 Good morning and welcome to the Green Mountain care board. My name is Kevin Mullen chair of the board and we're going to start off the meeting today with our executive director's report Susan Barrett. Great thank you chair. I have some announcements and to start off some changes to the agenda for this morning and this afternoon. So for this morning we are taking off of the agenda the update on COVID relief funds. We have rescheduled that to the beginning of next week likely September 14th. So please keep an eye on our website and our press release for the changes in Secretary Smith coming to report on those COVID relief funds and the updates. In addition this afternoon we will be hearing an update and it will have a discussion on the primary care program for the OneCare Vermont and we've invited folks from OneCare as well as Health First and others to testify and discuss this with you this afternoon and that starts at 1 p.m. today. And Mike I don't know if there's anything else I need to do for the agenda let me know but I think we've covered it. No I think you covered it. Great thank you and that's all I have to report. Thank you Mr. Chair. Thank you Susan. So today we're going to turn it over to our hospital budget team to walk us through the rest of the hospitals that we did not go through last week and before we do that I just want to say that because of Susan's announcement earlier that Secretary Smith will not be here this afternoon it brings up a question about whether we should be utilizing Act 91 to create an extension likely it would just be needed for a couple of days maybe a little bit longer than that but that would be up to the board to decide in a vote and at any point any board member could make a motion to change that September 15th deadline if they so chose. As for myself I would really like to hear from Secretary Smith before we make any final decisions on any hospital budgets but again that will be up to the board to decide and we will go from there. Sunny are you hearing everything that we're saying okay and everything good. Yes good morning I can hear you just fine thank you. I just want to clarify that when you do not need me to record any part of this proceeding just please let me know if you are going to have someone come in later. Thank you. So we will not need you this afternoon we will not need you at the one o'clock. Okay very good. Although it's somewhat related it's unrelated to the hospital budget process. Sure sure. All right thank you. Okay with that I'm going to turn it over to Patrick Rooney and his team to begin to walk us through the rest of their analysis on the other Vermont hospital. So Patrick are you ready? We are ready thank you Mr Chair good morning board members. At first I'm going to apologize I will not be on screen today ever since the winds went through our region on Sunday my allergies have gone into hyperdrive and I look like a cleric in commercial with a inflated head and a faucet for a nose so I'm going to spare you all having to look at that for the next couple of hours. However I do seem to have my voice so I will continue to chat away and Lori will hop in intermittently on a few of the other hospitals as well but before we start we're going to give you a couple updates on some of the changes to the slide deck that we presented last week they are relatively minor in nature. On slide seven we changed the title here and added the caveat at the bottom. We changed it to approved overall change in charge five-year average and we noted that this is not include the UVM health networks. I'm sorry Mr Rooney. Mr Rooney. Hi this is Annie the core reporter. If you wouldn't mind just slowing down a little and maybe getting a little closer to your microphone that would be really helpful thanks. The last thing you said approved overall change change in charge five-year average and yes and we included the caveat note at the bottom that this does not include the UVM health networks commercial effective rate. That is an update from last week I will navigate to slide 20. We did receive some updates to planned ACO participation. These are ongoing and we will continue to update this throughout the deliberative process as we mentioned we would last week. We added for our board the CRF funding application information that we have received to date and this actually came through our July 2020 year-to-date monthly submissions from the hospitals and so we have shown here up on the screen those hospitals which have applied some hospitals mostly the network and when regional have given us numbers of funds they hope to attain through the state CARES Act funding that Executive Director Barrett and Board Chair Mullen mentioned earlier in this meeting here. Most of the hospitals do not have a figure that they could apply for or supply for us so we did note whether or not they intended to apply or not in this first round of funding that the state has opened up for providers in the state of Vermont. And lastly on slide 27, Board Chair Mullen last week requested that we add to this the requested data and other information in a timely and accurate manner to standard budget or conditions as we discussed at last Wednesday's meeting. There is probably not going to be any time in the future in which we do not seek monthly financial information from the hospitals and with everything that is up in the air this year, timely and accurate monthly reporting is more important in the coming year than it has been in years past so we have added that to standard budget order conditions that will be in every hospital's budget order once these deliberations and votes conclude. With that I'm going to navigate down to where we left off last Wednesday and that is on Copley Hospital and I will turn it over to Laurie Perry to discuss the Copley Hospital. Good morning. As we're navigating to that particular slide we wanted to mention that we have all of our submissions and we've made sure that the slide deck has any revisions updated to all of the hospitals but we will continue to keep the board updated if we see anything new coming in. So Copley Hospital had a budget request that was 6.1 percent higher than their 20 budget and this is 14 percent higher than their 20 projection. The hospital is asking for an 8 percent change in charge which is made up of 3.5 million commercial and 1.9 million Medicare. Their justification was that they're also using a new accounting firm that will offer them process improvements. Their volume was expected to decrease because of COVID and they're expecting to see those volumes return pre-COVID. They need a reasonable margin to rebuild their cash reserves and their pair mix is shifting due to their population aging and because of COVID. They have a master facility plan in 2021 and that is cost effective, integrated and efficient in capital outlays and we've heard from other hospitals that they are trying to be very cautious with any capital plans going forward and most of them are mainly doing replacements at this time but this hospital is getting a plan together for 2021. Copley's operating performance for last year was doing pretty good like they said the beginning of pre-COVID and then like all the other hospitals it started to reduce every quarter because of COVID and then in quarter four they made progress at a 17.8 percent quarterly NPR growth. Their operating margin also grew that last quarter at 17.2 percent. We are encouraged by this hospital that they are struggling but they are trying to keep an eye on their costs while not getting the volumes that they usually would have seen pre-COVID. Copley's, we like to look at the different all the hospitals operating performance back to 2015 so this slide is showing their NPR FPP related to their budget and what they actually came in at for that particular year so we also noticed that they were doing pretty good as of 2018 and then excuse me it was below budget excuse me but they're trying to get a $77,000 budget for 2021 and they're also their operating margin has been up and down as you can see with this slide and they were at 2.2 million dollar decreases for 18 and 19 and they're trying to build their operating margins as they said for their justification for this budget. Copley's change in charge as mentioned they're asking for an eight percent change in charge and they are going to be using this for all of their service categories they're increasing them 8.8% and then as mentioned in the previous slide they're asking for 3.5 million for commercial and 1.9 million for Medicare. The change in charge though is well over 100% of their request budget their change from 20 to 21 budget is 4,400 but their change in charge is 5,400 so it's 122 percent of their request and on average this hospital has been approved at 0.6 percent on a five-year average last year they were approved at a 9.8 percent change in charge. Next slide please and and Copley's payer mix has been relatively stable they were at for commercial they're at 60 percent of their MPR FPP in 2019 and they're budgeting at 57 percent their Medicare it was at 31 percent in fiscal year 19 and they're budgeting 33 percent so it hasn't changed drastically the only one mainly probably would have been the commercial self-pay and other payer their net patient revenue as a percent of gross revenue has declined since 2019 they're at 59 percent and now they're at 54 percent so staff recommends that the 6.1 percent request for MPR be reduced by what we are going to be recommending for their change in charge so they were asking for an 8 percent and staff is recommending that it should be 6.5 percent and basically that's because we feel that they didn't get a chance to really use or they did use but the volumes did not support the 9.8 percent change in charge that they received last year so they weren't able to see those results flow through to their operating margins also this hospital as of February 2020 was operating at 3 percent above budget so we thought that was pretty encouraging they said that they were exploring opportunities for cost control and opportunities to for gains and integration but and their staff we would like to see these opportunities to be further allowed to be come to put a mutation in the coming years mainly give them an opportunity to fulfill those particular management and process improvements we also feel that because of the new leadership the CEO and the CFO that we should be able to see how they can improve this hospital's growth and basically just give them a chance to like I just mentioned process improvement and see how things go in this next year the MPR growth of reduce the change in charge is 6 to 6.5 percent would be to reduce the MPR to 4.7 percent if the change in charge reduces to 6 percent it would reduce MPR growth to 4.2 percent so this is what our staff recommendation is to change the change in charge from 8 percent to 6.5 percent Lori I have one question yes my notes talk a little bit about a PPP grant that they were carrying as a loan and assuming that they would have to repay it is is that something that we should keep in mind or do we know anything more about it it was a $5 million PPP grant and it's currently considered a loan that they'll have to pay back but I I guess if the hospital performs and in certain ways they can keep that money I would have to research that Tom and get back to you great thank you okay moving to Rutland Regional Medical Center Rutland's NPR FPP budgeted 2021 revenues are coming in at 7.6 percent under the FY 20 budget they are budgeting down and their change in charge this year is being requested at 6 percent the hospital's justifications as noted on the slide in front of you on slide 70 they made material changes of 12.7 million in cost reductions they had a negotiation with their union to postpone salary increases in the during this time of uncertainty the the pension is currently appropriately funded as CFO Judy Fox noted and they are opting not to contribute $2 million to the pension this year they are forecasting a ADC or avid deli census of 82 for their budget they are currently at 77 now it did sound like there was some uncertainty around whether or not they would be able to get to 82 but that was one of their justifications for their their current budget they are assuming inpatient volume around 80 to 90 percent and outpatient volume around 100 percent of the 2020 budget or for an average of 95 percent historically their five-year change in charge is relatively low on the hospital spectrum there are certain items here that are unknown as there are with many hospitals and that would be being a grant funding state cares act money and other financial relief or forgiveness of loans and the hospital itself follows similar trends to other hospitals in the state they were experiencing issues moving into the second quarter and and the third quarter as COVID descended upon our system and have plugged along since then and this hospital as you can see with its 2021 budget on slide 72 is budgeting around 247 million dollars in npr fpt and that is on a similar plane as it was in 2016 and if you note below that on slide 72 they produced almost an 11 million dollar profit in 2016 and then it descended to 4.1 in 2017 the hospital came in with a negative 5.1 percent change in charge to offset that increase and since that time they've produced operating margins around a half a percent which is not substantial it is consistent it's probably not what they want to be but with their reduction in revenues for this year they are operating with a larger cost structure than they were back in 2016 and they're forecasting only a 0.6 operating margin but that is consistent with prior years breakdown of their change in charge again the overall change in charge request is at 6 that will contribute about 8.3 million dollars to their npr the value of that is 1 percent of that is about 1.4 million they will disperse those charges across inpatient and outpatient gross charges at 2.3 and 3.7 percent respectively and the due to the the reduction of npr of almost 20 million dollars the change in charge contributes only a portion of revenue back to that and as you can see at the bottom their five-year average change in charge is 1.8 percent which includes that negative 5.1 that the hospital came in with it was approved for in fiscal 17 following the 11 million dollar operating gain that they incurred in f y 16 their payer mix from the commercial side remains relatively stable and there seems to be an erosion being reported on the Medicare side although slight and an increase in the Medicaid portion additionally as we discussed with coply we're seeing a reduction in npr as a percentage of gross revenues from 2019 actual 45 percent there was a budgeted spike to 46 in 2020 but it's now coming down to a budgeted figure of 43 percent of gross revenues so the negative 7.6 percent request budget to budget certainly falls within the 3.5 percent growth ceiling set forth by the board we would recommend we approve that as submitted and the change in charge we would also recommend that we approve as submitted it is a little bit higher however the hospital was operating about 4 percent below budget so they are budgeting down moving forward as far as npr goes they believe that some of the changes that are being made to their operations as it relates to COVID are certainly going to have an impact on their overall operations they do have a history of strong budget management even with the historically low change in charges they've maintained a consistent operating margin as I noted earlier and they've successfully managed those low change in charges they continue to produce a margin and therefore although they are sometimes considered a higher cost hospital they haven't pushed those charges off to the commercial payer year after year after year and they've managed within that structure that they've created themselves so this request does support an operating margin consistent with past years and we do believe that it is time that the hospital itself be allowed to raise its charges and to get it back into more of the median with its fellow Vermont hospital so as noted with a motion language below we would approve the reduction in the npr as set forth in the budget and the change in charge as set forth. Lori moving to provider transfers and accounting adjustment request hospitals. Do we want to talk about any comments on that one? I'm not sure how Kevin wants to proceed. So originally I was going to proceed with questions at the end but after Tom jumping in on the last one I do think that it's a lot easier to focus them as we're just going through the slides so Maureen I would proceed with your question. Okay just just a couple comments first you know one of the things you know I know I appreciate about the process and you know I think we need to remind people you know in the public this is the first time we're seeing this presentation as well and you know we don't we don't talk about this as a board or talk you know we haven't talked to the staff about what they're putting for recommendations so I really appreciate all the recommendations you guys are putting forward you know I just want to you know put that out there that you know it's not like we've seen this and we've all you know kind of agreed with this and you know one of the things on Rutland I do think or for me that I'm really going to keep in mind is they are the only hospital that is showing an npr that's lower than 2019 actuals and that's after their rate increase that they had in 2020 as well as this rate increase of 6% in 2021 they may be right I mean it could be that they the volume doesn't come back and that they may be the ones that are correct on the assumptions they're putting in and other hospitals maybe are assuming too much is coming back but only time it will tell on this one in particular I think for me the 6% rate could be bifurcated to have some being as COVID and the reason I would put that forward is because they are showing a quite a top line drop off year over year they did state that it was related to volume not coming back you know due to partially due to COVID and you know if if in fact they're right and we separated part as a COVID adjustment then as we move into 2022 we could say you know that wasn't a temporary reduction or temporary commercial rate increase if in fact they actually see more people coming back and their npr is higher and it also drops to the bottom line there may not be a need to keep 6% increase year over year so I I'm just going to put that out for for this one in particular because I do see it as different than the other hospital requests I agree it falls you know under any of the caps but that also doesn't necessarily mean that you know what I would consider a relatively high commercial increase you know should carry I'd also would say they did put a lot of discipline and hard work into their expense management and they are one of the only hospitals that is also lower for expenses in 2019 from 2019 as well so I mean they are trying to pair this with expense management but you know and then one of the other metrics that we have looked at which is your charges relative to Medicaid and Medicare the commercial charges relative to that they're on the higher side so I wouldn't say that they charge low prices in commercial for the services especially when you compare it to how that compares to Medicaid and Medicare so those are some of the things that I'm thinking about as I look at this one and and just to put that out there so when we will be talking about decisions you know this one certainly I would want to bifurcate the commercial rate you know whether whether we would whether I would agree to approve the whole thing and it's three and three or something like that but but I am definitely thinking about that on this one thanks so I would just chime in that this is a hospital that made a decision late to become more actively involved in the all-payer model and they did not come back and ask for any additional dollars to be allocated for reserves for the risk of taking on the Medicare population so I just want to put that out there as well Marine. Lori Brattleboro? Sure we separated out the hospitals that had provider transfers or enhancements in any accounting adjustments and Brattleboro was the first one and this hospital is requesting a 5.3 percent growth rate between the 20 budget and the 21 request they're also asking for 18.6 percent increase from their 20 projection to the 21 budget. This hospital is requesting a COVID change in charge of 2 percent and a 2.9 percent change in charge for their standard overall. The standard is asking for 1.3 million commercials and the COVID is asking for almost $900,000 in commercial so this is a total change in charge of 4.9 percent. The hospital's justification was the growth revenue is 95 percent of their fiscal year 20 budget and this is called their new normal. The 21 budget assumes they will maintain this 95 percent of old information as the new normal and the 2 percent COVID portion of the rate is to cover their COVID expenses which includes 15 FTE screeners. They are the fourth busiest hospital in terms of the emergency department treating mental health and psychiatric patients and they're in collaboration with Dartmouth and Cheshire on some of their services and I believe they said definitely cardiology. Next slide please. So we have the accounting and provider transfers in this slide broken out so that you see they said that the pediatrics just so pediatrics that they had had in their 20 budget was a portion of that was moving to private practice from the hospital and that equated to almost $833,000 less in their 20 budget. They also were making an accounting adjustment for their ACO dues which were included in their contractor allowances and now it's going to be included in their operating expenses for our instructions and that was equal to $427,000 and the effect of NPR percentage growth so reducing their 20 budget by the $800,000 for provider transfers equal to 1 percent growth NPR to NPR but the accounting adjustment makes that a minus 0.5 percent adjustment to NPR. Slide 78. S79 excuse me so this is just talking about the provider transfer again this was just so pediatrics showing what their NPR reduction is their expenses but because their expenses were higher than the NPR it's actually giving them a profit and this particular transfer was effective July 31st 2020. Next slide please. And again this is the more detail on the provider transfer request for this just so pediatrics. The they just consolidated this pediatrics into the Browderboro Primary Care and so that's why and it didn't happen the four-year slits partial so this looks like it's basically two months worth of NPR and expenses. This included a partial provider FTE they had eight non-provider FTEs and then this in effect is a one percent impact on the NPR FPP for comparing 20 to 21 budget growth and we recommend that the board acknowledge this particular provider transfer. Other provider transfers that are going to be coming up or is this the only one that we have this year? The is Browderboro Montescutty has basically we're calling them enhancements and then we have North Western is showing the providers that were in their 20 budget they no longer were present for the 21 budget and then also they have service enhancements also and North Western has accounting adjustment. Okay I see that you were use the the term acknowledgement I thought that we had to approve these changes to the NPR FPP through the provider transfers what is the appropriate language when we do make that motion? We will be giving that to you that we will asking you to acknowledge these transfers. Okay great thank you and at the moment if the motion on the particular slides don't quite say that we will be adjusting the motion language through all the slides when you're ready to vote so we'll be giving you that slide deck updated with that information. Super thank you. So Browderboro Morrill Hospital's performance for 2020 they were doing pretty good compared to what was happening in the latter half of the year. This particular hospital was 0.5 percent over their budget as of February 2020. They're operating margin they were doing very well while at least breaking even in quarter one lost quite a bit of money in quarter two started to see gains in quarter three because of COVID relief funds bless you and then 3.9 million dollars operating margin for quarter four a lot as the other hospitals it's because of the COVID relief funds. Browderboro has been since 2015 has been pretty good about their performance actual to budget they've been higher in 15 little lower in 16 and then gradually they have not meeting their budgets until 2019 they were basically right on their budget and then of course at COVID they're not meeting their budget and they're requesting 92,800 budget 21 which is a substantial increase from their 2019 actuals and also their of course projection and budget. The operating margin has been up and down as you can see from 2015 through to 2019 2017 and 18 were very low a minus 3.1 percent operating margin and a minus 2.4 percent they started to see about break even in 2019 and because of COVID they were going to be seeing a positive operating margin for their projection 20 and hopefully to be about breaking even for the 2021 budget. Slide 80 thank you the change in charge this is where we mentioned the overall change in charge total is 4.9 percent and the NPR due to change in charge is 2.1 million dollars and it's a value of 436,000 which is a value of 1 percent change in charge they will be making adjustments to their inpatient change in charge at 5.9 percent which is the combination of their COVID and their over standard and the outpatient is 5.5 percent so 2.9 percent of the standard change in charge for commercial is 1.3 million and 2 percent of the COVID change in charge for commercial is almost nine hundred thousand dollars the change in charge is 46 percent of their growth from 20 to 21 which is 4.6 million five hundred excuse me four million seven hundred thousand dollars and the like I mentioned the change in charge is 46 percent of that they have been averaging 3 percent for five years from 2016 to 2020 for their changing charge our recommendations on slide 84 oops excuse me the pair mix sorry you can go back one more for the pair mix there thank you um their pair mix has been uh changing quite a bit and we did ask them at the hearing and they were saying that um especially in the last year so they were going through a general ledger finance system uh computer change so we're not quite sure if these are as accurate as they could be but this is what they presented to us and did not make any changes um I can't speak any more on that for this particular hospital and um their NPR as a percentage of gross revenue has been basically between the 46th and the 47 percent range from 2019 to 2021 um we will probably be asking more information on this during their monthly reporting um to make sure that their accounting system is more accurate and that they are giving us more accurate information so staff recommends that because the hospital requested 5.3 percent increase from their 2020 budget that we reduce the NPR growth to 4.3 percent with those accounting adjustments and provided transfers which and it is worth 4.8 percent the covid and standard change in charge is equal to the 4.9 percent of which 2 percent is covid we recommend reduce the change in charge to 2.9 percent we feel that um the provider tax for this particular hospital was built off 2021 budget by mistake it should have been based off from at least their 2020 projection this is overstated by about 821 thousand dollars which is equivalent to approximate 2 percent change in charge so that's part of the reason why our recommendation this hospital is projecting a 2.6 percent margin for 2020 we feel that approving the standard change in charge as submitted this is the line with their is in line with their five-year average the and like I mentioned the payer mix and reimbursement assumptions last year in this year should be more accurate and not spread overall 12 pairs as they stated at their budget hearing so um like I said we're going to be updating the motion language but right now we're asking you move to approve Broward Memorial Hospital with an NPR increase of 4.3 percent from fiscal year 2020 to 21 budget and an effective NPR FPP increase of 4.8 percent from the fiscal year 20 to 21 budget and a 2.9 percent increase to overall charges as submitted reduce xn to reduce their expenses accordingly this is subject to the standard budget conditions out as outlined in slide 27 we also encourage this hospital to improve their timeless inaccuracy of data submissions Lori they weren't the only hospital that appeared that there was a mistake on the provider tax I'm wondering did you reach out to Broward Memorial to get confirmation from them that it was indeed a mistake and what about the other hospital that that also appeared to have made a mistake we did go ahead we did not reach out to them because we um basically um did our own analysis and double checked with them and they we have a few other hospitals that we will be presenting that same type of information to you well since we're not voting they'll have an opportunity if we have made a mistake to correct us so right thank you yeah I just have a couple comments on this one um can you roll back to slide 77 and um you know this is a theme that that is occurring you know throughout as we look at these and I just want to kind of um you know go through some of the assumptions and one of the factors that I'm going to be looking at so if you look at the 20 budget it was 88 million their 20 projection is 78 million so they're off 10 million and then they're um go back up for a sec I have the numbers in front of me too but so in 77 the slide I was on so what I'm looking at is the 20 budget was 88 145 the 20 projection is 78 million so they're off about 10 million dollars their 20 budget of 88 million to 21 request is up slightly over four million dollars so so to me the net of those two is they're still down six million so I I appreciate that they have requested a five five point three percent change to 20 budget but one of the things I'm certainly considering is what did they you know kind of what's that two-year look at it as what what did they lose in 20 and what are they gaining in 21 and I know that is one of the things we did talk about if we were to look at enforcement at one of the pieces we would look at so I just want to put that piece in and the other thing um because I haven't stated it yet and and I'm sure people on the other end are waiting for me to say it you know every number is wrong in these budgets I mean I appreciate they're trying to put them together but you know all their assumptions are not correct so some may be a little more aggressive on what they're thinking in the top line than others and we won't know until the end of the year so I wouldn't I wouldn't necessarily penalize them for that I also respect that this was one of the few hospitals that came in and separated a standard and a covid number in there when they looked at their their 4.9 percent so if we if we were to cut them back as suggested by the staff you know I could still be comfortable with a 2.9 percent standard and potentially the 2 percent covid and the reason why is if you roll now to slide 82 this hospital has has struggled in the past so in 17 and 18 they lost quite a bit of money 20 they have been um they they are making in their 20 projection getting some of that back but their 21 budget of 4 42 and half a percent is is relatively low as a percent of operating margin so even if we drop the 800,000 if the provider tax which is you know one thing that yes that was that was an error so that's different than a budget miss but even if we drop that to the bottom line it still puts them at 1.5 percent so you know these are some of the factors I think that I'm looking at as we go through these you know not not just are they is the top number too high but you know how is this hospital performed in the past so I just want to put that out there because I do respect that they separated the covid piece and so that will go away so they're actually asking you know for a 3 percent 2.9 percent increase and I'm not sure if we went on the staff's recommendation of 2.9 if we would make some of that covid or not that would be the suggestion but I do think looking at their historical performance and that they were not coming in looking for 21 budget to be at a 2 or 3 percent margin is also important so um and the fact again that they're missing quite a bit on 20 budget to projection and not making that difference up in their 21 forecast um you know because I do have concerns about the prior you know 2017 and 18 performance in 2019 at 0.8 was was not um you know a huge margin so um that's a factor here that's all hey lori this is tom one comment on the provider tax yes um they did submit a response um and basically what they said was is that um and I can read it to you is that um the new tax rate was based on the actual annualized net patient revenues for the time period october 1 2019 through march of 31 2020 was to a great extent and and then they say that diva there's a true up at the end of the year which is true but you know some hospitals it seems to me had a methodology for calculating their private provider tax and you know it you and it was based on kind of an assumption of that the tide is always rising and one hospital said point blank but you know uh there was a uh you know a um a stick put in the spoke of the wheel and so um so here you have a hospital using its traditional methodology of estimating the provider tax uh thinking that it was going to be a normal situation of a rising tide when in fact after march 31 the tide started going out and so that is uh so there you know there is um a lot of variance I think about the provider tax um across all hospitals and we just might want to think about you know uh keeping it simple and saying here's the methodology you had a 2020 projection you know we should budget at six percent of that and kind of uh uh you know think about applying a standard to all hospitals as opposed to uh a kind of picking and choosing and getting into the weeds the the other issue I'd just like to mention um is is I view this process more as steering than rowing and then try to restrain from getting into the weeds too much of how a hospital um uh you know allocates its its npr um you know it you know and plus we have the sustainability process uh just down the road with us but here's the situation where um Brattleboro has afforded or budgeted a uh four percent increase across the board for its staff and a 15 uh dollar minimum wage and um whereas other hospitals we see have furloughs and layoffs and uh staff staff reductions etc so I just you know I don't have a you know I don't have a you know a conclusion about that it's just thinking about it that that staff obviously is a big part of a hospital's budget and and some go are going in one direction and others have gone in another and whether or not you know we should consider that um I personally feel that we probably shouldn't let a hospital do what a hospital can within the steering um constraints that that that we apply to them but um I just wanted to have that on the table as as an example of um of of an opportunity I guess that Brattleboro might have that other hospitals can afford their employees thank you Tom um Chair Mullin I would also like to read address the question you had if we address ask the hospitals that were uh seem to have a large variance on their provider tax we did approach them and we also did our own analysis to Tom's point where we took like the February you did date information and annualized it and that's why some of the recommendations are before you today so let me ask you a question about that Laurie because I I thought that um the way the calculation was done at AHS was they took six months which would have been through the end of March if I'm correct multiplied that times two divided by 12 and then tried charge them for nine months and then there was the final three months where the true up occurred and have I got that wrong as far as the way it's calculated that's basically correct and we did that type of calculation where we we took you today February we took you today March and come up to an annualized amount that they probably should have reported for their provider tax and we found a few of the hospitals quite a large discrepancy okay so when you did the year-to-date February did you just change the assumption and calculate a monthly amount since it was only five months to come out with that amount yes okay yeah and Kevin just to chime in here Laurie's right we did reach out board member Pelham was asking the question where he saw notable discrepancies in some of this and we reached out to stakeholders at diva and others in the state just to try to understand if we're are we seeing something are we misjudging something and everyone kept coming back and saying there's been no guidance put forth besides what the normal methodology is and it would seem that some people are not actually factoring in the that revenue losses that were coming in in April May and to some extent June so the taxable base is coming down for this year we don't believe anybody is going to tax the subsidies that have come in from the federal government and therefore the taxes should not be going up if the taxable base is coming down so where we've seen sizable discrepancies we're trying to utilize those discrepancies to make sure that we're not giving rate increases where that tax is just going to fall to the bottom line so if you're not getting taxed on it what's the value of that compared to your commercial request and can we dial that back a bit and they can find those savings in the bottom line when they're not taxed for that amount that they've budgeted so in the projections that you were using to try to calculate the appropriate amount did you use the actual hospital projections for the full year 20 I believe we did we did both yeah we did it a few different ways yeah okay we just could not we could not reach the same figures that some of these hospitals were reaching and with the there was a varying of answers that were coming across from the hospitals which caused even more confusion around a methodology that's pretty set in stone from what we've come to understand from the folks of diva so we tried to run a variety of different calculations for reasonableness and we never got within anywhere within range of some of the hospitals who have these large overages okay thank you other questions about prouder borough before we move on proceed all right monoskutney monoskutney is asking for a 4.7 percent growth rate from 20 to 21 budget the 21 budget if is 56,300,000 their projection is 47,900,000 and the growth rate between their FY 20 projection and their 21 request is 17.6 percent the change in charge includes a COVID so they are at total change in charges 4.3 percent of which 2.2 percent is COVID and 2.1 percent is the standard overall change in charge and they have spread those charges between the three payers commercial Medicaid and Medicare the hospital gave a justification of that they're 94 to 95 percent of normal for the 21 budget meaning normal per pre COVID the they are having cost savings they said that they are terminating their pension and we understood that to mean the older pension where it's a quite a obligation on their books so this is and they're also limiting their retirements they have flat benefits for you year to year from year to year that's what they're budgeting they are not budgeting or even are excuse me booking a reserve this is equal to 1.5 million dollars and this reserve is in relationship to one care the COVID 2.2 percent is for the ongoing COVID related expenses such as supply staffing equipment and they said to replenish their cash they also needed for urgent deferred capital investments the they have 7 to 10 new FTEs for COVID safety and they also have added capacity for their mental health next slide please we didn't consider the information that monoskutney sent about their providers we did reach out to asking if these were traditional provider transfers and basically said that they were not because they were not coming from independent providers but we thought the board should be aware that this information could explain some of their increase in their NPR FPP growth so they had a urologist who was from another hospital and that increased their NPR FPP is worth their NPR FPP of 640 thousand dollars or 1.2 percent adjustment for NPR FPP and that was effective this last year in March they also have a neurologist that is worth almost 300 thousand dollars in NPR FPP that will be effective at the beginning of October and that is worth a 0.6 percent NPR FPP adjustment next slide please and this is the detail of each one of those expansion of services so this one is the urologist and like I mentioned this came from another hospital and they felt that their community still needed this particular service so they took it on and it was worth 237 thousand dollars of NPR but they also had regular NPR but they also have ancillary NPR of over 400 thousand so I included both of those in our analysis and this particular provider is not even a full provider it's a part-time provider and they have 1.6 non-provider FTEs and as mentioned on the previous slide it's 0.6 impact on NPR FPP and like Brattleboro we're asking the board to recommend acknowledgement of this enhancement the next slide is for the neurologist and this one is another part-time provider but they're sharing the services with the veterans hospital and they're saying the NPR is 171 thousand with ancillary NPR of 126 thousand and this is it like I mentioned a part-time FTE provider and part-time non-providers and this will be a 1.2 impact on NPR and we recommend the board to acknowledge this enhancement of services also so Lori before you move on focusing on that provider transfer adjustment it's easy for me to understand the urologist it moved over from a neighboring hospital and their NPR FPP is declining at the neighboring hospital so I think that the system balances out on that help me understand the neurologist and is this just a long time needed service that is finally being filled or what's the justification here that that's basically what we understood this to be and also considering they were sharing it with the veterans hospital which is close by okay thank you slide 90 please mount escutney's operating performance for fiscal year 20 has been pretty consistent for at least the first two quarters is like all the other hospitals and then dipped in quarter three and then they came back up to past quarter one so they're at 13.5 million dollars for the NPR FPP the operating margins that was they were having a little bit of trouble the first two quarters of the year and I think they had also mentioned when they were talking to us that they might have had some um they were getting more rehab I believe into their hospital from darkness and they were trying to understand that information also um the quarter four is where they saw the 1.7 million dollars in operating margin which as all the other hospitals is part of covid really funds also slide 91 please um this hospital has been uh pretty low on their the first two years 15 to 16 they didn't meet their budget 17 they did 18 and then um 19 they they didn't and um for fiscal year 20 of course they're not meeting their budget but they're expecting 56 million 300 000 for their fiscal year 2021 which is 17.6 increase from their projected 20 their operating margins have been um up and down through the years and in 17 and 18 they made pretty good but it was um 2.7 percent 17 1.9 percent in 18 they basically broke even in 19 and they're expecting to just about break even in fiscal year 20 um this hospital um for their fiscal year 20 they didn't really even budget an operating margin they were breaking even so they were coming in um the beginning of the year almost on budget or above budget but then of course covid hitting that affected them um drastically so um fiscal um excuse me thank you the uh change in charge for this hospital is 4.3 percent which is a combination of the covid of 2.2 and standard of 2.1 percent the npr due to change in charge is equal to 1.9 and this hospital is changing their inpatient charges by 2.9 percent outpatient by 2.9 but they're also changing their professional services by 1.5 and this hospital has a skilled nursing of 2.9 they're changing 2.9 percent the hospital's um payer mix for their standard and covid is presented here and the standard is equal to 933,756 of all the three pairs the covid change in charge for a total payer mix is 987,626 and that's represented here also how they're expecting to um allocate these changing charges by payer the changing charge though is 76 percent of their growth from 20 to 21 for npr and this hospital's uh changing charges is 4.3 percent on a five-year average annual increase their largest was in 16 and then recently they've been between 2.9 and 3.2 so um going to our recommendations on slide 93 oops excuse me I keep on getting that one mixed up payer mix sorry Patrick 93 please um this hospital's Medicare has been at 61 in 2019 which is the most most recent actual data and then they're budgeting 58 percent of their payer mix in Medicare for commercial they were at 35 percent for fiscal year 19 and they're budgeting 35 percent for commercial uh this year that the um change was basically in their projection 20 where they're asking for 39 percent in their payer mix um their reimbursement ratio which is the npr to gross revenue was 49 percent in 19 and they're budgeting 52 percent in 21 next slide please so staff recommends we approve this budget as submitted so the hospital's asking for 4.7 percent npr growth from fiscal year 20 to 21 and a 4.3 percent change in charge we asked the board to acknowledge the enhanced services that were presented and um we expect that the um the motion language would be to move to approve monoskutney's budget as submitted with a 4.7 percent increase from fiscal year 2020 to 2021 budget npr fpp and a 4 percent increase to overall chargers as subject to the standard budget conditions as outlined on slide 27 our recommendations are basically because monoskutney's operating margins are slim typically break even and as of um february 2020 they were operating at a 7.4 percent below budget on the npr the 4.3 percent change in charge is consistent with their five-year average and in the last two years the change in charge averaged 3.05 percent the last three years was an average of 3.67 percent so just to give you a little bit more statistics on this hospital that's our recommendations lori the ceo reached out to our executive director and said that they had like rottwin decided to participate in medicare in the aco and i believe he communicated to her that they would be filing a request for a change in their budget have we seen anything yet we were not aware of this change so no okay so i i guess um the my recommendation would be to reach out to um david and ask him when you would expect to see whatever the changes that they're requesting okay thank you lori just a comment on this on the change in charge when you guys put the recommendations um can you put the that it's 2.1 standard and 2.2 covid related because i think it's important you know this was another hospital that did request that split and that obviously is a big influence for what the rate would be in the following year thank you marine yes i noticed we missed that too we will break that out yeah yeah and i would say that and and the other one just on this one that's always a little bit harder to pick out is you know in the past dartmouth has contributed money to help fund them and then pulled that away yet they have a lot of borders and other things that they end up you know many times getting patients from dartmouth that don't make money but it's all part of their system so it's a little bit hard to look at their profitability and isolation um because of that because of the you know impacts dartmouth has had coming in and out helping them favorably and then maybe not helping them certainly they're getting benefits from changing their pension and the way they're doing that i believe they were getting some benefits from that so i think um i think those are important to for at least to be us to be thinking about and i guess the other thing as it comes down the pike if they're putting in a request to put increase their commercial to fund the acl reserves is that is that what we want to do i mean just throwing that out there no worries tom again just one factual question i tried to follow the bouncing ball through escutney's uh presentations having to do with the borders and the 700 000 and i after trying to follow about bouncing ball was still unclear whether they are reserving 700 000 in their 2021 budget in in case they can't find appropriate homes for for these folks or is it that that reserve was in 2020 and they're using it because they can't find homes for these uh borders and that they did not build a reserve into their 2021 budget so is there a 700 000 reserve for borders in their 2021 budget that's my question okay we'll check into that thank you thank you one last um maybe request when we're putting the fiscal year 21 request could you be uh make clear whether you're inclusive that's inclusive of the 1.8 percent npr increase that's really related to the expansion of services right yes yes okay so it just might be helpful since there is an expansion of services in here to to denote that thank you thank you and again i um to follow up on that i'm a little bit leery of combining the two of them together because i don't think the urologist is really an expansion of services to the overall system so we might wish to break that out as one being an expansion and even the neurology my question would be is that um dollars that have been traditionally going out of state for example the Dartmouth for neurology services that are now going to be kept in-state which is a would be a good thing if it was kept in-state so um there are questions about the uh two practice transfers or or not really a transfer but uh the new practices let's put it that way yeah and i think that was my point is that if it's 1.8 that's money that's already in the system it was just you know being delivered somewhere else then it's not the same as a 4.7 percent increase without that so that would be helpful thank you okay we'll double check on that thank you this is robin i just had one uh request when we get um if they do come back with some changes to their budget that is related to the aco reserve could we could you remind us of their current assumptions in their budget related to the reserving i'll go back through my notes as well but i i seem to recall them being pretty conservative compared to the other hospitals okay i think we're going to have to have a walkthrough of the whole reserve issue again if they seek to amend so let's find out quickly whether or not they're actually seeking to amend or if that wasn't off the cuff comment made to the executive director okay thank you other questions on mona scotney or comments okay proceed patrick i'm still on okay proceed more um we decided that we divided it up like this instead of like we did the other day or every other one um the northwestern is another hospital who had some changes in their provider transfers and accounting adjustments so we'll see that in a few minutes um this hospital is requesting a negative point two percent growth rate for their npr fpp from fiscal year 20 to 21 budgets this is a 19.8 percent growth from their fiscal year 20 projection to the 21 budget they are a negative 16.7 percent it's a for their budget to projection variance so their request for the 21 budget is 116,693,229 this is of course less than the 3.5 percent growth rate ceiling this hospital is another one who is asking for a split change in charge their covert is 1.18 percent and standard is 19.9 percent so a total of 21.1 percent change in charge and most all of the change in charge is going to be for commercial payer the standard is going to be for 11,500 and the covert is close to $700,000 the hospital justified their budget um they were seeking parity in their change in charge with their peers in order to remain flexible excuse me financially stable they are seeing a service area growth volume continue and it's continuing to improve they're evaluating their capital needs for their fiscal year 2021 and they have a $7 million approved co n for the ed expansion and that is going to be paid through their cash reserves and not through rates they're investing in primary care pediatrics ob gyn and they're strengthening their intensive care and sleep services in this budget they're restructuring their lifestyle medicine into primary care the rise vermont is resized for sustainability and alignment with the aco uh they transitioned the northwestern hope and recovery and outpatient neurology to community partners this wasn't included in their 2020 budget they are not in compliance with the debt service ratio covenant because of their low operating margins and other covenants that um trigger these issues with their banks and this is a historically low cost hospital so this is where i split out the we're calling against service enhancements and provider transfers they transferred cold hollow family practice out of their hospital because they found that they were not they were not able to transfer this particular practice into the hospital and then as we heard this summer their northwestern partners in hope also was transferred out of the hospital to a community provider they have um budget two service enhancements the icu through telehealth we heard this last spring when they asked for amended budget and then the northwestern pulmonology the um provider transfers are equal to one point a negative 1.3 million dollars for npr or 0.9 impact on the npr the service enhancements are worth one almost one point six million dollars to npr or a negative one point five percent impact if you compare it to their 20 budget and they had an accounting adjustment because again this hospital was asked to move the aco dues from npr to operating expenses which was worth nine hundred thirty one thousand dollars and that's worth a negative point eight percent to npr next slide please this is breaking it out again for the provider transfers and enhancements um the cold hollow family practice that is effective for this year october and the northwestern partners in hope was effective july 31st the icu telehealth with dartmouth is supposed to be effective for april 1st 2021 and the northwestern pulmonology is supposed to be effective for october 1st 2020 next slide please and another look at these transfers so they as they mentioned in their budget they did not acquire the cold hollow family practice as they expected in last year's budget so they're taking it completely out of the 2021 budget and we are asking the board to acknowledge this transfer in this budget this is equivalent to one provider oops okay go ahead um one provider fte eight non provider fte's and a point six five percent impact on npr then the next slide is where we talk about the northwestern partners in hope and recovery that we heard about this summer they um had it uh they could no longer support this uh practice in their hospital so it went to um transferred to the community and that's had one provider fte and 11 non provider fte's and it was worth point 25 percent impact on npr and again we asked the board to acknowledge this transfer this is they're calling this expansion of services um this is where they want to have telehealth ICU in partnership with darkmouth effective next year april 1st and um it's to retain the lower acuity ICU patients and allow them to receive services locally this does not have any provider fte's but it does have five non provider fte's and this is equal to a 1.3 percent impact on npr i'm recalling on a negative 1.3 percent impact because you compare it to 2021 and we are asking the board to acknowledge this expansion of services uh this provider is again not an acquisition but a routine expansion of services for northwestern and it's northwestern pulmonology this is effective for this coming october 1st and this one is has incorrect information on the side about darkmouth and his cock about telehealth um but this one is supposed to be an enhancement of services it's equal to 273 thousand 810 npr and it is a negative 0.2 percent impact on npr and gmc b staff would like the board to acknowledge this enhancement of services i can we will adjust this slide in the next round of our presentation um northwestern's operating performance for fiscal year 2020 they were um doing pretty good like all the hospitals the first quarter and then but their operating margins were still very low all year they were negative operating margins um and they're expecting to be at a growth of 25.6 million dollars in their quarter four for npr fpp but it still is going to get them a negative operating margin of 2.4 million dollars or a negative 9 percent um they have been struggling with their emr and their um volumes for quite a few months from since last year's budget basically this this is showing the historical operating performance since 2015 they were doing very well 15 16 and um we're about the same of their budget in 17 and then it started to erode in 18 19 and then they're hoping for 21 at 116,716 million seven hundred thousand they expect a projection of 97,400 97 million 400 excuse me um their operating margins as you saw in fifth at the bottom in 15 was over 10 million dollars and 16 was very profitable and then it started to go under at negative operating margins from 17 through 19 through projected 20 and they hoped to have a positive operating margin of 2.3 percent or 2 million 800 thousand in fiscal year 21 their change in charge the total change in charge is 21.1 percent and this and their npr change in charge um from and from their npr due to change in charge is 12,200,000 this is valued at 578,901 percent change in charge the standard request for hospital inpatient change in charge to gross revenue is 25.37 percent for inpatient and outpatient and then for covid they are asking for 1.53 percent for inpatient and outpatient so their service category is changing accordingly um on their payer mix for the change in charge it's all going to be going asking for the commercial change in charge and covid is 19.9 excuse me 19.9 is standard change in charge and covid is 1.18 percent change in charge we couldn't do a change in charge as a percent of npr increase because they are a negative increase from 20 to 21 it's that's the negative 233,000 and as mentioned above their changing charges were 12 million dollars 200,000 they have an average five they have a five-year average of their change in charge that was approved at 0.7 percent last year they asked for a 5.9 percent change in charge and it was approved we feel that uh some of these hospitals who asked for these higher change in charges didn't necessarily get a chance to realize those change in charges because of the lower volumes due to covid um the payer mix for Northwestern Medical Center from 2019 they were at 34 percent for Medicare and they are budgeting 28 percent for fiscal year 21 and then for commercial they were 50 percent in fiscal year 19 and they're budgeting 55 percent in fiscal year 21 Medicaid has been around 16, 18, 17 percent so basically around the same percentage of their npr their reimbursement rates were at 50 percent in 19 and they're going to 45 percent in fiscal year 21 budget the npr growth of a negative 2 percent request by the hospital we are recommending that that's being reduced by our recommendation for the change in charge the 21.1 percent change in charge is split with covid and covid is 1.18 percent we recommend to remove 7.25 percent change in charge attributable to the aco dues risk reserve funding and lower payments on services performed reduce the submitted change in charge to 12.67 percent the standard rate and then the 13.85 percent including covid um we expect them with reducing the npr accordingly with the change in charge that they also reduce their expenses so this particular hospital as of february was operating at 7.3 percent below budget and moving the 7.25 percent change of charge associated with the aco um seems reasonable to staff the keeping should be keeping with the keepings our staff um patrick and i and kate and the board updated with any cost mitigation efforts related to the e mr because we knew they had been struggling with that project for the last year so we suggest move to approve northwestern medical centers budget with an npr fpp increase in accordance with however the change in charge flushes out from fiscal year 2021 budget a 13.85 percent increase to overall charges as submitted reduce their expenses accordingly and subject to the standard budget conditions as outlined in slide 27 we also ask that this hospital improve the timeliness of data submissions yeah if i if i may jump in real quick uh sonny this is patrick we were uh we were very impressed with the presentation that northwestern gave especially around some of their efforts to control costs and the one thing that stood out to us uh the most i believe was the efforts to mitigate the impact of the electronic medical record that they rolled out last year when they came to us in april for a rate increase that was not something that uh was really well explained at the time and we thought northwestern's efforts to efforts to date to offset and mitigate some of those um the losses that have been incurred by that and their continued roadmap um to further mitigate some of those costs were very very important but we would like to see updates on that in the future because we don't believe their work is done but we thought they took the board's comments in april and considerations very seriously for this budget and the 13.85 percent rate increase is very substantial in nature and we just believe that with the historical change in charges that this is something that has to be done with the low-cost nature of their hospital they need more revenues period from our perspective but we also want to see them continue to make those efforts to offset some of the um cost incurred by the electronic medical record so i just wanted to add that in there because we thought they made a pretty strong case for that in their presentation i guess i would just love to hear more from the staff about why the 7.25 as it relates to the ACO as the choice um the lever to reduce that commercial rate i believe we felt that was kind of at cross purposes with the nature of the all-payer model um to utilize fee-for-service payments to offset the um cost of doing business with the ACO it wasn't something we were entirely clear on we haven't heard that as a justification from many hospitals we just heard that that a scutney may employ a similar change in charge methodology and we just did not feel that that was a justified component of this others may feel differently but we talked about it for quite a long period of time and we just could not get our minds around um subsidizing that component to date um that's part of the uh risk that you take when you sign a contract with the ACO and we did not want to see commercial rate payers put the bill for enrollment in the all-payer model that was our angle when we decided to remove that piece from the change in charge okay thank you and actually i mean the board has had a history of not allowing um the ACO costs to roll into commercial rate so it's consistent with decisions the board has made in the past but i just wanted to hear more from you all about that this that recommendation thank you other comments or questions about northwestern this is robin um i'm so when you were talking about um some of the justification for the standard charge recommendation you mentioned that they didn't have the opportunity in 20 to realize some of the rate increase because of the drop in volume i'm wondering why it wouldn't make more sense to put uh some value for that in the covid related since that seems like it's most likely to be time limited in the grander scheme of things rather than building it into the charge base i believe that's probably a question for northwestern uh we're just presenting their their budget as submitted and and this the imposition of um covid rates that weren't asked for is not something that we were operating under when we are creating some of these recommendations where we were sticking to the the guidance where the hospital had to request a covid component so we haven't gone back and tried to uh work with um shifting any of the standard rates over to covid to date so we haven't planned around that at all thank you that was helpful explanation wasn't sure if it was you or lori patrick you get me for the next three hospitals all right and we found out our presentation today with the three hospitals that operate within the uvm health network first up is port of medical center they are uh requesting an mpr fpp growth of 2.7 percent which is within the uh green mountain care where it's 2.5 percent growth rate ceiling they are not requesting an overall change in charge however they are requesting a 5.75 percent uh commercial effective rate to their change in charge and as you can see on slide 108 in the upper right hand corner the value of the commercial is about 1.6 million and they have reduced their medicare uh change in charge values by 350 000 there is no budgetary assumptions pertaining to covid no risk reserve for fy 21 they are uh rolling over what they've reserved in the past so that is maintaining on the balance sheet uh they need to balance and manage expense growth and it's necessary to continue to support the nursing home and we'll come back to that last piece as we move through the presentation because that stuck out with staff as far as considering the recommendation for this particular hospital so slide 109 again we are seeing similar trends the hospital was operating under budget in february about 7.1 you can see the first two quarters are are mimicking what we saw through february then again the impact of covid in quarters three and the projections for quarter four with a rebound to npr fpp north of 21.6 million and an operating margin for the fourth quarter of about 1.5 million dollars historically this has been a solid hospital for in the last few years for operating they are producing operating margins that are certainly within reason they had a high of 5.2 percent in 2019 4.7 million they are budgeting for 4.5 percent this year just shy of 4.4 million which that percentage outstrips every other hospital submission in this year and we have seen everything from almost break even with southwestern up to a high of 4.5 percent with porter medical center they are budgeting to attain almost 90 million dollars in npr fpp this year historically their last full fiscal year they surpassed 84.9 million dollars and slightly exceeding their budget in 2019 and of course with the covid component this year factoring into npr they are not going to meet their fy20 projecting figures for their budget breaking down the change in charge as i stated previously they are going to increase their gross charges by zero percent the commercial effective rate as submitted is 5.75 this adds 1.2 million dollars in npr the value of that is 1 percent of that is 278 thousand dollars and because they are not increasing their gross charges there is no allocation across those service categories that were offered the commercial component as stated previously is about 1.6 million dollars and medicare is being reduced by 350 thousand the change in charge is a percentage of npr fpp increase is 54 percent and historically they've had a five-year change in charge that is right about middle of the pack at 3.8 percent so they've been pretty well funded with green mountain care board decisions over those years although in the past few years those figures are coming down slightly from what has been approved in fiscal 16 and 17 payor mix remains relatively consistent for this hospital uh commercial hovers between 50 and 52 percent for the time periods up on slide 112 and medicare operates between 40 35 and 40 percent the 35 is for 2020 budget of course that not coming to reality can be omitted from that discussion because it appears that their projection is around 39 to 40 percent and medicare is showing slight erosion there their npr is a percentage of gross revenues is moving between 50 and 52 percent and they are budgeting up for 2021 as a percentage of gross revenues as it pertains to their reimbursement rate so at porter hospital they requested 2.7 percent this is within the budget to budget guidance however we are reducing the effective rate from 5.7 to 3 there was a lot of discussion around inflationary factors and whatnot from the network representative so we wanted to ensure that those figures between 2 and 3 percent were covered for this hospital so we would expect expenses to be reduced accordingly if they want to attain that 4.5 percent operating margin but one of the things that came to us from the presentation was that they need to continue to support the nursing home so we went and we began to look at some of the audited financials just to see what type of impact that nursing home has on the finances of the hospital because it's very difficult for us to justify some of these numbers if we don't know what's happening with that entity and we found that there have been transfers from physical year 17 to 19 of 1 million 2.15 million and 3.45 million respectively from porter to the nursing home to cover the operational losses of that entity and we could not justify ourselves continuing with a commercial effective rate of almost 6 percent when some of those monies are in those bottom lines are being transferred over to an entity that we have no authority over or capacity to consider as part of this budget so we wanted to make sure that we were very cautious in our recommendation there because it certainly does have an impact on the bottom line of the hospital when these monies are transferred over to that other entity again if I go back up Porter's operating margin in 19 was 4.7 million and there was a 3.45 million dollar transfer to Helen Porter and that is pretty substantial and so with a 4.5 percent or 4.4 million dollar operating margin this year we would assume based on some of the historical figures here that there will be more money transferred over to that entity and we wanted to be cautious when recommending an approval for that commercial rate so we are recommending the 3 percent effective commercial rate and appropriate reduction to NPR due to that and also reduction of expenses if they'd like to maintain the submitted 4.5 percent operating margin and that concludes our piece on Porter so if the board has any comments we would welcome those questions or comments on Porter can you go back to slide 111 for a minute one thing here I think would be good to highlight in the future is you know when we're looking at the hospital inpatient outpatient to gross charges because I guess let's go through I guess what they're doing if you had a charge of $100 and this year commercial paid 80 I guess next year they're saying you have a charge of $100 but now commercial is going to pay you know 85 of that roughly right so so basically they're saying they're not increasing the gross charge but they're reducing the deductions right so I think it would be important to understand how that plays out for hospital inpatient outpatient and professional so what's the commercial increase for those three because if they keep professional at zero then it's higher for the other so commercial is going up although not on a gross charge but on a net yes we agree with that the effective rate as we've looked at it a little more in depth this year is certainly something that we need to unpack a little bit more in the years to come I believe board member Holmes brought that up a couple of meetings ago and I think that's something we need to explore we also need to make sure that we're hearing the same story across the board so where you're discussing that they're going back to negotiate less contractual allowances to maximize their commercial business more we want to understand that is that how all the hospitals look at it or are they saying that at the end of the day our effective rate is x which means they've already done the negotiations and this is what they want to make sure that we have the explanations relative across the board to each other to your point we do want to get to know this more because we think it is important that for those hospitals who want to establish an effective rate that we make sure we understand what the impact is the commercial payer and these budget proceedings and then just a couple other things when you know when we when we talked about one of the prior hospitals we talked about the salary increases and things they had in there and that they were able to absorb and you know Porter specifically talked about a 2.1 million dollar cost of living adjustment that they have in their budget which exceeds the entire commercial ass that they have in here and you know I would just throw that out there because in in these times right now with COVID I would venture to say that most businesses are not able to afford a cost of living adjustment on top of on top of increases that they had in there so this was above and beyond increases you know and the other part for discussion on here I appreciate the support for Helen Porter I just think about you know how do we think about if a hospital other hospitals want to invest in something that is going to continue to lose money every year and they need to fund it and it's being paid for of the rate payers who go to that hospital so I'm not saying that Helen Porter is not something that should be supported it just puts a different dynamic on this hospital where it's funding that out of its services and needs a higher margin and you know other other hospitals may want to do that for their community as well and what will we think about that so just with those couple things out there and we agree with that we did we felt we didn't have enough information on that nursing home we are positive it is a essential service in that community but without the detail that would be required we could not justify a recommendation that would consider that as a factor and I'll just follow up on that I mean nursing homes are essential services in in every community and this appears to be once again another cost shift away from appropriate government funding for services provided onto commercial insurance rate payers and that's that's what's problematic here is that other other areas nursing homes are struggling everywhere in the state of Vermont and likely that's due to the fact that they probably should be giving more of an increase in their rates through Dale and and I and I don't pretend to know exactly what the reimbursement rates are homes but I do think that this is another key component of trying to contain the growth of insurance rates if it's allowed to be transferred onto commercial hospital rate payers rather than through the more traditional means of reimbursement through the state of Vermont and Dale so that one concerns me and I do want to highlight again that high operating margin and it's something that I put in the back of my mind for possibly a component of guidance in 22s budgets because I do think that there are justifications for varying operating margins but we're not hearing those from the hospitals one of the most reasonable being if you have the oldest age of plant in the state at your hospital and need to do serious capital upgrades like for example a southwestern you probably could justify a higher operating margin than someone who has had continual upgrades and has a much lower age of plant so it's just something to consider for next year's guidance that we may want to try to begin to formulate some type of targeted operating margin realizing that there would still need to be variances but it just seems that in many respects to this budget process that it doesn't seem fair when one hospital is asking for a half a percent operating margin and another is asking for a 4.5% operating margin so those are just my ramblings. Kevin can I ask a quick clarifying question? Sure. On this slide can somebody just remind me Patrick or Laurie why Medicare is going down 350,000 looks like the payer mix is is going up for Medicare so I'm just I'm trying to remember I cannot recall why that would be a reduction in Medicare reimbursements. Neither can I I would have to differ Laurie if she has anything. I don't have anything directly related to why but sometimes it's because of their reimbursements they are aware that they were going to be receiving less so they put that in the budget they don't need that for Medicare. We could double check for you if you'd like. If we see it on others would you like it if we see it on others also? Yeah I think that well if you can't unpack why that would be helpful to better understand. There might be something in some of the other hospitals where it's obvious why it's going down but in this particular case it would be helpful for me to understand why it's going down if you can thank you Laurie. Central Vermont Medical Center is up next we have a submitted budget that requests an 8.7 growth over the fiscal year 20 budget which is over and above the 3.5 growth ceilings set forth by the board. They are also submitting a 6 percent overall change in gross charges with an 8.5 percent increase in the commercial effective rate. The value of these changes are for commercial just under 5.3 million and for Medicare the assumption is a $183,000 dollar value to those changes. So the hospitals justifications are expenses have continued to exceed revenues since fiscal year 2017. They're being driven by salary and pharmaceutical costs. They are undergoing a higher collection rate trend an increase in volume of 1.5 percent and the margin has been eroding due to shift in payer mix growth in pharmaceutical labor inflation and unpredictable volumes. So again on slide 115 we are seeing a similar trend the hospital as of February was operating 2.9 percent above budget on NPR. However the operating margins per quarter continued to be in negative territory and again you can see the similar path here through COVID with the exception that in the fourth quarter they are again projecting an operating margin loss but rebound a rebound to their NPR FPP. So this is the hospital that in the last few years has struggled it has produced negative operating margins through fiscal year 17 through 19 and again in 20 is projecting a 4.5 million dollar operating loss. The budget is is expecting a half a percentage point operating margin or a value of 1.2 million dollars on the positive and their NPR is being budgeted to rise significantly to 237 thousand or 237 million dollars. Their last actual year NPR FPP surpassed 211 million dollars as well and this year they were budgeted to 218 if you recall they resubmitted their budget about this time last year so these figures are for that resubmitted budget and again due to COVID they will not be hitting their budget as is the case with all of the other hospitals in the state of Vermont. So a breakdown of their charge request again overall 6 percent commercial effective rate 8.5 the NPR value of that is 5.46 million 1 percent is valued at 621 thousand they will allocate their increases at 6 percent across hospital inpatient outpatient professional services and their skilled nursing facility at the 6 percent rate. Again to recoup or recap here the commercial value 5.283 million Medicare just over 183 thousand and their change in charges percent or percentage of NPR FPP is 29 percent. This is another hospital who has had a middle of the pack blended five-year average charge increase of 3.2 percent which does put them about in the middle of the hospitals for the state of Vermont and the difference between that and what they've submitted is only 0.2 percentage points difference. Payor mix tends to stay relatively stable for this hospital the fluctuations up here look a little more significant than they are again the 34 percent in Medicare on slide 118 for the 20 budget is not dipping that low their projections are around 39 percent which is about with their fiscal year 19 actual 38 and the commercial payers have dipped slightly but that's compared to budget and of 2020 however it is on par with their fiscal year 19 actuals and their rate of reimbursement here is at 50 percent and the reason that is looking like that is because there is rounding going on in there so we will make sure we try to make that look a little flatter than it is for the final slide deck when we move into voting so the 8.7 percent increase is well above the growth rate ceiling set forth by the board we would reduce that based on reductions to the change in charge and the commercial effective rate again we have another hospital where the provider tax appears to be overstated by about two million dollars and so the reductions here would basically take that into account across the board we do believe that if they are going to have rebounding volumes that can probably be made up on the NPR side but the change in charges with what we think is an overage here and the provider tax could be reduced so that that is not cost is not shifted over to the commercial payer and also reduce expenses accordingly they are projected to grow expenses between FY 20 budget and FY 21 budget by 8.2 percent that exceeds every hospital with the exception of the state's largest hospital which is a UVM medical center we would expect a hospital that resides within the health network to have greater buying power greater negotiating power and also be able to take advantage of the operational investments that the network is making which should return cost savings initiatives etc to the bottom line of this hospital and we could not we could not justify or did not believe the 8.2 percent was justified with the change in charge it would cover the inflation that the network representatives did discuss however the rest of that explanation we did not feel was justified in their presentation so the 8.2 operating expense growth seems relatively high for a hospital that operates within a network so we would like to see them realize some of those cost savings initiatives that are coming through the investments that they are making and that concludes our piece on the central Vermont medical center so if the board members have any comments or questions we'd be happy to address those question or comments on central Vermont medical center hi Patrick this is Tom um I have the same question uh for central Vermont and Woodridge as for Porter and Helen Porter that I think as I recall um I asked during the um during the hearing what the relationship was between Woodridge and the hospital and I walked away with the understanding that it was the same equivalent in terms of Woodridge and central Vermont and so therefore that same dynamic that same issue I think presents itself uh although we have less information about Woodridge I mean it sounds like you haven't looked at that Woodridge's audited financial statement but I just want to make sure that during the the um hearing that I heard it right that basically Woodridge and Helen Porter are on equivalent footing with uh central Vermont and uh Porter hospital Patrick I'll take Woodridge is in the hospital where Porter medical I'm sorry is this Perry yes I heard you got an echo did you start again sounds like someone else I'm pausing it um Porter medical has Helen Porter outside of their hospital information they present to us where Woodridge is included in central Vermont's hospital budget information presented to us so it's it's kind of like it is transparent we have the information in adaptive it is included in this budget so we are we don't have as much of a concern because it is presented and they don't as you saw in the change in charge they say that they needed change in charge for skilled nursing where you don't see that in porters for Helen Porter I see what you're saying so the link in terms of commercial and um Woodridge is clearer than the link between commercial at Porter and Helen Porter and so you're trying to make them equally transparent basically it all depends what hospital presents in within their budgets if a hospital includes skilled nursing in their budgets we will analyze and present accordingly if they do not wear our hands are tied but we try and inform the board of our concerns okay thank you so just to follow up on that do we know what the specific bottom line impact is of Woodridge on the hospital the no we do not but we do if you look at the operate audited financial statements for fiscal year 19 but not in their budgets not the bottom line we know gross charges for skilled nursing in their 20 budget but we didn't ask them to separate it out for this 21 budget when they entered into adaptive we will have that information so you could give us what 19 is either now or later it's in their audited financials and we can okay thanks yeah we'll follow up with that okay perfect um just a quick question if we're going to be considering provider tax overstatements and our decisions about charges it would be really helpful to see a chart with what the hospital submitted and then the analysis that the team did just so we can see what the delta is and how that would factor into a reduction in charge would that be possible before our next round of conversation for the hospitals for for whom you're thinking of adjusting downward yes we can do that thank you Patrick I didn't that isn't some of the work that Caitlin did wasn't that sent out to the board it was yes I believe Jess is looking for a slide that would that would show that to support okay is that correct Jess I got it you've done the work I just think it should be part of the the conversations in public about what the estimates are yeah okay moving on to the University of Vermont Medical Center the FY 21 request is a 5.7 percent MPRFB increase over their fiscal year 20 budget which does exceed the 3.5 percent gross ceiling they are asking for both a 7.9 percent 7.97 percent overall change in charge and commercial effective rate increase in the fiscal year 21 budget the value of those commercial dollars is about 37.7 million and their Medicare assumption accounts for 3.8 million dollars their justifications for their tertiary care volume continues to grow at the medical center if the rate increase is not sufficient to cover inflation the only option of the impact is to impact the margin and get back on solid financial footing would be to eliminate services that lose money the increase in volume in patients creates an increase in expenses they need 3 percent revenue increase to cover the 3 percent inflationary factor on total expenses if they're not getting 3 percent from the government payers in the ACO they need 6 percent from commercial payers 50 percent of their revenue to keep pace with expense inflation they are also justifying this budget by increasing their staffing of 18 positions and 129 non-position FTEs so the medical center itself was operating at about 0.7 percent under budget pre-COVID and as you can see in quarter one there they were producing a small margin during that quarter and then a combination of things happened in quarter two where they had to fund part of their pension and also the COVID impact on the back end of that quarter began to drive the medical center's operating margin into negative territory and they have just now begun to recover that in the aftermath of the first COVID wave that we've experienced in this state back in the spring and of course it does follow relatively to the rest of the hospitals in the state as far as the impact on MPR and their margins are concerned. Historically the hospital has operated slightly over budget last year they were 2019 they were nearly on budget and this year as with the other hospitals they are not going to meet their budget projection however NPR growth as budget for 21 is anticipated to grow over 1.4 billion dollars and most of the budget presentation for the hospital amongst other things discussed the need to get back to a operating margin that is necessary for them to make the continued improvements to patient health care and investments that come with that and the projected margin for this year at negative four obviously will not allow them to attain some of their their goals for that hospital however the trend here is pretty stark from 2015 through the current day where the hospital was producing around 6% operating margins for a couple of years that has since been in decline since that time. A breakdown of the change in charge on slide 123 7.97% for the overall gross charges increase and commercial effective rate the NPR impact of that is about 41 and a half million dollars the value of 1% there is about 4.7 and they were they are going to allocate those changes in gross charges across hospital inpatient outpatient 8.5% and professional services at 6%. The change in charges a percentage of their NPR increase is at 54%. Overall change in charges their five-year average is 1.1% while their commercial effective rate has been approved on average at 3.04%. So moving into the payer mix this is a hospital who does have a very favorable payer mix and is budgeting at 62% commercial this year which is on par with their past years going back to 2019's actuals at 59%. They are forecasting a reduction in Medicaid and a slight reduction in Medicare and NPR as a percentage of gross revenues their reimbursement rate is being shown to decline which most likely would run in in sync with a higher commercial rate base as they negotiate those contracts. Recommendations for the hospital their 5.7% request is above the ceiling set forth by the board. There was a lot of discussion in their presentation about anticipated volume increases combined with favorable payer mixes which should allow them to maintain a 5.7% NPR FPP growth despite the fact that we are requesting a reduction in their change in charge and that reduction comes for and their commercial effective rate and that comes from again the provider tax component that we feel has been overstated substantially and that that figure there we could not justify allowing that to pass over to the commercial payers and so it is almost 1.7% reduction and that's the value of around 8 million dollars I believe it was to reduce that by we do think that their overall change in charges averaging at 1.1% are low and eventually that is going to have to take up and again the effective rate at 6.28% they would have the ability to go back and negotiate with their commercial payers to improve their margin on their commercial business so we would expect them to reduce their expenses accordingly again they are the highest year-to-year growth budget to budget growth at 8.7% and they did talk a lot about the operational improvements that they're making through technology and other means to make the hospital more efficient and we would like to see some of those begin to come to fruition and suppress that expense base a little bit more in the years ahead so with that we conclude our recommendations for the medical center and the slide deck in general and we welcome the board's discussion points. Can I ask a quick question on slide 123 where you broke out the approved overall submitted overall approved commercial and submitted commercial for UVM I'm just wondering why you didn't do that for Porter and CVMC that might be a helpful comparison over time and whether you could Laurie I need some historical context here you're I don't think you're wrong Jess I think we should your call has been basically we thought because two eight two nine one six zero six is not available at the tone please read could whoever's not muted that someone is somehow trying to dial if you could mute yourself so that everyone could hear thank you go ahead Laurie hi Jess we can submit that for Porter and Center Vermont but UVM was the one who was doing it the earliest and we thought that would be more advantageous for you but we will get that information for Center Vermont and Porter for you that's wonderful thank you very much yeah just a couple comments first on this slide I think it's good to ground on those bottom two lines which is in you know 16 they submitted six they got six and 17 3 2.5 and 18 they submitted 0.7 and got 0.7 19 we did make a cut from four to 2.5 and 20 a modest cut from four to 3.5 because we've we've heard a lot about the requirements needed and and maybe the cuts that the board has imposed but they've been fairly modest and to continue on that if you go to the prior slide which talks about where the operating profit has been operating margin um you know just to kind of ground ourselves you know taking this chart in 2015 their operating first of all you can see the actual budget was significantly over an NPR from 15 16 17 18 and 19 and when you look at the margin in 2015 the 6.3 75.6 their budget was 44 million so they were over by 31 million dollars in 2016 the budget was 46.1 million dollars for operating margin and they came in 74 so they were over by 28 million in 2017 they had a budget of 47.9 million and they came in at 68.6 so they were 20.7 million over in 2018 again with only a 0.7 percent increase in commercial their budget was 50.4 million they came in at 46.1 so they were under by 4.3 i would point out in total operating margin that was more than made up and they exceeded their budget but keeping to the same numbers i won't bring that in right now and in 2019 they had a budget of 39.2 and they came in at 31.4 i'm not going to bring 2020 and right now because that obviously is hugely impacted with covid but in those five years for operating margin the total increase was 67.7 million dollars over that is why they had a 0.7 increase in 2018 to try to give back some of that some of that overage and in 2000 and also we know the 21 million dollars that was allocated for the mental health you know which was another decision that we made was really relating to all these overages and even if you take the 67.7 million that they were over in those five years and adjust for the 21 million dollars that they were to pay back they're still 46 million dollars over and i just want to put that out there because that's why they had strong cash positions and there were some benefits from that and you know really kind of set the stage for the fact that you know what we've done in the past has been a result of some of the prior year performances so i just wanted to make sure as a board you know we're kind of all aware of what the budgets had been for margin and what the actuals were and a lot of that does stem from the fact that they exceeded on the npr quite significantly and it did fall to the bottom line so i know then in 2020 clearly there's a huge mess and they didn't get all of the funding that some of the other hospitals did and you know that needs to be factored in but just just want to make sure everybody kind of understood you know from this chart the profitability of where things were and why there was some adjustments made to those numbers and i just want to point out that this was a hospital that was failing to meet its operating margin prior to covid due to two main factors really the problems at the fanny allen surgery center and the implementation of epic and just like every other hospital that has rolled out a new health records program it created some drag on efficiencies and productivity so that should be kept in mind too that hopefully these problems are events that won't reoccur especially the surgery center i i do did see the most recent press article that talked about the possibility of overuse of cleaning supplies um but certainly uh you know that's a situation that has to be rectified and it can't keep reoccurring so and i also think this this could could be a hospital when we discuss where we go that um you know some of some of the commercial late change could be related to covid for the lost revenue both top line and bottom line that is occurring in 20 um you know that was part of of how we could justify covid it's not just incremental cost and expenses in 21 it's also you know what did you lose here so so you know i would also propose we may have some flexibility to put some in as a covid again which we could then revisit at the end of next year or even the middle of next year to determine if that should be kept as permanent or adjusted i just want to add a little bit to uh marines kind of macro um you know overview and you know these are numbers that um you know i've cited before but i think it's worth citing them again that uh in terms of the operating margin results for 2015 to 2019 uh the medical center captured 295.8 million or 89.9 of the total net positive operating margin across all 14 hospitals in terms of uh the proposal for 2021 um of the the total ask is 89.8 million dollars with the vm medical center requesting 76.8 or 85.6 percent of all the increase um in the npr leaving only 14.4 percent uh to the remaining 13 hospitals and just kind of looking at the payer mix information um you can see that uh the medical center's commercial growth rates are strong um 2020 budget over 2019 was a growth rate from 757 million dollars to 804 million or 6.2 percent and from a 2020 budget to 2021 request growing from 804 million to 869.8 million or an 8.2 percent growth rate which um is that i mean this is all significant because the uvm medical center um is the is is is so large and so even small changes um you know affect the the the the the kind of allocation of total resources across um across the entire system and uh so i worry about that i i i fully appreciate the charts that the network sent in terms of expenses growing um at a faster rate than revenues but um expenses are also growing and and like trying to close out on the revenue side but expenses are also growing uh uh hugely differentially from what's happening to brumont citizens and rate payers and taxpayers and and those folks who are living in a much different world and the kind of rates that we're seeing here for the medical center so um you know this is an issue of kind of steering uh so that in the long term we just don't have one entity kind of absorbing all the oxygen in the room and some of the others you know struggling and falling by the wayside before i turned it over to the public for comments on today's presentation is there any further questions or comments from the board on any one of the uh entities that we've discussed today um on process um as we're you know waiting to get information from mike smith which we think we won't get until next week um and we do have a meeting scheduled for friday um there are several hospitals that aren't asking for anything from um from that money at this point um you know is that something maybe on friday we should look at trying to move those forward or does the board want to wait i'm just throwing out because we can't talk about it privately um in order do we want to wait until next week um to do all of that because i think personally we could could go ahead on some of the hospitals that have not requested any funding um but or maybe conditionally approve them until then so um i was going to save this until after the public comment on what we've heard so far today but um i was actually going to suggest moraine that we cancel friday um i just think that now more than ever we need to be looking at the system as a whole and i think it would be nice to have all the information in front of us before we start making decisions on on any hospital and i think that there's sufficient time next week especially if we do consider um extending the date past the 15th that would allow us um to have that better conversation and quite frankly i don't think it's going to take very long on on some of the low-hanging fruit and so um unless there's an objection from board member i would propose that we cancel friday's board meeting i respect that as well i mean i'm okay with that i just wanted to you know either either we can't do anything on friday if we're going to wait or we could move with those so i i think that makes sense so i support that decision as well i just want to throw out what we're going to do so thanks kevin is there anyone who objects to canceling friday's meeting not here no so hearing none that will be one item we'll take off the table we will cancel friday's um board meeting um so uh any questions from any board member about any of the presentation today before i open it up to the public yeah kevin i have i have one um i spent a little time uh while going through these hospital budgets also putting together what i would think might be a rough draft of a standard uh some standard language having to do with the cost shift and uh i just want to make sure that uh you know that we don't whistle past the graveyard um on the cost shift having listened to so many hospitals um uh you know profile it's the deleterious effect you know on them and so i've sent what i drafted to abigail and would um ask her to you know uh it was more of a concept paper but also something that can be boiled down to to language um to take a look at it and see what see what they think as well as any member of the public you know who wants a copy of it it's uh um it's just a uh you know i i i think i think that you know we can't be benignly neglectful of trying to push the envelope to fix the cost shift because it's such a structural imperfection in our system and um so i'm just you know wrote something up in that regard asking the board to consider it as part of a standard um uh um um element of of each of the decisions that we render fully consistent with 18 vsa 94 56 the language that i'm using where the the structure of it is fully consistent in my mind you know with what we the statutory authorities that we already have we just gotta you know leverage them and utilize them better so tom i haven't seen uh your language but uh is it something that you're suggesting that uh gets posted to the website for public comment on before you introduce it or okay somebody's putting it up now did you wish to walk us through that now or what is your intent well uh yeah i prefer people spend some time reading it um and that we you know knock it into word crafting at this point in time you know um if people kind of are generally favorable but uh you know what want to kind of approach it um so i i just prefer to put it on the table have people read it and the next time we get together you have have a thorough discussion of it but not not today because it's it's just too fresh okay thank you tom and i appreciate uh you're getting that out so that people would have a chance to look at it so i'll suggest that abigail send it around to all the board members and make sure it's posted prominently on the website so that everyone will have a chance to take a look at it and rather than offer suggestions to tom off the cuff we can give it some more thoughtful review thank you is there anyone else from the board with a question or comment um yeah i think um in light of the fact that we're not going to have a meeting friday and that monday we're going to hear from mike smith at some point and right now our deadline is tuesday the 15th i think in you know although maybe we'll be able to make that i think it would probably be more prudent to put a motion forward to extend the date and give us the flexibility and also kind of that alerts the public right now and maybe put a meeting on for you know the 16th for the whole day or whatever so that we have time at least that you know on the 16th that's not we can add more time as well but i just think it makes sense to do that now rather than to pull that on the 14th and say we're going to move our date one day before that that sound bite doesn't really hold well and maybe we'll be able to finish everything on the 14th yes it's a very good point and i think that member lunge was going to make a motion later in the meeting but maybe it might be appropriate just to get it over with now so sure uh hold on just one second because i have it in my email but i hadn't pulled it up yet um okay so my so my motion is to uh pursuant to the authority granted an act 91 of 2020 i moved to extend the deadline for hot for 2021 hospital budget decisions to the close of business september 25th with written orders following within two weeks of the date the board votes on the last hospital um and i chose the 25th because i am hopeful too that we will finish it next week but if it did have to run into the following week i didn't want to have to do this twice so that's why i picked the 25th um just as explanation and the other piece i would just make is explanation is that i think moving the deadlines will allow us uh to maureen's point to move forward with a more orderly regulatory process and given that we will not have significant funding information related to 2019 until next week um extending the deadline will allow us to consider that without issuing orders and then revisiting them is there a second thank you and uh thank you robin for offering that motion i would just say that um it's the the chair's intent to try to finish this by thursday morning of next week um but i um very much appreciate uh your motion because it does allow for that uncertainty if we do not finish it by that um but i i see no reason why we shouldn't be able to meet next thursday but again i think yours is a is a better motion um because it does allow that flexibility it also allows the flexibility for the um writing of the decisions realizing that um our staff is going to have to write decisions and that it can't be done overnight for 14 different hospitals um but that they are well on their way to um getting the templates crafted and um i believe firmly that um we can get this job done by next thursday and just be uh either on time or a day or too late on the written decisions so with that is there further discussion on this motion the only thing i would add is i i totally agree i am hopeful that we will finish by the 17th but that assumes that we do actually get the ahs information on monday so you know if for some reason there's further delay there that's kind of what i had in the back of my mind yep further discussion if not all those of favor of the motion second by by saying hi yes hold on uh you probably want to take public comment on that that motion is my suggestion thank you mike that makes a lot of sense so at this point i'm going to open it up for public comment just on this motion and then after this motion um is voted on we'll open it up to public comment on all the slides presented today so uh public comment on this motion only hello Kevin this is mark stanislaus from the university of remote health network um i would also think to add to this and this will come up under the other public comment perspective but this also gives a little bit more time i think the staff had made some calculations that they have factored into their recommendation and this also gives a little bit more time well to work through those components um you know well you know i think we would all like to get it done by the 15th i think it's more important to go about it a little bit more cautiously and there's so many more variables this year than ever before that are outside of the hospital's controls and the board's control too so so i just wanted to put that out there so um i think the extension makes definite sense thank you mark and we're definitely uh hoping that you'll weigh in to to confirm whether the staff is accurate or not on the um provider tax issue so other uh public comment on the motion before us which is to extend the deadline if not all those in favor of the question signify by saying aye aye aye any opposed okay motion carries so with that i'm going to open it up to public comment on all the presentation that has occurred um today and uh the first person i will recognize is mike del treco mike yeah good morning chair mullen or good afternoon oh it's still morning uh so uh first of all thanks uh to you and your team uh board members and and the gmcb hospital uh team uh for really thorough presentations and thoughtful consideration here um in the same vein of trying to understand all of the inputs and variables in a very fluid time um i'm not sure if you're a hospital team or or the board is aware of several moving parts around three three forty b um reimbursement as we know um as you know three forty b or other operating revenues is so vitally important to the profitability of our institutions uh there's some pretty significant changes uh that are um being uh tossed about um a couple of them are things like elie lily uh and astrazeneca not uh shipping three forty b drugs to hospitals um that's sort of a industry decision it's and it's against the probably violating the law on how the three forty b activity is supposed to take place um there's proposed 30 percent reimbursement or changes in payment um cuts that are that are out there um in the outpatient perspective payment rule so in this um vein of trying to get everything um right that's fluid may be part of the questions um when you go when your teams go out to ask hospitals could include impact of three forty b um changes that are on their horizon mike is that something that vaas could um submit as uh testimony since it seems to impact all the hospitals is it something that you could submit summation of uh what is transpiring um i'm sure we i'm sure we can certainly pull that together it there's some there's some issues that will affect all hospitals and then the others around outpatient proposed rules that don't impact critical access so there's a little bit of a juggling act here but we can um we can pull something together and get you that okay great do you know what type of type of timeline you could get that to us in well uh where we're where we're shooting to have everything you're shooting to have everything done uh next week what's today wednesday we can put a request out and see what we can uh pull together in that same time frame yeah um i would suggest that you try to get it to us by monday sure possible sure great i appreciate that mike and and appreciate uh the uh useful if not uh cheery information and um mike do you know if aha is um planning any type of a class action lawsuit to try to uh uh prohibit those two companies from violating the law i do know that aha is um having a meeting i think believe it's today or this afternoon more specifically to discuss how they might uh proceed in this area um so as we learn more we can certainly include that in our information back to you thank you so much mike always appreciated yep thank you other public comment hi kevin this is mark um i'm going to try to segregate my public comment into each one of the uvm health network affiliate hospitals um the first thing i would just say is we know just as a general general comment um you know the numbers that might just we know referenced on the 340 b potential changes that are out there or you know um i think those changes just came available to us last week and the numbers are not insignificant um and at this time you know it is very hard to estimate them because the information is just you know so so fresh and the other thing that i would like to say as it relates to 340 b and i think this relates to all of the hospitals obviously has impacted some differently than others but you know part of the reason that has allowed commercial rates to be lower i believe is because of the growth we've been able to secure as a hospital system through other revenue okay so you know i don't want to lose sight of that and and that has also been part of the revenue that has been covering the difference between the expense trend and npr um so you know i don't want to lose sight of it and it also appears that that window is very quickly closing on all of the hospitals too um so you know i wanted to throw that thought out there the other thing i wanted to say at least for all of the health network hospitals is that and it was so difficult to pick what your basis was for the budgets but the basis for the budgets i just wanted to remind everyone well like we said during our presentation um it was it was they were built without any impact of covid in there because we just didn't know how else to do it so so you know if we talk about a covid non-covid portion portion is the piece of it i'm getting feedback on the client yeah if i could ask everyone to do it themselves unless they're okay so i just wanted to remind everybody of that and and and you know i also wanted to say that the cost shift is impacting the hospitals you know you can discuss there's different opinions on how much or how you go about calculating it but the cost shift is real okay and if we don't find a way to offset a large portion of it that means that is born on the backs of the providers so you know i just want to get that comment out there i mean it seems kind of odd you know i want to make sure that the default isn't that it's born on the backs of the providers because these are the individuals whether they're individual um you know whether they're physician practices hospitals or not you know they are the ones that the community members rely on when they show up at that door to provide the care so and obviously this is a balancing act and it is a juggling act and there's a lot of moving pieces um and there's no perfect answer so you know i did want to put that out there um and and and then the other thing well i don't think it's that important because the focus wasn't that great on that but i just want to remind when we talk about payer mix payer mix is really the split of gross revenue not of net revenue and what was shown today was net revenue so so you know i i mean well to me that's almost net payment mix not what the payer mix because the payer mix of the volume of the services that you are providing are completely different than what that net is and i've said this before and it's it it's difficult to look at either one in isolation and it's a complicated conversation well to put all the pieces well together but i did want to share that so i'm going to attempt to fill in for Jen Bertrand if that's possible as it relates to Porter okay so Porter being a critical access hospital understanding with the relationship of expense and the cost to charge ratio is a very very important relationship as we think about any of these potential changes that were put out there it's not just as simple as say changing the expenses to make things balance because that changes the whole reimbursement model so you know i would stress that there needs to be some work done to understand the relationship of that before a final decision is made you know so there's no unintended consequences um the other thing that i would like to throw out there too as it relates to Porter and all hospitals um there are still the staffing challenge in healthcare the wages need to be competitive to attract people if not you fall back on on travelers and premium revenues and i also think that Porter is going through a contract negotiation because there was something said about their increase so i just wanted to put that out there and and and i think across the state of Vermont i think we realized how important these frontline workers are in circumstances will like this so i just wanted to put that out there also and then the last thing is is you know the relationship between the nursing home and the hospital okay this goes back to way way back when and i can't say you know when that when was but when the nursing home was stood up the hospital was stood up they're under different tax identification numbers so so that's why they're split out that way and it's and and it's it is it's complicated and also i also think it's precedent setting if it's broken out in this budget cycle compared to the other ones but there's also other relationships and there is one that gen wanted me to say that um gen estimates having the skilled nursing facility that close or on their campus saves the hospital about a million dollars a year okay because on the swing beds they can transfer them to the skilled nursing hospital if the patient qualifies and the change in payment rate is about 12 to 1500 dollars per day so so so having that there while they're showing as a loss there it probably does reduce the total cost of care that we don't want to lose sight of and there's other reasons for this based upon the relationship of how a critical access hospital is structured and the reimbursement model with medicare so i just wanted to put those out there and potentially you know we may work with staff on some of those educational items if it helps um as it relates to CVMC um it would be great to work with the staff on that provider tax calculation because our number isn't quite as high as the one that they referenced i think they referenced around two million dollars um and you know our calculations on the low end is a half a million on the high end it's a million and it seemed that there was a lot of emphasis on what that number was to do a backwards calculation so it would be great to have the opportunity well to work with the staff on that and as far as it relates to the university of vermont medical center i would say the exact same thing well to just work with the staff on their provider tax calculation because we do think as it's budgeted is in line with prior year relationships at the end of the actual year if you look at the total we'll compare to the total npr but we you know we're very glad to go into those conversations with an open mind and then the other thing i do just have to put out there about the medical centers well performance as it relates to 15 or years f y 15 to through 17 that is in line with what we presented for our co n presentation for the miller building we had said that our margin performance would increase we were building cash going into a major investment and so i just don't want that to get lost um at the same time i do think the right focus is f y 2019 you know performance but i don't want to lose sight of that that was in line with all of our multi-year financial framework projections that we put forward during the miller building co n so you know and and and then i know it is very hard to juggle these two but you know adjusting adjusting commercial rates for a one-year impact for something that continues in perpetuity that's a difficult thing to balance particularly over multiple years and you know i think that's kind of where we are as a health system is you know i think that balance for a single year decision has made sense but when you look at the impact over multiple years that has led a little bit to the deterioration of the total hospital system you know margin and i would welcome the opportunity on how we could think about this differently so you know thank you for your time um um and you know if there's anything else well that we can help you with you know we look forward to working with any of the board members or the staff thank you mark and we're definitely going to take you up on that opportunity if uh patrick and his team could work with you and your team to try to to get the exact correct numbers on the provider tax it would be very helpful so thank you for that and and uh appreciate your comments um is there other public comments other public comment can you Kevin this is ham can you hear me we can ham proceed yes i i wonder if i kevin i wonder if you could i would ask patrick whether the recommendation on northwest um effectively um approved or disapproved of either or both of the new or much reinforced icu as well as a sleep specialist that was a those were big issues in the spring and i can't tell whether the what what i didn't i i can't tell the way that the staff proposed dispose of them um so patrick ham's question evolves around um both the expansion of the icu and the um sleep um therapy practice um do you have an answer for ham or do you need to get back to him i would put a worry on that one we just we in our recommendation we said we would ask the board to acknowledge those enhanced services as they are not necessarily provider transfers they're just explanations of why their npr is increasing i i don't know what that means kevin so what it means is um it it's not uh tacitly approving or denying but it's factored into their recommendations okay thank you okay other public comment an answer question yes go ahead i believe that's dale is that you dale yeah because i've only been able to pop in and out a little bit so i'm kind of sketchy on following it but doing my best um robin mentioned that we don't have to that you would not have to revisit it by the proposal are you thinking that when you pass these hospital budgets you won't have to revisit them for a whole year because i don't think i don't think that uh at least i didn't hear robin say that no what i said this is robin what i said was that um that was specific to the time extension for the deadline of september 15th that's in statute because we are getting the ahs information on monday it allows us more time to factor it in and not have us make decisions and then get that information right afterwards so that was only related to the motion um about extending the time okay that's what i wanted to clarify because i where there's so much dynamic going on um i would be hesitant to say that you aren't going to have to revisit this within the next year i think there's going to be continued discussions on a regular basis okay thank you other public comment if not patrick lory katelyn we really want to thank you um for all the information you've put together for us um you have a few homework assignments and um hopefully by canceling friday's meeting it gives you a little bit more time to um try to assimilate the the uh data requests that have been given you um but the board is very very appreciative of all the hard work that your team has put in and um thank you um board members um we have the minutes of wednesday september second would someone like to make a motion so moved second it's been moved and seconded to approve the minutes of wednesday september second without any additions deletions or corrections is there any discussion hearing none all those in favor of the motion signify it by saying aye any opposed so at this time i am going to um recess this meeting till one o'clock where the topic will not be hospital budget so we will not need the uh court reporter this afternoon but thank you very much sunny for this morning um there's a lot of uh numbers and everything thrown out very quickly and i'm always amazed at how you're able to capture everything and get it so correct so thank you for this morning um board members we will reconvene at one o'clock this afternoon