 Thank you. Good morning, everyone. The first item on the agenda is the executive director's report, Susan Barrett. Yes, thank you. So I just have one announcement, and it's timely with our discussion today. Many of you already know this, but with AFD retiring from state government come Friday, his last day, we have appointed Pat Jones to be interim director of health systems finance for the Green Mountain Care Board. Pat has worked for the board for about four years, but has worked in state government for over 18 years. In addition, sorry, I got that wrong. 18 years in state government, and then before that she actually worked for Blue Cross Pugetio. Many of you now have excellent work in regard to the work she did on the health care model in essentially creating the elevated quality metrics for that model. And she's worked very closely with insurers, hospitals, other graduating teams. She has seen the programs, she has seen the programs as well as other quality metrics for the health care model. So welcome, Pat. I think she's up for the task, and she's been working very closely with Andy and his team over the last several weeks. We're very grateful for your service. Thank you. Thank you, Susan. The next item on the agenda are the minutes of March 12th. Is there a motion? So moved. It's been moved and seconded to approve the minutes of Monday, March 12th. Without any additions, deletions, or corrections. Is there any discussion? Seeing the follow-ups, we're signified by saying aye. Aye. Any opposed? Thank you. So at this point, we're going to turn it over to Andy and the hospital budget team. Good morning. I apologize. I have a little bit of a voice. I'm going to walk through the 19 guidance and try to address some of the things we've been talking about in 17. And then sign off on the guidance, hopefully. Walk through the issue of 17 and get into the matrix that we've been working on for 19 MPR. And hopefully get at least a panel to finalize it, if not final approval. And over the next couple of days, we're going to transition to where the next steps are. I'm just going to start with this chart. The board had asked that we give a chart of hospitals and their compliance from budget to actual year over year. And so this is draft. These are numbers that are not filed. I just wanted to show you the framework that we're working on. The board is going to spend the next couple of days, hopefully the earlier on this week, send us to you in the final posted on the website. But this is probably going to be a framework that we use for the board to use in the coming years, just to guide you right here to the right hand side. So basically, just the very top ground of our own. This is their 2012 budget, named 3.9% over. And you know, they file their actuals on this. So that's how this chart works. It just goes out by year. And they say, lawyer, finalize this. And I think I'm going to attempt to create a draft and send this to you in the final form. So that's all I'm going to say about that. Can I take one suggestion on the chart? I wonder if you could also just use, like, a color coding to note when we had done, like, rate cuts. Because I think that would be a helpful overlay in some of the ups and downs and the more recent years. Okay. Yeah. So the changes to the presentation. What can I add to that? You could add columns for the 2018 budget. And how that relates to where they came in on their actuals. Just to show, you know, what that was trying to do. Maybe that's a different chart, but we could look at, you know, what does that mean for 2018? I know we're going to look at 2018 now, but in the future, for other years, you know, could give us a direction on what that means for the current year budget that we're in against their actuals compared to what their budget number or percent was. So we submitted a PowerPoint to you when we estimated it. We'll walk through that. Basically, we got the decision points laid out in the PowerPoint. I actually think I missed something. Before I get into the PowerPoint, we said to you yesterday, final draft guidance. So this guidance has, still needs a few edits that I'm working on with the general council, but in overall construct and stuff, right? So that all the decision points that we put into the work through the CFO group and work on the FJR's play. And depending on where we decide on FJR, it might require a few more words. But I think based on feedback, we have agreement on the overall guidance and it probably can be finalized as one exception. And that's the exception on what we're capturing for salary. So they're trying to capture this in three decision points. Okay. You could just agree on your point. Okay. So the three decision points. We had a chart that we had this year that basically captures the salaries by income level. So I think, I don't know if you can put it forward, but I think you all generally agree on capturing the 990s, posting it on our own subject. Which is basically grab the 990 from our post. We want to go into our budget section on the very not careful website because the 990 is in fault, right? So I don't think there's any disagreement on that. I think the only disagreement that I'm hearing is on this chart. This chart is not attributed to May. And there is a dispute whether or not to capture this chart or to capture an attribute by name while I'm serving on the threshold. So I think before we can stay at this final, the board has to just have a quick conversation about what we want to capture and how we want to capture it. I'll move the 990 to the side and just accept that we'll capture that and post it on the website. So I could throw that to you guys to the board to think about how you will find this section. And you just took our five. We were asking for that chart in two ways, right? Is that a follow-up? No. Can you pull that chart up? Yes. I don't know. But we were asking for it by completing the table. It's on page seven of the final guidance that was sent to you a couple of days ago. Completing the table of salaries to the minister and administrative staff for a while. So we were asking for it. It's not in our code, right? So I think that I may have been part of the disagreement on this chart. And I expressed it earlier. My sense is that we made some changes to the salary information. Posting the 990 says public data. And I think there's consensus, as you said, that can go up on the board website. And in my mind, I try and weigh the cost and the benefits of asking hospitals to collect data. So the cost is the administrative time and putting this chart together, which has basically the salary ranges between 0, 199,000, 200, 299, et cetera, et cetera. And the total number of staff, the total salaries, and the compensation. And in my mind, that's a fair amount of data collection. And when we get that data, I think what it's going to show, I'm anticipating, is that larger hospitals with lots of specialty providers are going to have more people in the final row of that chart. I think that's what it's going to show. And I don't see the value of collecting this information weighed against the cost of collecting this information. I don't see what the action steps that we're going to take as a result of this chart are. I think that the addition that we made last time, which is asking the hospitals to submit their policy on executive provider and non-medical staff compensation, which has here, you know, what do you benchmark, what are the peer groups against which you benchmark, what are the targets in terms of percentiles for each category, and then what is your actual compensation level compared to the target. It gives us all the information that we need to know whether the hospitals are appropriately benchmarking and whether their target scene is reasonable and how far off the targets that they are. This table to me seems like a lot of collection of data that doesn't have any action steps coming from it. I personally would like to see this table removed. Thoughts from other board members? Well, I think collecting the 990 information is helpful, but it is kind of episodic. It gives you information about individual salaries without any context, and I don't find that helpful. I find it informative. It is a public document. But the table that has been in the guidance from its photographs and doesn't seem to be problematic from the hospital point of view when you've been at meetings in a way the last time, and it seems fairly routine data, and it is structured so that hospital data can be seen in the context of overall population's tax part of the data. And it ties out completely to the total salaries and benefits at Utah's bill by income category. And Jess may be right that we get the data and we see that it is not informative and certainly we don't want to waste people's time and we move on. But we don't have the data yet. We haven't seen it. The public hasn't seen it. I think there is a public interest in having an organized profile of salaries and benefits hospital by hospital that individuals in the public can look at it and say, well, this isn't of interest to me or it is of interest to me. Collecting salary and benefit data inside the organization is a fairly routine task and my guess is that it won't be that burdensome and that we may find some important direction in that data and certainly the public will find important information around them to better understand where their rate dollars and tax dollars are going as it relates to hospitals. Can I just ask something for clarification? So this data would be, so you're saying you would use this as comparative with the tax data of the general population? Well, it is the income cohorts are structured exactly as they are on the tax department website. And I understand that income data in the tax department website has its own characteristics and in terms of how the income data is defined but in terms of broad sense it wouldn't allow some comparability but standing alone on itself I think is important for monitors to know hospital by hospital where the dollars are being spent both on the medical side and the non-medical side. That's why the chart was broken out into two components because obviously on the medical side there probably will be a lot of people with a lot of high-paid positions out there but on the non-medical side it might be a venture so I'm not going to profile the information one way or the other I would just like to get it and have a year of it and see if it is worthwhile. So you and Tom and Maureen had a working group with members from FOS were there objections to the chart? Was it discussed? It was discussed. Actually the chart that was first collected or first drafted started I think and Tom and I think we started at a higher threshold as opposed to dribbling all the way back to zero and one of what the CFO said and you got Tom and Maureen correctly is that it would just be easier to flesh this chart out so that it just ties to the budget and some of that and so I think we originally had 312 maes and then three categories across and I think 10 maes and two maes would just be all in the figure of this chart. Just a quick question. Have they seen this specific chart? Yes. Was there objection to this specific chart? No. Other questions? Does somebody want to make a motion one way or the other? We could do that. That would be the right thing to do. At this point I'll open it up to the public for a comment on the discussion just as it relates to the inclusion of this chart. Mike Deltrakow. Sure. In our letter it is March 8th in the public comment part of this discussion that we do indeed have public comment on this specific chart. There's a lot of confusion on what administrative and medical means so definitionally there's a lot of challenges there. So we did have we did outline our concerns and we do have a proposal as well. So in the public comment we said the hospital reporting process is highly transparent. The request to report person specific information into the salary chart seems redundant to the IRS Form 990 salaries. The chart intent is not clear. It is supposed to match the 990 which includes the top salaries or is it the budget for all FTEs so it's not clear. Also the definition of medical staff and administrative staff needs clarity. We need to know what that is. We don't know what that is. What is it physicians? What level physicians? Is it NPs? Is it PAs? Who are we talking about? So our proposal was the salary chart should collect total FTE information in aggregate. You'd have the categories you'd understand the amount of FTEs in the section. It would closely tie to budget numbers because of collection and timing of when budgets are built and wage inflation would have reconciliation there but it would closely tie. So capturing all FTEs would also eliminate the discrepancy around definitions so we would eliminate that. So an all individual earner information would be collected in the 990. So you'd accomplish the range evaluation. You'd know the numbers in each one of those ranges. You'd eliminate challenges around definitional reporting and then you'd still have 990 information if you choose to look at that. So that was our plan. So the information that we would capture might be the same as last year. So in other words are you getting the most current filing ahead of time? You would get the I don't know what last year was so but you would get the exact IRS form based on what would it be? 2017 So can I make one clarifying in my case right the original chart the split between medical staff and administrative staff was a more recent change and they hadn't seen that to see if it would they've seen the chart but the change, the split between the government isn't more recent change that makes like a good way of saying this definition of the you know the challenge. I'm just going to form a little bit on this history here. At the beginning of this there was some confusion as to whether or not this chart related to the 990 information made clear that these are two separate silos that the 990 information is as it's reported to the federal government and it blends medical and non-medical staff and therefore it's very hard to kind of separate that out and I think it was first suggested that we move the terminology from the number of employees to the FTEs which was a and this just back in January and February that we were talking about this reporting documents that we get from hospitals for example on you can see the budget documents on staff growth and the number of staff being broken down by medical and non-medical so those definitions are already in the information that hospitals are to report to us is this perfectly tuned? I would say it's not but I think in terms of an iterative process to get to the point where the issue of salaries in hospitals is discussed it would be a very helpful document. I have a question. Was the intent to capture all FTEs? Okay, so I think the confusion is for example a cafeteria worker who doesn't fit into medical staff or admins so I'm concerned as Jess is about the time that it takes to compile but I can be convinced if we basically made it clear we're talking about all FTE we don't break it out for this first year and I think the current version I don't know that Mike has necessarily seen I think does make it clear that the table matches the actual fiscal year 17 so I think that's where I'm at. So if I could ask Mike a clarifying question Yes. But I think what I'm hearing is you don't object to providing the 990 information what your objection is and you don't object to the FTE reporting is just the name specific part of the FTE reporting? So to restate the my concern is definitional so if it says admin and medical officer so we have CEOs that are clinicians but they're also CEOs that admin or MD I don't know admin unless they're still practicing well I'm just saying we have those challenges that need to be addressed so my recommendation was to eliminate that report all FTE's you'll reconcile very closely to what the budget you're submitting you'll have all of those categories aligned the lift is a lot easier than delineating all of those pieces and parts that around admin or medical staff and you could certainly indeed still have the 990s as you always can. I don't know if that answers your question. There is no intent in this to have this chart list any individual by their name that's uniquely associated with the 990s as I said these are two separate silos and in terms of your question it's not divided up into medical and administrative it's divided up into medical and non-medical after the instructions are that's not what it currently says in the document the current document is medical staff and administrative staff well that is a mistake and that is new from when I last saw this document said it was time to you asked us to break it out between medical and non-medical I mean maybe administrative is a wrong term but I think the bottom line is do we want to break this out at all and I think that that's the concern on this. So for me in our in the budget documents that we get from you all it has actually a very specific breakout by different role type around medical staff different types of medical staff so we have average salaries so we get a substantial amount of information already broken out by role type so if the point of the chart is to be able to do an aggregate comparison along certain income breakdowns and given last year what we basically saw in the 90s is that most of the higher earners are medical staff I would just make it simple this year see if it's useful and a further breakout makes sense next year I would do that but I think so I think maybe unless there is I'm just going to put a motion on the table which is to include the chart without a breakout of staff but with all FTEs so that it can be tied back to the budget submission so that's my motion. I just want to comment as well that before you make the comment is there a second? I'd second that to me this is about starting a discussion that is all in the salary benefits I did interrupt you Tom I accept your second but worry he has the floor I'm sorry. I just wanted to comment that I'm okay with the motion as it is my concern isn't as much the amount of time it's going to take the hospitals to put this together because I believe they can do that from what they've told us it's how much time are we going to spend specifically going into the buckets when we actually get to the budget process because we can start to say okay there are 10 people in the million dollar bucket what do they do and I think to go into that level of detail and questioning will take a lot of time potentially during the budget process and without comparing it to benchmarks and other things I don't know how meaningful it is to us so I will be okay to let it go for the year and see how it goes but I think it's just to be in a data point and we can put that in because here what we're talking about we basically are regulating at the NPR level which is up here to start to get into individual salary levels way down here and that's not even touching near all the expenses and everything else that we could talk about so I just wanted to put that out there. And I... Tom wasn't... Tom? I would second that if that is a compromise that works for me this is just about tying the salaries benefits out to the total budget number and having it stratified by income groups that already exist by and large in the tax department and I think Maria was implying if that information is of interest to anybody then they can ask questions to kind of parse it further I personally would prefer parsing it from the get-go between medical and non-medical I think the substitution of the word administrator was a mistake that was not caught if you go back to original graphs it was medical and non-medical but if that's not a place where the entire board feels comfortable then Robin's amendment is acceptable. Okay Jess. I guess I'm just going to say I'm going to vote no because I don't think that we need to be getting into the weeds to that level and I do feel like we are getting information in our regular budget submissions that provide information about compensation and FTEs and we're going to have medical and non-medical so this feels to me redundant and what I am very much looking forward to seeing is the benchmarking and the goal setting and the targets so my reason to vote no is that I simply don't think any of this is new information that we can make actually action step decisions from. Okay is there other discussion? I would just briefly add that I think to eliminate the chart means that we are left with the 990s are information that is very very tied to the person by name and I'm just not sure that's the best platform for us to be on in terms of understanding salaries and benefits relative to the hospital budget. So Tom the one correction I would make is that we do look at for example nursing FTEs and things like that in the budget process we haven't been through that process yet so you haven't seen that type of look but I just want to add that we do get more information than I think you think we're getting. Okay is there other discussion? If not Robin's motion is to include the chart but without the breakdown by name by medical medical Have I got that correct? Yes. All those in favor of the motion signify by saying aye. Aye. Any opposed? Yes. Nay. That's opposed. I'm yay opposed. So that's the guidance. We're going to go through and the only missing piece of the guidance I think the general council is still making some minor edits so provided otherwise but other than that the guidance is done the NPR just towards the end of the guidance is still is wide open so so start with 17 actual and again this is a distillation of conversation looking forward individually it doesn't so I just wanted to figure out a way to kind of capture the range of what the board is saying by kind of a different point of time the option for 17 would be to take PBMC's bounds of 29 that are over and we're out of that obviously that's another might be off the road there and reserve and so the only amended budget order that we would do with this chart in the first part would be to reserve that 20 million and set it up so the reserve can't be used without coming in front of the board so board approval. If 2018 is trending higher and there's a number that drops to the bottom line in 2018 that would be added to the reserve. What we know because all our hospitals have provided us with the actuals through the end of January so the first two or months of the year UBM's trending about $15 million over there NPR for the first that's really simple math so another reaction is there but about $15 million over there NPR approved which is consistent with what NPR has put around UBMs in the care of the board and so if any of that is actually that's total revenue, it's not that but if there's anything that I could add that we sort of put that in I'm forgetting for a long time each one percent of the commercial revenue reduction is about $7 million and we do see by about one percent I don't really know if there's about $900,000 in the quarter we would need as it is and one of the things that we've talked about is the cash on hand so UBM is about $180,000 $180,000, $180,000 $180,000, $180,000 $180,000 $180,000, $180,000 $180,000, $180,000 $180,000, $180,000 $180,000, $180,000 $180,000, $180,000 promised or practically all four of these months So Any clarified question these numbers are based on weight on fiscal year Correct, $70. aquesta We very well a pocket in eastern so what I heard very clearly from insurers is that we instructed them to base the rates during this year on the guidance that was given for last year in that if there isn't a correction, then they would be back at the table and asking for a rate increase for the additional monies that they put out this year, and so I would be hopeful that we could take a look at doing one specifically on time, starting with UVMMC, that we could do a four-month or one-third of a year reduction, and that would take effect June 1st. We heard from the insurers that it would take four to six weeks, that would give them 10 weeks, I believe, my math is correct, and that would allow that amount less to be paid out by the insurance company so that we can actually not have that impact on the REC. I would hope that we could do something like that. My hope would be that this would just be for that four-month period, and then we would be listening in the budget process to what the case would be from that particular institution on what the proper rate increase or no increase would be at that time, but I would hope that we could take a look at this, and so what I'm seeing is, if it's 7 million for one point, literally that 7 million for one-third of the year would cover a three-point rate crop. Is that correct? So let me just expand on this a little bit. If the board is silent and indicates the rate cut in the 2019 budget, that's effectively the same length to the contracts with the insurers running policy programs that are runs in January through December and January. So if you're silent on a day and be effective January 1, that 7 million, if you wanted to capture 7 million in four months, you would have to triple that. So that would be through the 7-rate cut for a four-month period, and then that would give you 7 million dollars back. I think we're all saying the same thing. So one thing to think about is the rates in the middle of May. So anything to do with respect to the 19, if you were in a single now, that would be something that you could have actually dig into in a very common sense. So that's why we kind of see that this way. I think we're all saying the same thing. So I would hope that we do something sooner rather than later as we're impacting rate years in the state of Vermont if we don't do it at the sooner juncture. So I don't know if there's any agreement with other board members. I was on the mindset that if you get a rate cut as of June 1, first it also send the same order to MVP and Blue Cross copy of the order, letting them know. I think that our basis will be covered. This has been done in the past. There's historic precedent at both UVM and at IRMC. And so throwing that out there as a possible option, look to the rest of the board for their thoughts. I see a little clarification of what that means then for 19. So I understand like do the rate cut sooner? How does that flow into the next year? So I think as we're getting more interim information, the proposal from the entity was that they were going to come in with a 0% increase. But by doing the 3% now, they may provide data that says they should get an increase because we're implementing the cut now. But at least we have a chance to recapture some of the monies that occurred in 2017 and not have the insurers paying that out, affecting their capital reserves during that time period. And I think it puts us in a better position to get this out as we go through the next rate review and hospital budget process. I would just comment that there was discussion by UVMC of potentially the issues of putting this across 40 insurers and doing it now. And I could see doing it with the order for 19 and then carrying that through for the whole year. I would be a little bit concerned if we did a 3% rate cut now, caught some of that money and then allowed UVM to come back and potentially take a rate increase when they put their 19 guidance. I'd prefer to give them something on 19 planning for the full year and have that go into their planning effect for that year and whether that was 3% and then that's 21 million. Because I think if we say, if we send the message, we're going to take this 3% now and then you can come back under 2019 guidance to potentially take a rate increase. I don't think we're capturing all that we think we should be from them. So my proposal would be to do it as of the 19 budget process, which I think is cleaner and then take the debate on what that rate would be. I agree with Maureen. I think the administrative process of the transactions of changing it right now and then changing it again in three months don't make a lot of sense to me. I think what would make sense actually is to split the difference between the January 1st and the June. The hospital budget cycle goes October through the end of September. So I would say if we make a decision now to pay up on what the board decides, it should be effective October 1st and then it's all in the fiscal year 19 budget. And the QHP and the other, the carriers will know in advance what the fiscal year 19 expectation is for rate and they can actually put it in their planning. If we say I've cut now and then we're not sure what we're going to do later, then I don't know how the carriers are then effectively planning for the future commercial rate. So I think it's better to put it out there now and start it October 1st and have it in all of the planning not only on the budget side of the hospitals but also on the carrier side. So I guess somebody will have to make a motion but before they do, I just want to reiterate that if we don't make the cut now, then there's $7 million of additional pressure that will be on the rate filings that we see for 19. So does somebody want to make a motion one way or the other? When do we do public comment? We want to take public comment first. Okay, sure. Is the public comment just about the timing or because we have a determinant of the rate to be on the rate? There's a couple of decision points here. And they're also, if you look back into the hospital budget rule, which is this process developed before there was a rule and I think that some of the process persists despite the rule but there generally has to be a determination that there's a substantial variation from the budget that the board doesn't will provide a written notice of that to the hospital. I realize there has been written materials so they do know that this is an issue now which should suffice but the board also should be setting forth the results of their review. You approach this to vote on a change whether it's on the timing or what actually the rate difference would be I would consider doing that provisionally allowing for the week and doing a final vote next week to put out the proposed rate cut if there is going to be one in when it is. I would not make that a final vote today just as, as I said, this process has been muddied by the fact that it went on for so many years without any parameters and it seemed to keep going at that same pace but I think there would have to be there should be a written determination saying there's a substantial variation from the budget and the proposal of the changes and allow for the week or a comment or response and vote on it next week. Any motions from anyone? I'll move that if, if we decide on a rate cut that it should be effective October 1. Is there a second? I'll second. Okay, any discussion? If not, all those in favor of the motion signify. Do we have to take public comment? Are you taking a public comment on this from the hospital? Some of them are here. Okay. Do we also need to put what rate that will be or are we going to do it separate? I think it's that motion. As I said, if there's a rate cut. Does any member of the public wish to make any comment? Yes. Mark Sandes-Loss, I'm a resident at St. Albans Vermont, Franklin County. I'm also an employee of the University of Vermont Health Network. And there's a few pieces that I would like to just draw here. So this is the first time seeing this exact proposal. So on the first item, I would just like to say an understanding that you haven't come to any decision yet. But, you know, depending on how that's managed, that has certain accounting implications. That if that is considered restrictive, that has to be backed out by any of our days cash calculation and might impact certain financial metrics. So I would just ask you to take that into consideration. Also, I see that there's the days cash listed across. And particularly for the medical center on our days cash. There are two CONs that have been approved by this Board that has dollars in that cash balance of approximately $190 million. That should be factored into this consideration as you think to reacting to days cash on hand. And there are two very important investments to advancing the all-payer model and bettering the health of all of the community members of the state of Vermont. So the financial, as pointed out by this Board in the review of the EPIC presentation, on how important financial stability is and predictability as you go into projects such as that. Particularly given the critical importance to everything we're trying to do in the state of Vermont. So I would say that the days cash there are overstated if you factor that in. And then the other thing that I would say on follow-up questioning to the commercial payers, they had said the 17 run rate was already built into their premium base. That's what my memory, you know, recalled from that day. And there was significant conversation even questioning from the Board. I think Maureen, on your question, was it 700 or was it 710? And at the end of the day it came out 710. At least that was my recollection. So this base of 17 actual is already built into their premium base in 2018. So if there is any reduction, that savings needs to go directly to the premium payer. And in my experience of 23 to 24 years working in healthcare finance and probably 15 years directly on the budgeting side, I haven't seen how there's been a clear pathway between the rate setting of the hospitals, the rate setting of the commercial payers and how that goes back into the pocket of those commercial payers. And I would add a significant portion of that variance was related to non-commercial payers in 2017 and also that $20 million it was related to other operating revenue. So those are important points that I don't think we should lose sight of. And then the other thing in 2017, which I think is a very important consideration and we made this before, the way hospitals are paid and the way healthcare is paid is complicated. If you move one piece it affects another piece. And that's just the way it works. 2017 was the basis for the all payer model and a lot of decisions that hospitals made to get into that. If that balance is disrupted too much, I'm certain personally based upon my financial expertise, not the role that I fulfill for the University of Vermont Medical Center or the help now. Those entities are gonna go back and re-look at the foundations that they use to take that jump into the all payer model. That's how important those relationships are. And I would say if you look at any rates you really need to factor in the impact of 19 inflation. And I'm going to attempt to do some simple math and the numbers might be off a little bit. But if the Medical Center committed to a 0% increase in 2019 and just based upon the sample guidance out there, that increases $32 million of increased price inflation, their cost to provide care to all of the patients that seek services there. If they commit to a 0% increase, none of that inflation gets passed on to the commercial rate payers. None. It is all absorbed within the system. And that's something that I think is missing from this. So if they cover that $32 million in expense and based upon what's said on these slides, if the variance is 20 million, I'm concerned about if that's not factored in that that hit is gonna happen twice to the University of Vermont Medical Center. I can tell you that we'll have a negative impact on the credit rating for the University of Vermont Medical Center. That comes from more than 30 presentations to the rating agencies. So I think when you factor all of this in, you absolutely need to factor in and I think it was very clear from the payers that this would not hit their premiums until January. That's the date that we should focus on. And I realize how complicated it is to pull all of these pieces together. But I feel like we're jumping before some of those other pieces aren't exactly lined up. And if the goal is to get the savings into the rate payer, I'm not sure that this hits us there. So those are my comments and I'm happy to take any questions. Thanks, Mark. I have a couple of questions on... You know, first, I do agree that the insurance companies did say they probably captured some of this. I'm not sure they captured all of it because, again, it's based on their actuary data and that would have to say it was spot-on and they got all the utilization and mix right. But they did say they based it on trends, so I don't think the difference is completely the same. I also understand what you're saying about, you know, all of this didn't occur in the non-commercial payers, but I like the fact that we've talked so much in the past about cost shifts and how the commercial insurance rates really pick up the difference that Medicaid and Medicare don't pick up. So I don't have a big issue with pushing it back on commercial rates and taking some of that back, if you will, because I think we've said in the past, you know, the commercial rate goes up higher than the other rates to offset that. I also think that, you know, we're talking about implementing this in 2019. We clearly saw a benefit in 2017, and I think, you know, when you add non-operating revenue in, it was even more than $20 million across the three hospital networks. It definitely was. In 2018, you're trending again to be, you know, 3% over the budget at numbers, so one would expect with that there also would be potentially more operating income dropping from that. So it gives me more of a comfort level to say, you know, if we put in a rate decrease for 2019, we're going to have some information on 2018 as we're going through the budget process, where again I think you're going to have captured some additional funding, and, you know, we'll be able to look at, you know, where your cash flow is at that time. You know, some of the questions I would have back to you, V.M., is what was your cash flow budget for 2017 across the entire network and where did it end up on a cash flow basis when you talked about, you know, the 180 days, because I think we're going to see kind of pick up at least that $20 million. And, you know, one other question I would have is in your models that you guys have modeled out on your Epic plan and things like that, what did you have in there specifically for assumptions for rate increase across that model? So did you have a specific rate increase in for 2019, 2021? Because I do also appreciate there's a compounding effect of taking, you know, a rate decrease in a given year, you know, across the other years. So those would be some of the questions, you know, we could put that in writing, but back to you. But, you know, I really want to emphasize that, you know, 2018, we could be seeing the same thing, it should be because you're expecting, you know, we're going to talk a little bit about what we need to do potentially for 18 to rebalance because we expect you are going to come in high or both on top line. And one would hope that the bottom line would follow that as well because your budget was based on a, you know, 1209 number and it's probably going to come in closer to, you know, 1250 or something in the given year. So I think we're not necessarily, we're not taking that point right now into consideration to say let's make an adjustment for the 2017 Actual and the potential 2000. So just, um, I think we need context. The 2017 variants is really attributed a portion of it back to 15 Actual. So I would say that is definitely in the utilization trends. Okay. And secondly, and we're talking about a variance that goes back to a budget setting process of 2010, which did budget, budget, budget. And one thing that isn't on here at all is how do we make the shift to population based healthcare. And in that those are the balancing factors that are very critical to how you treat those patients, where those patients live, where they seek those services and the system needs to adapt over time and acknowledge that and understand that and move very cautiously to I will add. And that hasn't been done in a minimum of eight years. Okay. So if we are serious about this similar to what we do with the insurance companies let's engage a third party. Let's have actuaries take a look at this. Because this right here is still budget to budget to budget to budget to budget. And in the real world of finance it's just difficult to tie that story together. And we know happy to respond to any of those other questions in writing, but this ultimately comes back to budget to budget to budget to budget. And what that variance is and what's driving not all of it, but the largest portion of the 17 variants is the 15 actual variance. That's one of those. I agree with you on that and you know I've been at it for one budget cycle and right away said you know we need to go off of actuals. But I would also say in the budget process every single one of the hospitals has ownership when they came in to the budget. And I'll look at the UVM budget. When you came into the budget in October you delivered exactly what we asked for. 3.2% up for your 2018 budget. And at that time you already knew 2015 you already knew 2016 2017 was 20 million trending ahead at that time. And you submitted a budget saying you were going to come in at 12-11 off of a prior budget. I get that. But you know respectfully you guys have ownership for coming in and giving us that budget knowing you blew away 2015 by 25 million, 28 million. You blew away 2016 by 25 million. You blew away 2017 by 38 million. I specifically asked at the meetings how are we doing against actual? Where is the trend for actual? Are we going to keep to this number? And the responses were this is where we're coming out. So I understand and I agree that we should absolutely factor in actual and we're going to do that. But I also say each one of the hospitals you guys are the ones with the data. You come in in those presentations in August you have six months behind you already at that point you acknowledge you're going to be 20 million over but no one said anything about asking for any adjustments and coming in saying we can't live with this budget. We either have to take a rate increase now to these numbers or we have to ask you guys to go higher because this is ridiculous to go off of that. So I think we need to get off that cycle and I think we're going to start to make some adjustments to that. But the way the rules are written there's regulation that can take place if you exceed your if any hospital exceeds their budget and profits by a certain amount and no one can deny that in 2017 there was significantly more profit that was generated from the hospitals based on their budget. I think the only response to that is if you go to our October 2017 presentation and that volume slide and all the guidance that we had particularly on the invitation slide showed that our 17 budget was in line with that and I want to say that we submit our 17 budget we were only four months five months into our actuals because our budgets although they're submitted six months into the fiscal year an entity of our size are really based it's really based upon the first four months actual just because of the size of the information. But this is a very good conversation and I don't disagree with some of those comments but I think if you look at the volume for 2017 whether it be presented it was clear to see that that volume was not in our run rate when we presented the 17 actuals and that volume came up afterwards. And I want to be very clear the difference that we're talking about on the volume and that base revenue impact is or NPR's 8.6 million of that 20. That's a pretty small margin on a $1.1 billion budget the other 10 million 12 million is from other operating revenue. Okay are there other members of the public who wish to comment? Yes? Office of the Health Care Advocate I'd just like to shift the discussion slightly. We are talking about money in Vermonters pockets and we throw out lots really large numbers but we have to remember that Vermonters are struggling to afford the necessities of life and health insurance and that for these Vermonters there's also a compounding effect. When you can't afford day care when you can't afford food that impacts your quality of life feeds forward into overall quality and also feeds into this talk of population health right? You're going to become sicker you're stressed out that you have to or you have to miss work because you are child care. I also think there is some value to the board setting a precedent both in terms of the hospitals and insurers there's constantly this discussion that we should wait and see we should exercise caution that next year we'll realize that rates will be lower. The problem with that is consumers right now don't have enough money and the sole discussion can't just be about the financials of the hospital or the financials of the insurers. The board needs to set a precedent that they will not tolerate the growth in health care costs both from the hospitals and from the insurers. Thank you very much. Thank you. Are there other members of the public who wish to comment at this time? Seeing none the motion by Jess was to this is only on a date not on any percentage but setting a date of October 1, 2018 is there any further discussion? If not, those in favor of the motion signify by saying aye. Those opposed signify by saying nay. So the motion passes. I would just like to make a wonderful couple of final comments. This is kind of a whole proposal in that we would be reserving this $20 million and Mark's comments aside around the number of days cash on hand even if you were to take that $190 million out there so probably we're in a striking range of the state average I'm definitely rounding a bit on that but within plus or minus but both to this great reduction regardless of the funding source my name was derived would be UBM has that $29 so if you blew the steam off quickly they would be in front of the board asking you to use that $29 in which case if taking the industry that has 46 weeks to differentiate rates you've got a 46 week way to turn that around so the first thing that I'll take away is there's a budget board that will be drafted and I assume the way that you do this is that budget order would be drafted come back in front of the board from the final bill next week which would allow the process would be a UBM would come in with a great reduction on $10.18 I think you have to make a motion to allow them to reserve this and then I think you have to make a motion apologize to this I have to make a motion on which how much this rate of cut is affecting the total of $1,000 you've seen I think she didn't have an answer but from the accounting point of view I don't know that you actually reserve for in the current year for a rate a decrease that's taking place in the next year I mean that's typically not how you would this would look like a restrictive fund so within the days catch on hand you would get $20 million I don't know how I'm not thinking about how we were just from a hat one thinking about how she works I think if you're going to make a motion because we've talked about UBM had a couple proposals for this $20 million if you want to go with one of those proposals that's part of the budget order but if you want to reserve I think you're going to want to keep an eye on 20 million minutes and these guys can work out with UBM like similar language but that was just a proposal yeah I think it's two separate things in my mind I think it's two separate things if we were reserving $20 million to put against the ACL for instance they could book that to their P&L and book that expense I believe but if we're saying we're going to take a commercial rate reduction of however much 2% and that's $14 million I'm just going to say 3% is $21 million over the course of the year that would just they would have to put that in their budget and take that as an expense as it occurs I don't think there's a way to reserve for that so I think we would have to go forward and we put a rate reduction that we're going to expect that rate reduction is in there we're estimating how much dollars that would represent and we would reflect that then in their NPR guidance for the year so I think the way we would handle that is say if your NPR was going to be a certain number it would be reduced by that because you're giving back money I think that's how it would go but if you can follow up on the accounting I just don't know that you can reserve for a future commercial rate reduction so then the question becomes do you want to let UVM keep $22 million that would be the question if we can't keep an eye on that do you want to just allow the matter to do days cash on hand we can strike this and it would just be it's probably already reflected by the distribution so then what if it's cash on hand it's real time but that's when we're going to stop doing the days cash on hand we go home and then we go over 3% of the rate cut over the rate cut after one month you'd have a lot of favoritism if that $20 million on top of all the other cash on hand would play I just don't know if it's really doing anything I think I would agree with Maureen that I would strike the reserve piece because what we've been trying to do with the rate cuts is to basically do what I think of as a virtual global budget so if the budget's over you cut the rates so that the budget gets cheered up in the future the reserve part feels a little micro management it asks to me personally I don't know the mechanics at this point in time but I like the idea of a reserve because it's very transparent we're talking about an operating budget for 2017 that anticipated excess revenue of $63.2 million and about the actual end of the year they had revenues of $38.3 million and additional expenses to cover utilization and other costs at $28 million leaving $20.6 million on the bottom line as an excess and that's before the $6 million operating revenue added to the bottom line so I you know I always thought education funding was complex but this is more complex funding education but I like the idea if it's achievable of having a reserve that is transparent that we can all concede it's money at the end of fiscal 2017 that's done, that's cooked it's baked, it's there and if we could hypothetically order the European Medical Center to hold that as a reserve and then moving down the road to the insurance rate process because there's a lot of unknowns there we haven't gone through that process we haven't seen the actuarial work that's associated with that we haven't seen DFR's analysis of the solvency of insurance companies so there's a lot that we don't know but to have that $20 million sitting on the side with the intent of the board very clear that this is to reduce rates makes sense to me I think the UBM Medical Center's budget 2017 actual versus 2017 budget and I think that when you went through this CON process for EPIC it was based on the 2017 budget as I can see it was based on 2017 actual and it came to a factor that presentation and the CON I think for the purchase of I think the name of the street buildings as I've looked at that it's kind of a great even proposition whether you're paying Piscale the owner or you're paying a mortgage it looks like it's kind of a great even but clearly at the end of 2017 there's $20 million above and beyond what you've projected as excess revenue and we can find a path to put it reserved so that everyone can see it's there it's there to go back to rate payers and then we through the process of rate setting on the commercial insurance through the remainder of the year knowing that's there that seems simple and explainable and transparent and if we can do that that would be the path I'd like to travel so are you I just want to ask you a clarifying question are you saying the reserve in lieu of the rate cut because to me it's redundant so that's what I'm trying to understand well I I think you have two things going on here you have a fiscal year 2017 and with more excessive revenue than folks with disabilities then you have and as I think Marine makes the point that that seems to be a constant run rate and I think Kevin was trying to get at trying to get at that overage sooner rather than later which I think Kevin's intent is good but it also complicates the process by trying to do something in the last third or last quarter of the year so my hope is that as we go through the commercial rate process given that trend and certainly the other hospitals have to fit into the next but that would be able to cut rates and that's what we did last year last year we had direction to our actuary to take a look at the rate cuts that we had done for the at that point it was 16 actuals and they did apply those rate cuts to the submission that Blue Cross that Blue Cross had done so we have to Mark's point been trying to true up the two processes now the problem quite frankly is that the hospital budgets are decided after the rates are decided so we're raising what we can factor into the commercial rates are what we do now in terms of 17 actuals and then what's will have the budget submission so we also have our actuaries look at those so they're not final final there's a lag there because of the timing problem but we have been working to make sure that these rate cuts flow back through the process and then get reflected in the premium so I think we all agree on that being a priority. I get that I'm just saying that there isn't into fiscal 2017 it is according to the financials around 20 million dollars and that's there and I would rather not leave that in an unsegregated manner in UBM's budget I would rather have it segregated and distinct so we can track it and I say that because these budgets are incredibly complicated and as much as we've had presentations on oh it's utilization then it's driving additional 30 million dollars which there's great truth to that but there's also liquidating a bad investment there's also extraordinary contributions to the retirement fund and I worry that if we have been unsegregated the process of UBM medical center kind of continuing down their path that money will get lost it's there in 2017 that's rear view mirror let's book it, let's segregate it and then let's move forward to the rate 7 process I just don't get how the money gets out of the reserve back to the rate pair because to me the way the money gets back to the rate pair is by the rate that's being charged for the services received being reduced so that's where I have sort of a gap of understanding and so do I and when we went through the one care approval condition 23 was to ask the staff working with one care because it's a similar issue to develop that pathway that's that pathway has not been developed yet and maybe it cannot exist but I don't know that and given the condition on our approval for one care we asked staff to create that path and so I'm expecting that by the time we get to the end of the rate 7 process we will have a path great that would help if we had a motion and kind of saw where the rest of the board is because Tom I think some of the issues with what you're saying 2017 is cooked and it's already been audited and they have that so we wouldn't be able to do anything now you know we're talking about 6 months and you know we work cooperatively with the hospitals as far as setting budget guidance you know a rate decline in there and we will have that approval at the 2019 budget process we're going to all expect that it's in there so I'm not really sure what trying to hold and segregate might so I would just put a motion forward just to see where everybody else is of not putting a reserve on UBMC's books because we've agreed to do we've already put forward a motion to say we're going to take a commercial rate reduction can I make a friendly amendment to that or to be in the second amendment it's okay go ahead you want me to hear that go ahead my friendly amendment would be with the caveat that we would have a requirement from the carriers and from the hospitals that confirm that that rate reduction would be put in place so we have some more greater compliance so is there a discussion from the board not have it open it up to the public for discussion is there any member of the public to say anything I think to your point is very well taken we've openly acknowledged that that $20 million is an archived balance so from our mindset from now to whenever that's in our mindset I can tell you or whatever piece of it is in my control that $20 million is kind of whether it's protected or just kind of known until we talk through these processes just know that just one statement open it to do a rate cut so a date if there was okay any other member of the public wish to comment any further discussion by the board if not all those in favor signify by saying aye aye any opposed okay so at this point I think that we really are at the point there should be a motion concerning a rate cut on the October 1, 2017 date if someone would like to make one did you say 2017 October 1, 2018 why don't we start with the easy ones I move that we don't do a rate reduction for quarter any discussion any member of the public wish to make a comment on the board seeing none all those in favor of the motion signify by saying aye aye any opposed okay would somebody like to make another motion I would make a motion for a 3% rate reduction for UMMC effective October 1st is there a second I would actually like to second that because I'm still trying to process in my mind about how the 3% rate cut starting next fiscal year is I think kind of running over it that we've seen in the UMM medical centers budget and I'm trying to just push this path given the 2017 service so I guess that's my question how do you see those two tying out to be on the work sure based on the information we have 1% rate reduction equals 7 million dollars for a full year then 3% would be 21 million dollars and we were looking for covering 20 million dollars of coverage so I think assuming those numbers are correct there is a wash on that so I just got a ruling from our parliamentarian that I am allowed to make a second so I will second the motion thank you is there any other discussion from the board I have some discussion for me 3% is too high and the reason for that is because UMMC has been taking a leadership role in moving forward aggressively with their entire network to value based payment and quite frankly I think this whole discussion today is a prime example of why we need to move away from fee for service to value based payment and more predictability in healthcare system growth I think taking a leadership role in the all pair model in the ACO program deserves to be recognized and I understand that they have had the 20 million dollars over a few years but we still have a lot of work to do in terms of meeting our goals under the all pair model and I think we will continue to need that kind of leadership in our hospital sector it has been challenging for some of the smaller hospitals to see a path forward to jumping in I was very happy with the results of how many smaller hospitals move forward but we're really just beginning this journey and there's a lot more work to do so I'll vote no on 3% but you're not offering a substitute motion? I could but I thought I'd let other people talk first just one comment one of the reasons that I feel comfortable with the 3% is because I expect that UVM is also going to be over in 2018 probably again to the tune of 30 plus million above their NPR rate and have additional profits for that I feel comfortable taking this 20 million dollars back and then adjusting to 18 and potentially not going after that in the same way for some of the reasons that you're talking about I'm kind of separating the different things as far as in 2017 clearly from a profit they will up a 20 million and I think we need to remember that from a top line it's 38 million so the Ramonters had to make up 38 million dollars more from UVM going over if you will somewhere insurance payments and it may have already been reflected in the insurance payments but it's significantly higher than the gap of profitability in 2018 the trend is going to continue and again we're going to probably to the tune of 30 to 40 million dollars higher that still got paid out by insurers whether it was in their budgets or not and whether the insurance companies already reflected that that already hit Ramonters it still washes out in the end at the end of the day insurance companies have to pay it out whether they had put it in their forecast or not so that's what made me feel comfortable was saying we actually have a two year potential issue and we're addressing the 2017 now and then a room later to adjust it in 2018 so I was where you were yesterday in general I think that commercial rates could be cut I think there's a strong argument that the budget was over utilization is higher the kind of use of scale I think should permit a lower per unit cost which a commercial rate reduction would allow and as many people know I'm typically the first person to say return the access to consumers that has been my line for years but here's where my mind has changed a little bit in the last 24 hours surprising even to me that is that so I think that I appreciate it in some ways UVM's leadership role to your point Robin about we need leaders to help us move from one canoe to the other canoe from fee for service to value based payment one of the things that came up in this letter we did receive a letter from UVM and it was this line here to the extent that new medical health inpatient bed capacity is needed the state has made it clear that it will look to the designated hospitals which include UVM Medical Center and CVMC to create and operate those beds one of the things that I thought about as I read this we have a unique opportunity here so I'm going to throw a little bit of a slight proposal out there I think UVM is in a very very unique position to make tremendous roads in our state's mental health at the moment and this is a crisis that's crippling all of our hospitals across every 14 hospitals increasing expenses at every hospital in every ER leading to you know these inhumans to some degree lockdowns of patients boarding in ERs for long periods of time it's putting a huge expense in these hospitals and it's something we need to do something about and so here's an alternative proposal that we're just going to throw out there what if the rate cut was slightly lower let's just say 1 or 2% with a commitment by UVM to add a 20 bed unit which my understanding would cost about $7 million which is exactly 1% right so having 1% of this overage go towards building this adding this 20 bed inpatient psychiatric unit at the hospital we have I think trickle down effects in all of the hospitals reduce expenses in all of the hospitals which is what we want also provide better, more appropriate care to all of those patients who are currently boarding in all those 14 hospitals I think there might be some room here to say rather than the reserve which we're not doing let's say let's target some of that money UVM's unique position to try and actually make inroads on this mental health crisis without the rate to some degree I think a rate cut is justified but maybe a lower rate cut with some of this money targeted towards building this capacity at UVM so I'm going to throw that out there it came to me when I read this and I did a little background to find out how much that would cost $7 million seems to be about what it might cost so I'm throwing that out there as a possibility that may be along the lines of trying to mental health is one of them and I think UVM is in a unique opinion position to be able to make this happen so I don't know if this is a possibility it would be something we have to think about but I have to be of the mindset of maybe having a slight rate reduction when perhaps targeting some of this money towards building capacity at UVM from this overage is that or is that supposed to be for the remit well a proper procedure would be to propose a substitute so I would propose then I would propose a 1% rate cut with a usage of $7 to $10 million today because I don't know what the exact number is going to be of the overage to build inpatient psychiatric capacity at UVM I just want to point out that we can't really order a CON at this point so I guess discussion and that would be in this budget we cannot order them to start a capital project so I guess I have to take that back what I would like to think about is how do we best use this $20 million where is the $7 million where is the best value for that dollar I mean some of it should go back to the rate here but could some of this money be put to use to really solve some of our state's major health crises so that's where I'm going to go about but I guess I'm being could your motion be 1% rate cut with going back to the reserve $7 to $10 million to explore the additional it's not committing to it the money could always get taken care of in a different way later but that would allow for the exploration and CON process to proceed I don't know if that's legal either but that's my attempt to make it legal I would I could be swayed to move off of a complete 3% rate reduction however I think we should incorporate the full $21 million you know from some of the responses that we got from EVM you know I didn't see them having a huge issue with owning up to and contributing back was $21 million so they were looking at a 0% rate decline in their proposal if we said 1% that would be about $7 million one of the other things they put forward I believe in their first proposal or in discussions on a proposal but was potentially reserving for some of the risk for ACO so potentially that could be an option I do think there's a tremendous amount of risk out there across all the hospitals in the ACO wouldn't just benefit UVM but it might alleviate some of the concerns we have on the ACO budget there's $28 million of risk embedded in the 2018 budget and we know some hospitals will probably go over potentially but that could be an option so maybe it reads more to say if we put a motion forward to have the 1% rate reduction and then $14 million set aside for whether it's this potential proposal there or some of it to go against the ACO something like that because one thing I do see with a rate cut is it compounds so if we do a 3% rate cut I'm sure they had had a forecast to have something in their rate increase for 2019 and if we're going to a minus 3 is what we're going to hold them to that could be a larger swing so I would put forward to try to use all of the $20 million we're talking about and one suggestion might be to put off the final vote again until next week have no more than a 3% rate cut pending discussions with the hospital on alternatives for investments in mental health or in the ACO and come back and revisit this once the hospitals consulted with and we look at it we could put the monetary amount in but as they say that the rate cut would be no more than that which would account for this amount and then go ahead and have those discussions not finalize this until this is reviewed and there's a proposal out there that may address the concerns about considering it was raised by UVMC I would assume that there's some ideas as to how that money would be spent and also towards the ACO investments I guess I need to withdraw my original motion and the seconder agrees to withdraw the seconder so would somebody wish to make a motion at this time I have what Judy said so if I understand the motion correctly Robin I believe that you are moving to provisionally recommend up to a 3% rate cut but over the next week working with UVM to see if a portion of that rate cut could be allocated towards either mental health improvements or improvements to the reserves from the ACO is that correct? Yes I would actually broaden the list of potential improvements to any mental health substance or substance abuse or ACO reserves ACO reserves or investments investments I would like to see what people come up with from the conversation so I think the broad language is helpful. Okay is there a second to that? Second. Okay has it been moved and seconded is there for discussion? I think that's a proposal that I can't support we were looking at a situation where UVM's expenditure on an expenditure basis for 2017 over 2016 was 6.27% and 38 million dollars over their budget and as one person today made the point this is money coming out of rate payers pockets and many in Vermont are having a crisis of affordability as the representative from the healthcare advocates office has said so it's not that we're being stringent or penny pinching with UVM in terms of this growth in 2017 they met their additional obligations and still had 20 million dollars that fell to the bottom line and there are always when there's extra money floating around thinking of ways to spend it we're trying to find that we're spending Vermont's money I think that there is a process already in place having to do with mental health facilities I know that secretary go baby made a proposal and that's in the legislature for whatever that's worth I'm not quite sure it's our role to try to in the end here think that as much money as we can responsibly send back to rate payers is the path that we should follow because we have rate payers out there that are just just burdened by education spending and healthcare spending I don't want to divert so I would just have a little bit of a different viewpoint because I think that we're still talking about the potential of the rate but it's giving us an additional 7 days of time to try to figure out if there is another way to actually have a return on investment to rate payers in Vermont we've all continually heard the stories of how people stuck in emergency departments are driving up the cost for hospitals around the state and so on so I think that what this motion allows is gives us a little bit of time to better figure out what the appropriate amount of the country and what the appropriate amount of possible investment that could yield a return to the Lawners could look like so I think it's probably a worthwhile exercise of waiting one week to do that I would also say to Judy's earlier point in order to comply with our rule it sounds like we do need to provide some sort of written documentation and allow for that week of comment so I think it also helps us move to make sure that we're taking in time with our role can I just ask for clarification and I know we're trying to kind of line this right now with the 2019 process which has data of March 31st that we have to get the information out the prior year adjustments seem to have lagged a little bit longer in the past into April or May for finalization so I just want to put that out there because I'm not sure we really have to decide this in the next week if we need to take the time I don't know Andy do you have the timing of when the requirement or Judy at what that's going to be no you're right one thing I'd say at Tom's point is this was designed around the testimony that you are, you guys in here asking for permission to do certain things over 20 million in 2017 right then there's the potential of 2018 which is trending a bit higher in 2017 trying to address that where you're cutting the address the point Tom is trying to make is there's no linear path to how you discuss this between 2017 and 2018 except the jump in the 19 leading the 20 and 18 to our address and that I think is a real concern so what I want to say if I may make a suggestion in my last day and a half of period I'm going to check out last week is that back then the team dragged you some kind of a motion that brings all of that together and then you could there's no doubt on this you don't have to have this done by today but maybe I think to fairly adjust this point you may have made a request around this 20 million and how you understand it and we haven't been talking about that we're simply letting it drop to the bottom line there's no kind of a motion that then could feed to you and say this is going to be the step of the process you've moved the revenue cut central line on the quarter of us it wasn't on the table at least we haven't been able to see it I'm going to lose the track there so somewhere there needs to be a motion that you can then react to feed you and I think that would be the cleanest one I move that as an amendment we already have in how we describe you dealing with it my motion was laughing was the 2018 so the chair is very confused what the motion act is let me try again I withdraw the prior motion let me try again so I move that direct staff to have a conversation with UVM about a potential rate cut of up to minus three with alternatives around a smaller rate cut but specified uses of the 17 and 18 over just is there a second honestly I think it's probably complicating things by trying to add the 18 in when we don't know what it is I mean we know the 17 is 20 million and this has been to wait until the actuals come in and then adjust for it we haven't really had much discussion on the 18 we're surmising they're going to be over we don't know what that means for profits there were some one-time things this year that helped them in their profits they had said the profits related to the overage was only about 8 million so I don't think we know what 18 is yet and I don't think we're going to know that until down the road so I wouldn't ask people to say should we take 18 off the table right now and we will go through that process what's going to be it would allow trap door if you will if 18 trended higher it doesn't mean you're taking an affirmative motion but the indications we have now based on their testimony and what we've had submitted for the end of January is that we're having this coming up so this wasn't a one and two I think maybe I don't even know if I'm going to talk because I've been reading it a couple of days but you can fashion them the budget order to be they also have to address what 18 may look like I would assume four months into the year they at least have a general idea of what they're doing I know we've been spending a lot of time on this one of the reasons I have a concern about that is the problem with going budget to budget is you pay for your sins twice if you will so they were over 38 million from 17 and we're going to take some action against that and we should for 18 they're probably going to be over I'm guesstimating maybe the 38 million but it will be could be keeping in check with what we've given them as a percentage increase over their budget of 3.2% so in 18 they may be over 3.2% where they were for 17 probably we probably would not expect that they're going to be flat with 18 so that's part of my problem with the budget to budget is I think we should be strong handed on when you miss the budget in that given year and take action against that but then for the next year you're just it's the same 38 million we've seen that since 2015 they've been over 28, 25, 38 it's carrying each year they're over and then we go and we hit them on that because they're over but it was part of it was because of the budget so that's one reason why I've been more strong handed on saying we should do something for 17 and then for 18 let's look at where they're coming out on a year over year basis and we made it to make an adjustment so I'm not saying we don't do anything on 18 I just think we're complicating that right now and let's wait so that would be my point of view can I be fine for staff to come back to our presentation next week so I don't think it hurts to have people talk about it and they may end up right where you are was there a second to Robin's motion and Jess seconded is there further discussion by the board is there any discussion by members of the public at this point in time stand up my name is Hamilton Davis wow Hamilton Davis I just got a question for Robin the term overage applies not to the increase the overage in that patient revenue but the overage that falls to the bottom line is that correct that's how I meant it I think because I was looking at that's the number you've been talking about 20 million roughly 40 million is a 40 million dollar increase but 20 million of that fell to the bottom line and it's the bottom line to try to claw back is that right the other question I have is is this number the bottom line for UVM is this based on not on a given number but on a percentage of the net patient revenue is that part of do we know what that is and is that part of the sort of structure for the financing of the bond issue in other words it's supposed to be 4% it's supposed to be 3, 4, 5% at the bottom line in terms of the actual numbers I think they were they came in against a budget not looking at the bottom bottom line I think they came in at 6.2% off of a 3.8% or so target so it did go there there's no perfect science to this the rate payers paid 38 million dollars more we can't get 38 million dollars back 20 million wasn't necessarily one for one related to the 38 million they had other things going on but they dropped 20 million to the bottom line more than that to the bottom line actually I have a comment about that just to make sure that everybody else in the room can hear some too it's not known here but there's been an issue here since the early 1970s what are the movements within the state of patients and populations from one place to another and so the underlying question of the policy instance in my view for increase in volume at UBM is whether that increase in volume is what some old people used to call BOWA utilization or what is the valid utilization if you're getting utilization at UBM which is coming from somewhere else you're going to reduce somewhere else then my guess is you have no way to tell how valid the utilization increase is in terms of quality you don't have any way to do that number one and number two you really don't have a methodology to check whether the patients are coming from somewhere in the state if you don't do that if you don't subtract if you're getting movement out of rough and say or out of central minor out of anywhere getting movement from the state then the overall equation is whether it costs the state more has to take that movement into effect right on the face can you hold that thought for one minute I think we're on page two of Landy's presentation we're wearing everybody down on the 2017 actuals so when we get to the 2018 NPR we'll just slide right by and address a little bit on a further slide adjusting that are there other members of the public that wish to comment at this time if not the motion was to direct our staff to come back with a recommendation next week with potential an up to 3% reduction but it could be reduced by investments in either the ACO or in mental health or substance abuse any discussion from the board I just want to reiterate we don't need it for next week and I don't think we should try to force the force that we don't have it for next week I'd like to look at what the timeline is and get a UVM ample time to help in that is all I would say because to come up with whether they put a set you know 20 million bed facility in or increase I think we should give time for that and understand that so I would just say the motion is to direct the staff to come back and the staff direction could come back and say we need more time that's it so all those in favor of the motion signify by saying aye any opposed so before we move to the next slide we wish to make a motion on the CBM and C at this time so seeing no motion no I'm happy to move I can move that we reduce the commercial rate there by 1% that's half the conversation so I would move that it's ready to deal with that box so I think could you give us the effective date Jess? no as of October 1st 2018 has been moved and seconded to decrease CBMMC's commercial rate by 1% effective 10-1-18 is there discussion among the board? if not is there any member of the public who wishes to make a comment or question at this time? Mark Stanislas from the University of Iowa for my help that I was speaking on behalf of CDNC keep in mind that the first time that we saw this was you know when it came up on our website yesterday afternoon so no we could ask for more time before we make that final decision it would be appreciated there's been a lot of talk about the trend of 18 and why we're comfortable on kind of reacting on the rates earlier sooner rather than later and keep in mind that there's still some variation but CUC is barely breaking even so I was asked that in part of consideration in all of these great decisions whatever is done we completely agree with that whatever decision is made and whatever date that should go directly back to the rate care at that time I know that's difficult but any decision on rate should go directly back to the rate care at that time that it's chosen to be implemented so that's our chance but on CDNC that would carry over to CDNC too is we just saw 1% yesterday afternoon you could allow us more time to react to that it would be appreciated and do you really need to make this decision today if you are targeting him on October 1 so I have no problem with that what's the position of other board members I'm fine with that I think Judy correct don't they have 30 days to under the guidance of the rule well the first thing we should do is provide the written notice that that's a proposed decision of the board and the reasons why and that's what I think the staff and we should be doing first providing it to CVMC and allowing them to respond so they will notice an opportunity to respond and the board can push this off but what we could do is go ahead and just provide that written notice that there was a proposal to reduce the commercial rate by 1% under the underlying rationale and allow them to respond so I think the third system will be available to us is that from the legal team or from the hospital this is coming from our rule so it's your legal oh the notice I will work with the hospital budget team on putting that together okay so you'll get the notice out we will get a notice out okay thank you so Andy if you want to proceed we have a very kind of 10 to 12 we have a full afternoon we have a very unique structure that we're considering for NPR basically what it includes I'll just do this a quick picture of it is a rebalance of people's hospital 18 budget basically what happened in 17 which was I'm up with it now and then later in 18 we had a crew of people who said it was on the track and then on to see where they were using the national health care strategy pieces that I'm wondering if it would be better because we haven't had this thing as the change up until yesterday it would be better to allow it would be better to allow the hospital budget team to talk to a few hospitals that are affected by this rebound it's not so much in positive but in negative grace around just to talk a little bit about those reasons I started with the chart that I had but all hospitals are now they have been trending to see if the utilization is year over year or if it's the kind of one on so we've talked extensively about unionization so do something or just put them in a position where they've been in the year and by that they can actually do the budget order so I don't know if it makes sense to have an hospital team go back and do that but can you make some of that data and then come back what we're proposing to do here is rebound based on a percentage so we put two scenarios in here why is it being exceeded plus or minus on the budget order and that half of the percentage is already mentioned in our role as a potential action step for the private board we worked with a couple of board members and also came up with a 2% scenario which shakes out some of the smaller and we could divide or we could do anything that was basically construct was rebased which sets the brand base for a 10 to 19 and then this shows the maximum commercial rates that we talked about but then the ACL revenue is coming out now there's a 3.5% of the action media that's really going to fall because that's a whole set of decision making but then non-ACL revenues allowing 4% for investments in the all-parent model, investment areas and then inflation increases people to find which is backed up by a long-term trend for healthcare expansion and so this 2.5% set off as that as your inflator that sets the path forward because that inflator is an inflator projection going on I think 2026 so that will bring it on to at least where we can start the process next year one of the confusing parts for our team this year is we have different inflators and there are a lot of them out there this seems to be the most generally accepted one I think one thing I mentioned this is inflation this is not utilization so what we've done in three bounces allow for some real-time utilization that's going on and inflator come up with what we've done down below is mentioned over the 18 approved budget it's a 3.5% but that allows for a third that's probably utilization so what I think might make sense is for the team to think about this get some data from Bob's and a couple of the effect in hospitals and then come back maybe next Wednesday morning and I present this in a way that is kind of holistic in the system this needs to be done probably by the week of the 26 because by the end of the week it has to go out by rule so we have more time with this to kind of absorb the talk to the departments and pick a path so I think that suggestion makes a lot of sense so that we do get ample opportunity for those hospitals that would be affected by a re-balancing to digest it and comment back to us so are there any objections from other board members of allowing the staff to work with those affected parties if possible I'd like to see where the board sits on whether it's the 2% or the .5 because then you know who you need to talk to I really felt the 2% was significant and part of the rule says significant but I didn't think going with just the .5 and adjusting to everybody so whether there was any agreement amongst the board and you would know which hospitals we need to go back to and I noticed there's 2 on the upside and 4 on the downside and those hospitals are continuing to trend on the downside this year other than one of them, Grace Cottage I think it's not so this would give the hospitals a chance to come back to the rule they get 30 days to come back to look at it it's not going to change where we come out with our guidance on the NGR the base changes but the actual numbers don't change but I think first the board hasn't talked about it so I don't know where people sit but if you could rule one of them out it's probably a little easier to then go back to the hospitals either all of them on the .5 or only the 6 of them on the 2% maybe we can pull I go with the 2% and one thing I know I might know is that could become your process for every February or March or the year any hospital that's up or down 2% in this case it's only 6 and we have this case they represent 2 of these anyways so that kind of focuses the budget team on where you want them to focus and I want to consider the rebounds that they get for 2% so I would agree with Maureen the 2% in favor of using that as the trigger for potential rebounds and I think that just in general the rebounds are in favor of that thinking about it going forward but certainly this year I think we've been living budget to budget for years and I think it's time to actually level set with reality and for some of these hospitals their budgets have truly been aspirational and this has then have been somewhat aspirational targeted so I think this is a good idea I would say the 3% I would add to what Jessica is saying there the 4 hospitals that are going taking declines or the 3 hospitals decline but also North Country those hospitals had significant operating margin shifts from the positive in their budget to negative for 2017 and that's a real ongoing concern about the financial stability of them building budgets at a much higher rate hitting our objectives on the top line and on the bottom line in budget and then completely missing it we need to scrutinize as much as the downside hospitals as we do as the upside hospitals and place enforcement on those as well I also like the 2% for the reason that you both helped me I like the 2% it would be nice if we had we're doing this based on maybe a 3 or 4 year trying to take some of the noise out of it but so given that it's better to have kind of a wider set of guardrails to govern this analysis we captured it so it looks like the 2% number is the number that's good that's it girls thanks Andy we are right at noon we just received news that the one o'clock schedule will have to be changed Susan would you recommend that we still meet everyone or would you recommend that we use the start time to 1.30 I would recommend that we start at 1 because all of the presenters are internal staff I see one of them in the room already so I don't see that being a problem we have a busy afternoon so we're going to recess until 1 o'clock and again we will not be discussing the certificate of need for the Green Valley Surgery Center today that will be postponed to a future day can I just ask I would recommend that we file through with the rest of this because the whole hospital can do so and then break into 1.30 but it seems to make sense to continue this discussion down and then take it away so I thought I heard you just say it was done I don't know what else was on the table we didn't really discuss the NPR that's why I said we it was not we would get a comment from the hospitals and I was the one that would come back with a more complete discussion about the calculation and the effect of that on each of the areas that are listed here so you're saying that 2.5 inflation I think we should either take public comment or take this discussion I think Irene is right I was thought that we were done with this but I think they're right that we can take the half hour we're going to keep going Andy was hopeful he was done and the issue that we haven't talked about is 1 year of guidance versus 2 years of guidance correct and so Mr. Chair there will be public comment after the break then after the recess on this more this information that's what I'm hearing I just want to make it clear we're going to keep going now and break into 1.30 so Andy if you could walk us through the recommendations for NPR so I'll circulate the article that we used to couch the 2.5 but essentially what we've done is taking the 2.496 of the food and budgets that came off the budget orders in 2019 if we really fix the hospitals that are plus or minus 2% or more it essentially adds $31 million to the internet system which is a quarter percent of the wage dollar that I've changed then we assumed the maximum rate of deductions in U.M. and CBMC and these are these are maximum meaning 12 months so we ordered about 12 months we took an estimate of what the ACR would have to use in order to treat them up for 12 months and look at 3.45% in flavor and the reason we've done that isn't to lock the board in any particular set of decision making it's to have an adjustable base in which to calculate the NPR from so you can get an adjusted NPR off of a a more accurate and estimated base and so then to focus on non-ACL revenues we have about 4.10% of health reform investments and inflation increase of 2.5 which is on a national health care expenditure guide which I will circulate to the board it's an article I'll make sure we publish on our website so you can see what we're anchoring at 2.5 and again I wouldn't suggest that you want to append exactly just this inflator but this is something that's set on on your trend that gives you a new base for 2019 and when you look at what you've actually done is you get over the I would go to this slide which is over the 2018 new base project it's a 2.2 100% effective increase and if you look at what we've done over a 2017 actual just a simple math is not a common structure it's 2.18% so that's effectively the slope that you set however on a hospital-by-hospital basis for something like UMM where they're coming in at 1, 2, 1, 1, 17 18 is probably getting any harder in fact to 1, 2, 5, 0 we set a new base for 18 that's actually a little more realistic is where we get them coming in in 18 it adds so they're at 1, 2, 5, 2 then we put in a plater on that which is kind of the bottom of these people in America the other way they're ranked at 1.2 7 which is probably where they come in at if you actually went over 3% 12 month annual commercial rate cut so what I would suggest is that the team can then take this break it down and then agree on 2% break these 6 hospitals down to the actual dollar amount beat them back to hospitals and say given this set of circumstances this out of the bottom of the rational place where you're at what we're trying to do is create something heavy to the budget orders so not just getting a budget order they see that we do something that only comes back in we know they're involved by this we know that so that would kind of be a one-time if you go forward you could be adjusted to 2% hospital by hospital this is going to come with see if you can push back from all these in hospitals that we're meeting but in the case of Gifford just as an example they are underperforming their budget every year it's 2012 5%, 5%, 9%, 7%, 3%, 6% so those are negative underperformances so there's no reason to believe that we need to keep running budget orders up as if it's pretty much an unadulterated if you're going to acknowledge that you've got to acknowledge that in the case of greatest coverage I think that this seems to be redone but using more accurately in terms of my experience then minus 8, minus 18, minus 6 minus 11, minus 6, minus 12 so there's no reason again to have a budget order that won't put on an unadulterated fair assessment based on their reasons and acknowledges what we've been saying which is the realizations of the population and then once you break in with the real relation we truly did allow you to clear that you want to see because you invested both of those into that so that's it so it's your recommendation for the board to officially approve 2.5 with a 0.4 investment in health care reform activities specifically targeted towards the goals of the all-term model we have more time but I'm comfortable with that I think that again you're getting a significant pushback from these three entities where you are reducing their NPR but if you don't do this you can't do this so if you don't do this it makes no sense to put a 2.5 on top because you've just been set a budget order to do the exact way to do a gap just by and it's not as if you give 3.4 grades you don't even have to pick on to underperform from right here this is a 6 year contract you and some of them are dead in the case of Springfield because we got some pushback about Springfield their performance in 13 minus 8 14 is minus 4 15 is plus 3 but then 16 minus 4 is 17 minus 12 that's a little bit of more of an 8K and genie trend as opposed to 12 so that probably requires a little bit of drilling down and again this is guidance this is your lining in the sand but this is not you writing a budget order that has some money in fact so and frankly can I have a comment on your slide I'm very supportive of doing this on this slide as I've talked a lot about especially on the down hospitals that said it's midway through the year the hospitals are getting an increase they're not going to push back too much they're going to say it's not high enough but they're going to take an increase the hospitals are going to decrease their midstream there may be some things and they'll be able to come back I looked at where things were trending on the first quarter just budget to actual knowing that it's not completely lined up that way and the one outlier is Grace Cottage is trending at 1.2% above their budget through 3 months they come in and they hit their budget but I think their guidance is I'm looking at where they're trending against their budget what the point is they're kind of on track relatively to hit their number if they do I think as a board we can't really go back and say hey we cut you down X amount mid-year but you actually were trending there because when they came in there may have been extenuated circumstances so I think we're going to have to have a little bit of a year you can't necessarily change the game Springfield on the other hand is trending I think this puts them down about 10% down and they're trending about 8% down so maybe they're going to come in a little bit better than this trend that we're putting but they're not going to hit their number based on the trend right now so I think those hospitals will have a chance to come back and either say hey wait a minute we had some one time things that were going on we're actually hitting our number and either say it's mid-year we have to acknowledge that and so they're going to come in where they come in at 18 but the trend as they're carrying on the other hospitals that are down their budget is going to be impacted at 19 on that and when they come in in August we're going to want a really good look on where is 18 coming in and hold them to go off of that number if it's significantly down so I think you know the the guidance on NPR and the final calculation I think is not necessarily relevant to that point I mean we're going to say we're going to re-budget I think we can talk about the specifics of the guidance of those in total and one other thing is I wouldn't necessarily say we're going to do this every year at this I think we're doing it this year it hasn't been re-based for eight years I think the board would have to decide isn't every year a thing we weren't necessarily saying every year expect the starting point for the budget you know the budget team gets all these actions in somewhere in like January isn't the starting point to say using this chart here's where they are I guess so I'm just going to say that to me it's not just looking at what the results were in the budgets it's also looking at the demographics of the different areas and how that relates to it I think there seems to be some alignment with what's happening demographic wise with what's happening with the outcome on the budgets at those areas so I think it makes sense to do this rebasing I definitely would even consider doing a rebasing one year from now but maybe two or three years from now we'll have it again depending on changes that are occurring but it's been eight years since it's occurred again I just want to get us refocused back to the decision point on the 2.5 and the 4 410s I just want to point out also what our rule allows and what the board does annually is that they establish these benchmarks which are targets and these are all part of the guidance not the budget orders and what it is going to be based off of is another subject so this is establishing the yearly benchmarks that will go into the guidance Does anybody wish to make a motion on the NPR? Sir I'll make a motion For the NPR the ACL Revenue Base will go up by 3.5% and the non ACL Revenue will go up by 2.5% and then there would be an additional 0.4% allowed for investments that each hospital would have to support Can I just make one clarification I would say I would focus only on the non ACL Revenue and buying only the non ACL Revenue I don't know if we just have only the reasonable process I think the ACL life has been treated separately to make the decision on those lives We made the decision on one quarter of fiscal year 19 we have not made the decision on the other in terms of what we would approve for a trend so it's a little bit of another time issue where we would look at that in next December after we've already done the process but again clearly those lives should be separate I agree I agree with Andy that we shouldn't find ourselves to the 3.5 that we should use that as a placeholder and it should be no more than that amount So I think that's exactly what Andy was trying to say is that all we're voting on is those that are not in the ACL world I'm totally fine with that I just think it's important to signal that we are separating the ACL Revenue in this conversation but I do like the fact that we have intentionally sort of signal that we think that the growth rate on the ACL Revenue is going to be hopefully higher than the growth rate on the Fever Service Revenue and I think that's intentional because the incentives then are structured such that the hospitals have more incentives to part more of their revenue encourage more attributions in the fixed payment world and the Fever Service World also recognizes that the risk and underlying change to the business model associated with moving toward the fixed payment world So while I agree that the 3.5 is just a placeholder I think it's an important signal to send that basically the blended rate possibly chooses to be in the ACL will be somewhere between 2.9 and an upper bound probably of 3.5 and that the more revenue that's in a fixed payment world the higher the growth rate And one thing I want to make perfectly clear because there's some skull put on the streets that some hospitals have had conversations about trying to exclude ACL related revenue from the provider tax ACL Revenue is still part of your net patient revenue and there is not going to be an exclusion for ACL Revenue from that provider tax So Mike, hopefully you're listening and you can get that word out That'll be public comment You are Sure So that's been the ideal where that came from part of the legislative process and discussion was recognized that that's net patient service rather than not excluded from the tax So that's one thing I think the board creating incentives for movement to the all pair model is an interesting concept to me I agree there should be some incentives and some discussion The all pair model is intended to be voluntary This makes it not so much and makes it really a challenging proposition Interesting to see that the additional healthcare expenditure data report which I haven't seen is at two and a half percent where CMS one of the largest tanks says it's 5.3 to 5.5 percent Visient information that I received from suppliers that I shared in the chart the other day ranges that anywhere from 2 to 8 percent 8 percent on the high side with pharmacy So it's really challenging to see how some of these small organizations survive within the what I'll call potentially artificially low inflation or guidelines Second on the other chart related to the rebase I think each one of those organizations should be required to come in and have a conversation with you outside of the staff discussion I think that would be imperative to the thought process and decision making I worry a little bit that you're doing that we're moving into a rate-setting process through an NPSR mechanism I don't disagree that some of the correlation between historical budget to budgets have created some artificial or opportunistic artificial growth in NPSR which has maybe buffered some of the expense conversations I think when you start talking to some of these smaller organizations of what it takes to run a critical access hospital and Medicare recognizes this they pay cost structure not necessarily an NPR structure So I really think that we really need to talk to each one of these organizations about the impact to what their organizations will look like with our new guidance that takes these dollars amounts out and I'm not saying they would have achieved those dollars amounts before but I'm saying that their expense structures might be perfectly in alignment with them I'm making emphasizing a point here to say perfectly in alignment with the services they provide so this is a sort of an artificial rate-setting process using an NPSR mechanism as opposed to really looking at what we want in those areas so a little bit of policy is leading to this discussion which may not be right but I think we should clearly have each one of these organizations in to talk about what they do how they do business, their expenses structures so those are my comments it's if we have time that would be my recommendation that's too important of a decision process to not hear from them I think that as part of our 2017 action, not as the rate-setting process we are able to look at any hospital up or down and provide then regulation on top of that so I look at it more as that when I then looked at each of these hospitals that are trending down as I said, Gracie Field is not trending there they should come in or we should talk to them and say hey, they are trending right on their budget Springfield is trending down as is Gifford relative to where they are coming in so I think it's really just kind of aligning to say their budget for 18 is also too high they are coming in lower and I don't have the numbers in front of me 1.7 million operating margin and operating profit and they came in at like minus 3 which absolutely is showing that's not sustainable so I do think they need to look at what will the expense base be and what will their profitability be based on the new numbers because they are coming in that way for 18 we are not regulated to say that they can't have a negative operating profit if that's what it shows that's what they are doing but let's be realistic about it because they are basing their expense budgets I believe on this higher amount they are not able to react in the middle of the year when they fall 12% short which is what Springfield fell so they end up having a huge negative because they can't react to that so I think it gives them the opportunity to come in absolutely they should come in show us where they are trending for 18 where their top line is and their bottom line and then for 19 some of the things we are not showing on here which we talked about maybe putting a cap on how much rate hospitals could have and I think that might be something in the future but some of these hospitals had 10% 14% rate increases all their lines of businesses so I think that will will not allow them to do that and then build a structure that's not sustainable because they are not hitting the top line and putting the rate through and they are losing money on the bottom line so I think it would be great to have them come in and look at it and I think we can't talk both ways which is we want to rebase for the hospitals that are over and everybody is all for that and then we look at hospitals that are coming woefully under profits are horrible it's not sustainable long term and then we are not so sure about it so we need to make sure we are balanced and then it's not combining into the rates and that's why I'm trying to say separate it's two separate things I'm actually not saying it should be one way only I'm actually saying that if I can't speak for any one of these organizations operational structures and what programs they have or shouldn't have that's why I think it's really important to have them physically here and I'm going to put it in the slide right here if any of the organizations prefers not to just work through the staff they're going to all have to work with the staff but if anybody wishes time to come in before the board get that to us immediately and we will hear them okay Mark can you go back to the next slide I would just like to reiterate you will have to work with the staff to understand these numbers and how the calculations got there once again this is our first time seeing it you know whether rebasing makes sense to make a better alignment to the all payer model absolutely but there's some other adjustments in there that you know I think just need some understanding first before we can have some conversation and then once we have the understanding to have the opportunity to have that conversation that would be greatly appreciated and the only thing that I would say is echoing what Mike said 2.5% on expense inflation that's literally probably going for the lowest benchmark you can find and pegging that as the number and the difficulty that we all have and it's difficult because there's no crystal ball but everything we're seeing in 2019 as far as all inflation factors across the board that trend is going to change in 2019 I don't know what it would be but it's just that 2.5 seems like it's on the low, low side thank you that's even low I think 2.5% yeah Chris Hickey Chief Financial Officer Northwestern Medical Center as well as you know on Monday Vaz and Jill and Tom came and talked about the cost increases and I agree it's like I always tell physicians when we're benchmarking their salaries is anybody can go out and find an article that supports a higher salary or a lower salary so you really have to be careful exactly what number you use and I agree with Mark you probably found the lowest one and you identified that and for what it is to use a health care expenditure inflation factor wherever you find it and to apply it against a hospital based organization is a challenge because many of the health care expenditures for instance the capitated agreement shows that half of the revenue that's coming in is going to outside the hospitals and half of it is going to the hospitals the hospitals have an enormous cost structure that isn't part of the rest of the health care cost structure they don't have to worry about getting travelers to come in as you heard I think, I forget I think Tom Huebner said on Monday that well it has 45 travelers or something like that you know they don't have to incur the significant pharmaceutical costs that hospitals have to incur which pharmaceutical inflation I think is up in closer to seven or eight percent I think might present that information on Monday so I just caution you to say just because there's a benchmark out there of 2.5% national health care expenditure that you can find I don't know if it's necessarily appropriate to just pin that on hospital expenditures I think hospital expenditures have unique and different challenges that make that number be extremely low that's fine Tom I appreciate the words of caution that's a conflicting role and what we have to do as a board is look at the constraints that are on the hospitals while at the same time looking at the constraints that are on the monitors so it's a tough balancing act I would just add to it one of the things you don't see in this guidance what we talked about is an expense reduction target and so we didn't put that in but I think to that point you know I think UVM showed the other day about 2.8 or 2.9 was the medical inflation rate I think that was in the materials that were sent over from UVM if you take a 0.5% that across the non-ACO revenue it's about 11 million dollars about 5.5 million that would go to UVM and so if you think you're trending higher I think where we really want to see in the budgets that are presented is I know everyone already looks at cost reduction but even going deeper for those cost reductions and finding that extra 0.3 or 0.4% so we didn't put that in here on top of this which I was pushing for but we decided based on the 2.5 we didn't put that forward but I would just suggest that's where we really want to put the pressure is on looking at those expenses too and those cost saving programs I'm going to suggest that this looks like a good time to take our a lot of recess so we will meet again at 1.30 thank you can I just have clarification so at 1.30 we're going to come back to the hospitals I actually think that what I'm hearing is that we should wait in a lot for feedback on this proposal before we actually vote on it so I think Andy at this point you don't have anything more to add to you done is there still an open motion morning was there a motion on the feature service on this if there was a little bit of a fog on all these measures so if you had one maybe you should withdraw whoever seconded it do you wish to withdraw thank you so with that we will meet again at 1.30 okay we're going to resume the Green Mountain board meeting it's 1.31 and Sara Sebastian take us away thank you very much I'd like to start by thanking everyone who commented on the charter proposal the comments were really thoughtful and helped us narrow the issues that we needed to address with the charter after discussing the comments with the team we decided to make two changes to the charter first we agreed that it was important that board members at least have the opportunity to serve on the council so we added a subsection 5.2 which you can see on the screen that explicitly allows board members to serve as voting members of the council this was done in order to provide the council with the perspective of the board and to allow that board member to communicate with the board about the work that the council is doing in response to some of the comments we also discussed requiring a board member to serve on the council because this would involve at least one board member assuming additional workload we felt that it would be appropriate to leave that decision to the board so we developed two versions of these revisions this one on the screen is permissive so the council may include a board member in its membership and this version is mandatory saying that the council shall include at least one board member in its leadership so because that involves questions of the board's workload we felt that it would be appropriate for the board to discuss and vote on potentially we also incorporated in response to one of the comments a requirement that the composition of the council changes to the composition will be subject to approval by the voting membership after that membership has been set initially we felt that this change would serve as an effective check on the appointment power of the executive director as outlined in the charter Christina can we switch to the power point so we we also got a number of comments related to process and to address those briefly I just wanted to yes take a step back and look at our broader data governance efforts so where we are is we are kind of a step down with the council from the vcures role right now we are working on an update to the rule that we hope will roll out with the next version of vcures which Sarah is currently putting together in our p4 and as part of this broader review of our data governance efforts the council will be working on a disclosure policies and procedures guide which will address things like the data use application process and the decision making process for way applications and our intention is for most if not all of the process questions to be addressed through the guide I don't know if you have any additional comment about the broad scope of the data world not unless you have a specific question I can address so I don't want to get into any weeks so that's where we are we wanted to again think all of the commenters because the comments really were helpful in figuring out where we needed to go with the charter and I guess at this point we are happy to take questions from members of the public or from the board so the first question I have Sebastian is this is a rule correct this is not a rule this is a charter that governs the board's delegation of authority with regard to certain data governance matters those are outlined in section two of the charter and they have to do with data quality and utility risk management finance and program sustainability basically evaluating the expenses of the data program and trying to find new use cases for our data and data use and disclosure so this is a charter that was adopted by the previous make up of this board that's correct and what year was that adopted the first version of the charter was adopted on January 13th 2015 so what you are looking for is two decision points that's correct and is it a simple majority vote or change the charter it's a simple majority vote so the first one is whether or not um it is a decision on whether it's permissive for a board member to serve or whether it should be mandated that a board member serve correct that's right so does the existing board have any preference on whether it should be may or shall I do have a strong preference I do think it's a good idea to have a board member involved because it is a significant responsibility of the board and we are delegating that responsibility to this subgroup of people so I think having a board member to kind of make sure that things get put back on our schedule when needed and having that conduit would make sense I'd just like to point out one of the problems we did have before is we did have a board for a while when Betty Ramberg left we did not have a member we didn't want to necessarily cripple the the data governance council if in fact there was a reason that we did not have someone acting at that time just for clarification didn't this council used to have all board members? it had to be passed was that a requirement or a requirement? it wasn't a requirement in the previous version of the charter the charter itself specified which board members were on the council by name? by name yeah that's not a good idea and if I could just add Mr. Chair as the chair of the data governance council I would agree with what Judy shared one of the reasons we stopped conducting the data governance council meetings was because both of the board members who were on the data governance council were off the board so I agree with Robin I think I would support having at least one board member but I think May is better than shall and we could have two members that would be fine too does it have to be a board member I know obviously we want continuity but if that person wasn't available another one sitting I think we should have somebody a board member I would just say it would be more helpful if the same board member attended all of the meetings because the content of the subject matter is pretty dense and if there was a meeting that the board member couldn't attend that's fine there would still be a forum they could miss me I think the intent was that we were going to put a board member to go on there but whether it's a requirement or not but I think there's there's some reason that board member can attend I think it should be a requirement to have someone on there to be perfectly clear it's the intent to have Tom Cowell serve on the data governance council we can get the same document I am would anybody like to make a motion I have a question so especially said this will take some time and should this is very important and the last phrase on the first changes and to communicate with other board members about the work of the council and so with those communications we subject to public meeting any meeting of three or more board members is subject to the public being as indeed are meetings of the council they were run previously as a public meeting just as this is which is in the document also that it don't say I saw that for the council but I just want to be clear about the board member communicating with other board members in the past what we did was we would have updates to the board at this public center but then the meeting itself is public there's a lot of transparency there where's the language that talks about the appointment of the other four members the appointment of the other four members of the other four members in the council the that language is in section 5.2 take a do put the document back sorry for making you run back before me so under section 5.2 of the charter the executive director and she has the power to appoint voting council members from the board from GMCB staff and from other Vermont state agencies or organizations so that's where that's where the other voting council members would be drawn from I think the other change was more in regard to once it's established if there would be any changes the data governance council would vote on those changes I just want to flesh this out it's a strange situation that the chair has to appoint all the members and I think in the past what we did is we had a five member data governance council and we did not have direction from the board who would be on that council but then the membership was reported back to the council I mean back to the board if you wanted to pull if you guys I'm just concerned so let's say there was some type of debate I mean it sounds like the chair of the council could agree to sign new members that agreed with the chair of the council that's the only check and balance I'm a little bit concerned about not anything about the present chair thank you but go through the board this board what they're asking so my understanding is that once the board the council is set by appointments made through the executive director it would keep operating and then the changes to the composition would be subject to the council's approval if we accept that addition the full council that's the second change that they're suggesting so that the chair could not step in it's just my question you got it so is there a motion on the shower May? just a quick question here so who would be the appointing the board if the pre-month care board did not have the executive director is that a hint? sorry Susan enjoyed your time so who would appoint on the so I guess at that point and I defer to these folks but at that point I don't think there could be any new appointments for the council if there wasn't a chair the charter is silent as to who would have appointment authority in the executive director's absence and because the charter specifically names the executive director as the appointing authority no one would have authority to appoint new members if the position of the executive director were vacant that seems like it's easily solved by just putting a note that the role of the chair is held by the executive director unless that position is vacant at which point the pre-month care board could appoint a new chair in the interim something like that so we could solve that or you could say held by the interim executive director appointed by the board I mean because I'll just we won't foresee all this the reason I ask that is I think the statute is that the director the statute is the director of the board serves at the pleasure or at the appointment of the chair of the board and so as I read it it's a chair's decision so I'm just thinking that's what I was just going to say in time but I stopped I was just going to say exactly what you were saying so I'm just speaking of an odd situation where the chair doesn't want to appoint the executive director but I think I'm satisfied with the fact that the council will continue to continue on with its membership I mean what's your point like the independent of the renegade chair the board may have been in the public sector too long I've seen squirrelly things happen if the board would like us to add a renegade board chair clause after I leave just scratch where the game is I'm happy to make a motion to accept the language that's permissive using May it's be moved and seconded to use the permissive language can we have some public comment before the vote the board gets the time to discuss it first any discussion from the board if not members of the public yes Eric my name is Eric Schulteis I'm with the healthcare advocate first I want to thank staff for their hard work in general my dealings but then they've been outstanding I want to applaud the board work towards creating a public use data set off of vcures the independent contractors you guys hired were wonderful I really appreciated the desire and commitment to getting input from potential users regarding this I want to point out a few things one it strikes me that perhaps it's safeguard again to pick on Susan I'm sorry of the whole board has to approve if the board is consistent all of GMCB staff members whose jobs are controlled by the executive director seem to be quite the safeguard it appears to be on paper so it's a safeguard in practice but of course everyone's going to agree their jobs are on the line and so there's also the permissive language regarding outside parties being on the board and I think that should be at least one person on the council should be an outside party then I would also just point out that there's a lot of talk in the charter about being agile and that's to be applauded I think the board should think about what it means that the composition of the council impacts whether it's agile or not and that both means focusing on users not just the board as a user obviously a very important user but also the public and policy analysts I can only say also that I think generationally there tends to be a split in how people view data and I think it's important to have on the council a wide variety of opinions so in fact the council can be agile and isn't locked into opinions around data that it should just be academic researchers who use it or that the only use of the data is claims level which I think I can only speak from personal experiences we don't have the infrastructure even to use claims level data and if I went to my executive director and said hey how about an additional $20,000 for a new server rack to be able to run this efficiently and oh by the way you hired a PHD advanced statistics training I can't use the data because it's so complicated you hired the wrong PHD sorry in addition to getting fired I imagine the executive director would look at me as skins so I think the board should consider including some language to ensure there's a diversity on the council including both in roles age well maybe not explicitly age because that might be illegal but also membership on the council of outside organizations and you know I fully want to see it be an agile council and I hope the board takes this into consideration and takes the steps necessary to ensure that with a reasonable certainty thank you so it's been moved to use the permissible language is there any other member of the public seeing none is there any other discussion by the board I actually like I like that idea to add a requirement that we have at least one outside so that's not specifically relevant to the motion in front of us but I just wanted to say that before we move on to the motion so I agree with you Robin I just don't think it's part of this motion got it so seeing no further discussion all those in favor of permissive language by saying aye any of those signified by saying aye okay Robin do you have a motion to make I do I would move to add language requiring that at least one of the voting members be from an outside agency and that to the extent practical that the appointments strive for diversity I'll second a question outside agency outside of state government I meant the fourth category on your list and my suggestion would be to add it to also to that language but I think that's what you're raising it says from other Vermont state agencies or organizations and I don't know if that means Vermont state organizations or not so voting council members from other state agencies or organizations I think that maybe needs to be verified that there are two if that's not going to just be state agencies and then you can just add the line to the bottom at least one but important first shall be from this category you know the council shall strive for diversity of interests and opinions or whatever but I just want to verify that title too Spassin do you have a clear idea yes okay does everybody understand the motion second been moved and seconded any discussion by the board if not any discussion from the public seeing none all those in favor of the question say goodbye by saying aye any opposed okay moving on to the next page the addition of the sentence any changes to the initial competition of the council shall be subject to the two of the vote by the voting members for the council as indicated on page 13 is there a second second been moved and seconded to improve the language as seen on page 13 any discussion by the board if not any discussion by members of the public seeing none those voting in favor of the change signify by saying aye any opposed signify by saying aye is that anyone from the board wishes to make a motion on it this time seeing none I think they're all set thank you we would just ask to be put on the agenda at a future board meeting after we've made the change described in the second motion in order for the board to approve the new version of the charter as a whole that request is approved thank you I don't think we need to do that you can just send it to us can we talk to them data person not aware but this is like not representative of all the changes from the previous charter so I didn't know if the whole charter has to be approved to continue on these revisions that we've discussed if we need to put this on the agenda again okay and that's already approved we did just have a vote on the changes we did just approve the charter as amended to have you circulate the language are you making that motion wrong? I'm making that motion wrong second any discussion by the board any discussion by the public all those in favor of the question signify by saying aye thank you thank you thank you very much for all the work on this so Ina and Tina regulatory activities for the agreement and care for related to accountable care organizations and all care model specifically Act 113 of 2016 requires the board to establish criteria for implementing all care value based payment models and an interim agreement for Medicare's participation it requires review modification and approval of accountable care organization budgets an activity completed at the end of last year in December and it requires certification of ACOs which we're here to talk about with you today this legislation and these three major areas are reflected in how the agreement and care boards by governs these activities today we're going to provide you as a team an explanation of our process and recommendations for the certification of one care per month accountable care organization to do that we're going to walk through the timeline that we've been on for this review the 16 statutory criteria that guide the process as well as the 10 categories criteria that are included in rule 5 we'll then share our assessment of one care per month performance in each of these categories and turn it to the recommendations and next steps before we dive into the assessment I want to thank the team here Marissa, Melissa and Mike for all of their work beginning with the development of rule 5 and continuing through what's been an expansive review of a variety of materials to include but not limited to policies, procedures, charters work plans, case studies sample reports, participant and affiliate agreement templates scopes of work, meeting minutes, narrative responses, attestations documents received through the ACOs budget order review and ongoing monitoring through the budget order as well as the staff's attendance along with two board members as a demonstration of the ACOs technology I'm going to turn it over to the rest thank you good afternoon so I'm going to take the next couple slides here and the first the first bullet on this slide is just to remind you what the significance of certification is and has to do with the ACOs ability to receive payments on Medicaid and commercial insurance the second bullet there is related to the timing issue so the board was required to begin certifying ACOs on before January 1st 2018 and the third bullet to remind you that the board has the ability under the rule 5 to provisionally certifying ACOs conditions in which case that ACO will be eligible to receive payments from Medicaid and commercial insurance which takes us to what's been going on in the past several months with respect to one care per month we intentionally sought documents and information during the budget review process that will be relevant to certification we reviewed that material and recommended with December and again in early January that the board provisionally certified one care through the end of this month and that would enable one care to receive those payments from the DEVA with a plastic shield and time to get some more documents and information from one care and review those so ACO one care was provisionally certified at the beginning of this year we reached ACO one care with additional document requests and asked them to to questions and they provided us a bunch of documents that you mentioned last month we reviewed those as a team identified some additional documents we needed those were provided recently by one care we've reviewed those now and as you mentioned we also went to one care's co-chester offices to get an in-person demonstration of care navigator and workbench one which are one care's care coordination and analytics platforms so before we start going through the rule sections I wanted to just remind you that the rule really establishes standards around 16 statutory criteria and I included the criteria in the slides I won't include them but I wanted to be able to refer to them and see hopefully the connection between the rules requirements and the statute and how the rule really implements the statutory requirements so these are the 10 rule sections that we're going to be doing through the containing criteria that ACO has to meet for certification and these subjects like I mentioned generally correspond to the statutory criteria so the first section is a pretty short one and it deals with whether ACO is a legal entity that has registered with the secretary of state and authorized to do business in Vermont as well as deals with whether ACO is a legal entity that's separate from its participating providers and we felt that one care we've got the documents going to be there we felt that one care met the requirements in this section one care is a domestic manager managed with the liability company that's registered with the secretary of state who received the certificate of standing authorized to do business in Vermont it was formed in 2012 by the University of Vermont Medical Center in Dartmouth Hitchcock Health the entity from those two entities and that's really the main trust of that section the next section is a bit linear it deals with the general authority and responsibility of an ACO's government body the composition of the government body the transparency of the ACO's government processes the mechanism ACO has for consumer input and finally the existence of a consumer conflict of interest policy that addresses different things on the first topic the rule requires an ACO's government body to have ultimate authority and responsibility for the oversight and strategic direction of the ACO and for holding management accountable for the ACO's activities and we felt this requirement was met the government body of one care is its board of managers the board of managers has the responsibility of oversight for strategic direction to implement the government's leadership the board of managers appoints a chief executive officer chief compliance officer and chief medical officer to manage the daily affairs of the ACO and each of these positions reports to the board of managers to make you the second topic composition of the government body the rule requires ACO to have a government body that reasonably and equitably represents the ACO's participants and at least 75% control must be in the hands of participants or their representatives we felt that this requirement was also met there are 19 managers on one care's board of managers and more than 75% of them are elected by participants so the University of Vermont Medical Center and Dartmouth Hitchcock each select three there are three consumer members on board managers and so that's nine and then of the remaining ten managers nine are elected by participating or affiliated providers including mental health, substance abuse providers and health agencies field nursing facilities independent practices FQHCs community hospitals excluding CVMC because it's part of the health network and critical access hospitals and then final the 19th manager is an at-large manager leading that either she is elected by the supermajority of the board of managers the rule stop me of course if you have any questions actually I want you to go ahead because I don't okay so I guess my question is have there been conversations around that composition of board of managers with Dartmouth getting equal voice as UVM given that the financial commitments are not the same we have not the other strategy with one care because I don't think so as I mentioned the requirement of the rule is reasonable equitable representation participants and I don't know that I don't know to stress that to get out there it's an issue we haven't discussed we will and are proposing monitoring as you can see here about the composition of the board of managers because we do expect that over time as one carries priorities might change and shift that the composition of their board of managers would reflect those changes so that's something that we have endeavored to set out a process for monitoring closely over time it's something again we would expect to see changes there sticking on composition of the other body we will also have some specific requirements around consumer representation on the governing body and those requirements we felt were met so one care has three consumers so it's one Medicaid consumer one Medicare consumer one commercial consumer and that's what the rule requires the next topic is transparency of governing processes the primary requirement here is that the ACL comply with 18 VSA 9572 which is a statute that's kind of similar to the states over the weekend and it deals with things like how to review governing body reading schedules agendas, minutes so on and so forth so we review one care's website for that material because a lot of it has to be posted on the website and was confirmed for things that we could have confirmed to the website confirmed that one care was meeting those requirements in that statute the next topic consumer input primary requirement here has to do with an ACL's consumer advisory board so one care has a consumer advisory board patient to family advisory committee the committee brings consumers together to discuss health care and to help one care improve patients experience of care the group meets every two months which is actually more frequently the rule requires and provides input to the board managers and then the last topic conflict of interest policy one care has a policy that applies not only to the board managers but also the officers of the ACL the policy imposes on these individuals who continue to disclose relative interests that provides a procedure to determine whether a conflict exists and address if you need your actions for individuals that fail to comply with the policies requirements which we felt satisfied with the requirements of the board so going down to the bottom we felt that the requirements were met but there are two things that I just want to mention one actually is not already mentioned so the requirement is reasonable and equitable representation of providers when the care is in that work we understand and expect will change over time so we recommend getting reports from one care on the composition of the board managers to monitor that and then the second is a potential will change the rule requires an ACL to make a good faith attempt to recruit and select consumer members to its governing body who are representative of the diversity of consumers served by the ACL and as I mentioned there's only at most there could be four consumer representatives on the governing body as appeals one and it's hard to see how you can get a couple of people who represent the diversity of individuals served by the ACL we think it probably makes more sense to have this requirement applied to NACO's consumer advisors more because they have a lot more flexibility there so we're we're thinking with this maybe a potential will change for the future as for the way the rule currently needs you know we felt comfortable one care isn't currently retrieving or selecting consumer members first governing body these three slots were filled sometime ago as I understand it before the rule was adopted so we didn't see an issue from that issue the next section 5.3 deals with the ACL's leadership and management construction and management of oversight of the ACL's clinical programs and its compliance we felt that the requirements of this section were met as well on the first issue one care described its government structure during the budget process includes what I mentioned the senior advisory board operation health committee clinical and quality advisory committee finance committee and the management team which we felt that structure supported the ACL's efforts to improve quality with this class and the population health on the second topic clinical oversight one care's clinical activities are overseen by a clinical director who was part of the ACL's senior management team as I mentioned and he was a board certified physician which is what the rule requires based on the Medicare requirements and the final topic one care has a compliance plan the purpose of which is to ensure compliance with laws Dr. Paul's Plain's Act start laws and kickback laws and all the other use laws that apply to health care industry the compliance plan describes how the ACL will undertake period of auditing and monitoring activities we confirmed that compliance training is provided to one care staff the board of managers, leadership committees and one care participants and affiliates we saw that one care maintains a toll-free hotline where people can honestly report compliance concerns without fear of retaliation the plan noted also that one care works cooperatively with paid compliance department for example, he was a program manager and we felt that all of the rule requirements regarding the compliance plan were satisfied and it deals with whether an ACL has mechanisms for assessing legal and financial risks and it also deals with the issue of financial stability and solvency in the ACL on the first issue one care explained that it monitors legal vulnerabilities through the processes described in its compliance plan and that it also has compliance committee to oversee its compliance program annually the compliance committee identifies potential ACL risks or risk areas considers controls to mitigate the risks rates of risks as even high or medium or low and once those risks are identified and weighted the compliance committee develops plans to monitor the risks which we felt was good and certainly adequate to the rules and requirements with respect to monitoring financial vulnerabilities explained that it does this through its compliance committee which is the committee charged with reviewing the financial operations of the ACL and making recommendations to board managers explained that there is a monthly spending mentioned that I think for the board managers where the finance committee's chair on the ACL's profit and loss and balance sheet statements the finance committee also routinely reviews and reports out to the board managers on its assessment of the ACL's performance on the pay of contracts the second topic the rule requires the ACL to maintain adequate financial stability and solvency and this is something that we feel will have to be monitored throughout the year and one character is already submitting financial reports to the budget team as part of the budget process and I think having it as a certification requirement gives the board another mechanism to address concerns that may arise around financial stability and solvency and then it's not on the slide but because it relates to financial stability and solvency one of the if you go back to the statutory certification criteria is that the ACL has sufficient financial guarantee to cover potential losses and this is something that you looked at during the budget review process you approved the maximum risk that one character could take on this year with those risk renders also reviewed one character's risk dedication strategy and required the establishment of the reserve next session 5-5 deals with whether the ACL has risk agreements with providers that allow the ACL to take legal actions for violations of the ACL policy program deals with whether the ACL has appropriate mechanisms and criteria for accepting providers into the network and finally deals with whether the ACL has a process in place for appealing certain decisions related to providing participation in the ACL on the first topic we felt one care met the rules requirements one care provided during the budget process in place participants can fill the agreements and the agreements generally require practices to comply with other applicable laws as well as one care's clinical model and policies and they provide those agreements provide for remedial processes and penalties of the event on the issue of actually the next two issues let's get ahead to the next slide so both of these I think are things that we feel will be satisfied that we need we need to follow up with you and not care on these so we asked one care to describe its process and timeline criteria for accepting providers into the network for 2019 and one care responded that its board of managers was scheduled to endorse 2019 contract and process by timeline network development slash expansion strategy next week at its March 20th meeting so once we brings back to receive something after that board of managers meeting and we forward the board back to the actual next board on the next issue one care does have a policy which they provided us that allows ACO participants to appeal a decision by the ACO to terminate their participation and not renew their contract it does not currently allow providers to deny participation in the ACO to appeal that we discuss with them amending that policy so that it would allow providers that fall within the ACO's expansion strategy to have them feel right we're going to be able to appeal a decision to deny participation and this is something that one care thinks they can provide to us after their March 20th board managers meeting and we're going to give them a report to you on the next board meeting so we think well, I don't want to prejudge it but we will report back to you to mention I'm going to turn it over to Melissa through the population health management and care coordination section of the criteria and this section asks for ACO to build a care coordination model that with the intent to align with the existing services that were already in the community of remote and that ACO must support participants in using data for their care coordination model so one care was required to submit a care coordination policy in which it described that they have a decentralized community based model where care coordination activities are conducted in each health surface area by appropriately qualified professionals they are one of their directiveness through data training tools and incentive payments for care coordination activities to build a patient centered approach one care demonstrated through the documents that they submitted that they are highly integrated with the blueprint for health and since 2015 have worked with the blueprint and the other ACOs to grow 14 regional multidisciplinary teams one in each health service area also known as community collaborates each of these community collaborates have a formalized governance structure they identify their own clinical priority areas and use a data driven focus to achieve their quality improvement goals one cares for meeting with the blueprint weekly to align these strategies including quality improvement activities and to align with the blueprint health service area and contracts for ACO priorities so we felt that these demonstrated well how the ACO was coordinating services with the communities as they existed one cares care coordination policy also describes their workflow and tools that they use to manage care coordination including a tool called Care Navigator the Care Navigator tool is interesting in that it uses the payer data and to click to use claims fees into an address into one cares analytics tools they use an evidence based tool called the Johns Hopkins risk grouper that uses factors such as patients, diagnoses, medications and utilization of healthcare to categorize the patients by risk and then the policy provides directives to the care coordinators for risk categories and they did provide to us that in their early analysis of the firm Medicaid next generation program among the top high risk category 89% of the patients had at least one chronic condition 87% had at least one mental health claim demonstrating how they are using Care Navigator to drive the results within their communities they also described how Care Navigator can be used across the agencies to enhance multi-agency communication for example one care allows a patient's shared care plan to be uploaded and maintained and used by multiple care navigators or care coordinators within the communities they also demonstrated that they are contracting with UMMC for a program called Healthwise which is maintained in Care Navigator and they worked with the blueprint to identify diseases to build electronic health education materials to be used by the care coordinators and patients to foster health literacy they also attested that their care coordination policy can be available to the public this was quite extensive section and but I felt that they more than adequately met each of the criteria so their status is complete so 5.207 was the quality improvement section so one care was required to have a quality improvement program actively supervised by the clinical director to identify, evaluate and resolve problems and areas for improvement one care act does have a quality improvement procedure work plan that provides guidance on their quality improvement activities which the chief local officer has responsibility for oversight they described their utilization management plan that they use population and individual level cost quality and utilization data to identify variations in care and develop initiatives and policies to reduce this unnecessary variation or to enhance quality of care and this is provided through another one of their analytics platforms which is called work bench one and work bench one allows users to drill down to the individual facility provider for patient level and this is also used by ACO staff centrally or locally at the participant level to drive change this utilization plan is reviewed by one care's utilization review committee to review the trends in their utilization process care and health outcomes to identify areas for improvement and the clinical and QI department review and interpret measure sets for each care program and when these results are reviewed and compiled by staff they are driven out to the community collaboratives that I discussed in the previous section and one care clinical consultants bring this data to inform and guide focused quality initiatives as well as to monitor performance using dashboards finally a final requirement for this section was for the ACO to promote evidence-based medicine and they have created and facilitated statewide activities and best practices for sharing information on hypertension diabetes and congestive heart failure and they have also developed a hypertension tool fit of evidence based strategies finally they offer grand rounds for network participants to drive quality improvement as well so we followed this section list section 5.208 deals with patient protections and support including four topics enrollees, freedoms, select their own health care providers prohibition against increasing cost sharing or reducing services covered under enrollees health plan ensuring patients are not billed in the event an ACO does not pay a provider for the ACO's grievance and complaint policies to review this section with the relevant documents and the one care policies listed on the slide the one care network support and access policy states that one care will maintain a network of willing providers and ensure contract providers are enrolled with each care program one care will not restrict paying access to any provider in the payers network and the one care payer program that will require beneficiary freedom of choice the board staff asked that it does not one reduce or limit the services covered by enrollees health plan or two, offer inducements to providers to forego providing medically necessary health care services to enrollees or referring enrollees to such services in addition participants in their grievance agreed to accept an infecable co-payment co-payment and or infecable to cover the payments provided for under this agreement as full reimbursement services rendered we confirmed that the ACO's grievance and complaint policy includes the consumer telephone line as well as contact information and referral to an health care advocate for support in the grievance process one care will provide reasonable assistance in completing forms or other procedures that's related to an agreement decisions will be provided within 14 days and will be extended due to complexity and one care attested that it consulted with the health care advocate in developing a process policy also includes maintenance of records of all complaints and grievances received as required this section also includes a requirement that the ACO provide and will be to the written plan language notice that they are attributed to the ACO one care provided the Medicaid generation notice letter of the Blue Cross Blue Shield on the commercial notification which cannot be executed until the final attribution and at that point they will provide documentation to the board that is complete and we note this in the monitoring section we felt that the requirements of this section were met with recommendations to monitor the completion of the role of notification and regular reporting of grievance and complaint information to the health care advocate and board so I did the next section on provider payments first off the ability of ACO to administer divided payments it will be paying providers which obviously one care is second issue the coupling of alternative payment methodologies so one cares for example fixed perspective payments to hospitals and certainly in the primary care practices coupling that with mechanisms to improve and maintain performance quality and access measures the alignment of ACO payer incentives and ACO provider incentives and provider appeals the right of providers to appeal it's the payment related disputes to the ACO on the first topic as you one care has been making fixed perspective payments to hospitals for over a year now under the Medicaid next generation program they provided their policy on how to calculate and execute these payments the electronic funds transfer policy described quality controls and audit procedures to ensure accurate and timely payments obviously we can't say that there wouldn't be hiccups or issues in those payments but certainly felt the rules requirements for met and that the ACO had the capacity and processes in place to make those payments the second topic coupling alternative payment methodologies with quality improvement mechanisms Melissa described one care's quality improvement process and they provided their policy where they have a clinical quality advisory committee that uses data to identify gaps and opportunities for improvement and recommends clinical priority areas each year that reflect the measures in the payer contracts and these clinical priority areas which they have provided to us are then disseminated to community collaboratives through the regional clinical representatives and the clinical representatives support the community collaboratives in identifying clinical priorities that are aligned with the overall ACO priorities and we felt that that was a certain mechanism to improve and maintain performance the third topic alignment of incentives so in addition to the clinical priority setting process that I just talked about one care has its value-based incentive fund which you heard about during the budget review process basically there's a quality withhold from the payer payments and based on the ACO's quality performance for each payer program distributed to providers and for this year funds will get available for distribution to primary care providers but one care noted in its budget will explore adding a variable component to that distribution formula for 2019 that accounts for performance at the provider organization level and so we felt that that the requirement was met on the final topic one care has provided its participant appeal policy which allows participants to appeal disputes relating to shared savings and losses calculations distributions or assessments made by the ACO and calculated payments calculated by the ACO and we felt that that again we have the rules Finally, section 5 to 10 a lot of concerns the role of information technology for the ACO's effectiveness the first subsection deals with data collection and integration that we can send always data sharing to support care coordination training and support the next subsection deals with the data analytics including integrating data to make an actual measure in care process improvements and cost of care and the third topic is integration of clinical and financial data systems to manage financial risk as Melissa mentioned there are several staff and two board members attended a lot of demonstrations of workbench 1 and care navigator platforms for an indebted presentation of the spending utilization data available through workbench 1 and care coordination software as well as we reviewed the budget submission which included descriptions of the population health management capabilities which include partnerships health catalysts the informatics platform provides the capability for combined claims and clinical data from all ACO participants to perform the analytics and support clinical decision making we explain that the sharing of information is allowed through there that the nation has organized health care management established by the Board of Managers and the business associated as participants and payers this arrangement allows use and disclosure of health data within the organized health care management as permitted by KIPA the care navigator platform supports access to the sharing of data and information that's necessary to address the role of these care management needs and Melissa gave a description of this care coordination policy describes how patient data are loaded into care navigator and where it is used to trigger care coordinators to follow up on care coordination activities and all relevant care coordination activities are documented in care navigator including patient assessments, goals, care plans, outcomes and notes in December 2017 one care implemented in event notification for all admissions discharges and transfers 14 organizations are currently sending these ADT data feeds via bio-health into care navigator in real time as well one care is currently working to grant second day of source for event notification patient pain into care navigator one care scenario response is the topic specific patient resource materials are made available to patients to care navigator as part of one care's efforts to increase patient awareness and promote patient self-management and as Melissa also noted this the content is currently focused on a high priority condition such as asthma for this department COPD and hypertension and high risk pregnancy as of February there are 500 unique users that have been trained in care navigator we confirm that patients have access to the only health care information through their participant providers additional care coordination materials such as the shared care plan are available to care navigator and on the topic of integration clinical and financial data one care demonstrated how they are using Workbench 1 to monitor financial clinical performance to satisfy their requirement with their financial data systems be sufficient for assessing and managing financial risks and be integrated with clinical data systems one care provider is a sample report that integrates clinical financial data they have a report for Medicare and Medicaid commercial programs an example they provided is a recent sample report for the next generation program and these reports may be used by the ACO to understand financial risks in our review about monthly utilization review meetings after reviewing topics in this section we felt that it was complete so that's our review of the sections and our recommendation is to certify one care upon receipt and should be received in the view of those two items that I mentioned in the section probably two to five so relating to process timeline and strategy for network development and an amendment to the Kiehl's policy that allows providers who have denied participation to have the decision to review so we our plan would be to to get an amendment to the policy I think the 20th of March is when they said they could provide it as well as the process, timeline and strategy and hopefully we have enough time to review that and present the report to you on the 21st so your plan is by next week to that final recommendation that's the plan what's our deadline again? the deadline they're originally certified through the end of the month so it's teed up for our potential vote on the 21st as well as the company and just to remind so we drag and make some monitoring and reporting as we work through this there is some existing reporting requirements under the rule that I want to bring to your attention section 5.501c says that an ACO in addition to any other reporting that you might require of them has to report within 15 days of the occurrence of these things we felt were significant changes that you needed to know about the one to note there is number 3, changes to provider selection criteria so that's something that changes would have to be reported the other thing is that we went to as we mentioned as we went through composition of the board of managers reporting around that reporting and documenting the completion of the rule as required by the patient protection section and reporting complaint information which is the requirement to both the statute and the rule but needs some more specification around what exactly is reported and the timing let's get to the next steps already so do you have questions for us just to note that the public comment is open I just have one question did you think of any other areas for monitoring reporting one that came to mind when you went through the information was on the participant positions for the managers and their grievance process as well so I think it was 5 205 D, the appeal process for the providers I was just going that out there did you consider any other areas for monitoring reporting and just passing the board wanted to see that as well it's not something that we discussed so are you suggesting maybe getting a report on a number of types of provider appeals for grievances no it's not something we discussed I was just going that out for a discussion with other people but it's something we've heard about in prior meetings and so it's going to continue I would imagine each year that providers are not in the ACO and there could be valid reasons I'm just saying we may want to be apprised of that process and the number I would just like to add my voice to what Marine said the fact that so far providers are applying is a trajectory of this tension out there between ACO and providers does not understand I think that the ACO is growing and we have had to play it out of the process as well and the documentation is very important before you do that Christina just mentioned that the phone has hung up so she wanted to redial in so Mr. Chair when you are ready to take a little break order to do that let's do it right now we don't really need a break should take that long so are there other questions from the board to the panel this is a great amount of work going down with you folks going through this page by page it was quite an education and the detail and just tactical level of sorting through all this was impressive and it's work that I want to understand where it goes beyond the certification goal I firmly support what these minor fixes so we have the rule and that is established in a very formal manner how after certification does this work at all relate to the rule itself I'm asking if we have some of the region-wide provider or somebody that just wants to know what the rules of the road are performing document as to what the intent of the board was when they were to certify and so maybe my question is what standing does this have once a certification goal has been given so once an ACO is certified they remain certified until they are de-certified there's also a process in the rule for de-certification but there's also a process in the rule for requesting corrective action plans if there's an issue identified for example like you mentioned to complain to the kid and it's something that's concerning and relates to the rule requirements we can ask the ACO for a corrective action plan there's not going to be this so we're not going to come before you next year and do this all over again the way it is kind of set up in the rule is that each year the ACO would need to kind of in addition to the things that they had to automatically report within 15 days they have to tell us basically yes we're still in compliance with these rule requirements here's what's changed in the interviewing year that started discussion with them on on if there are any issues from those changes so that's kind of how it's set up in the rule there's still a lot that needs to be worked out within that but how would that help? I think so I'm just picking down the road after the site and energy all this kind of thought you know when ACO are starting on happily there's a controversy somewhere and so somebody goes to the rule but this is another layer associated with that and it's specifically associated with our hope to certify but I think what I'm hearing from you is that if somebody has an issue they can come to the board and request a review and that has to that that has some standing I would presume that the board would go back to this and say what do you mean when we do it when we certify as a helpful directive control I think it takes some additional work to be done on the provider certification not in the best election and they know that I mean that's already in the point Do you have any other questions from the board? I do want to just thank the staff because I think they put it for at least a minute over into the underlying documentation and review Okay at this point I'm going to open it up to members of the public for a public comment for questions Ken Libertov for reasons of full disclosure I just got a letter yesterday saying that my doctor had joined the ACO so I have a new level of interest in some of the discussions would you like to have one of the individual lines? Hopefully I don't fall over while I'm talking now when I'm here at the budget I did have first of all this covers an enormous amount of territory and it's really hard to respond to many sections making the rules is important but it's an ongoing process and there's people always say that the devil is in the details so I thought I would just look a little bit more at the governing body issue and for reasons of past interest the question is when you look at all the rules I always ask why is healthcare so expensive and what can we do to continually ask our questions to reduce the cost of healthcare so I was very happy to see that in the governing body it's 5202 the slide the word transparency is highlighted I think that's a really good thing but I'd like to just have a more practical question and the practical question is one that goes that I've raised quite a few times before and I don't want to simply be redundant but I think it's important one of the many drivers of healthcare costs is what I would call the enormous burden of administrative salaries can somebody explain when you look at the governing board who sets the administrative salaries in the ACO and I guess the more particular question to the Green Mountain Care Board is do you feel like you have any role in instructing the ACO as it considers that question so this is an opportunity in a way to revisit some issues that have been percolating with the Green Mountain Care Board for over 5 years whether or not the board has any role in setting administrative salaries or limiting salaries and so here's another opportunity and if this transparency is so important someone must have an idea of what's being considered or how it will be considered and how it will be presented to the general question who would like to volunteer to answer that I can try as far as who sets the administrative salaries of the ACO I'm going to go out on a limb and say I assume it's the board managers but I can't be wrong it's not something like the level of compensation it's not something we look at in certification and not something that the rule addresses if the board or the client is doing anything it would be nice to be in the project and process their acting expenses so just for clarification maybe we should just ask them a question who sets the salaries other questions or comments from the public Susan I'm Susan Harron from the Developmental Disabilities Council I appreciate the work that has gone into this and I'm really glad that there's a legislative proposal to include ACOs and fillback provisions so that maybe in addition to the taxpayers paying for some of this work our buddies at OneCare can contribute I think there's I just want to clarify even though you guys aren't going to be going through this whole process for certification next year there will be a budget review process next year so the question that Ken just asked about administrative costs will be relevant but the board does have power under Act 113 in the budget section to address administrative costs and the board hasn't yet done that so just in terms of going forward not in terms of anything related to this certification question that's before you now but going forward I would really encourage the board to look into that administrative costs and the power that the board has and its authority and ability to set administrative costs in the budgeting process to address administrative costs in the budgeting process because as we move towards all payer and as we eliminate a lot of the the roles that Diva traditionally pays in the administrative or medicated funded services and move that function over to one care instead of paying state employee salaries to run our developmental services program we're going to be paying one care type salaries to run our developmental services program so while we are cutting developmental services for people with disabilities and personal care attendance services for people with disabilities it's really important that we look at what are we spending on administration on extra administration and how many people are we serving for these administrative dollars which brings me to my question for the day I do intend to submit comments by March 20 it would help me to have some information that hasn't been available yet for more than a month I've been seeking information about the contracts that one care has as you all know the budget without the contracts we still haven't seen the contracts there's a very basic questions like how many attributed lives will be covered in the Medicare contract does anyone know if you could post that information or if Executive Director Barrett can get me that information I've been asking for for more than a month because with administrative fees there's going to be 120,000 people covered that's different than if there's 80,000 people that's different than if there's 40,000 people and I cannot find any information really and you guys know I look for this stuff on how many attributed lives one care has responsibility for right now so if there's some way I know the staff is working really really hard with the systems that you have but if there's some way to make it clear in the ACO certification section of your website when new information comes in that the information is there because it's really you can't find it so maybe it's there and I'm missing it but if you could make it really clear how many lives are covered per contract right now that would be really helpful. Can you make that available on our website? We've been waiting for the final numbers on the Blue Cross contract because of the attributed lives meaning to be analyzed and we are expecting that by the end of March. We're expecting a final budget with all attributed lives and final budget numbers and we can post that at that time. That's because the Blue Cross can't run the attribution until after the open enrollment period for the QHP lives is closed which was the end of December and then there's some additional period of time where people have to pay and not get dropped off but do I have that right? That's satisfied. There are obviously some some of the things that you've asked for Susan probably would never be able to use because of the criteria information that Blue Cross would claim. And Medicare too. I could accept too. Really it's just the numbers of attributed lives right now would be really helpful and Medicare should be easy to know the attributed lives that they pre-attribute don't they? Prospective. The participation agreement that One Care has with Medicare is available on our website I believe it is posted there and the contract that One Care has with Diva is posted on the Diva website. Can we post it on our website as well? Definitely. Yes. But it doesn't seem to have the numbers of attributed lives. Unfortunately we're waiting for those numbers to move across. No, Medicare. We do and we do have the final numbers from Medicare but because the budget was a final we didn't want to post a partial budget with attributed lives. However we could disclose or post a partial budget if that's the board's preference or wait until the end of March. My preference is to post it as soon as possible. Okay. We can do that. I just wanted to comment on the administrative costs. I don't have the numbers in front of me but when we went through the budget process with the ACO we absolutely looked at the costs of their fees including all the administrative costs relative to other ACOs and I recall their percentage was significantly lower than many other than most of the other ACOs as a comparison. So we did look at that getting into the weeds of individual salaries and how those were approved. I mean that may be something the board is going to contain in the future but I personally wouldn't see us going to that level but I do think benchmarking it against other ACOs what that percentage is and watching that is something to look at we did I know that was considered when we looked at their I can't remember off the top of my head I think they had a $7 million budget specifically for those costs but it was a lower percentage than most of the other ACOs that were all comparing that And even more importantly we had to come to the conclusion that the cost for the ACO were less than the savings that could be achieved so it wasn't an additional administrative expense on the system. Any other members of the public? Yes Walter Harkinder Vermont Health Care for All Just wanted to ask are there any and back up can I think administrative cost should be important considering that even with the ACA they had the administration and CEOs et cetera that cost me $8 billion in just 10 years but that's not my question the question is are there any patients involved in this governing board to kind of the back up Kenny's question or how to are they just in the consumer advisory groups or just on complaint points So there are currently three patients on the governing body of board managers one Medicaid, one Medicare and one commercial and there's also one care has a patient and family advisory committee that's comprised of patients that provides input to the board of managers and the other committees that one care has quality advisory committee and we yeah so yes there are patient input and we'll okay any other members of the public would you have anything else to add I think at the beginning we'll go back to you next week as soon as we get the materials and review it which I assume we can and thank you it's a lot to digest I know it's going to be a little bit tenuous for you next Tuesday trying to get information back and have everything ready to present to the board for the next day so thank you in advance for what you being doing that night is there any whole business to come before the board is there any new business to come before the board is there a motion to adjourn so moved to adjourn all those in favor signify by saying aye any opposed say nay thank you everyone have a great day