would also add when we look at other operating revenue, the impact on 340B is really starting to show and the impact of those manufacturers really pushing down on that benefit that hospitals provide is starting to have an impact. And we all know where that's going to go when the revenue begins to dry up. So again, along with Board Member Walsh and others look forward to digging into this, but those are some of the areas that I've been focusing on as we look at the last couple of years. So thank you for the opportunity to comment. Great, and thank you for doing so. If you have more thoughts on what this all means and how to think about it, please send a letter or reach out. Any other public comment? We're a good bit ahead of schedule and we have one piece of old business that I would like to bring up, which is a potential executive session for border view of ahead notice of funding application. I want to take a 10 minute break to, well, actually let me ask this. Does anyone know whether or not interim director of healthcare form Ms. Jones can join now or should we wait till 4pm when we're scheduled? Can you hear me chair faster at season? I shut off my camera so you could hear me. Yes. Okay, so I texted her. Let me confirm. I could give her a time. I let her know that we would likely be ending a bit early, but she had been confirmed that she can attend that time. So would be what time would you assume it would start like 3? Why don't we just do 3, 10, 3, 10, which gives a little over 20 minutes. And if she can't do that, we'll adjust. So we'll put up a sign for people who, I mean, we're going, I think we'll probably go into executive session. So there's really no need for people to wait unless they want to. So we'll put up a time, then we'll come back. We'll plan on 3, 10. If it changes, we'll adjust the sign. And before we do that, I do want to discuss whether or not it's executive sessions so that we can deal with that now and then come back. So the executive session that I would propose is that it relates to the state of Vermont's application to apply to the AHEAD model. And under one VSA 313 A6, a public body is allowed to go into executive session to consider a record that's exempt from the Public Records Act. And so long as the discussion of the exempt record does not itself be to an extension of the executive session to the general subject matter that the record pertains to. So it would really need to be limited to the application itself. And with that background, I would move that we go into executive session, pursuant to one VSA 313 A6. And the nature of the business again would be the state's ahead model application. I will second. All those in favor please say aye. Aye. Aye. Aye. And I think we go into executive session. Do we need to come back on the public record before going into executive session? Does anyone know? No, you don't have to come back to the public session before going into executive session. Having been, the board has voted to go into executive session. You will have to come back to the public meeting after executive session to formally close the public meeting. Perfect. And then attendance would be limited to the care board members, relevant staff, including council and Ms. Degree and Ms. Barabee. And I would also indicate that I think Ms. Jones can attend as it's AHS's NOFO application that's a subject of the executive session and it's their information that is relevant here. Ms. Barrett? But it's fine if you confirm that 310 is social. Great. Then we will come back at 310 in executive session. Thank you. Looks like we have all the board members so we can resume the non-executive session. We're done with the agenda items other than any other new or old business and a motion to adjourn. Second. All those in favor, please say aye. Aye. Aye. Aye. Thank you. We're adjourned.