 Yes, thank you, I'm here. Great, thank you. I see that all the board members are here. So we'll get started. My name is Kevin Mullin, chair of the board, and I'm calling this meeting of the board to order. And the first item on the agenda will be the executive directors report, Susan Barrett. Thank you, Mr. Chair. Good morning, everyone. I wanted to announce that yesterday our federal all payer model partners released the first evaluation report for the model. This is on performance years one and two, which are 2018 and 2019. The report was prepared by a team of researchers from NORC at the University of Chicago. While the quantitative results focus on the Vermont Medicare population, the report also includes all payer findings, especially in the qualitative results. The report summary and technical appendices are posted on the Vermont APM page on CMMI's website, as well as on the Green Mountain Care Board website. And you can find that under our federal reports section. Just a brief summary of the findings, the report shows statistically significant Medicare spending and utilization reductions, both for the Medicare ACO program and for the full Vermont Medicare fee-for-service population relative to a comparison group. I want to note here that this is not in comparison to past Vermont performance. The report methodology compares Vermont to a comparison group rather than to Vermont baseline performance. Additionally, similar to AHS's implementation improvement plan that was produced, I guess last year, I can't remember earlier this year, the report highlights that the Medicare ACO model poses some barriers to critical access hospital participation. Qualitative findings include improved cohesion around shared goals and collaboration across the state payers and providers. And the report also found spillover effects to the full Vermont population, noting that some of the ACO and hospitals population health initiatives are payer-blind and serve ACO and non-ACO beneficiaries alike. And that Vermont has a long history of investment in primary care and population health, a statewide culture of reform, and a strong regulator in the Green Mountain Care Board. I'd recommend that folks take a look at the report either on the CMMI website or on our website. And if you have any difficulty finding that, reach out to me or to Abigail. I wanna also announce we have ongoing public comment through today on the FY22 hospital budgets. As Chair Mullen has mentioned previously, we accept public comment 365 days a year, but we encourage folks to submit their public comments so that they can be considered by the board. Lastly, we are conducting ongoing public comment for potential next all-parent model agreement with our federal partners. All of those comments will be shared with our colleagues over at AHS and at the governor's office as they are leading the negotiations on a potential next agreement. And that is all I have to report. Thank you, Mr. Chair. Thank you, Susan. The next item on the agenda are the minutes of Wednesday, August 11th. Is there a motion? Some moved. Second. It's been moved and seconded to approve the minutes of Wednesday, August 11th without any additions, deletions, or corrections. Is there any discussion? Hearing none. All those in favor of the motion, please signify by saying aye. Aye. Aye. Those opposed signify by saying nay. Let the record show the motion passed unanimously. And now we'll turn ourselves over to the business of the day, which is hospital budgets. And I'm gonna turn the meeting over to Patrick Rooney. Patrick. Thank you, Mr. Chair. Let me know when you can see the slide deck, please. We can. All right. And Joanne, can you hear me? Yes, I can. Thank you. Very good. Please feel free to interrupt at any time and tell me to stop mumbling if that's the case. And I'll be happy to adjust mine. Well, good morning, everyone. Good morning, board. Good member. Good morning. Members of the public and stakeholders. Good morning. Board member Yusuf, are you ready? Yes. All right. Once more under the breach then for Maureen. For those of you who didn't think Shakespeare could be a part of hospital budgets, here we are. So September 1st, hard to believe. This is day one of the deliberative session as part of this regulatory process. Before we get started, I'm gonna be working from a slightly updated slide deck from what we posted and what we sent to board members. The changes are very, very minor. One being on slide three, we received a public comment last night, so I updated that number from nine to 10. On slide five, the final bullet point says non-Medicare advances, it should be not Medicare, not including Medicare advances. On slide 12, the FPP as a percentage of NPR FPP, the title says FY21, that is obviously incorrect, it's FY22. And finally, on slide 50, Rutland's, it says 9.2% growth is within budget guidance, obviously that is not rectified in excess of. So the latter three- I'm sorry, Patrick, Patrick, I'm sorry, it's Joanne. You cut out there, could you do the last one, please? Slide 15. Certainly. Slide 50, five zero. Thank you. It says, certainly, it says 9.2% growth for Rutland's NPR budget to budget is within guidance. It is not, it is in excess of those last three being the fact that we've become snowblind to this massive slide deck by looking at it almost every day over the last month. So we've made those corrections and you will see those in the presentation today. To recap the hospital budget schedule, this process formally began on July 1st, as submissions were received from the hospitals. And on July 28th, the staff here did a preliminary budget review and offered Gifford Medical Center and Northwestern Medical Center for exemptions from review, meeting a separate set of guidance that the board set out back in March. Throughout the weeks of August 16th and 23rd, we heard from the remaining 12 hospitals who were not exempt from those hearings. And as I stated here, we are today, September 1st, day one of deliberations and we have additional deliberative dates set for September 3rd, 8th, 13th and 15th. By the 15th, the board has to have votes completed for the 14 Vermont hospitals. And over the next two weeks, following that, the staff and legal counsel will work to draft orders for delivery by October 1st of 2021. So the order of operations today, we're gonna review how we got to this point, the public comment piece and system slides that capture the system perspective in the aggregate across multiple data points. We'll stop on slide 33 to kind of codify Gifford and Northwest Medical Center's budgets for motioning and official approval as part of the deliberative process. I'll turn it over to our counsel, Russ McCracken at that time to work the board through that. Once the system review is complete, I'll turn it back over to you, Mr. Chair, for any board discussion or questions that need to occur. And then time permitting, with how close we might be to a bio break or lunchtime, the staff will then go through each of the remaining 12 hospitals in this slide deck and just recap for you what we've heard so far through the financial component, the narrative and the budget hearings and the information we've captured through those for each hospital with the information that we have to date. Once that is complete, we will go back to the first hospital in the slide deck and we'll begin offering recommendations for the board to deliberate on and potentially offer a vote. We are prepared to do that for six hospitals today, time permitting, of course. And that's how we'll navigate through this slide deck today. Deliberation and public comment. As I noted, we've received 10 public comments to date. That includes three that were mentioned in the preliminary budget review presentation on July 28. The public comment period for fiscal year 2022 budgets was officially opened after that presentation on July 28th and we'll close today, September 1st, 2021. However, Green Mountain Care Board will accept public comment at any time on a variety of issues. So if you'd like to make that public comment and we encourage you to do so as part of this transparent process, we have a link here at the bottom of the page that will take you to the Green Mountain Care Board website where you can submit your public comment for the board's review. Some staff considerations for this budget as we went through all of the processes that we've been through over the last 60 days. We've looked at the adequacy of the NPR and FPP growth rate requests with allowances for COVID-19 vaccine and testing revenues as set out in the guidance. The hospital's overall financial health, including operating margins and key financial indicators and the overall impact of COVID thus far. Potential financial uncertainty due to COVID-19, hospital capital and infrastructure needs. We've heard several hospitals that projects that have been postponed for the last year and a half are beginning to ramp up again as the need to complete those and get them started is becoming more necessary due to things like patient backlog and aging physical plan. Participation in the all-payer model and delivery system reform efforts, the impact of change in charge on commercial ratepayers, provider transfer and accounting adjustments and how those fit into those NPR requests and the justifications. Hospital-specific risks and opportunities, utilization components and cost savings initiatives. Continuing on, some other considerations that we wanted to bring before the board today, we've heard from hospitals how challenging it's been to produce budgets for fiscal year 21 and for fiscal year 22, which also makes your decision-making capacity challenged as well. The creation of these budgets and the way we regulate them does not occur in a vacuum. It certainly passes through to you, the board members. So we wanted to outline some of the items for you that we've heard from hospitals over the last couple of budget cycles. And that is the first bullet point here. Fiscal year 21 budgets were extremely difficult to create with COVID's impact on 20 actual results, which in many cases is causing the budget to budget growth that we're seeing here in 2022 on a hospital by hospital basis to fluctuate pretty wildly. Hospitals did their best last year. They did their best this year. And there's so many unknowns that some of that MPR growth that we're seeing seems pretty high on a budget to budget basis. Fiscal year 22 budgets were no different. Have also been very difficult to create due to COVID-19's impact on the first two fiscal quarters of activity, which for those listening at home would be October 1 to December 31st and then January 1st to March 31st where from a public health perspective we descended back into that COVID black hole in late 2020, early 2021 calendar year. And also the impact on the 2020 actual results with the cessation of elective non-emergent procedures, making the basis for these budgets extremely challenging. We've also heard about how projections remain extremely major, changing on a month to month basis with the rise of COVID-19 variants, slowing vaccine administration, the ebbs and flows of utilization that almost directly correspond to those COVID variants and vaccine administration as we know it today. So what is today? We may not know tomorrow type of scenario. And also the remaining COVID relief fund balances not including Medicare advances and PPP loans are susceptible to federal government guidance and timeframe changes. We had a lot of the same conversations this year that we did last year around provider relief funds and what is on your financial statements, what are you going to use? At this time last year, those provider relief funds from the CARES Act were used to lose it by 12, 31, 20. Well, that changed as we descended, the nation descended back into a very serious period for the pandemic in late calendar year 20 and early 21 before vaccines became a commonplace. And also the PPP loans, it doesn't feel like we're in any better place today to understand if those will be forgiven or they will have to be paid back from what we heard from hospitals. We're looking at maybe deep into fiscal year 22 or early 23 before there's clarity on that. The one item here that we have a better understanding of is that Medicare advanced fundings are undergoing reclamation by CMS as we speak beginning in April of 2021. So we just wanted to outline some of those items and some of the challenges that we considered when looking at some of these hospitals and hearing from them over the last two weeks. Some common budgeting themes. You've seen this slide before in the July 28th presentation. So I'm not going to go through it point by point. We did add one bullet at the very bottom from that we heard from several hospitals around the staffing challenges that they're seeing, especially with recruitment. There are socioeconomic challenges in this state that are leading and inhibiting the ability to recruit. Oftentimes when people move here it's very much a family decision to do so and therefore finding accessible and affordable childcare, finding housing and some of those other matters are apparently inhibiting our hospitals ability to successfully recruit folks from out of state to move to Vermont and take up their life's work here as a healthcare provider. On slide seven, we have the system wide income statement for budgets as submitted. You can see here, net patient revenue and fixed perspective payments are coming in just shy of $3 billion. That is the 6.4% increase over the 2021 budgets that were approved. Total operating revenues are growing by 6.7% over 21 budget that includes specialty pharmacy, 340B and those other operating revenues. Operating expenses are pushing just shy of $3.2 billion or 6% budget to budget increase which is resulting in a net operating income or operating margin dollars of 76.5 million. When we factor in non-operating revenue we have a bit of a complexity there this year. For budget 22 as submitted we're looking at negative 7.5 million. So when you add that to the operating margin to get your total margin in dollars or excess of revenue over expenses the system is as submitted would like to produce $69 million in revenue which produces an operating margin percentage of 2.3% and the total margin of 2.1%. Change in charges, you can see here on slide eight the very bottom right hand corner estimated weighted average for all hospitals is 6%. The highest numerically is Springfield at 8.3% requests and the lowest is Mount of Skutney at 2.2% for their charge requests increase. Obviously from a weighted average perspective the University Medical Center 7.1% is driving that 6% number up over the rest of the system. Another slide you're familiar with from past presentations specifically the preliminary slide is a five year average and five year median for change in charges from 2017 to 2021. The five year average Northwestern Medical Center tops out the hospitals at 4.88 and Porter is at the bottom at 0%. For the five year median Mount of Skutney is at the top 4.6% and Porter again is at 0%. Porter has not requested an increase in their gross charges over the last five years that's why they are at 0.0%. Instead they have followed the UVM Health Network hospitals on their past approvals for commercial effective rates. So at the bottom there you can see that Porter has an applied percentage growth for commercial effective rate. Net patient revenue in more detail than the system-wide version that we just showed you this is on a hospital by hospital and compiling that into the aggregate. Again, here on slide 10 on the far right-hand side you can see each hospital's proportion as submitted to the Green Mountain Care Board bringing net patient revenues for the system up to just shy of $3 billion, which is about a $200 million increase over the 2.78 that was approved for 2021. To put that into perspective here we have the net patient revenue percentage growth. So from 21 budget to 22 budget the straight average for the system is 6.4% growth. When we adjust the 22 budget for COVID vaccines and testing revenues, the 21 budget to 22 adjusted budget, straight average drops to 6% from 6.4. And we applied a compound annual growth rate off of 2019 to smooth out some of the fluctuations that the COVID pandemic has caused with NPR and FPP and it produces with budgets as submitted a 4.7% annual growth off of 2019. This will your 2022 fiscal perspective payments and their proportion of fixed perspective payment to total NPR FPP total system just over 409 million economies of scale here are very important. The University of Medical Center producing 182.3 million dollars of that 409 million. The system average coming in or the system total coming in just short of 14% FPP to total NPR FPP, but leading the way within an individual hospital would be Southwest Medical Center at just shy of 24% fixed perspective payment of their total $178 million in NPR FPP. Total operating revenues, which is NPR FPP plus other operating revenues such as specialty pharmacy and 340 B are just shy of 3.3 billion that's submitted to the green map care board. I will continue to reiterate this here. It's the economies of scale factor. UVM Medical Center being the flagship of the network and the tertiary care center in Vermont is going to carry more than 50% of that in any given year. And on the other side of that is Grace Cottage coming in just shy of 24 million in total operating revenues as submitted. COVID-19 funds reported to the green map care board fiscal year 2020 actuals. We'll see 191.2 million dollars. You'll note in 2021 budget per the discussion we had a couple of slides ago that at this time last year hospitals were not sure if they were going to be able to justify and therefore recognize the use of some of those CARES Act funds and other relief funding that the United States taxpayer has funded to support their healthcare system. And then you can see here in reality what's being projected is a very different story which reflects the changes in guidance that have occurred over the last year. And I'm sure from what we've heard from hospitals as it relates to how they account for it those guidance changes have occurred more frequently than even what we're giving credit to here but you can see heading into the 22 budget there's not much expectation that there will be more relief funding coming at this point in time. Whether or not that actually materializes I don't think any of us can say right now but you can see here that for the system and 2021 projection it's coming in just shy of 107 million dollars that has been realized and taken in by these hospitals. And of course we heard from some hospitals concerns that some of that money may have to go back. I don't think we can weigh in on that now. We'll just have to wait and see with that what occurs with that with the guidance as it relates to being justified those funds. Other operating revenue again another slide that board members and those who follow these processes are familiar with on the left hand side here on slide 15 we're showing the growth of other operating revenues in terms of dollars for the system. So here in 2022 on the right hand side of that left graph we're looking at about 297 million dollars in other operating revenue. You can see shaded in a different type of blue where hospitals reported their provider relief funding over the last two fiscal cycles is driving those numbers up to 400 and over $450 million respectively for 21 and 2020. And on the right hand side for fiscal year 22 you can see a breakout of the drivers of other operating revenue and specialty pharmacy and 340B pharmacy programs no surprise are carrying the weight of that 297 million dollars for fiscal year 2022. Operating expenses system wide coming up just shy of $3.2 billion with again the medical center carrying over 50% of that total dollar figure and Grace Cottage coming in on the small side of that 24 and a half million dollars with a very diverse bag of expected operating expenses occurring between those two bookends of the medical center and Grace Cottage. Again, providing some perspective with the growth 21 budget 22 budget we're looking at a system wide straight average of 6% growth budget to budget. Northwestern Medical Center is reporting the smallest amount of growth actually less growth headed in a negative direction with Copley Hospital showing 12.8% growth budget to budget. When we adjust for expenses for COVID vaccine and testing cost the system straight average drops to 5.7% Northwestern's actually reduces to almost a full percentage point and Copley's stays on the high end at 12.8. And of course as with revenues COVID has had a major impact on operating expenses which have fluctuated pretty significantly. So we applied a compound annual growth rate to smooth out some of that activity from 2019 to 2022. So on a system wide average it's been 4% annual growth from 2019. And you can see each hospitals figure there for your edification operating margins. We often see here on slide 18 we often see during budget time a lot of black but as the year progresses with some hospitals those budgets don't quite work out and expenses exceed revenues. For the projection so far not too bad on the whole. Again, I don't wanna overstate that hospitals are in excellent shape as we are still in the pandemic. But there's a lot less read on there for the projection for fiscal year end. And I'm sure some of these numbers are going to change by year end. So again, not wanting to overstate that but the system as submitted to us back in July is looking at about a $69.5 million operating gain for the budget 22, $76.5 million is what has been submitted to the board. And again, the medical center in Burlington just shy of 51.5 for an operating margin and Grace Cottage who historically budgets for either break-even or loss budgeting almost a $900,000 loss but for the support of their very generous community they usually end up on the positive side for total margin. Margin percentages applying some context to those big dollar amounts that we see at some hospitals system-wide the straight average is 2.3% for operating margin. And although UVM is looking at 51.5 million it equates to about a 3% margin as submitted to the board. Grace Cottage their $900,000 budgeted operating loss is just shy of a negative 4% operating margin. And as you can see we have several hospitals within that one to 2% range as submitted. Gifford Medical Center being the high end just shy of 6% with Porter Medical Center coming in just behind them at 5.1%. Total margin or what we call below the line when you take your operating margin and add your non-operating revenue to arrive at your total margin. We can see here some pretty diverse activity on slide 20 for fiscal year 2022 budget. We heard from Southwest about the budgeted $45.6 million total million dollar loss that they are anticipating. This is not a cash loss. It is them going through the appropriate accounting needs to facilitate the shift of their pension obligation off of their balance sheet. The liability that goes with it is being seen here but it is not that Southwest and Vermont is in dire straits by any means. And on the other end of that we have $72.5 million planned by the University of Medical Center. So when we take all of this and add up that very differentiating activity between Southwest, Vermont and everything and Vermont Medical Center and everything in between we arrive at just north of $69 million for a total operating margin as submitted for fiscal year 2022. Again, providing some context around those dollar figures. Southwest, Vermont, coming in just shy of a negative 34% total margin as budgeted. On the high end here, we have Gifford Medical Center at 7.4% system wide average of 2.1% and just to continue highlighting the medical center here 4.2% operating margin. Total margin, excuse me. The next set of slides are slides that you've seen before so I will move relatively quickly through them. Nothing here has changed since the preliminary presentation about a month ago but I will run through the logic here as it relates to some of these financial comparisons that we're doing. On the left hand side here you'll see we've grouped the critical access hospitals together and from that you can see for operating margin the median margin for fiscal year 2022 as submitted is 2%. So that is represented by the blue line that you can see on slide 22. And continuing with past practice we're using the flex monitoring financial reporting for critical access hospitals which we have found very, very useful in the past. We're continuing to use that here for hospital budgets to provide perspective to some of the numbers that have been submitted for our plan for 2022. So we broke it out geographically for Northeast critical access hospitals for 2019. And I should speak to that 2019 piece because it seems like a lifetime ago at this point but many of our hospitals this year are using 2019 as their demarcation point for 2022 budgets as that was the last year pre-pandemic or normal normalized activity. So we feel comfortable using 2019 financial measures to compare our hospitals to. But we broke it out into geographic footprints here with the Northeast represented by the red line there coming in at about 1.7, 1.8% operating margin and US critical access hospitals altogether across the 50 states coming in under 1%. So you can see relative to the United States our hospitals are budgeting for operating margins that exceed that US median. Again, like we said in the presentation these are not meant to be targets. The situation around the country can change pretty wildly depending on which region of the nation you're in. And when all told, those margins are coming in just under 1%. So that's why we feel justified in taking the Northeast the Northeast traditionally operates for the most part relative to each other across several states. So we feel that that's a pretty good measurement. And as you can see where our hospitals median falls it's very, very close to that Northeast median for critical access hospitals. And then you can see each hospital's individual budgeted operating margin for fiscal year 2022. On the right hand side of slide 22 again, we took the Vermont median for PPS hospitals those perspective payment system hospitals the median is coming in just shy of 1.5. Again, the Vermont median being represented by the blue vertical line on the graph. And then you'll see each of the six hospitals that fall under some sort of PPS designation and comparing them to some Fitch rating solutions comparisons that we've selected again sticking with that geographic footprint. We took Northern New England, New Hampshire, Massachusetts and Maine and hospitals that operate within that footprint that Fitch rating solutions, which is one of the major three major rating bond rating companies in the world along with Moody's and S&P. And then we took the Northeast which expands that geographic footprint Pennsylvania, New Jersey, Connecticut, New York to gain a little greater understanding of what's occurring in the Northeastern quadrant of the United States. And you can see that Vermont's hospitals for 2022 are planning to beat those medians in general. But we do want to say one thing about the Fitch piece this is our first year using them. It's been very, very informative. We feel very comforted in the fact that we're using a geographic footprint. We know that throughout that geographic footprint the operational and financial diversity that exists within that most likely reflects the operational and financial diversity that we're seeing in the state of Vermont. And so we're not targeting a specific bond rating grade because of that. If we did that certain hospitals would look very, very good and the rest would look not so good. And we don't feel that that's from a regulatory perspective to add context that that would be the appropriate way to look at this. We also need to remember that bond ratings are a measurement of risk so that those folks who are looking to lend money and those folks who are looking to borrow money will have an accurate assessment of how risky that lending is going to be and what to charge in an interest rate. Bond rating is very similar to your personal credit score. Your credit score is very, very low. If people lend to you at all they're going to charge you a premium. And so you're going to pay more on that debt that you are borrowing from them so that they can reserve to cover the potential loss if you don't pay and make some profit off of you. But if your credit score is very, very high people will be extending credit to you hand over fist for the most part. So it's an assurance measurement. Also, Fitch, when they do these analyses they incorporate things that we don't. So when they're looking at assessing an organization who may have a bond rating and I think in this case the UVM Health Network is the only organization that has a bond rating in this state to my knowledge. When they're looking at that they're applying many, many more inputs than we are for this regulatory process. So just to be fair to the rest of the hospitals who are in this coverage here that's not how we're looking at it. We're taking geographic footprint and the financial comparables that exist within that and benchmarking those hospitals or the hospital system against that as a whole. So just to clarify that we feel good about this approach with the geographic footprint capturing that diversity and not making any hospital look better or worse based on that. Moving on, the next few slides are some of the financial metrics that you've seen thus far. So we just covered operating margins. We have total margin percentage here and you can see how things shape up. Obviously here on slide 23 for PPS hospitals Southwest Vermont is the outlier with the accounting methodology that they're following to shift that pension obligation. We have our note right there in the slide for the folks following along at home. Slide 24, days cash on hand. You can see using the logic we've just discussed for critical access and PPS hospitals and the rating systems that we've brought into this. You can see each one of those hospitals falls along with the median for that data point for 2022 budgets for days cash on hand. In this instance, slide 25, days receivable. For the most part, our hospitals are doing a very good job of collecting what's owed to them at a very rapid pace compared to the metrics we have here which does not surprise those of us who work with these hospitals. And we know the conservative nature of the financial leadership that the organizations in Vermont and usually in Northern New England as a whole they wanna make sure that when they send those claims out they have the documentation they are buttoned up and there will be no kickbacks or denials of those claims in which you have to start all over again. So we can see that our hospitals do a pretty good job of collecting the money that's due to them. Days payable, days payable is much more inclined to be to shift all over the place on an organization to organization basis based on how management views their cash flow situation. But for the most part here, our hospitals do a good job of paying their bills on time. Certainly scenarios like COVID will could shift how management decides to pay their bills, what bills they decided to pay, whom they decided to pay and when they decided to pay determined based on what the cash flow situation looks like. But for the most part, our hospitals are in pretty good shape. Flex monitoring does not carry this as a metric. I think if I read it correctly they use a 12 month rolling average on a hospital by hospital basis. So they don't capture it from a median perspective across the geographic footprints that we've selected from them for the Northeast and the United States. Long term debt, how much debt did these organizations carry to replace assets? We can see for the most part that compared to their peers, they are relatively low. However, we heard the medical center say that they're carrying more debt than they would like to. That's why they would like to produce an operating margin to use more cash and doing so so that they can lower that number. But as you can see here, the Northeast Fitch comparison is north of 30%. I believe it's around 35%. So UVM is still 10% under that geographic footprint peer group for the Northeast. And they're just under it for Northern New England which again is New Hampshire, Maine and Massachusetts. Debt service coverage, how much of their liabilities can they cover with the assets that they have here? Four points of the cash flow that they have here. So for every dollar in liabilities that they carry, we can see the critical access median here is $4.64 per dollar of debt service that they have to cover. And for PPS hospitals, they have $3.32 for every dollar of debt service that they owe annually on their liabilities. Age of plant, we heard over and over again throughout the budget hearings the last couple of weeks that Vermont's hospitals average age of plant is very high. As we stated in our presentation, this is not surprising. Our hospitals in the state tend to get the most out of their assets, but that can't go on forever eventually investments have to be made to replace assets or construct new assets for the organization to continue to carry out its mission. So we can see here that for the most part Vermont hospitals exceed their peer groups both from critical access and PPS perspective. And we have some hospitals here whose age of plant is really getting up in years and is gonna require some significant investment in the years to come. And we heard that time and time again throughout the process. A lot of that is due to delays over the last year and a half and not carrying out some of those plans, but speaking from the CON perspective, we have heard and we'll see several CONs coming in to the Greenland care board for review if they have not already arrived. Shifting to ACO plan participation, we can see here that the Medicaid program with the exception of Grace Cottage is universal across Vermont's hospitals. We did hear from Grace that in the coming year they're going to explore the possibility of participating in Medicaid. Medicare continues to be somewhat of a mixed bag, critical access hospitals that are associated with the Medicare program generally have some sort of system affiliation that comes with that. And as we heard from Executive Director Barrett, the newest report says that there are some challenges with the model as it currently exists now as it relates to critical access hospitals participating. We do have several hospitals participating in some sort of commercial program with the ACO. We didn't go into detail on this, but if they are involved in some type of commercial payment reform, we did mark them down as a participant. And then we have a few hospitals here, the network and health network and Rutland who participate in self-insured program. So total monthly average budgeted attributed lies for calendar year 2022. You can see the program groups here, Medicaid, Medicare, commercial and self-insured with the Medicaid program having the most average budgeted attributed lives. This is for again calendar year 2022. So January 1 through December 31 of next year. And then shifting over as we near the end of our system review here, we had two hospitals who were approved for exemption from public hearing on the July 8, 2021 presentation and board meeting. And that's different medical center in Northwestern Medical Center. Underneath those titles here on slide 32, you can see the qualifications that they had to meet for exemption. They met those with their fiscal year 2022 budgets and therefore were exempted from having to come before the board over the last two weeks and have their budget meeting on a public forum. With that, I'm gonna turn it over to our general counsel, member of our team Russ McCracken to discuss with the board, suggested motion language for these two organizations to officially accept those fiscal year 2022 budgets. This is the deliberative process. As you know, we'll be going through votes on the remaining hospitals. So to capture that for the record in this deliberative process, we have some motion language here for the board. So with that Russ, I'll turn it over to you quickly to navigate the board through the slide. Great, thanks Patrick. This is Russ McCracken. I'm a staff attorney with the Green Mountain Care Board. And as Patrick noted, the board did find in its July 28th meeting that both Gifford Medical Center and Northwestern Medical Center met the requirements to be exempted from the public budget hearing because those hospitals, as noted on the previous slide, met all the requirements that were set out in the board's budget guidance for FY 22 for that exemption requirement. The board voted to exempt Gifford and Northwestern from public hearings at that meeting and said their budgets will be approved as submitted. At the risk of some redundancy here, we recommend specifically approving the budgets for Gifford and Northwestern. As you'll see in the proposed language here, and it's language that will look familiar as you go through the rest of the hospitals, it specifically approves their budgets as submitted with the NPR increase, the charge increase and subject to the standard budget conditions outlined on the next slide on slide 34. So in thinking through this a little bit more, it may be prudent for the board to take a look at those conditions on slide 34. And I'm happy to walk through those as well unless Patrick, you would like to. To make sure that these are the standard budget conditions that the board was comfortable with, they're based largely on the budget order conditions that were included last year for the FY21 budget orders. These are kind of the baseline conditions. Of course, the board could make specific conditions to specific hospitals if the situation warranted that. But just to walk through these quickly, there's a monthly reporting requirement for FY22 year-to-date operating performance that would begin November 20th and done as in coordination with board staff. There are telephonic check-ins to be scheduled at the discretion of chair Mellon in consultation with the staff. And that's based on the hospitals upcoming year-to-date operating performance. Notification to the board of any revenue and expense assumptions that underlie the hospital budgets that materially change. Filing information necessary for the board to review. Each hospital's FY22 operating results includes audit financials. Now it would be as instructed by board staff. Pass that all hospitals timely, file all provider acquisition transfers and other material accounting adjustments as instructed by the staff. And that's also set out in a little bit more detail in the FY22 hospital guidance. The hospital would continue to file all requested data and other information in a timely and accurate manner and if flagged in particular, including updates on access to care and wait times, given the ongoing challenges that Vermont is facing in that regard. And then asking that the hospitals participate in the board's strategic sustainability planning. So I'd welcome any comments, suggestion or discussion on those. And also as Patrick has moved back to the suggested motion language for Gifford and Northwestern. I guess I'll turn it back to you, Mr. Chair, if that process is okay. Thank you, Russ. Do any board members have any comments or questions about the standard conditions? Kevin, I have a quick question. I wanted to float an idea, but I'm not sure it belongs here. So I'm open to suggestions from other board members and our legal team. But it's potentially floating the idea of adding another condition that relates to the potentially avoidable utilization. I think that as we're all trying to increase access and reduce costs and improve quality, I think we really need to make sure that hospitals are thinking about ways to reduce that avoidable utilization, particularly in the ED and particularly in our inpatient settings, that'll free up resources, right? For those who really need hospital and emergent care, most it's gonna help reduce costs and it ultimately will help our population health. So I'm wondering if we wanted to add a condition to all hospitals to develop strategies to reduce that potentially avoidable utilization. So we know that they're tracking it, understanding it and developing strategies to work with their community partners to try and prevent some of that utilization and improve population health. So I'm not sure if it belongs here, but I thought I'd throw out that idea. Are you suggesting any type of reporting for that, Jess? Well, I think what I'm trying to do is probably telegraph that I would like to see it in the budget guidance for next year is some, I wanna incorporate some measures of it or some assessment of it, but I think knowing right now that it may be difficult for them to collect the data and we'd have to figure out if Mathematica can continue to do this data analytics for us. I just want to ensure that they're thinking about it as they're developing their budgets for next year and as they're, we're already into fiscal year 22 that they're already thinking about reducing some of that potentially avoidable utilization. So I'm not sure whether I'm actually asking them to report on it or just to be developing those strategies that we would hope to see in next year's budget. So, but I welcome other board member feedback on this topic. I'm not sure exactly how to do this. I just don't want it to be forgotten and I want it to be considered as we're going through fiscal year 22. If we wait until fiscal year 23 budget guidance, we're already a year behind. Other comments from the board on the member home suggestion? Well, my sense of it is that it might not be ready for prime time in a very tactical detailed sense, but I know that Jess was very thorough in discussing with hospitals during the hearing process about that study that came out about avoidable services and profiles remat hospitals in specific. And so, if the condition could be such that points toward that opportunity that that report raised and asks hospitals to kind of provide a report or a discussion around that as part of the budget process, that makes sense to me. It doesn't make sense to go for me to go too far beyond that because it's just not as well-developed in areas. I think it needs to be to be a standard budget condition with any teeth in it. But on the other hand, I agree with Jess. I don't want to lose a year in terms of hospitals knowing that that's something that's on the table and we would like them to think about it. Other thoughts? I think it makes sense for hospitals to start thinking about it. It's consistent, quite frankly, with what their communities are doing or attempting to do with the care coordination and the ACO programs. So it's really tying together the community efforts and the hospital efforts in a sort of a way of measuring how potentially measuring how well or poorly the community is achieving their goals in care coordination. Since it seemed like a lot of those measures are really determining whether the upstream, the community efforts are successful in keeping people out of the hospital. So I like the idea of having folks starting to think about it. We also had several hospitals talk about strategic planning initiatives. So it would be timely for those hospitals to be thinking about it in that context as well. But I agree, certainly we're still in the middle of a pandemic, people may have operational challenges, we know they have staffing challenges. So I think we need to be sensitive to those sorts of environmental conditions, which understandably, quite frankly, mean that some of the care coordination and efforts on population health are gonna be less successful because of all of the COVID kind of problems and issues that are arising. So I think just a suggestion of doing sort of a signaling condition that is not meant to have strong teeth or require specific operational changes, but kind of say folks should be thinking about this and be prepared that in the next year's budget cycle, they're gonna be asked about it. I'm not sure exactly how to word the condition, but I think our staff could work on that. Well, I think it's difficult to approve the budgets with standard conditions if we haven't hashed out those standard conditions. So could we, so would it make sense then for Jess and Legal to put their heads together and have a standard condition to propose for Friday? That also gives, quite frankly, stakeholders time to weigh in if they have ideas and then we could add that on Friday and move forward. Oh, yeah, because we're meeting Friday, yeah. With these two, because... Unless they believe they could do it over the lunch recess today. That's a good thought. So please get some of these low-hanging fruit approved. Yeah, I think, yeah, I think let me try and work with Legal over our lunch break. I'd like to move forward with the budgets approved today. I don't wanna stop that. I just wanted some language in there that suggests that this is important to consider and we hope that they're building some strategies to reduce some of this avoidable utilization. That's all I'm really asking for here. So I think we can work on that. Okay, so we won't take any action on the motions at this time. Those two hospitals should not be concerned that they don't have approved budgets. It was an oversight in some of the wording of the motion during the previous vote, but they will be voted on, if not today on Friday. And so nobody should try to read more into this than what's there and hopefully Jess and the legal team can come up with the final condition over the lunch break. So with that, Patrick, I'll turn it back to you. Thank you, Mr. Chair. So that concludes our system review. And as stated, I know we're kind of playing pass back and forth here, but I will turn it back over to you, Mr. Chair, for any discussion on the system view that we've discussed. Getting some pretty strong need back here. Jess, it seems to be coming from yours. I'm not sure. There we go. Thank you. And does anyone wish to offer any comments at this time about the system view? Any board member? I have a couple. I didn't see it in this slide deck, but last year there was a slide that showed kind of the new money that the NPR FFP growth, the new money and the percent of that new money as distributed across the hospitals. And I remember to me that was kind of a striking table in that it showed that the new money in the 2021 budget relative to the 2020 budget, the 2020 budget I think was a 3.3% increase, but when you took UVM Medical Center out of it, it was a four-tenths of 1% increase. And I just think that that's a table that is helpful to follow the money rather than we could do it with the information or I could do it with the information that's presented here, but it would just take quite a bit of time to go through all the netting calculations. And then there is the issue of what would it be relative to? Would it be relative to the 2021 budget or relative to the 21 projected budget? But to me that is a table that I would like to see and have part of the record so that as a board member, but also the public can follow where the money goes. Here's the new money and here's where it went. And then the second one would be a, and I think of this in the context of the cost shift, a table that profiles the new money by payer. So we would take the new 2022 additional NPR that's on that first slide that Lori did. And profiles where that money is coming from by payer, because I think the story is probably one that would paint the picture of how debilitating the cost shift is in terms of pushing these new additional resources onto the commercial payers as opposed to Medicare and Medicaid. And this is through the eyes of the hospitals. This is in their presentations of payer mix. When you go through those, you see a lot of hospitals just don't have any anticipation that the payer mix for Medicaid, that the amount of money coming from Medicaid will increase by any substantial amount. And I just think that's a fundamental structural story, if true, and I believe it's true, looking at past records that we should be focused on. So those are two tables, one that I know that we did last year and another that I would ask the staff to consider. I don't think either of them are hard to do, but I think they're very informative. Other members of the board? Yeah, first I wanna really thank the staff for putting together this comprehensive overview. And I think it really helps to set the stage for the discussions that we're gonna have. I too, I think there's one other table that would be helpful and I have all the information as I'm going through, so I can pull that together for myself. But really the cash balances, I know in the appendix there is something, but it's really just the 21 budget projection and then 22. And I think it's important to look at the days cash on hand going back to pre-pandemic to where we are now, because that certainly is a critical metric and we can use a lot of averages to look at operating margins and things like that. But one of the things at the end of the day is, where's our cash? And what's the, fortunately many of the hospitals, if not most, aren't in much better cash position, even taken into consideration where they may need to, giving back obviously Medicare advance and where they think they're gonna net out between whether they have to repay any COVID money back. So their 22 budgets certainly consider that. And I know that is gonna be something I'm going to look at and weigh in on as we make decisions because we know the pandemic has certainly taken a toll on the hospitals everywhere and on society, everything, but when we do look at some of these hospitals, the money that they were able to receive has certainly put them in a stronger position on their balance sheet. So that would be a good table maybe to have as a reference, certainly we all have it in our backup, but I think that would be one to look at. But thank you for all the comprehensive work. Any other comments from the board? If not, I'm going to suggest that we take a break till 10.05, give Jess and the legal team some time to do some work. Patrick and his team can huddle and we'll come back at 10.05. Hopefully at that point we can approve the conditions and go back to the two that we just have to do a redundancy vote on and then proceed from there. Is there any objection to that suggestion? Sounds good. Okay, with that, this meeting is in recess until 10.05. Okay, it's now 10.05. I'm going to reconvene the board meeting and ask member Holmes if you have had success with the legal team. Yes, we have. I think we have some language that I think Patrick added to a slide. There we go. So the language as it reads, and thank you to the legal team for helping me and Robin actually for helping wordsmith this, but hospital review will review the data and information in the Mathematica report regarding potentially avoidable utilization in their ED and inpatient settings and hospitals will work with board staff to potentially include these measures in non-financial reporting as part of the fiscal year 23 hospital budget review process with the goal of developing strategies to reduce potentially avoidable utilization. So I'm comfortable with this language. I think it's suggestive of this is something that the board, if everybody agrees, would like to continue to look at, understand more. We'd like hospital input in how we might incorporate these measures in our non-financial reporting process. And at the end of the day, I really feel strongly that reducing this potentially avoidable utilization has real potential to impact patient health outcomes and reduce costs and I really wanna focus on this. So this allows us to start to focus on this for the upcoming year. And Patrick, are the other one, two, three, four, five, six, seven conditions identical to what we talked about earlier? Yes, the only change is in that final bullet point which has been added for the work of board member homes and the legal team. Okay. Board discussion. Works for me. Yeah, for me as well. Would somebody like to make a motion before I turned it over to public comment? Sorry, Maureen, I may have cut into you. But no, I said it works for me as well. Thanks. Okay. Would somebody like to make a motion? I will move that we adopt the standard budget order conditions on slide 34 to be included in each hospital's budget order. I'll second it. And one more thing I should have asked to begin this. Joanne, are you there in copying all this? Yes, I am. Thank you. Thank you. Okay, at this point I'm gonna open it up to public discussion on the motion that's in front of us to adopt the standard budget order conditions as seen on slide 34. Is there any member of the public who wishes to comment at this time? Is there any member of the public that wishes to comment at this time? I see that both Jeff and Mike are on from Vaas and they are not making any comment. So I'm assuming that there isn't an objection to this change. Although you know what happens when I assume. But with that, is there any further board discussion on the motion? If not, all those in favor of the motion signify by saying aye. Aye. Aye. Those opposed signify by saying nay. Let the record show that the motion carried unanimously. Patrick, if you could back up a slide and would someone like to make these motions at this time? I will move to approve Gifford Medical Center's budget as submitted with a 3.5 increase from fiscal year 21 to fiscal year 22 budgeted and PRFPP, a 3.5% increased overall charges subject to the standard budget conditions as outlined on slide 34. Second. It's been moved and seconded to approve Gifford Medical Center's budget as outlined in the language on slide 33. Is there any discussion by board members? Yeah, I have just one question. I mean, when you go back to the minutes of July 28th, the language in Robin's motion was that, and I think I have it here exactly. It was to approve basically their budget. And I understand. So, I just wanted to ask for redundancy and that's because the motion did not include the charge and that patient revenue language. And so the motion is recommending that. I understand that, Kevin. I just wanna make sure that I'm just asking the question whether or not Gifford and Northwestern have been notified about this because, you know, and don't have any problem with it. It is redundant and it's more technical in nature than substantive or totally technical in nature than substantive, but I just wanna make sure this doesn't becomes a surprise to them or muddy the water with them. Because I think they left the July 28th meeting thinking it was done. I think we all left that meeting thinking it was done but I think we have to follow legal's advice and make sure that the motions are properly out there. And this is consistent with what they submitted. There's no change. It doesn't change anything for them. But again, before we take a vote, we'll open it up for public comment in case anybody wishes to say anything. But you're right, it is a little bit unfair because they may not even be tuned in. But I don't think it does anything different than what we did last time. Now I agree with that. So at this point, I'll open it up for public discussion. Does any member of the public wish to speak on the motion in front of us related to Gifford Medical Center? Hearing none, is there any further board discussion? Hearing none, all those in favor of the motion, please signify by saying aye. Aye. Those opposed signify by saying nay. Let the record show that it was a unanimous vote. Is there a second motion? I move to approve Northwestern Medical Center's budget as submitted with a 2% increase from fiscal year 2021 to fiscal year 2022 budgeted MPR FPP, a 3% increase in overall charges subject to the standard budget conditions as outlined on slide 34. Is there a second? Second. It's been moved and seconded to approve Northwestern Medical Center's budget as outlined in the motion on slide 33. Is there any board discussion? If not, we'll open it up for public comment. Does any member of the public wish to comment on the motion in front of us regarding Northwestern Medical Center's budget? Is there any further board discussion? If not, all those in favor of the motion, please signify by saying aye. Aye. Any opposed signify by saying nay. Let the record show that it was unanimous vote. And Patrick, I'll turn it back over to you. Thank you, Mr. Chair. So as I stated before, the break that rounds out our system perspective. And as discussed at the beginning of this presentation, the next step for the team here is that Kate, Lori and I are going to navigate through each one of the 12 hospitals that we've heard over the last two weeks, recapping what it is we've heard, what their request are as submitted. And then once we're done with that stage, obviously considering the timing, whether it's around lunch or what have you, we will then move into back to Southwest here, the first slide in the slide deck and we'll begin to go through making recommendations for board discussion and potential vote. So I'm going to kick this off with Southwest for our hospital by hospital review here. And I'm doing so primarily because there's a few different perspectives that we've added this year over prior budget deliberation review periods and even fiscal year end periods, keeping with that narrative that I discussed at the preliminary review where we're trying to take some of the data points that we already collect and be more creative or even illustrative of some of the numbers. We understand that not everyone is a numbers person. We have a lot of numbers that we collect which is probably an understatement. So finding new ways to provide some imagery around what that would look like, but also the challenges that we just missed earlier in budgeting with COVID are also challenges for the board in making decisions. So how can we help facilitate the decision primarily around items like reasonableness? It's very, very difficult to assess reasonableness under normal circumstances. It's even more difficult to assess reasonableness in the current state of things that we've experienced over the last two fiscal cycles here as it relates to our regulatory processes. So we'll start with Southwest and Vermont and I'll give you an overlay of what you can expect to see in all of the subsequent slots in each one of these hospitals. I'm sorry, Patrick, there's some background noise and I lost you after what you can expect to see in all of this. Okay. Somebody got muted. I will reiterate, safe travels to whoever is getting in their car. So what you can expect to see is primarily what I'm gonna show you here on Southwest with the layout. Each hospital has been catered to the information provided and what we've heard or read in the narrative and in the hospital budget hearings. So I'll start off here with Southwest. They are running 1.4% for their projected FY21 over what they had budgeted. They were relatively conservative in their fiscal year 21 budget with all of the unknown. So you can see here at the top left on slide 35, the numbers that go along with that 1.4% variance with their projection as of the time of submission at just shy of 169 and a half thousand. They're looking to grow 6.3% over their fiscal year 21 budget which would put their NPR FPP at just north of 177.5 million. The request for 22 is 4.8% growth over the projection of 169.5. So in addition to that, they are requesting a 4% overall increase in their charge master which is coming from commercial revenues of $4 million. That is the NPR impact of that charge master request. And you'll see here on the left-hand side a graph that we have not shown before. We heard from a couple of hospitals that 2019 is kind of where they're looking to get back to from an operational and financial perspective, all things being relative that that is the last pre-pandemic or quote unquote normalized state of operations and finance. So we heard some hospitals talk about how they looked at it and trending 3.5% NPR growth off of that period. And the reason they did, they chose 3.5% is that the board has approved in their hospital budget guidance maximum growth ceiling of 3.5% each year for the past several cycles which would cover fiscal year 2020, 2021 and 2022. So if we trend 3.5% off of that you'll see that orange line beginning in 2019 rising up and covering the periods of 2021 and 22 and arriving for Southwest at about 181.8 million dollars. So said another way if with all things in if things had been relatively normal and Southwest had grown at that 3.5% rate approved by the board, their revenue for 2022 would be at or near 181.8 million dollars. And this is how in the discussions we've had internally like how do we contextualize and kind of smooth out all of the fluctuations we've these hospitals have experienced and saying if we come off of 2019 we look at 3.5% growth as approved by the board where would they end up? And this is another assessment of kind of the reasonability piece and trying to make sense of everything that's happened as we've talked about already the difficulty in budgeting and the difficulty in projecting and whatnot that has gone into the last few cycles. In addition to that, you'll note these black I bars right here coming off of each fiscal year from that orange line. So the staff wanted to reinforce that reasonability piece by adding a plus one or minus one off of that 3.5% growth. So said another way, if you take that orange bar and you raise it up to the cap of that I bar that would represent trending 4.5% growth. If you take that orange line and you lower it to the base of that I bar that would trend 2.5% growth. So when we look at these budgets, a variation off of the 3.5% in some instances can be very, very significant. So we're trying to say where are they coming in? Even if we were to lower that to trending 2.5% do they come in underneath that? Even if we raise it to 4.5% are they coming in over that? Are they coming in right on point? So again, trying to assess that reasonability in circumstances where reasonability has gone almost out the window as it relates to the actual operations and budgeting here. So we've taken their 2019 and 2020 actuals with the blue line and then showed where their budget 21 was gonna come in and where they're looking to go for 2022. So, and we've also added in their current projection from the time that they submitted. So we can see here, the green line differs from the blue line from projection to budget. That gap right there looking at 2021 is the 1.4%. You see at the top left. So you can tell that they are running over their budget as approved by the board in 2021. And where they're looking to go is still gonna come up more than 1% short of that 3.5% trending at the 181.8. So even with some pretty good budget to budget growth at 6.3% and 4.8% over that 169.5 projection, they're still coming in short of where they would have if we consider that 3.5% trend moving forward. And you're gonna see this for every single hospital, the exact same layout. These are actually called error bars in Excel. We're using them for a different purpose here, which is to gauge some reasonability off of that 3.5%. So these are gonna fluctuate in size in accordance with the graph. And that's entirely due to the numbers over here in the vertical axis. So whether they're smaller or larger, don't be worried about that. We set them at plus one and minus one off of that 3.5% trend line, that orange line for each one. So don't let the optics get in the way of the logic that's being applied to this graph. So moving along, we heard from the hospital through their submitted materials and hearings that this is a continued recovery budget as of submission. They were very conservative in fiscal year 21's budget with all of the unknowns coming out of the first stage of the pandemic. Their budget to budget MPR growth after COVID allowances is 5.7. As you can see up in the yellow at 6.3 before we consider those. So of that 5.7, 3% as they've stated is from a rate contribution and 2.7 is from a volume contribution. Their operating expense growth budget to budget is 3.65%. They normally target a 3% operating margin. However, in fiscal year 22, that margin is being targeted at 2%. They do expect volumes to be higher in their organization in the coming year over 2021, especially in their primary care practices. For cost controls and cost mitigation, they're looking to engage an outside or third party to review their cost centers for efficiency potential and they are actively engaged in payment form efforts here in Vermont, primarily through the ACL. As we noted in our preliminary budget review back in July, we provided a system wide review that looked a lot like this using these waterfall graphs. And we said we would do that for each hospital to break down how they're reconciling from budget 21 to budget 22. And we put these in a descending to ascending order. So you can see the suppressing factors on MPR and then the contributing factors to MPR. So on the left hand side, you will always see the largest suppressor of revenue. And this instance, they have identified it as shift from fee for service all the way up to the utilization factor that's contributing and helping them reconcile or bridge from 2021 to 2022. So we can see here in ascending order, rate effect contributes 4 million, FPP contributes almost five and utilization returns contribute almost 5.4 as they work their way up to that 1.77 million dollars or $177 million. We provided the same view for operating expenses so that the board can see the various drivers or where efforts such as cost savings are coming into play and other factors here. As you can see, reduced drug use is helping suppress operating expenses. However, we see this incline here where inflationary increases at 3.5 million are really driving operating expenses up to the 180.8 million dollars that they have budgeted for 2022 as submitted to the board. This is a slightly different look than what you've seen in the past. It is the exact same information. However, in the past, what we would have had to do to provide a quarterly perspective on NPR and operating margin for this slide would be to take 14 hospitals, nine months of Excel spreadsheets, grouping them into three-month clusters to represent fiscal quarters and then having to continue the manual work to extract that information, graph it and put it in here. However, as many board members know and folks at home may not know, earlier this year, we shifted our reporting to a quarterly format in a IT program known as Tableau. And so we've been capturing this information on a quarterly basis all along. We set parameters in Tableau and then pull in these Excel spreadsheets and it pre-populates based on what we've told it to populate. So for this slide here, we saved an immense amount of staff time this year compiling this look for the 12 hospitals you're gonna see in the slide deck because we were already capturing it. And it may look a little different but it's still capturing the quarterly NPR. In the middle there in the white numbers, you'll see the change from prior period. And then at the bottom, you'll see the contribution to margin each quarter and at the top in percentages what the operating margin percentage is. So again, our switch to this platform saved a lot of staff time. We were able to produce this very, very quickly instead of having to go through that very manual process. So you're gonna see this in future presentations as we build out our history in Tableau, you can expect to see more images coming out of that platform for use in our presentations around hospital finance as we begin to build our expertise in that. And a huge thank you to our teammate, Kate Hoffman, who's really taken this on. For anyone who wants to view year to date activity around that Tableau platform, I encourage you to do so. It's on the Greenmount Care Board website under hospital budgets, fiscal year 21 actuals. We have three windows there that capture each fiscal quarter as submitted to us by the hospitals. It is an interactive platform. So you can change the data points and see how it affects each individual hospital and how those hospitals are faring year to date. So that's one change that we have in this slide deck for this year, slightly different imagery, same data capture. So Southwest here, we can see that here's their year over year view of budget to actual results for NPR and their operating margins. We can see from the blue actual bar to the gray budget bar that Southwest has a long history of very accurate budgeting. That includes fiscal year 21, to be fair, with all the complications that came out of that, they are coming in almost right on budget a little over, which is excellent given the conditions that we have. And we also have here tracking the percentage change from year to year. So going over to the left-hand side here, 2017 was a 0.4% change over 2016. So that 152.6 is a 0.4% change over the 151.9. And moving left to right, you can see 2018, a 5.6% change in NPR, the 161.1 over the 152.6 in 2017. So you can see the changes year to year in the history of Southwest. So as they've submitted their budget, they're looking for a 4.8% increase off of that 21 year-end projection, which would take their NPR to 177.6 million. And down below in the operating margin, as previously stated, they target about a 3% on any given year. You can see here that often times they come in slightly over or slightly under it. So some pretty good operating margin performance when compared to that 3% target. And for fiscal year 2022, they're dropping their expectation to 2%, which has a value of $3.6 million in operating margin. This is the annual snapshot we give you capturing the impact of that 4.8% request as it relates to Southwest. The NPR impact of that is $4 million. 1% of that request equates to $840,318 of that impact. They are applying it to their service categories of inpatient and outpatient gross charges, nothing for professional services. By payer, you can see that that $4 million NPR impact is completely attributed to commercial revenues. And of the change from budget to budget of $10.5 million, their charge of $4 million makes up the majority of that shift. And at the very bottom, we can see tracking over the last five years what they've submitted for a request and what they've been approved at. Five year average, very little variance, 0.2% from the 3.3% submitted to the 3.1% approved by the board. On slide 41 here, we've built out the data point on the left, the gross to net revenue collection rates. This is something that we've provided the last, at least the last cycle, maybe the last two cycles, it was a graph that can be helpful, but we didn't feel was maximizing its potential. So we were just capturing the all payer gross to net, which in Southwest case here, would be 43% going into budget year 2022. But when we started looking at that and asking ourselves questions, how does this graph help inform and educate? It wasn't really providing us with the answers that we wanted. So when you think about that 43%, well, what's driving that? So we wanted to break that out by payer so you could see what they collect gross to net off of each payer after deductions from revenue like bad debt, free care, contractual allowances, et cetera. So here you can see that in 2022 Southwest anticipates collecting of their gross revenues, 70%. So their net patient revenues from commercial payers, they will get 70 cents on the dollar as it relates to this year's budget. For the government payers, they're relatively close. They expect to collect 27% of gross revenues in Medicaid and 32% in Medicare. So averaging all out, you can see the trend here at 47% of its peak in 2018, coming down to 43% for all payers in 2022. And we put that alongside the payer mix to help again provide more perspective. Their payer mix is favorable to commercial. It's not the highest in the state. It's not the lowest in the state. But you can see here the history there is pretty stable for this hospital across these major payers. And then again, going back to that left-hand side, you can see from that payer mix what they anticipate on collecting in net revenues. So we've done that for each of the 12 hospitals you'll see here today. And then for each slide, I'm not gonna go through all of this now because we're gonna come back to this for recommendations and discussion. Familiar layout here. We've had Russ provide the motion language, but I will touch on this real quickly here before we get to the vote piece. What you're seeing here in the highlights are areas that might require a change of language. So I'll speak hypothetically here and say that I have no capacity to make a motion. So I'm just reading this for the board's edification, but you might read this as move to approve Southwestern Vermont Medical Center's budget as submitted with a 6.3% increase from 21 to 22, budgeted NPR, a 4.8% increase to overall charges and subject to the standard budget conditions outlining 34. That's if you want to accept it as approved. If you don't, you would pick up the as modified hereby. You would alter the highlight over the percentage increase and then you would say with commensurate reductions to operating expense growth in the aggregate in order to protect margins. And then you would select your new figure for the overall charge increase. So you don't have to read the whole paragraph. You just have to cater it to whatever the scenario calls for if you want to take it as submitted, it simplifies things. If you want to alter it, then you'll read from some of those bracketed areas that are also highlighted. So that concludes Southwestern Vermont Medical Center's hospital review. I'm going to turn it over to Kate Hoffman to perform a review of Rutland Regional Medical Center. Kate? Might I interject at this point? Rather than go all the way through every hospital and then come back, there may be some hospitals at which we're ready to make decisions. And rather than repeat the information and actually while it's still fresh in our minds so that we readily remember it, I'm just curious if it might make some sense if any board member was given some time at the end of each one to begin the conversation. We are amenable to that, certainly. So if you could back up. Yeah, I think that makes sense, Kevin. And also I think, because this is the first through one hospital, maybe talking about any comments we might have about the presentation format, because that's going to be the same for each hospital. So not specific to Southwest because I do have a couple comments. Sure, let's back up to Southwest. And Maureen, you can take it away. Yeah, so my comments are not going to be about any approval piece. It's just going to be about the format. If you can go back to slide 41. You know, this was one of the things the left hand side of this chart was one of the metrics we were really trying to get, at least from a comparison for all the hospitals. And so what would be helpful is if you could convert that ratio to Medicare. So this is where we would take the 69 if I'm looking way over on the last bars. So Medicare reimburses at 32%. And then if we benchmark that to what is commercial relative to Medicare, it's 2.1% or 2.1 times. And then similarly, if we look at Medicaid to Medicare, this at least helps us, it's one comparison point across all the hospitals just to say, how are they looking against Medicare? Some are pretty close to Medicare. Some are double Medicare. It goes a bit with the, I think some of the healthcare advocates' questions that did not get answered completely. So without that, this is one of the benchmarks that I am looking at. So do you understand what I'm asking for, Patrick, are looking at? Yes, I do. Okay, I just think relative it is something we're trying to say how are their commercial prices relative, at least we can benchmark it to something. And I know it's not apples to apples, all services aren't the same, et cetera. But at some point when you're crossing hundreds of millions of dollars worth of revenue, there is some relevance to look at how it is as a comparison. And then if you back up to page 40, and this might be fine, I just have a question on, do they have professional services that are at a zero? So is there NPR there? Because if so, then the overall change in charge would be lower, and that's the way it is on other hospitals. So on other hospitals there might be an inpatient charge of five, an outpatient charge of five, nothing on professionals, so their overall change in charge was lower. And maybe they don't have any professional there, but I'm just trying to get, because when I do look at some of the other hospitals, there is a difference there. So maybe you can talk about the calculation there or if you understand what I'm saying. I do understand what you're saying. The calculation there is not done by the staff, it is done by the hospital, so we're simply projecting what they offered up. And when I look at their tab two of their appendices here, they apply 0% to professional services and 0% to other. And so what they list out is charge master increases of $21.5 million overall and a 4.8% charge master increase and 4.8% for both of those inpatient and outpatient service lines. Okay, because I'm concerned there might be some inconsistencies when we look at how the hospitals did this because some hospitals again will say they had six inpatient, six in outpatient, zero in professional and therefore they were a four, for instance, for their overall change in charge. So, do we know that they did, so their inpatient is 4.8% for sure, it's not 6.6 and zero getting to 4.8? They have listed 4.8 for each of those. The key to that may be in their narrative, they may have outlined that they don't have any professional service increases this year, but we took this straight out of the appendices and applied it to this table as they supplied it to us. Okay, it'll be just something I made point out as we go through some of them because some of the hospitals do have a different number for their overall change in charge versus these categories. And if we're relying on what the hospitals gave us, there might be some interpretation differences in how that's done. So I like looking at what by service category what it is and so we will see in some hospitals a larger service category charge than the overall change in charge. So just something to look at there. I think that's it. I mean, what I talked about before, but obviously we're not gonna have time to change it before we look at each of these, which is really understanding where their cash balance changes have been. So when I talk about certain hospitals, I will look at that as a reference, but clearly we don't have a table that shows that for each of these hospitals, but maybe you guys can at least be ready with what they are if we have a question on what their days cash on hand is in 2019, 2021 and the 22 budget. That's all I had on format. I'm really just talking format here. Okay. Any comments from other board members on Southwestern Vermont Medical Center? So I would chime in and say I like the graph that you included with the 3.5% from 19 because I think that is for me at least very helpful to think about kind of holding a steady course over time and trying to figure out how to deal with the various ups and downs related to COVID, which do make this more challenging. I guess I had a question that I wanted to ask for people to think about. Normally we include the language in the motion that if we cut the NPR that the hospital will cut the expenses to reflect it in order to preserve the margin. I'm wondering if given the staffing and expense situation this year and the ongoing uncertainty related to the pandemic, we would wanna give more flexibility to the hospitals, not that I want them to budget for a negative margin, but if we know that there are these COVID related pressures, would it give them more flexibility on that? So that's just a question that I wanted to ask to get other people's opinions about in terms of that part of the decision. So I'll give you some quick feedback, Robin, in that there were at least one hospital where I think a change in charge may be necessary, at least in my view, that's just one person. But I was thinking along the same lines as you that I'm not so sure that given all the uncertainties would depend up demand if changing NPR makes sense in that particular case, but I think we can have those discussions as we go through on each of the hospitals. Yeah, I was explicitly asking for, I mean, I appreciate that and that makes sense to me, Kevin. I was also asking about the expense because if I'm not sure who's driving the slides, but if we could go to the motion piece, typically in the motion, we include an expense reduction. I mean, maybe to your point, Kevin, if we don't change the NPR, that piece is irrelevant, but if we did change the NPR, and I guess we could talk about this when it comes up further. I just wanted to pose the question, like does it make sense to require that or does it make sense to give the hospital more flexibility in this particular circumstance? And again, to your point, Kevin, if we don't change NPR, it doesn't matter. Well, in some respects, it matters because we would still hope that they would strive to keep expenses as low as possible. And I think they do that as a matter, of course. So I guess the appropriate question here is, does anyone think that Southwestern is an easy decision point that they could make any particular motion on at this point or should we just go to the next hospital? I guess I would say I think that I'm in favor of approving the budget as submitted. So I could make that decision today. I think the team submitted a pretty conservative budget. I actually applaud them for that. I think this may surprise people. I think they could have potentially budgeted for more NPR. That was actually trying, what some of my questions were about because their projections for 2021 grew between submission and hearing, that volume continues. I think they may exceed the budgeted NPR. They were budgeting a decline in inpatient and ED volume, but it looks like that's coming back. They didn't include volume for new hires. So I think it was a very conservative budget in my mind with the potential upside of even more NPR. But at the end of the day, I appreciated the conservative approach that they took because it also means they took up conservative approaches to expenses. And I think that's one of the reasons that SBMC is as successfully managed as it is and why they continually generate positive operating margins. So I'm content with approving the budget as submitted. And in particular, that chart looking at the 3.5% growth from 2019 is compelling to me. They're well under that with their submitted budget. I do think given where we are now, and I know it's different from, the circumstances are different now than when they submitted the budget back in June. But I think there's even potential room for more NPR that might come in. And I think at some point, not for today, we do have to think about what we're gonna do with enforcement for this budget cycle if we're gonna do it or not given all the uncertainties, but I will hold that conversation for a different day, but I'm comfortable approving the budget as it was submitted. Other board members? Well, I'm fine with it too. I mean, I look at their NPR trend since 2019 and it's well below our 3.5% threshold. And I look at their participation in the value-based programs and they're I think the best in the state. And they are also can show that they're doing well with that in terms of transitioning their inpatient population to an outpatient population. So I'm happy with them. I will say that since the slide deck arrived yesterday, a little afternoon that for me to kind of go through the slide deck worry, which I mentioned earlier, a couple of things that I'd like to see to give context to all the 14 hospitals and then looking at voting today, I'm not prepared to go beyond Northeastern. So I just raised that red flag because that's as far as I've gotten in terms of kind of going back and thinking about where I'm at on individual hospitals, but where I'm at on this hospital is a thumbs up. Yeah, I don't think that any board members should feel pressured to vote on anything today. Just trying to take off anything off the table that we can take off, Tom. Yeah, I'm fine with Southwestern. They do a great job. Is there any contrarian point of view on Southwestern? No, I'm okay as well. I would say that their rate request is higher than what we had put in at a 4.8, but the fact that they came in at a 3.5 last year and didn't have any, they came in per our request last year with the three and a half on their rate increase has allowed me to feel comfortable with their 4.8 this year. And I agree with what Jess was saying on their NPR. They're below that 3.5% trend when you go out for three years. They talked about beating this year. And so, I also think their age of plant is on the older side, their cash I can't even look at because it doesn't really reflect their cash because of the parent corporation, but they're up a little bit higher than they were before. And they did get over $15 million of COVID money that's supported them. But I can support this and go forward with this recommendation. And I'm good as well when I looked at their change in charge and the five-year average, even adding in the higher change in charge, the average is still in the 3.4 range. So I'm comfortable. Should I make a motion? It would be appropriate. I moved to approve Southwestern Vermont Medical Center's budget as submitted with a 6.3% increase from fiscal year 2021 to fiscal year 2022 budgeted NPR FPP. A 4.8% increase to overall charges and subject to the standard budget conditions as outlined on slide 34. Is there a second? Second. It's been moved and seconded to approve Southwestern Vermont Medical Center's budget as outlined here on slide 42. Well, as modified by what Robin just said. And is there any board discussion before I go to public comment? Hearing none, does any member of the public wish to comment on Southwestern Vermont Medical Center and the proposed motion in front of us for approval? Mike Daltreco. Good morning, Kevin and board members. I have a, I'm not sure, this isn't public comment specific to SVMC. We've moved from sort of SVMC specific discussion to more generalized budget hearing order conversation. So mine is more general in nature. Do you want me to hold my comment until after your vote or do you want me to do it now? Go ahead and do it now. Okay, great. So as we move through the process, I really want to have a few comments on what I've heard so far and where we are. First of all, I want to acknowledge each and every one of you. It's really, this is really hard work, not easy. And sometimes from where I sit, it's easier to listen than deliberate as you do real time. So I just wanted to acknowledge that. So on slide six, as Patrick went through his process, I really want to emphasize and our continued. Can you go back to slide six? Certainly. Sorry, Mike. No, no problem at all. Thanks. I just want to emphasize our continued capacity challenges, our workforce pressures, our inflationary pressures, the increased clinical intensity. And you've heard this all during the hospital hearings. And as you just mentioned, we're always managing our expenses. To what looks like from the outside, in the most recent conversation, what might be considered as not clear of why changes are happening on rate expenses or changes to expenses or NPR and FPP is not very clear. And I just think we need to understand and how you rationalize those decisions as you move forward. As I see these budgets, every dollar is necessary because of these really difficult circumstances and the lack of understanding what might happen in the future. In Maureen's balance sheet conversation, I think to look at cash is important. Finance people say cash is king. I don't disagree with that. But I also think it has to be taken in stride with other exposures such as risk, capital needs necessary to support community mission, relief funding, reconciliations that are a complete disaster as we speak. And maybe most importantly, the great uncertainty to future public health needs. We are in a very, very tenuous situation. And I think these things need to be considered as well as just an absolute cash number. And then finally, I know you approved a new condition and it makes sense and it's a very important part of reform to look at avoidable admissions and all of the things that we need to do to have healthy coordination of care and handoffs, patient care handoffs. I think to have new conditions as part of 2022 budget orders are difficult, especially when we have, we VAS that represents the hospital members here have very little time to consider and opine on those things. I just wanna know how we might manage that as we go forward. So really hard job and I wanna re-emphasize that I understand you're the challenges of doing the stuff real time. So those are my comments and I appreciate the opportunity. Thank you, Mike. Is there other public comment? And Patrick, if you could go back to the slide with the emotion language while we're waiting to see if there's any other public comment. Hearing none, is there any further discussion by the board on Southwestern Vermont Medical Center and the motion in front of us? Hearing none, all those in favor of the motion please signify by saying aye. Aye. Those opposed, signify by saying nay. And anytime that, in this case it was, let the record show that it was unanimous vote. Anytime that it is less than unanimous because we are doing this online, I will ask the general counsel or one of the lawyers to call the roll. So let the record show that the board just approved the motion for Southwestern Vermont Medical Center and we will now proceed to the next hospital and turning it back over to you, Patrick. Thank you, Mr. Chair. I'm going to turn it over to Kate Hoffman to discuss Rutland Regional Medical Center and Kate, before you start, I would say probably adjust your strategy here from just a review to navigating towards that recommendation if that impacts the way you're going to present Rutland because as I understand it, Mr. Chair, we're gonna take these hospital by hospital and the board will either discuss for a potential vote or we'll move on, is that correct? I just think that makes the most sense and anybody on the board can object to that, but I like to have information fresh in my mind and I don't think jumping back and forth makes a lot of sense. So unless a board member objects, I think that if there is reason to proceed with a particular budget while we're speaking about that hospital, we should. Obviously, Tom has already expressed some reservations about doing some votes and I think that at any point on any one of these hospitals, if even one board member would like additional time, I think we should respect that. So with that, we'll go to Kate. Thanks, Mr. Chair and thank you, Patrick. So we're gonna take a look here at Ruhlin Regional Medical Center. So just to start off, their budget to projection variance for fiscal year 21 is about 7.8%. Their budget was very conservative in 21, which drives the budget to budget and peer variance to 9.2, but budget to projection is only 1.3, as you can see in the top left-hand corner of this slide. The requested overall charge master increase is 3.64%, which you can see is coming from commercial and self-pay slash other. Again, as Patrick discussed, this new graph in the bottom left-hand corner here, you can see that Ruhlin's performance and trending information is pretty far below where they are trending at 3.5% as of the 2019 actuals. Other justifications from the hospitals, which we heard from most with the staffing issues and challenges, including the costly travelers, increased utilization is offsetting inflationary factors in driving their MPRFPP increase. Their financial stability is keeping their rate requests low. They're utilizing participation in the ACO to better align their services and they also echoed difficulty in creating the budget as the base is uncredible. And next slide, please. So their MPR is set to increase about $22.9 million with major drivers in utilization of about 11.6 million, about 4.8 million for reimbursement, pair mix changes, 4.5 million for their rate effect and 3.1 million for changes in accounting, which is due to a revenue recognition change. And then of course, there's a little bit of offsetting there on the left for bad debt and free care. The next slide discusses their operating expenses. As you can see, there's a lot going on on this one compared to MPR. Their operating expenses are increasing about $24 million. The major drivers, just I'll discuss here is 9.3 million of inflation, about 3.4 million associated with travelers, 3.4 million related to fringe benefits, drugs of about 1.9 million, and then the resulting provider tax change of about 1.6 million and IT of about 1.4 million. Next on their quarterly performance, which we can see here, they've been pretty consistent across the map, but as I've projected the fourth quarter, they're declining it, but there you can see the negative 5.9%. They are still projecting and operating gain for the year, which is about $6 million. So pretty strong performance considering the unknowns of fiscal 2021. Related to their historical performance, this hospital exceeded their budgets in 2016 and 2018 and are projected to do so in 21, which as we discussed earlier, they had a very conservative budget in 21. They have been realizing a nearly break-even operating margin for 2018, 2019, and 2020, and also in the 2022 budget, sorry, that's a lot of 20s, and then in the projection for 21, they are looking like they're gonna have a positive operating margin as we looked at on the previous slide due to increased volumes and utilization. Next slide please, Patrick. So slide 48 breaks out their charge request as Patrick was talking about. So their overall charge request of 3.64%. The NPR due to the change in charge is just over $4.5 million, giving them a 1% value of change in charge at about 1.2 million. As you can see with the service category, all three are being impacted. Hospital inpatient being about 4%, outpatient about 4.2, and then professional services down a bit by 0.3%. The payer, again, as we showed on the first slide, we see this changing in commercial and self-pay other, commercial being about 4.4 million and then the self-pay just over 100,000. Their change in their NPR FPP is about $22.9 million and of that, about 4.5 is derived from their change in charge. Next slide please. So as Patrick was talking about as well, this slide shows the net revenue collection rates for all pairs in that line that goes across in the left-hand graph. You can see it's slightly declining from 43% to 42% in the 2022 budget. We also see some slight variation in their payer mix to commercial and self-pay from the 21 projection, but a little bit of a bigger shift to Medicare from the FY21 budget. And on slide 50, so again, Patrick discussed earlier, we mistakenly say that they're within the growth rate guidance or we had said that I believe it's changed here. So we are suggesting that they are approved as submitted for their 9.2 request on an NPR FPP, which is 9% with the COVID allowance. And we're also are suggesting to approve a submitted for their change in charge request of 3.64%. And again, the motion language is in the bottom. So board members, does anyone have any reservations about discussing Rutland at this time? Hearing none, I'll open it up for board member comments or questions to Kate. Sure, I'll just throw out some comments. I'm not gonna put forward a motion yet at this point, but just getting some background. So this is a hospital that has seen significant growth in their cash. So if we look at 2019, there were 10 million, 2020, 54 million, 21, 50 million and the 22 budget looking at 23.5 million, which would then reflect what they're assuming they're going to be able to recoup from all the COVID money and the money they have to pay back. The other thing I just wanna put out there on the table and I will bring this up for each of the hospitals that there was a consideration for this for last year, which is last year we approved a 6% rate for this hospital. And although we did approve it at a full 6% rate in our discussions last year, we talked about bifurcating the rate for the COVID piece, if you will, but felt that if we put the rates out that way that may put them at risk for being able to keep all of the COVID money that they had received. So their rate last year was 6% and we had it split at 4% and 2%. So 2%, we were thinking about possibly having as a temporary rate to help them through with COVID and with all the uncertainty. And so the question I have and I will bring up on some of the hospitals is, how do we wanna think about that? Do we wanna roll that in at all? We now know, for instance, where their cash is gonna be. So they do have a much stronger balance sheet. In addition, their forecast for 22, for I'm sorry, for 21, their budget was to have a $10 million bottom line after everything and they're coming in at about 23 million. And then in 2020, so 2019, they came in at 6 million. In 2020, they came at 15 million and the 21 projection is 23 million. So they have certainly benefited from the COVID money as they should and that's helped keep them afloat. So I just wanna kind of put that out there. I'm not putting a solid recommendation right now. I think one, just perspective again, their rate requests, so 1% in rate is worth 1.2 million. Again, their cash is up quite significantly. Do we consider that as we're going through this? So I just kind of wanted to get everybody's read on where they sit. I agree their 3.64 request is not high. I'm just trying to put it in context of the prior year and some of the intent that we had potentially from last year or at least that's where we said we were gonna potentially consider that this year. So just wanna kind of put that out there, not putting out any formal motion language, but just wanna get a read on where everyone sits. But one of the couple of other points I will make is Rutland, when you look at that commercial ratio that we talked about that would be on slide 49, they are at 2.1, which is the highest of all hospitals except for UVM, which is at 2.34. So they have a real solid ratio between where they are pegged against Medicare. And again, as we look at some hospitals that may be closer to Medicare, it just should reflect some type of pricing there. And then I think their four-year average for commercial if we accept this one is 3.75. So just slightly over the 3.5 on an average. So that's ways things a little bit the other way in my mind. So I'll stop now and see what other comments be. Other members of the board? Just a question to Maureen. I think that 3.7 over the four years includes the 6% as opposed to the 4%. That's the way I calculate it. Right. So that helps sway it a little bit the other way because they have been low in 2019, they had a 2.7%, 2020, 2.7, 216, 22, 3.6. I'm not saying I won't approve this as is, I just wanna lay that out for people because I know last year under testimony, I said I will consider that next year. We were asked in questioning and I said, that will be a consideration for me next year for some of the higher rates. But you're right, Tom, the 3.75 includes the six. And I think you made some valid points Maureen, but I look at that operating margin that's just above zero and that has some major concerns. This is one where I think expenses are really the key discussion point for them as they're making decisions, not so much for us, but the fact that they don't have an operating margin tends to concern me if we were to make a cut, but... But they do have a total margin. And this is a hospital that has had a, they have a total margin of 2.2, but in this current year, they're projecting 7.3 and in 20, it was 5.2. So they do have a total margin at the hospital. So another factor just that we should be considering. Yep, other board members? Well, go ahead, Tom. I was just struck in the hearings, that the fact that they have no margin, operating margin is a choice, they made a choice. And that choice was to try to keep their charge as low as possible in order to kind of add cohesion to the overall healthcare infrastructure in the Rutland area, which I thought was kind of a noble choice to make. And that they basically expressed that there's a lot of uncertainty and a lot of kind of opportunity for continuing opportunity to have the Rutland providers better aligned. And so they wanted to, given their strong cast position and balance sheet, they wanted to take the time to, and have a message of cohesiveness across their provider network. So I kind of look at their margin a little differently here in that they chose that. They could have come in looking for, and I suggested that, not that they do it, but I raised the issue, why don't you come in with a little bit more so that you can add a little bit positive margin? And they were very clear that that's a choice they wanted to make. So I'm not gonna fight with them over that. Okay, Robin. Yeah, I appreciate what Maureen says. And certainly last year, I think I definitely was interested in looking at kind of this offsetting effect. I have to admit that I was hopeful last year that we would be a little bit farther along to done with the pandemic. And so that the current pandemic situation does change the way I look at it. Because I think there continues to be uncertainty now and I think we're still in the middle of uncertainty around utilization and uncertainty around staffing and expenses are a very big concern. So I think it is, for me, it's important to look back to last year and what we approved and how that fits in. But I think where I may land on that, given all of the current COVID situation, is to think about how we continue in the future to incorporate that look back into future budgets so that when we eventually get back to something resembling normalcy, that when there's less uncertainty, perhaps that would be up the time to push back on that. And I do have concerns about Rutland being a relatively more expensive for commercial payers hospital in Vermont. But I also think that they have done a good job in the past of coming in with great decreases when their utilization has run hot and really tried to live within the guidance. So those considerations as well as the financial metrics and what Kevin was saying about operating margin, all of those different things, I think where I probably would land with Rutland would be comfortable approving them as submitted, given their NPR relative to the five years and kind of the COVID situation. So I guess I'm last and I'm probably gonna be generally in agreement with others. And I always appreciate Maureen's perspective on this and others perspectives on this. And I share some of those concerns around where the relative commercial rate is relative to Medicare. But at this point, I'm in favor of approving this budget as submitted. I think the budgeted NPR is below that annualized 3.5% growth rates since 2019. The 3.64 change in charge request is reasonable in my mind, given the inflationary pressures that I think these hospitals are under and potentially going to be under even more so as the labor market heats up and we've got an even greater shortage. It's also, I wanna remember that 3.64 is pretty close to what we allowed in our presumptive budget approval, which was 3.5. So given that, I feel like that's what we actually articulated to all the hospitals if they came in under 3.5, we would presumptively approve if their NPR was also under 3.5. So 3.64 is pretty close to that. The, they also, if you look at the five-year average, they're at about 2.2%. So I think we've slowed through some of our approved commercial rates for Rutland, perhaps slowed some of that, the commercial to Medicare growth rate potentially. It's something that I think through our sustainability planning efforts will have a better understanding of price variation across hospitals when that data is completed and submitted to the board and presented to the board. I would also say that that rate that they're asking for does generate a 0% operating margin, which they can do, as Maureen says, because of their strong financial position. It may in fact be, they may have, I think they're maybe like Southwest, they may have a conservative budget here. I would not be surprised if their NPR exceeds what they're projecting if volumes keep up. And frankly, if they need to accommodate the excess demand coming down from Chittenden County. So at this point, although I wish that in general, their commercial rate was a little bit lower relative to Medicare, I'm comfortable with approving this budget. And just as a point of reference, can the staff remind us, my recollection is that they came in last year with a reduced NPR? Is that correct? I believe so. That is correct. Yeah, significantly reduced NPR. So I think you really do have to look at a multi-year look. That 9.2 sounds very onerous, but I'm not sure that it's reflective of what it could have been if someone had just come in under the guidance last year. Here we go. Does anybody wish to make a motion at this time or would you like to go to the next hospital? I think we can continue this hospital. And I just wanted to be clear, especially because we do this in public, I just wanted to be transparent about the different things I was going to look at, but intentionally I didn't say, whether I would make an adjustment to change in charge or not. And I am willing to accept this budget as presented because I think they have been thoughtful in the past about their change in charge requests. But I'll let Robyn make the motion. She's so good at that. Happy to. I move we approve Rutland Regional Medical Center's budget as submitted with a 9.2% increase from fiscal year 21 to fiscal year 22 budgeted NPR, FPP a six, excuse me, 3.64% increased overall charges and subject to the standard budget conditions as outlined on slide 34. Second. Is there a second? Okay. Further board discussion? If not at this point in time, I'll open it up for public comment on the motion regarding Rutland Regional Medical Center's budget. Is there any public comment? And I see Eric Schulteis. Eric? Hi, Chair Mullen. I apologize for not raising this earlier. I was actually working writing on another project and I have difficulties multitasking while writing. This is a general comment. I think in the future, if the board could just clarify it's special public comment period for hospital budgets, that would be helpful. So the first sentence on the board's website reads that the special comment period runs from July 28th to September 1st. And then a few sentences later, last sentence, it says please submit public comments prior to September 1st to be considered by the board in deliberation. So I think what should have been said is at least for deliberations, which presumably is why you would want public comment would be it runs from July 28th through August 31st. So the deadlines and what the word prior in the last sentence can lead to it being a bit misleading. I mistakenly misread it myself and I imagine other people might too. Thank you. I totally agree with you, Eric and we'll make sure that doesn't happen again in the future. August 30th should have been the date. Thank you so much. Is there any public comment on the motion for Rutland Regional Medical Center? If not, is there any further board discussion? Hearing none, the motion in front of us is to approve Rutland Regional Medical Center's budget as submitted with a 9.2% increase from fiscal year 21 to 22 budgeted NPR FPP and a 3.64% increase in overall charges and subject to the standard budget conditions as outlined on the slide 34. All those in favor of the motion, please signify by saying aye. Aye. Any opposed, please signify by saying nay. Let the record show that you've unanimously approved the motion regarding Rutland Regional Medical Center's budget and at this point I'll turn it back to Patrick. Thank you, Mr. Chair. Next on the docket here is going to be Northeastern Vermont Regional Hospital and Lori Perry will be addressing this organization. Lori, over to you. Before Lori starts, Tom, did you say that you were good through Northeastern? And after that, we should wait till Friday or I just want to clarify. Well, I'm caught between here. I kind of went back and reviewed all my notes and everything for today through Northeastern. I didn't really know when it got the slide deck, which hospitals would be the first six? So for clarification, is it alphabetical through Northeastern or is it these three, Tom? Say it again. Is it alphabetical? Did you go through each hospital alphabetically through Northeastern? Or was it just these three? It was just these three. Yeah, that's fine. I don't think anybody should be pressured into rushing up a decision. So it sounds like this will be the last one unless I hear differently, Patrick. So after this one, you can just proceed through the rest. But Kevin, can you make a suggestion? I just throw out there. I'm not sure how beneficial it is to go through the rest of the slides. If we're not, I mean, my preference would be to do it like when we're going to review that budget. So to me, it's just, we'll be going through 60 or 70 slides without having the recommendations. I mean, I would have preferred to go through the six that they did do the recommendations and maybe Tom would feel comfortable on some. Maybe not, that's fine. But going beyond that and love the rest of the board's perspective, if they think it's beneficial, to me, I think this is well set up. I think it's very helpful to go through each one. But if we're not going to deliberate on them and make that decision, not sure what the benefit is, but that's my point of view. So Patrick, other than the three conversations have begun to take place, Southwestern, Rutland and Northeastern, what are the other three that you believe could be tackled today? I believe we have Mount of Scutney, North Country Hospital and Grace Cottage. Perhaps Tom, we could take a little bit longer break at lunchtime and you might be able to look at those three. And then we could come back this afternoon and proceed. So unless there's objection, I think we should proceed through Northeastern because everybody seems to be ready for that. Listen to Laurie's presentation, have a discussion on that. And then I would suggest that we take a little bit longer than planned lunchtime. And Tom, you can let us know when we come back if what you're prepared for and we can move from there. Well, thank you for that, Kevin. I think I'll be prepared. The only Grace Cottage and Mount of Scutney, I have a pretty good feeling about, it would be North Country that I'd want to revisit again, just, but I think I can do that. Okay. And again, don't feel pressured if you're not ready, we won't- No, I know. Okay. I know. I've had to say no before in my life. Okay, Laurie? I don't want to say no here though, but okay. Thank you. Thank you, Mr. Chair. This is Northeastern Regional Hospital's budget and for their fiscal year 21 budget to projection variance, it was 3.5%. Their budget was over 90 million 0.5 and their projection is 93.7 million. They are requesting 97.4 million or 97,368,788. This is 7.6% over their 21 budget and it's 3.9% over their 21 projection. The 7.6% request is higher than our 3.5% growth rate guidance and with looking at their trend for the 3.5%, they are projected to be, budgeting to be higher than what we're trending for the 3.5%. They are asking for 3% overall change in charge and this is composed of commercial at 1.2 million dollars and self-pay at just shy of $50,000. We heard from the hospital that they justify this budget being because they are at or above capacity and they have significant inflation pressures. They are expanding and adding services to their community. Their price comparison analysis determine overall change in charge increase. They look at it and they need an overall change in charge increase. Their volumes are expected to return to pre COVID which is 2019 and they are continuing to offset or continuing to reduce their avoidable ED utilization. And we also know that they have an express care at their hospital. This hospital is increasing 6.8% from the 21 approved budget to the 22 budget and the major drivers are their rate at 1.2 million. Utilization is 1.6 million. They are having an improvement in their bad debt and free care of 1.1 million and they expect to increase FPP by about 700,000. And then their new and expanded services are about 1.5 million of their NPR FPP drivers. For their expenses, this hospital is next likely, thank you. The expenses are increasing 6.3 million from their budget 21 and these are mainly through inflation of 2.1 million. Those new and expanded services equal 1.6 million. They are expecting new positions of about 700,000 dollars and they are budgeting a decrease in travelers of 1.5 million. The next slide please. They're operating performance for NPR FPP. This hospital has been pretty steady throughout the quarters and for fiscal year 21 and their operating margins are also very well. This hospital is pretty much through all the years that we've been also reviewing have had positive operating margins. So they're a steady hospital. They are projecting for NPR for their last quarter to be 2.9% over their third quarter. Next slide please. For their historical performance, NVRH has exceeded their budgets for every year except for 2017. This hospital has consistently had positive operating margins between 1.3% and 2% and from the years 2016 to 22. So this is a very steady hospital and hopefully it continues. Next slide please. The change in charge for this hospital is 3% and it is about 1.2 million dollars of their NPR and for their 1% value of change in charges about $400,000. And they're splitting this evenly for outpatient and inpatient gross charges and nothing for all the others. And as stated from the other slide, their payer mix is gonna be mainly for commercial of 1.1 million dollars and then only $47,900 for self-paying other. Their NPR FPP change is the 6.8 million and again, the change in charge makes up 1.2 million. This hospital has requested on average 3.9% and have been approved at 3.4% on a five-year average. For their collection rate, this hospital has been pretty steady from 2017 to 22 at about 49 to 48% and also their payers have been remaining about steady. On their payer mix NPR FPP mix, this has shifted a bit between commercial and Medicaid for between 2020 and 2022. So like in commercial and 2020 it was 49% now they're going to 47 and for their Medicaid it was 13% now it's 16%. What Medicare looks to be about pretty even. Next slide please. So this hospital, we recommend to approve as submitted. They are at their NPR FPP growth is 7.6% and it does exceed the budget growth rate guidance and with the COVID allowance it's at 7.1% and then the change in charge is 3%. So Mr. Chair, if I may jump in just for a correction to the record here, I think on slide 52 when Lori was discussing NPR, she noted that their NPR was growing 6.8%. It's growing $6.8 million over prior budget, which would be 7.6% budget to budget. So I just wanna make that correction for the record. Thank you, Patrick. Certainly. Okay, board members do you have questions for Lori or comments on the Northeastern Vermont Regional Hospitals budget? Sure, I can start. First Lori, can you go to page 56? What I just wanna point out here is the question I was asking about Southwestern at the beginning and again, maybe they have no professional but what this shows is hospital inpatient at 3-4, outpatient at 3-4, all others zero and overall change in charge of three. And I'm fine with that. I just wanna point that out because when you look at Southwestern, they had 4.8, 4.8, zero and then they still had 4.8 for their overall change in charge. So it is something as we're going through the hospitals, we should clarify because we may be approving a lower charge again, for instance, on Southwestern when you look at it the same way as we are here. So just wanted to specifically show what I meant when I was talking about Southwestern earlier. On this budget, I'll start by saying I'm okay with this one and moving forward with it but I will just make a couple of comments on some of the things I've been commenting on the other hospitals. This is one of the lower hospitals when you go to page 57 and look at that comparison between the commercial and Medicare at that 58 to 41 is a 1.4. So when we looked just at Rutland, which is a 2.1, so their relationship is a lot tighter. Again, we have different types of hospitals and different way of pricing, but that's important to look at that. They did not get a temporary rate last year so it was not requested nor did they get a temporary rate. And they have seen quite an improvement in their cash balances, but their days cash on hand is not huge, but they have gone from 5.8 in 2019 to a high of 29 million and 20 and a 22 budget of 13.4. So I think their balance sheet is looking a lot stronger which is healthy. And this is obviously one of the hospitals at the border. So it's always hard to decipher when they've had changes from people from New Hampshire coming in or out, but I am fine with approving it as submitted. Other board members? This is Robin, I can jump in. I am also fine with approving it as submitted, although I will note that I think one of the issues with this hospital for me has been a multi-year concern about their utilization. Their change in charges have been steadily fairly low, but their utilization has been steadily over, their NPR has steadily been over 3.5% driven by utilization. And because they are a border hospital and frequently anecdotally site to New Hampshire or out of state residents, I did look back at the patient origin analysis, now granted that is only through 2018, but if you look at that data, it's pretty consistent that their episodes from inpatient for out of state tend to run in the teens and their episodes for outpatient tend to be around 1000 dropping down to 900 in something in some years or up to about 1100 in others. But at least in the prior data, it looks pretty consistent and it doesn't, I'm not seeing what they're saying anecdotally. So I just wanted to say that out loud again, because we are currently in a pandemic, that is gonna shape many of my decisions this year, but this is an ongoing concern that I just wanna put out there because eventually, I'm gonna be looking for Northeastern to have either better data on the out of state utilization and how that is impacting NPR or better explanations about why their utilization is consistently above the guidance. But this year pandemic, I'll let it go. I can go then. So I'm happy to approve this budget as submitted as well. I think the 3% change in charge master increase is reasonable given the inflationary pressures that we know, hospitals are under particularly also, we know it was below our presumptive approval of 3.5 and their five year average is also below that 3.5. So the change in charge, I think was reasonable. I have some concerns about the NPR request to growth rate in it to 7.6 budget to budget. If you look at that chart, Patrick, where the 3.5 annualized growth would have been, yeah, you had it there, oops, sorry. Yeah, so you look at the orange line, that would have been the 3.5% trending. This is gonna be above that. So again, to Robin's point about utilization, where is it coming from? This is one of the hospitals that, on the potentially avoidable utilization was high, but I also very much appreciated that they are recognizing that, they're starting to track that and they're starting to do something about that. It was the only hospital I think that mentioned that they were indeed tracking it and trying to work towards that. So I guess I would echo Robin's concerns about the utilization, where is it coming from? Document it, if it's coming from New Hampshire, if it's growing from New Hampshire, that's one thing. But I'm also appreciative of the fact that they are working towards reducing some of their avoidable utilization. So I guess I would say just to make sure that they end up with a margin, that they're not over projecting NPR growth for next year, budget to budget. My hope would be that if quarter one and quarter two starts to slow down and the pent up demand is kind of has been met, that they will reduce their operating expenses so they can ensure that there's a margin at the end of the year. But I am comfortable with approving the margin, I mean the budget as it stands. That's true for me as well. I, the only kind of orange flashing orange I had on this budget and going through it was that their FFP as a percent of NPR FFP is only at 9.3% and kind of looking at the growth in Medicaid. I think some of that has to do with the movement to the expanded Medicaid approach to blacking out the word contributed to lives. But I, it's, so that's my feeling about it is that they're looking at an 11% increase in 22 budget over 22 projected in Medicaid. I think that might be a little steep in that the prior increases have been, I think attributable more to a change in methodology than a change in underlying population. But all that said, I can support this budget. Is anyone prepared for a commotion? I will move that we approve Northeast and Vermont regional hospitals budget as submitted with a 7.6% increase from fiscal year 21 to fiscal year 22 budgeted NPR FPP a 3% standard increased overall charges and subject to the standard budget conditions as outlined slide 34. Second. Is there a second? I heard a second from member Holmes. Is there further board discussion? Not all open it up for public comment on the Northeast and Vermont regional hospital budget motion that's in front of us. Is there any member of the public who wishes to comment at this time? Hearing none of return back to the board discussion. Is there any further discussion by the board? If not, the motion before us is to approve Northeastern Vermont regional hospital budget as submitted with a 7.6% increase from 21 to 22 budgeted NPR FPP and a 3% standard increase to overall charges and subject to the standard budget conditions as outlined on slide 34. All those in favor of the motion please signify by saying aye. Aye. Those opposed, please signify by saying nay. Let the record show that the board unanimously approved Northeastern Vermont's budget. And at this time, it seems logical to take that extended lunch break to give board members some time to be prepared on the next three. So I'll put this meeting in recess. I believe that the agenda called for a 135 start time. So this meeting will be in recess until 135 and we'll commence at that time. Thank you everyone.