 Um, so I'm going to start by turning it over to Russ to address the topic from prior to lunch. So Russ, I'll turn it over to you. Thanks, Patrick. Um, I actually don't need to address that at this point. Um, so I'm going to turn it back. Uh, I'll turn it back to you. Okay. Thank you. We will move on. Um, so before us here, we have Mountain Scotty Hospital and Health Center. This is an organization whose budget to projection variance is 7.6% over the budget that they were approved for in 2021. That would bring their projection to just shy of 60.5 million. Their request for 2022 is a 6.1% growth over their budget. However, some of the justifications that they gave us place their 22 requests actually under where they're projecting to end fiscal year 2021, which means that their request for 2022 budget is $59.6 million. Um, you can see here on the graph that they are running over their 2021 budget and yet still the projection going into 2022 is that they will take a bit of a step back under the $60 million mark, which would still be over and above the trending 3.5% that we've been discussing throughout the meetings today. So their overall change in charge, the maximum charge increase that they seek is 2.2%. 453,000 will come from commercial just over 56,000 from Medicaid and a little under 566,000 from Medicare. This is an organization that's been affiliated with Dartmouth Hitchcock for several years now. They are continuing to integrate with Dartmouth Hitchcock systems such as IT systems from a labor perspective and service line perspective. They have some capital projects that are returning inclusive of electronic health record integration with Dartmouth Hitchcock that would be epic that Dartmouth Hitchcock runs throughout its network. They have lost some providers in the last year. They are also along with many other hospitals citing inflationary and staffing pressures as issues that they're having to deal with. They're working with other area providers to maximize scarce resources and I'm paraphrasing here, but Dr. Paris had discussed kind of a mini network that they had established with providers on the, I believe it was the New Hampshire side of the river. Where they're trying to coordinate efforts to maximize the resources that they have with some of those smaller, some of the smaller organizations such as themselves. So really making an effort from their perspective to instead of increasing costs on their own share those costs with other organizations that are providing health care services. They are actively reducing they're working to reduce prices on ancillary services, which is keeping that rate request low at an overall 2.2% as they continue to work to get back to better financial outcomes. I believe Mr. Sandville noted that looking back several, several years, they have finally gotten to a point where they've recovered every dollar that they lost several years prior to new leadership coming on board at Mount of Scotney that current leadership that they now have. So again here we have some of the major drivers that are reconciling budget to budget. Utilization is a major factor even though their 22 budget is not surpassing the FY 21 projection that they've set. Utilization is still the leading factor, followed by over a million dollars in rate effect and the need for $750,000 in risk reserves as it relates to their enrollment in the ACO and their expectations around fixed. Sorry, payment reform reconciliation payments. Operating expense drivers the common theme of inflation factors continues to be one of the main drivers in operating expense costs fringe benefits again that is on a hospital by hospital basis but we're seeing that move through these graphs over and over and over again. Professional and consulting fees at half million travelers at 400,000 and new positions at 385 to round out some of the bigger contributors to their operating expense growth on the other end of the equation almost $400,000 in costs savings initiatives and about $100,000 from drugs costs that's coming down as well as with the production of anticipated FY 22 revenues the health care provider taxes expected to regress as well. Overall, activity in the first two quarters was pretty relative. They did see an uptick of 7.4% in Q3 and they're projecting quite a bit of a decline going into quarter for the 11.7% from Q3. And with that they do anticipate their operating margin to suffer in that final quarter, which is one of the justifications they had even though they're running hot on MPR that their projection for their bottom line would remain intact with what they submitted to the Green Mountain Care Board engine. They're history. They have a kind of a mixed bag as to whether they exceed their budget or underperform their budget. So really almost a break even perspective year over year from Mount Eskudney as stated they are running over this year based on that 2021 budget and they are looking to pull their budget back from the current year end projection by about 1.4%. This is a hospital that in recent years has had some positive margin activity with the exception of 2019. More likely you could consider that a break even year given the small loss that they suffered suffered operationally speaking. And you can see this year they're projecting a 5.3% operating margin and for their budget under 2% at 1.7%. I'll break down of the charge request as I stated is 2.2%. The MPR impact from that is just shy of 1.1 million and the 1% value per percentage point of change in charge is effectively contributing $489,000 to that MPR growth. The 2.2% will be applied equally over the three service areas inpatient, outpatient and professional service charges. At this point I would like to speak to Board Member Yusuf's perspective about what appears to be almost some changing logic between hospitals. I look back over lunch and it has been like that for some years and we have adopted the hospital's perspective and trusted that what they are providing us is accurate. So there is a history of what she was suggesting. If they do not increase charges somewhere, does it bring down the average or are they actually increasing the number or asking for the number that they're providing? So we have that history as a board, so it definitely predates what she's addressing this year. Moving on, the payers, as we've already discussed, the breakout here. Commercial, about 453,000, Medicaid, just over 56 and Medicare, about $566,000. The change from budget to budget, 3.4 million, and change in charge is accounting for about 1.1 of that. And for the last five years, this hospital has requested and been approved for the exact same amount, which means their five-year average of approval submitted at 4.1% is relative. Payermix, they have one of the lower commercial payermixes in the state and one of the higher Medicare payermixes in the state, while Medicaid remains in single digits. For the most part, we are seeing a bit of an uptick in Medicaid from the projected FY20 to the FY22 budget with a reduction in Medicare by an equitable amount with commercial remaining relatively stable from 21 projection to 22 budget. And again, the gross to net collection rate here, 56% on commercial with the government payers coming in at 40 and 46% for Medicaid and Medicare respectively. So this is an organization that we are recommending be approved as submitted, although they are running hot on their projection to 21 budget, they don't anticipate on building on that revenue activity. In fact, as we've noted, they're actually from 22 budget to 21 projection, they're forecasting a regression of 1.4%, which leads us to believe that they think the growth that they have occurred this year isn't going to continue to move north of what they are experiencing. So we think that 6.1 request is accurate that they will, from a budget to budget perspective, they will continue to capture similar growth to what they have during the current year, but that it's not going to move the needle at the end of the fiscal year 22 timeframe that much. In addition to that, though, the efforts that they're taking to continue to integrate with Dartmouth should reap some rewards and savings. The many network that they are working on with other hospitals across the river should also help suppress cost. And in addition to that, the active work that they've done around ancillary services to assess those to find out where they're perhaps over their peers is just another emphasis on the fact that they're attempting to keep their charges down, while at the same time maintaining a positive operating margin, but that's also contributing to the need that they don't need a very high rate. If it wasn't for the obvious challenges with budgeting 2021, this is probably a hospital that would have met our pretty qualifications coming into this budget year. But simply the fact that they didn't know along with other hospitals what to budget for last year and what their actual results are telling them to guide them in their budget this year means that that MPR budget to budget growth is north of 6%. But again, when we back out COVID it's 5.6%. So this is a hospital that staff believes has justified their MPR growth and justified their change in charge. So with that, Mr. Chair, we'll turn it back over to the board for discussion on Mount of Scottney. Thank you, Patrick. Any board member have any questions for Patrick or would like to make any comments on the Mount of Scottney budget? Tom? Yeah, I have a couple. One is during testimony, I asked the Scottney folks about their 53% increase in Medicaid 22 budget over 21 projected and he said it was a mistake. That was a mistake in their presentation and that they put too much of revenue into Medicaid and not enough into Medicare. So I'm just wondering if you have had any conversations with them about that since the hearing to make sure that the numbers that we're looking at are aligned with the mistake being corrected. We have not received any communication from Mount of study on that note. If it was just in their presentation, then we would have support the numbers that they would have provided us prior to that would be accurate. But for the fact that they misstated in their presentation, but we have not had any discussions from or communication from Mount of Scottney to correct that. Because you can go to their pair of mixed tables and you can see the 53%. So that it's a big number and in your pair mix here, you can see that they go from 6% to 9% in 20 22 budget over 21 projected, which is consistent with what he said at the hearing is that the 53% is a mistake. So I So, so that's just a question I have. I mean, he was very clear about it. He said it was a mistake. The other question I have is looking at the increase in charge. First, in this presentation where that's been associated with an increase in Medicare and an increase in Medicaid revenues. I'm just wondering what your take on that is. So as I understand it, the growth and revenues that they are have experienced this year will be reflected in their cost report. I'm guessing it's tied to that. I don't know exactly. If that's true or not. But I think that would be a good question to ask Mount of Scottney. Again, we just compile this information for from the hospitals as we have in the past. And that's how they broke it out. So there must be a very logical reason as to why Medicare will be contributing a portion of that growth and revenues from those charge increases. So those are my two questions. Thank you, Tom. Build on on that what what Tom was just saying, because I noticed that as well. And, you know, to the extent that there are some increases of Medicare and there are several hospitals that do have that reflected and many that have zero, you know, but to the extent that there were Medicare increases that were going to come in that could have offset commercial on some of the ones that didn't project that projected zero for Medicare. So, but looking so I think they are reflecting what may be happening with other hospitals have talked about a one or two percent increase from Medicare. And I think in the future, we should try to make sure that's consistent. And to your point on the commercial charge chart, Patrick, whether it's been in there historically or not, that's fine, but you know, I think it should be correct. And, you know, so I would just say in the future, making sure there's consistency between how all the hospitals do it to come out with that average. I focus more on what they're actually increasing like inpatient and outpatient because many of them have always said we don't increase professional, you know, but yet they might increase in and outpatient buys, you know, a fairly high number and they bring it down because they're not increasing professional or other but so I'm just I'm still not sure whether Southwestern is apples to apples to everybody else for that example. But discussing Mount of Scutney. I'm in favor of what's been presented. A few things they are the lowest ratio on the Medicare to Medicaid at 1.2. So they're commercial to I'm sorry to Medicare commercial to Medicare is a 1.2. That's such except for grace grace is lower but that that's kind of a separate animal but they are the lowest of all the other hospitals. They did last year have when we were accepting their rate there was consideration for initially when we approved it on September 15. We had separated their commercial rate to 2.1 and 2.5. However, since they are asking for only 2.2% this year and it's underneath our request. I'm looking at that as part of their ability to do that is because they had the higher rate request last year and the two year combination between last year and this year is 6.8% so it would have been under 3.5% both years. Their cash is growing, which is good. They were at 9 million in 2019. They had a high of 17 million in 2020 and they look to be about 11 million in 22 budgets so they have seen some growth there. A little concerned whether or not they really will be underneath last year. They're the only hospital that's projecting decline from their 2021 projection to their 22 budget. But in their history they actually have remained fairly flat many years year over year and then all of a sudden they had a fairly significant jump this year. But they are definitely the only hospital that is projecting to go down year over year and part of that might be capacity issues, which I believe they talked about. But I'm okay with the recommendation. Thanks. Hey Maureen, can I ask you a question? Sure. So you've been making a point of the ratio of commercial to Medicare, but I kind of look at it like this and tell me where I'm wrong when I'm looking at it in that critical access hospitals should be getting their actual costs. So they're probably getting more than the PPS hospitals for Medicare patients. And if there is a big disparity at a critical access hospital, then it begs the question about whether or not they're actually maximizing their cost reporting to get fairly reimbursed. So am I missing something? No, I think you're right. That's what I said before that, you know, the hospital classifications would make an impact about, you know, what their Medicare might be in that case. So, you know, and then obviously depending how much Medicaid they have and how that reimburses to their Medicare commercial is probably going to take up a slack to offset what they're not recouping in Medicaid. Okay. Other board members? Sure. Okay. The budget as submitted getting some feedback. Can you all hear me? Yep. Okay. And I, you know, I do want to say that I appreciated the self imposed pricing reductions in their some of their answers and imaging services, which actually is going to think from the testimony that we heard will actually reduce the change in charge requests. Honestly, or change in charge, even below what they're submitting, even though they didn't want to adjust it that way. So in my mind, this is an upper limit on probably the change in charge that we'll actually see from a Scutney, MetaScutney. And I agree with Patrick and team and others that the 6.1 budget to budget NPR growth was supported in their documents and their testimony. I think much of it is probably, or some of it is coming from out of state, especially as they're engaging with Valley Regional. And also recognizing that they're taking patients from Dartmouth Hitchcock and as Dartmouth Hitchcock faces capacity issues, some of those patients may be sent to Mount of Scutney. So I am supportive of this budget. Okay. Other board members? I'm also supportive. And, you know, I think everyone else's rationale has really covered the basis so I don't have any additional thoughts to add. Is there any other comment from board members? I can support the budget. If you look at their change in charge trends over the last four or five years, it's been modest. Their NPR growth is a little heavier than the hospitals we've already agreed to, but it's still reasonable. I can vote for, but I would, you know, like some after action information about that mistake because, you know, if it's, you know, if the difference between 2021 P projected and 2022 B is $1.5 million. And that's inclusive of that 53% increase. And I just, I just don't want to go away from this without an understanding of the magnitude of the mistake that they said that they had made, but you couldn't, you know, document it at that point in time. But I support the budget. That's not a reason for me to, you know, to hold up the train. I just, I'm just asking staff to find out what what that detail is. Patrick, can you recall if Dave said he would, he would follow up with that information at the hearing. I can't remember. I don't recall either. We've done a pretty good job of of asterisking points to follow up on and I don't think anyone on the team had that as a follow up but Tom will take care of that. I did read the transcript over launch. And he didn't say that he just said it was a mistake that implied that they were going to correct it. But I don't know. I don't think he there was any intention of of he just knew that he had to correct it in his internal documents. I don't think he was making the connection to our documents. But I think Patrick will follow up and make sure that we get that information Tom. Yeah, that's good. Okay. Is anyone prepared to make a motion? I moved to approve Manus Kutney Hospital and Health Centers budget as submitted with a 6.1% increase from fiscal year 21 to fiscal year 22 budgeted NPR FPP a 2.2% standard increased overall charges and subject to the standard budget conditions has outlined on slide 34. Is there a second? It's been moved and seconded. Is there further board discussion? If not, I'll open it up for public comment on the Manus Kutney Hospital motion that's in front of us. Does any member of the public wish to make a public comment at this time? Hearing none. The motion in front of us is to approve Manus Kutney Hospital and Health Centers budget as submitted with a 6.1% increase from fiscal year 21 to 22 budgeted NPR FPP. A 2.2% standard increase to overall charges and subject to the standard budget conditions as outlined on slide 34. Is there any further board discussion? If not, all those in favor of the motion signify by saying aye. Aye. Those opposed signify by saying nay. Let the record indicate that the board unanimously approved Manus Kutney Hospital and Health Centers budget. Patrick, back to you. Thank you, Mr. Chair. Next on the docket is North Country Hospital and Kate Hoffman will be presenting this hospital to the board. It's all yours, Kate. Thanks, Patrick. Good afternoon, everyone. So for North Country Hospital, we're looking here at a FY 21 budget to protection variance of about 3.9%. Their FY 21 budget was about 82.7 million with their projection coming in at about 85.9 million. Their 22 request is 88.8 million, which is a 7.3% increase from their 21 budget and a 3.3% increase from their projection. Their 7.3% increase is higher than the 3.5% growth guidance that we issued as part of guidance. Changes in charges, they have increases to commercial Medicare and self pay slash other, which gives us a total of 4.9%. Again, looking at the table or the graph, I apologize in the bottom left-hand corner, we have their budget, 22 budget coming in just below the 2019 trend of 3.5%. It's just around that 2.5% there that Patrick was talking about if we zoom in really closely to that blue line. Some of their justifications that they discussed were staffing shortages and challenges, which of course we heard from most hospitals. Their reinvestment in their aging plant, their increase was mainly driven by utilization and rate. Their charge of 4.9% was 3.3 for wages, supplies, employee health insurance, and then the 1.6% were the CERNR conversion costs, which is their new EMR that I believe they said they were hoping to get in by May 22. But I remember they're also saying the CERNR the better, so maybe it'll be before then. And a quick utilization return from the pandemic. So here, again, the waterfall for North Country, their MPR increases about $6 million. 3.1 million of that is the rate and 3.2 is utilization, so there's the 50-50 that they were talking about. They have about 4.3 due to FPP programs, but then they have decreases in their payor mix and their dish payments as well. Their expenses are increasing about 4.6 million, which again with most hospitals is mainly driven by inflation of 1.9 million. The contract and purchase services of about 1.6 and the fringe again of about 1.3 and drugs of about $0.6 million. And again, they have some cost savings initiatives in here. I believe due to supplies and provider tax and depreciation. So here looking at their quarterly performance, it's been a little up and down. They're expected to decline for the fourth quarter after a very strong third quarter. And they're still projecting a positive operating margin for the year. One comment I did want to make on Tableau, this probably goes without saying, but the scales automatically change when you select the hospitals. I know some of the lines look like the bars, I apologize, look like they're the same size. I just ask that you focus on the dollar values associated and not line them up and think that they're going to be consistent because it will just automatically change them. And then for their historical performance. The hospital has not met their budgets from about 2017 to FY 2020. And it doesn't, they're looking to exceed their budget in 21, which happens, I think with most hospitals do the uncertainty around budgeting in 21. But in 2019, their operating margins did turn around and they're projecting to continue into FY 21 and budgeted in 22 for positive operating margin. And with their change in charge, so as we discussed their overall charge increase request was 4.9%. The NPR portion of this was about 3.1 million, giving the 1% value at about $560,000. The breakout of the changes for inpatient and outpatient are consistent at 5.6% while all other changes in gross charges is zero. Again, we're seeing that the payers that are being increased are commercial Medicare and self pay slash other. And as we look at the total NPR increase of about $6 million about 3.1 is driven from the charge increase. And as you can see in the table below, they have a five year average that are the same for approved and submitted as they've were approved as they've submitted since 2017. And the next slide. Thank you, Patrick. So this is looking at our net net revenue collection rates for all payers. It stays pretty consistent around the low 40s. So declining a little bit from 42 to 41. We also see a consistent pair mix to the 21 projection, but there's a bigger shift from commercial and self paid in Medicare when comparing to the 21 budget, which you can see from the 51% to 47 in commercial and then 33 to 38 in Medicare. And finally, to our suggestion, so I'm actually going to start with the charge because that's where we're suggesting a change. So in light of the information presented, we are suggesting a change in charge of 3.3% to remove the CERNR rate request. We as a team share the board's concern about baking in a one time increase for the CERNR costs, but we support the remaining charge requests of 3.3%. North country has about 270 days cash on hand, which is far above the median metric, which I believe was 150 days. We were hoping that they would use their cash reserves to support this one time cost. And as a result of this decrease, it would decrease their MPR FPP to 6.2%, which is reduced by the almost $900,000 as a result of the 1.6% reduction in charge. Just remind us the 1.6% reduction in charge. What does that equate to in dollars? 895,024. Okay. Questions for Kate? I don't have any. I don't have any questions for Kate, but I support the staff's recommendations. I think given North country's strong financial health in terms of better than expected operating in total margins for 21. And one of the highest days cash on hand, I think it makes sense to reduce the change in charge request and to remove the CERNR component. I think this is a one time expense and it should be covered with days cash on hand rather than getting, you know, baked into to rate and then compounded year after year. So I support the staff's recommendation here. Other board members. Yes, I'm supportive as well. And, you know, also had marked down that this, you know, that that was one time expense for CERNR. And so, you know, totally support that being removed. And this is a hospital that has seen tremendous benefits in their cash position. 2019, they were at 2.7 million. And in 20, they're at 21 million and in 22, they're projected to be at 15 million. So clearly they benefited from cash, their cash position from the COVID money, et cetera. And I'm supportive of this recommendation entirely. Okay, comments from other board members. I'm also supportive of the staff recommendation for their rationale at based on the rationales that have been expressed. Same here. I note that they have 1.46 million in CARES Act money, which they say that they think they're probably going to have to pay that back. But, you know, as we know, that's been a little bit of a moving target hospital to hospital. So, you know, I wouldn't bank on them not having to pay it back, but I just think that's something in the background to keep in mind. And that I'm in support of the staff recommendation. Does the board member wish to make a motion? I, so can I just ask one question because this raises before I make the motion because with this is the first reduction in NPR and so my question that I raised earlier of should we include the reduction in operating expense growth to allow them to figure that out this particular year. Let's could we talk about that so I know so I can figure out how to frame the motion. The way that I've heard the conversation so far, most people are strongly encouraging them to use their existing cash balances to pay for Cerner. So I haven't heard anybody say that there should be a reduction in their expenses to compensate for that. $800 somewhat thousand dollars, but you're you're welcome to make whatever motion you wish Robin. Yep, I agree with what you just said Kevin as well. If they can cut expenses, they should, but my expectation is that they'll paper this out of their cash balances. It's not reoccurring and that's why it's not proper to have it in their commercial rate. Okay, great, then I'll go ahead and make a motion. I moved to approve North Country hospitals budget as modified by approving a 6.2% increase from fiscal year 21 to 22 budgeted NPR a 3.3% 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 is there further board discussion. So let me just understand so that the staff recommendation is a change in charge reduced to reduce to 3.3%. Okay, I got it. I got it. I'm sorry. Lights are on and somebody's home. It's always better to be safe than sorry Tom so I'm glad you were making sure I know. I've embarrassed myself enough in my life asking silly questions so I'm hopefully beyond it. No question is silly. Is there other discussion from the board? If not at this time I'm going to open it up for public comment on the motion before us concerning North Country hospital. Is there any member of the public who wishes to say something at this time? And I see that Mike Del Treco has his hand raised Mike. Good afternoon, Chair Marlon. Thanks for calling on me. I've been in discussion with the team at North Country and it's a little bit difficult for them to be on the phone or on the meeting because they're sort of unaware of the timing of hearings. So maybe that's something we can improve in the future. But I think knowing what is happening in these organizations and the lack of predictability in the future. I don't think it's appropriate for the organization to be taking money out of cash when they've built the budget and plan for this budget as they've provided to you. It seems like we're using federal relief dollars in their balance sheets to fund operations and that's not what it was intended for. It was intended to support COVID relief. So generally I'm concerned about this notion that because there's a strong balance sheet in a moment in time we should start using cash. I think we should be looking to preserve this cash and make decisions on how they spend cash maybe at a later date and not today. Thank you. Thank you, Mike. Is there other members of the public who wish to comment on North Country Hospital in the motion in front of us? Hearing none, is there any further discussion? Can I just make a comment? Certainly. To what Mike just said, I would say that should not use commercial rate changes to pay for one-time capital expenses that are not going to reoccur. And then they were very clear in their discussions that to the very specific amount they were putting in charge related to CERNR, which is a long time. So I just want to be on record that we should not be putting one-time expenses into commercial ratepayers' expectations that they pay for that and then reap the benefits year over year over year having that in their rates. Joanne, I had Maureen breaking up a little bit in the beginning. Were you able to copy everything that she said? Yes, I believe so. Perfect. Mike, I see your hand is raised again. Chair, if I may respond? Certainly. So Maureen, I don't necessarily agree with that. All capital purchases or acquisitions or projects need to be funded somehow, even if they're one-time or not. So that's typically done through operations and where we have three payers, two that barely cover costs or don't cover costs, and one that makes up the difference. Where do we expect these organizations to grow their cash, pay their depreciation as it comes online, even if it's a one-time capital purchase? Thank you. Okay. Other members of the public? Other members of the public? If not, is there any further discussion from the board? Yeah, I would just like to note that the motion does not require North Country to use cash or reserves. They are free to figure out however they'd like in operations how to pay for it. The motion simply requires that the approved rate increase is 3.3%. Other discussion from the board? Kate, do you have your hand up? I do. Sorry, I just wanted to clarify as well that we recommended using reserves from their balance sheet, which would be, of course, their compilation of their operating gain slash losses over the year. I just wanted to make sure that was clear. Okay. Is there any other member of the board who wishes to comment at this time? If not, the motion before us is to approve North Country hospitals budget as modified hereby with a 6.2% increase from fiscal year 21 to fiscal year 22 budgeted NPR, FPP, a 3.3% 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, signify by saying nay. Let the record indicate that the motion passed unanimously. Patrick, back to you. Thank you, Mr. Chair. Next up, we have Grace Cottage Hospital and Lori Perry is going to run the board through this profile. Lori, over to you. Thank you. We have Grace Cottage Hospital in front of you and their FY 21 budget projection variance is 3.2%. Their budget for 21 was just shy of $21 million. Their projection is $21 million.3 and their request for 22 is $22.4 million, which is an 8.2% change. And then they've changed from their projection to their 22 budget is 4.8%. This hospital 8.2% is over the growth limit that we gave them in the guidance of 3.5%. They are asking for a change in charge of 5% and this is equal to commercial of 224,823. Medicaid is 16,883. Medicare is 511,253. And then self-pay other is 21,889. This hospital's 3.5% trend from their 19 would be at 20 million point eight. They are asking for 22 point almost $4 million based on the chart on the lower left. And this hospital's justification is their MPR growth is required to cover their increased operating expenses due to their supply and demand issues. Their rate request is the minimum amount to cover their operating expenses. Their pay or shift front is from commercial to Medicaid and self-pay. They have like all the other hospitals, they have staffing problems and travelers. They're also going to be trying to restart their capital projects. The next slide please, Patrick. This waterfall chart for the NPR drivers is showing their budget at 21 of fiscal year 21 of 20,700,000 and they're requesting 22.354,000. This is a $1.7 million increase. And as you can see, we don't see any increase in utilization related to the NPR. Most all of it is an increase in reimbursement and payer of $0.9 million. And then of course the rate effect of $0.8 million. They are having a slight increase in bed and free care. Their expenses, they're increasing expenses to $2.1 million from their 21 approved budget. And this is mainly due from inflation of about $0.9 million. They are having salaries and fringe is equal to about $4 million. And their new positions is about $6 million, $0.6 million, excuse me. They have decided that they are going to, they have a couple of doctors who are part-time that were leaving. So they're going to be recruiting for them. Their operating performance is the best only these last couple quarters. And it was the best on their quarter three. And then it's going to slightly drop 1.9% in quarter four for their NPR FPP. And then their operating margins have been down and are at the best at quarter three and are slightly high at 12.9% for quarter four. This hospital's historical operating performance has been a rough road from 2016 to 20 for NPR that's been up and down. They can't seem to meet their budgets. Their operating margins come back in the last couple of years showing 1.1% for 20 and 12.3% for their projection 21. And a lot of that is the COVID stimulus funding. And they're budgeting a loss of a negative 3.8% for 22. This hospital again is asking for a 5% overall change in charge. Their NPR due to change in charge is 774,848. The value of 1% change in charge is worth 212,891. This hospital will be having their overall change in charge applied to their inpatient outpatient and professional services. Their pair mixed for the change in charge will be commercial at 224,823. Medicaid is 16,883. Medicare is 511,253. Thank you. And total self pay other is 21,899. The picture Patrick had was great, but we don't want winter yet. Their NPR FPP change in charge increase is equated to excuse me. The NPR increase is 1,683. Excuse me backup 1,686,835. And they're changing charges 774,848. This hospital has submitted a 3.9% five year average and it was approved at the 3.9% five year average. The hospital's collection rates have been steady at about 6.3. Excuse me. I can't read that. Sorry. 65% for 2020. Let me see. Okay, thank you. And they're there. When you look at their 2020 actuals they were asking in for commercial 29% for their NPR pair mix. And for 22 it's 32% in for Medicare is 64% and 20 it's 60% in 22. So that's where we're seeing most of the shift for this hospital is between commercial and Medicare, but they've also thought that was going to be going to Medicaid for 22. So as you can see, they've got 8% in 22 for Medicaid. This hospital we felt was mainly all of their NPR FPP increase was their change in charge. So we felt that we should probably reduce it a little bit so they were asking for 8.2% request and it's in excess of the 3.5% growth guidance. And like I mentioned, they we think it should be reduced to 3.5%. And it would be an effect of NPR FPP of 963,501. So the new NPR would be 21,390,029. 21 million Lori. Excuse did it again. Sorry 21 million 390,029 dollars. But we want to keep their 5% change in charge. This and then we would want them to reduce their expenses to allow for their operating margins. So Lori, can you remind us of the cash that they have on their balance sheet at this time? I know that small is beautiful in most people's minds, but 5% is significantly above the guidance that was given. So I'm just trying to understand. I'll look at that for you. I'll check it out right now, Lori. Thank you. Sorry if my screen flips back and forth. It's computers. Go ahead, Maureen. In 2019, their cash was $252,000. In 2020, it went to 8.9 million 2021 7.4 million and 2022 projected to be 3.2 million after paying back after their assumptions for their COVID money and their PPP money, which they also received. Okay, thoughts from board members or questions for Lori? Can you just remind me, Lori, what the cut to 3.5% is worth? It's worth 963,501. So we're reducing it down that amount of money. And what is a 1% charge equal? Patrick, would you go up one? Yes, I believe they entered it as $212,000. And just to back up Lori there, the reason we're reducing it to 3.5% is mainly based off of that historical activity that we're seeing on slide 29 where perennially they don't reach their budget with actual performance 2021 being the loan outlier. And when we look back, it looks like they've been given just about 3.5% growth the last several budget cycles and it has not quite been attained, but that being the growth ceiling, we want to give them the opportunity to experience that growth supported by the 5% charge so that they can maintain the appropriate margins that they need to fund some of the items that they've put forward in this budget process. Well, let me just raise a question I have about the 5%. When I think about the 5%, they reference it as a need to cover their escalating costs, which I think we've heard from most every hospital is the escalating costs. Their inflation as they've determined it is 3% from the appendix that they put forth. So the inflation rate they're expecting is 3%. Many other hospitals have asked for more than inflation to cover the fact that not all payers actually will cover that inflation, which I recognize and have appreciated in other hospitals budgets. With Grace, their pair mix is 86% of their gross pair mix is Medicare and commercial. So on their Medicare population, 49% of their gross pair mix is Medicare. Medicare is going to cover 99% of their costs. So the 3% inflation 2.97 will be covered by their Medicare population. Commercial is 37% of their gross pair mix. So depending upon what the board approves here, if it's more than 3%, it will also be covered. So then the question remains, you know, there is a cost shift Medicaid, which is 14% of their population requires some coverage of those inflationary expenses required to treat Medicaid patients. I guess I'm not sure that 2% going from 3 to 5 is justified to cover only 14% of their population in cost shift. So I, you know, in my mind, it seemed like a leap from 3% inflation to 5% change in charge request when 86% of their gross pair mix will pretty much cover their expenses. And as long as we give them at least 3%, and if you look at it on a net patient revenue basis, it's 92% of their net patient revenue is coming from Medicare or commercial. So I just want to throw that out there as another conversation point. Yeah, I'll make a couple of comments too, because this one's kind of interesting. It's, it's reverse of everybody else. So I understand what you're saying. And it kind of goes to the point where Kevin made before so so looking this is the perfect chart so Medicare, you can see their Medicare reimbursement, their commercial reimbursement is below Medicare. So their commercial reimbursement is 72% of Medicare. And this hospital in the past has run at basically break even at an operating margin and then they get their income from their community. And then they have a positive total margin. So it's a little bit different in their numbers are small, I get that but it's a little opposite of what we've seen with others, you know, if in fact, we can make the leap that they're doing their cost reporting correctly and that Medicare is their Medicare rates are just slightly above cost it would, it would seem to say that their commercial rates don't cover the cost completely. And that they, you know, we know that they have typically lost money, you know, in 2019, you know, which was the last right normal year, their net operating income was 1.3 million loss. And then they had about a 1.2 million non operating revenue, which I believe was, I believe it was around a million or so was contributions that they achieved and then they have like a break even so you know this one's a little different conundrum than the other I would normally say I agree that a 5% is is high. They do have a bit of cash, though now so go into that piece of it. You know, so they could support potentially having a lower rate. But the other thing I would be a little bit concerned about is bringing down their NPR so much without a full understanding of is it new people that have moved in because when I look if I convert that back to against projection. They would be up 1.5%, which would be the second lowest. So if we if we take this actually I think it'll be about flat right because if you go back to the slide that showed where the operating or the NPR is we're here you said 21 390 right and then if you go back to the forecast you have up above. I believe it's 21 330. So we basically be saying we expect them to be flat with this year. And all the other hospitals except for Mount Scutney which had a negative 1.5 have a greater increase projected so just those are just some I mean again we don't know, you know what sound bites might be that people were here moved relocated into the area so maybe that would bump up for them in 21 that won't continue into 22. But basically if we approve this we would be approving a flat year over your NPR, knowing that whatever rate we give them would give some contribution. So it actually would be, you know, negative and utilization, you know, those are just, I can't say where it will be or whatever but just wanted to kind of put those things into alignment. So if we look at their history of the last three years I think they've had 3.2 3.2 3.2 and then five. So, you know, I could go with the five I could go with a little bit lower, you know, to some of the points that we've, we've talked about. But would sway me is more that relationship between kind of that you know their their commercial definitely is under their Medicare rate that's the only hospital we see that. And that that historically they have run at negative operating margins with, you know, again the contribution from their communities which is generous and you know we wish all the other, you know, but that that's not necessarily the way to make the budget. I agree with you that the NPR reduction seems to be a little bit excessive. The only point that I can't get to is the justification on a 5% rate. And I understand the argument that you're making but I just think that something should be done here and change in charge is what was it again 222 for a 1% 212 212. Okay. So, I, I don't know other board members. Well, for me. This is a very small hospital. And, you know, with size comes complexity and opportunity to adjust things as time moves on, whereas when you're small, teeny in the town of Townsend, there's not a lot of options when you have to compete in the market with with Dartmouth and others, you know, for travelers, they don't have that they, they just don't have the option and so either, you know, I mean, 5% here versus say 5% to Rutland or 5% to Southwestern or certainly 5% to UVM Medical Center is this to me a different animal than 5% here. I also, you know, am aware of the tremendous efforts that they have put in to voluntarily get people to help contribute to the hospital which is great. And that effort is not going to go away at 5%. There's still going to have to do that. And I also worried, I think that the only hospital that we've seen with an outstanding Medicare advanced repayment, the on the end of September 2022 that they clearly on the record think it's about $1.8 million rolls into 2023. So I mean, we're in an extraordinary situation. This is a teeny little hospital. I mean, we're talking $900,000 or $200,000. It's real money. But as we go through other hospitals, you know, if we're going to, you know, regulate at that minutia level, you know, it makes a whole, makes a much bigger difference here with a small hospital. They just don't have the options. And so I can support the 5%. I understand where you're coming from, Tom, is just that I think that you have to be consistent across everyone. And while I'm not a proponent of big, I'm also not a proponent of small in that At some point, you have to have the right size that can deliver the absolute best care at an affordable price for Vermonters. So I just look at that whole I-91 corridor, Connecticut River corridor, both sides of the both Vermont and New Hampshire sides of that river. And I just think, my God, how did this ever get built the way it got built? Well, I just think, Kevin, I understand what you're saying. And I just don't think you can find consistency in economies of scale between a $20 million hospital in Townsend, Vermont and say, Central Vermont or Porter or UVM or New Hampshire. It's just a different ball of wax. They don't have the option. So, you know, and these are bad times. So for $900,000, they're still going to go out and have to kind of pound the pavement for a couple of million dollars, you know, to, you know, I think, as they said, they didn't budget for all the travelers that they're anticipating. So I'm, you know, I understand your points. They're well taken. They're, you know, theoretically correct. But I just don't think, I mean, Grace Codges could be the perfectly run organization. And they're so small, they just don't have the options to trim their sales in the way other hospitals have. Yeah. I was just going to say, oftentimes I consider this to be a large doctor's practice with an emergency room, but I think they'd agree with you. Yeah. And there's something to be said for that because primary care is where we should be investing. And I get that. But go ahead, Maureen. No, I was just going to point out a couple of things. I mean, again, for their 22 budget, they're projecting a net operating income of a negative 900,000 offset by 937,000 of non operating revenue, which again is the contributions. You guys need to deal with those. Okay. And then, and then that, you know, that they're basically projecting break even once again. So, you know, for me, the reason I'm comfortable with the five is, you know, their, their total projection where they were last year where they only asked for 3.2%. And if we look at the combination of what people got last year and this year, you know, they're still below most of the hospitals. Granted, we're not done with many of them, but some of them got last year, you know, about equal to what they're asking for over two year period. And again, that reconciliation of where commercial rate their commercial pricing is relative to, to Medicare, which is below. So if we had price to price transparency, we'd actually be able to look and see, well, are they chart, you know, is it just because they're badly managed and so their Medicare costs are really high. You know, I don't know that part of the answer, but I can say by far that they have the most disparity they're the only hospital that is below one for that commercial ratio to Medicare, and it's 0.7. And something that we should dig into further as to why there's such a change there, but you know, they're, they're budgeting and operating loss again. So, again, we bring them down. That's just going to perpetuate that they're positive is they do have cash and Tom to your point. Their numbers, they're paying back. So they have 7.4 million and 21 in cash and they're going to 3.2. So that should be after they reconcile those paybacks but I think Maureen, you've convinced me. So I'm, I'm, I'm at the five. I'm fine with the five, although I, I do find it troubling. But I think you've convinced me particularly looking at their, you know, their projected margins of negative 3.8 for operating margin. But I do feel like this is a hospital that we really do need to look at carefully in our sustainability analysis and to Kevin's point thinking about the capacity in that whole southeastern part of the state. And what are the fixed costs required in running these hospitals and given the declining populations, you know, what is, is the appropriate distribution of resources here. And this is where I asked them questions about this new designation, right, the Royal Emergency Hospital designation. What would that look like? And would that allow them to be more sustainable? Any other comments from the board? Is anybody prepared to make a motion? Before I think I would make a motion, I would need a little more discussion around what people are thinking about in terms of the MPR. Because we've had a lot of discussion around the charge. It seems like most folks are comfortable with the 5%. I mean, I know I can make whatever motion I want, but I try to make my motion shoot for what looks like maybe the consensus that's developing. I'll be flat footed, Rob, and I rely on you to make a motion. Patrick, could you put up slide, let's see, hold on, slide 11. So here, focusing on the second to last column, which is the projection adjusted against the budget adjusted now. Granted, you know, it's going to depend potentially on hospitals having good forecasts, but they, you know, right now have the benefit of having most of 2021 in the books. So unless we're saying they're making most of their volume in the fourth quarter, you know, looking at this grace at 6.1. It's probably middle of the pack, maybe a little bit, you know, lower when you look at what other hospitals are projecting. You know, you know, I'm all for not having aspirational budgets and that that was the conversation we had for Springfield for the 21. And I'm sure we'll continue with that. But grace at 6. You know, I can live with what they put in just with so much of the uncertainty of what's going on. I don't feel comfortable bringing it down to the request your recommend the staff recommendation which would hold them flat year over year. So, but happy to hear what other people want to do. That's what I want to do. Okay, can we go back to the motion slide? And I'll throw something out there and people can discuss. Before I do that, I'll just say I appreciate the staff looking at the NPR history and shooting to make sure that we're trying to, you know, not aspirationally budget. And so I very much appreciate their recommendation. I think what what all so I'll throw a motion out that we approve grace cottage hospitals budget as submitted with an 8.2% NPR FPP from fiscal year 21 to 22 budget a 5% increase in overall charges and subject to the standard budget conditions as outlined in slide 34. Is there a second. Second. Is there further board discussion hearing none I'm going to open it up to public comment on the grace cottage hospital budget motion that's in front of us. Hearing none going back to the board. Is there any further discussion. Yeah, let me just ask a question and maybe I'm going to direct this to you Maureen. We always worry obviously about the aspirational budgets and if they don't hit that NPR target and their expenses are obviously budgeted for that target. They're already on the cusp right of barely breaking even actually they're operating margin with this current budget is already negative. So if either they don't hit the top line or they don't get the donations that they're anticipating. This is a hospital that could be in some trouble. So I'm just I want to just talk a little bit more about in your views on why this doesn't feel aspirational and worrisome to you. Honestly, it's it's the unknown of, I guess, Kobe they're up 8.4% from 2020, which is is higher than, you know, I think most of the other hospitals would be up this would be 6.1% off of that. But off of their budget, their projection around 64 times. So I you know I know what you're saying I'm just looking at you know what they've done this year and I think part of it's been people moving in to the area and it's small dollars but I understand what you're saying as well. I mean if we want to bring that down somewhat I wouldn't bring it just down as far as the 3.5 because that's that's flat. It's the 3.5 against the budget. If we do 3.5 against their projection, which would be I think they're at 21 330. So that would be like 22 100. Which would be, you know, a couple hundred thousand below where they are now I think that would be reasonable to maybe look at that right. Numbers correct. I'm trying to think so they're at 20. So they're 21 330 now right. And if they were to go 3.5% above that that would be 22 100, which would be down like 250 or down 1.2% or something. Right. Still on budget to budget. I guess my, you know, the question I would have is do we think they're going to go below what they're projecting this year. And I don't know that we know the answer to that. But maybe in their in the write up for them in particular, you know, the focus on the monthly meetings and things like that really need to be, are they keeping pace with this with their forecast. And if not, that the expectation is they're going to make adjustments. You know, to make a break, you know, they're basically a break even at operating income. So the part of it is a monitoring. But if we want to lower it some I mean we should think about saying that as well. I'm okay with that. Jess, were you seeking to ask Robin to amend her motion. Well, I don't have, I don't have a number in mind to amend it to I just wanted to express my concern about the budget growth and their ability to make that growth. I actually like Maureen's suggestion about 3.5 over projected, but I welcome other people's opinions about this my concern is really, as we all know just, you know, they have, they have not met their budgets. They have not met their budgets for most years, and it's led to operating losses. And so, you know, if this is another one of those years, we're going to have a real problem. So I just, I, you know, but I also recognize we are in, you know, incredible uncertainty right now. So I just want to make sure that their expenses are reasonable. I'm sort of doing the 3.5% over their projection, which I think will be midway between I think what the staff recommended and where they're coming in, and then, you know, kind of somewhat in the right of talking about, you know, really closely monitoring their monthly actuals against what their budget is, and to make adjustments should they not be meeting it. So, go ahead, Patrick. Sorry, I know it's probably unusual for staff to step in. I'm just curious to know if we, if we actively set that monitoring requirement. What can the board do? And what would the threshold be for any action that may have to occur? I mean, how are we going to police this if I'm hearing this correctly. I think you've policed it with, I mean, if we adjust the budgets down to what you suggested, which is flat with year over year, and if volume comes in higher, it's going to come in higher. You know, I mean, I'm not sure they're going to stop people from coming and from that utilization. You know, on the flip side, if it's put in higher, you know, they themselves should be monitoring that and making adjustments under good fiscal management to match their budgets. I mean, you know, I don't think people are trying to run it at a loss. The concerns I have are just there's so much uncertainty, we just don't know what's going to happen. And I'm trying to peg it against all of the other hospitals and what are all the other hospitals saying against their projection. And none of them except for one are saying they'll be down or flat. And that was Mount Scutney. So that was just one data point I'm using is looking at, you know, what everybody else is saying as well and the expectations that there were still things not happening due to COVID people coming in and that that would would come back. I think Lori has her hand up. Yes. If you wanted to have the growth be on projection in your motion language, please make sure it is as of their July 1 submission, because we've been seeing their monthly reports coming in and their projection is changing on some of the hospital. So, Lori, I would suggest we just convert that back to against budget, as we are here so we can calculate that I think it's 6.8% instead of 8.2 is if I take their 20, if I take their current the projection that you guys have, right, the 20,000330 and multiply that by 3.5% and divide it by last year's budget. That's that's probably the best way to look at it because I agree their projections going to keep changing. So what are we saying off of budget right. So if I follow that would be 3.2% they're currently running over plus the 3.5%. So it'd be a 6.7% budget to budget NPR growth. Yeah, that's what I would say. So the motion in front of us is still Robbins unless somebody wishes to move to amend it. So I think I will. This discussion has been very helpful for me because I agree with all the kind of weighing considerations that people have, you know, certainly I think we've been concerned in the past about the aspirational budget. There is so much uncertainty who knows maybe we're in, you know, we certainly know there's been some excess demand coming back but we don't know whether you know how that's going to flow through into next year through the whole year part of the year. There's just a lot of unknowns. So I'm going to amend my own motion. To approve Grace Cottage Hospital's budget with a modified NPR FPP increase of 6.7% from fiscal year 21 to fiscal year 22 budget, a 5% increase to overall charges as submitted and subject to the standard budget conditions as outlined on slide 34. Does the seconder of the original motion accept the amendment. It should be 6.8 because it's not additive to do the three point you mean I'm actually doing the math right so the if you take 20 budget, I mean the projected is 21331 right times the 1.035. So dividing that by the budget of 20667 it's going to be 6.8 because there's a compounding effect right so the actual math of taking 3.5% on the projection dividing it by the budget is 6.8. I trust Maureen's math over anything that I would ever do in terms of math so I'm happy to amend to 6.8. Does the seconder agree. Yes. Is there further discussion. And since it's been amended I'm going to throw it back open for public comment. Is there any member of the public who wishes to comment at this time. If not, I'm going to ask. Russ McCracken to do a roll call of the board members on this motion. I'll call the roll in alphabetical order. Member Holmes. Yes. Member Lunge. Yes. Chair Mullen. No. Member Pellum. Yes. Member Yusuf. Yes. So let the record indicate that by a four one vote. We have approved grace cottages. Budget by modifying the NPR FPP to 6.8% and approving a 5% increase in overall charges as submitted. And subject to the standard budget conditions as outlined on slide 34. So at this point is probably most appropriate to try to do a little bit of housekeeping. To try to figure out our path moving forward here. Now it's my understanding, Patrick, that you are waiting upon responses from Springfield and from UVM. UVM's response will not come until Tuesday at the earliest. When do you anticipate Springfield's? We set a deadline for Friday and I spoke with them yesterday. They're actively working on following up on our request. Okay. And there's, as I understand it, the board wishes to proceed one hospital at a time. What hospitals do you think you would be ready for Friday morning, Patrick? Friday morning would be the only two hospitals that we don't require any further follow up on which would be Brattleboro Memorial and Copley. So I'm going to suggest that because we have received a number of correspondences about people working at hospitals who had hoped to take a little bit extra time over Labor Day weekend, that we plan on coming in only on to do those two hospitals starting at 8.30. And at that time, we will stop for the day, which I would anticipate shouldn't be much past 1030 in the morning and then resume next Wednesday with all the remaining hospitals that we have left to tackle. Does anybody object to that plan of action? I'm totally supportive of that plan of action. And, you know, I think as a board member, I'm going to be prepared to be ready on Wednesday to next Wednesday to address the other hospitals. And with whatever information we have at that time, because we've requested some additional information. And we're going to need time to review that information. So, you know, I think well over a week to justify, you know, the questions that we had should have been able to time. So I, you know, I'm just putting that out there from my perspective because I don't want to have to continue to delay because hospitals have not responded with our request. Okay. Anybody else? Okay, then I would entertain a motion to adjourn and we will pick it back up Friday morning at 8.30. And again, I wouldn't expect it for those from the hospital listening in to go much past 10.30. Is there a motion to adjourn? So moved. Second. It's been moved and seconded to adjourn our meeting. All those in favor signify by saying aye. Aye. Those opposed signify by saying nay. Have a great rest of the day, everyone.