 Uh, it's 10 a.m. and we can call to order the green mountain care boards hearing of March 29th 2023 today. We have, uh, the fiscal year, 22 hospital hospital budget actuals that should be presented by Sarah Lindberg, Flora Pagan and Matt Sutter Matt and Flora are our health systems finance principal analysts here at the board. I think most folks are familiar with this Lindberg from her frequent appearances. And then after that, we'll have the fiscal year, 24 hospital budget guidance and a potential vote. I'll turn it to our executive director, Miss Barrett for the executive director's report. Thank you, Mr. Chair. Good morning, everyone. We have one ongoing public comment, which I announce every week, but I will remind folks that we are accepting any public comments regarding a next all peer model with our federal partners at CMMI any of the comments we receive, we share with our colleagues at the agency of human services and the governor's office as they are leading those negotiations and implementation of the current model. Today's we have accepted public comment on the F Y 24 budget guidance and those comments are posted on our website. And then last, we will have our schedule posted by the end of this week for the month of April. And I'll just remind folks who are not talking, if you could put yourselves on mute, I'm hearing a little background and I'll turn it back to you. Mr. Chair. Thank you. Miss Lindberg, Flora and Matt, take it away. Good morning. I will give Flora and Matt a chance to start sharing their slides. I'm really just here to make an introduction to two of the best people you'll ever meet on. So, Matt and Flora are the real stars of the team. And I'm excited for you to get a chance to hear from them directly. So, whenever you're ready, my fellow colleagues. My name is Flora Pagan. I'm one of the financial analysts at the Green Mountain Care Board. Today, my colleague, Matt Sutter and I will be presenting the F Y 22 actual report. Can you guys see the slides? Looks great, Flora. Yes. Okay, thank you. So, we're going to go quickly over the year and review system, white analysis, the hospital profiles, an overall review of the budget to budget and actuals to actuals analysis, key financial indicators, a five year result, possible enforcement, and we'll go over really quick about the appendix. So, the year end review. So, Vermont hospitals are required to report their physical year 2022 actual operating results as part of the Green Mountain Care Boards, F Y 22 budget orders. Additionally, hospitals are required to submit their F Y 22 audited financial statements as well as the hospital's parent organizations audited consolidated financial statements if applicable. These documents and any other additional information are available at our website. So, we're going to start here with our system wide analysis. So, the NPR and FPP system wide, it was slightly over budget by 1.5%. This was largely due to increases in the utilization. Here we see in the operating margin. So, the operating margin was negative. That was due to cost inflation shortages of supplies and healthcare workforce. The next, the nationwide staffing challenges that we had during the pandemic have continued as we can see throughout the year 2022. Here we have our pay your mix. The overall pay your mix. Trans largely the same with some relatively small increases to Medicare that we have is due to the agency of the population. And for Medicare was due to a redetermination. And that is planned to resume this spring. So, the 2022 year end results for the NPR and FPP. So, we saw a lot of the variances among the hospitals. However, even for hospitals with positive budget to actual NPR variants. We will see the next slide that these gains were mostly offset by increased overall expenditures of supplies salaries extra use of travelers with higher rates and as well, the French benefits. So, here we have the operating margin results. So, the operating margin results has been affect negatively. That was due to the safety net that was starting to be on revealing. And that was because of the impact of the financial and of the impact of the financial pressures of the workforce issues that we had bottom line. The expenses are growing faster than revenue. And that has actually lead to reduce margins. So, we have here the bottom line total margins. The largest contribution to the reduced margins was actually the investment of performance. So, the FY 22 year end review for the face perfect of payments. There was a variance between hospitals, but the system why FPP came in 2% higher than budgeted. The physical year actual to actual growth system of both ceiling. So, here the system of both ceiling, there was a difference between hospitals, but the system why it actually came with 2% higher. We do have a comparing of the FY 22 actuals to the maximum growth range in the old payer model. The system why it was more than double from a 9.9% versus the 4.3% that we can see here. So, the system overall above ceiling comparison for the past 5 years from 2017 to 2022 here, we're looking at a compounded growth in the NPR since FY 27 2017. The system white role has been roughly equivalent to the maximum of the old payer model growth, which the range was from 4.29% versus the 4.3%. Our common financial highlights here, so hospitals are facing strong headwinds nationally due to the growth on the workforce challenges that we have. Increased cost and capacity needs the challenges are shared by Vermont hospitals. System wide while the net patient revenue is almost 10% from the prior year and 1.5% above the budget. The hospitals are still struggling due to the cost pressures in all of the narratives of the hospitals. We actually reported significant pressures that was related to, as we know the staffing contract labor and salary and benefits. Inflationary expressures and as well medical expenses to do to this imbalance between the operating revenue and expenses, hospital operating margin system wide have been reduced by 80 million. And if I 21 and if I 22 by 61 millions. Anything else from the narratives and this presentation, we can actually see it in the FY 22 actual and the agreement to Kerber website. Now, I'm going to leave you with my colleague, and he will go over a quick review for the hospital profiles. Thanks for, I'm just going to quickly walk through each of the hospitals and provide some quick points or things we noticed from their narratives related to revenues and expenses. I apologize in advance. I think a lot of it's going to be pretty repetitive. I think that gets the point across pretty well. So, for Brattleboro, they had a slightly negative NPR actuals relative to their budget with them. It was pay or mix was mostly unfavorable. But this was largely offset by utilization dish and bad debt and free care on the expense side. And again, apologize. I'm going to sound like a broken record contract labor and inflationary pressures for driving costs there. Go to the next slide and for most of these, we saw will display the pair of mixed changes year to year. We didn't see broadly some, some, we didn't see major changes with one exception, which we'll get to. But just for your reference, we have these slides. Perseum CVMC revenue was down relative to budget 4.2. This was due to utilization and payer mix expenses were up. 6% relative to budget, largest driver here being staffing, and then the pay or mix slide kind of more of the same, no major changes or continuation of trends here. Copley had positive NPR relative to budget, but you'll see the operating expenses grew faster. So the revenue was positive driven by utilization, and I think they had a favorable FPP. Result on the expense side, it was a group faster relative due to contract staffing and other inflationary pressures. And then I mentioned that there was 1 of the pair mixes that we're still validating, but we did see a sizable looks like sizable shift from commercial to medicare. For Copley, so we will, we're investigating this and we'll get back to you, but just wanted to highlight that. For Gifford, it was their positive revenues were mostly driven by a favorable cost report settlement in FPP, though they also had favorable utilization, payer mix, bad debt and free care. And then the 10% increase in operating expenses due to inflationary pressures and staffing. And some movement here, but I'm kind of in line with prior year. Grace Cottage had. Increased NPR relative to budget and increase operating expenses relative budget on the revenue side is due to utilization on the expense contract staffing. Their pair mix kind of showing a continuation of trends from the previous 2 years. Mount of Scutney had positive NPR, FPP relative to budget and positive operating expenses relative to budget. Kind of the same deal here revenues were driven by utilization. Mount of Scutney had a favorable cost report settlement. Had an unfavorable pair mix, but as you can see, it was offset on the operating expense side. Same as the other hospitals driven by inflationary pressures and staffing. Mount of Scutney also noted the volume was having. Kind of a negative effect on operating expenses. Just wanted to bring that up and nothing jumping out on the pair mix side for them. For North country revenues were a little bit different here. So they're kind of an unusual case. So while utilization was up, they had an unfavorable pair mix, but most importantly for them on the revenue side, as part of their EMR conversion. They had an audit adjustment to write down their net patient receivable, mostly affecting bad debt. So as a result, their bad debt free cares about 5.9 million below budget. And you can see, given the relative size of the hospital that had a major impact. And expenses were up 7.5% budget due to staffing costs. And there was some movement here of some shift from commercial to Medicare or North Eastern. They had a positive variance to budget due to utilization. Mostly due to utilization, but they also had a favorable pair mix, bad debt and dish on the expense side. It's a result of staffing and inflationary pressures that 11% increase. And pair mix pretty similar. North Western's, NPR variance was just under budget. They had favorable utilization, pair mix, dish, and FPP. What was driving it down was, and it's not controlled for on this crap, but they had a provider transfer. That reduced their NPR. So it's basically was offset just looking at the raw variance there by their favorable utilization and pair mix. If you control for the provider transfer, the NPR would have been just under 2% to the positive. And on the expense side, it's driven by contract labor. Pretty similar from last year, pair mix. Moving to Porter, they had positive NPR variance relative to budget due to utilization and reimbursement, pair mix. But, you know, increase variance on their operating expense due to contract staffing and inflationary pressures and here it kind of continuing trends from previous year, but it looks like a some shift from commercial to Medicare. Kind of same overall story with Rotland, 12.9% variance on their NPR relative to budget. They report this is largely due to a steep uptick in volume. On the expense side, it's mostly driven by salary pressures and contract labor, but they also like the other hospitals reported significant inflationary pressures and their pair mix is pretty similar to last year for Southwestern, their higher NPR relative to budget was due to, was mostly driven by pair mix and then operating expenses higher than budget again due to staffing costs and inflationary pressure pretty similar year to year for them a pair mix. For Springfield, kind of their NPR variance was below budget driven by utilization and pair mix and operating expenses above budget due to contract staffing costs and inflationary pressures. I do want to pause on this one just for a second because it might catch your eye that their revenues came in below budget, their expenses came in higher, but their operating margins are higher. And that's due to a $5.9 million favorable increase due to federal and state grant funding, which is rolling in on the other operating revenue line. So it's not showing up in patient revenue, but it will roll into that operating margin. So that's what's accounting for that. They're pretty significant grants. On the pair mix side for Springfield, we saw a little bit higher commercial and reduced Medicare relative to last year. And finally, UVM kind of continuing the same story as the other hospitals revenues were slightly below NPR budget. So while utilization was up, the pair mix was very unfavorable to UVM. They did have some offsetting factors like favorable, bad debt, free care dish, and a sizable change to their graduate medical education, which can treat reimbursement, which I believe could be about $20 million. On the expense side, it's driven by contract staffing and inflationary pressures, which they largely identified as drug costs. And then pair mix for UVM is kind of continuing trends we've seen over the past few years. And moving to the overall review, these are just some larger tables kind of illustrating some of the stuff Flora spoke at beginning with an extra couple years of information. So here's their five year NPR, FPP for each hospital. And then if we move to the next slide, we can see that as a percentage basis change from the prior year. So you can see that massive jump we had in NPR last in FY 21, likely a result of COVID just, you know, changes, but we're seeing that trend for most hospitals continuing this year at a slightly reduced rate. On the operating expense side, I mean, just looking at the raw numbers, it's over a $400 million increase from 21 to 22. And just eyeballing it, it took a $400 million increase about what FY 18 to FY 21 was. So pretty rapid increases in operating costs over the last year. And then moving to the next slide, it just shows the same numbers on a year over year percentage basis. You can, I think that illustrates it even more. Operating margins are five year results kind of time the same store. I think we had this slide for three years up at the start of the presentation, but it's providing a little bit more history here. And then their margin as a percentage of the system total, total margins, which Floor mentioned was greatly affected by, oh, sorry. My slides were slightly different. You can see cash on hand. You can see, well, this is really the end result of everything we're talking about, right? Is it reduced operating margins? We're going to see reduced days cash on hand. And in 22, we saw a significant drop from the prior year. So moving to enforcement. So green on care. We move to the next slide. Thank you. So green on care board may review hospitals whose year end NPR FPPs exceed the requirement by 1% above or below the approved amount. This review does not necessarily lead to action by the board though. So the first step, we took a pass at, you know, which hospitals trigger review and it's all of them except for Brattleboro Northwestern and UVM. Or within that, you know, we're only looking at NPR here. So I know it's kind of. Just looking at just NPR triggering the threshold UVM Northwestern and Brattleboro didn't trigger it. So moving to the next slide. We want to take a look at, you know, of those hospitals, what were their actual operating margins looking like for the year? And of these hospitals, we only saw 3 that showed operating margins above what they had budgeted. So Gifford, Mount of Scotney and Springfield. And moving to the next slide. We are not recommending enforcement for those 3 hospitals for the following reasons. Giffords NPR relative to budgets largely the result of an FPP attribution. They had 500 more lives and budgeted in a favorable cost report without those 2 items. They were reported negative net operating and income. Mount of Scotney was similarly driven by a favorable cost report and FPP revenue. A couple of that net operating revenue of just 61,000 over what they had budgeted. Staff's not recommending enforcement there either. And Springfield reported decreased NPR relative to budget. But positive operating revenues we discussed previously just due to those federal grants. So moving to the next slide. Staff's not going to recommend enforcement for any of the hospitals this year. Just going down the list quickly, CVMC had a negative operating margin. So we don't recommend it for that reason. Copley, same deal. Gifford Medical Center they had a, they explained on the previous slide, their operating margin. Grace Cottage had negative operating margin. Mount of Scotney explained on the previous slide, their operating margins. North country, negative operating margin. North Eastern, their operating margin was 87% lower. So, you know, they had a positive operating margin. It was 87% lower than what they had budgeted. So not recommending enforcement for them. Northwestern didn't trigger review Porter, similar to North Eastern, their operating margin. They did have a positive operating margin, but it was lower than budgeted. So not recommending enforcement. Roland, negative operating margin. So not recommending enforcement Southwestern. Same deal, negative operating margin and Springfield, their operating margin was explained in their narrative. And on the previous slide. So, for enforcement, I don't think we need a board motion if we're not recommending enforcement, but I didn't want to pause there if there were any questions about that. Seeing none. I don't think we need to share. Sorry, I was waiting for Owen. Oh, sorry. To ask for six-week questions. Sorry about that. So it would be helpful, I think, if you could explain a little bit about how the cost report works for the critical access hospital, particularly the settlement process and why that would, why that's connected to your recommendation. And I would also just note that we didn't notice a vote on the agenda for this item. I might have to ask Sarah to speak more about the cost report settlement. I'm kind of butting up against my limits of my knowledge here. Yeah, no problem. So in terms of the parliamentary issue, yeah, we did not notice a vote. If we are going to explore this further, we would clearly have another dedicated time to vote. But just kind of want to introduce the staff recommendation at this point. As far as cost report settlements go, yeah, so it's there's these really long cost reports that all hospitals have to submit. However, part of the deal in being a critical access hospital is that you are reimbursed based on proportion of your Medicare allowable costs. And there's a very specific way that those values are derived. And so it's quite a guessing game to figure out where they might sugar out. Furthermore, you know, no one saw the expense growth coming. So, you know, just to summarize that, you know, a system level. Budgets as far as the NPR were up 1.5%, whereas the budgeted expenses were up 10.4%. So, you know, a 10 time delta on the growth there. So all that to say the favorable cost report has to do with unintended expenses. And there's also a bit of a sequencing issue where those settlements happen after the year is over. And then, you know, look backward. And so you're booking revenue in an odd time that's not necessarily related to the year at hand. So does that help? Is that enough context? Great. Yes, I thought it just would be good to explain that. Are there any other board comments or questions on the actuals? I just a quick one. I just want to, you know, we flew through the payer mix slides pretty quickly. And I just, you know, I noticed some troubling trends I think we've seen, but they seem to be getting more troubling for some hospitals with the switch, you know, drop in commercial and increase in Medicare. Particularly, I think it was Copley, Porter, I think maybe Gifford, might have been another one. And I'm just thinking that it might be helpful to do a system-wide look at some point on that. You know, what's happening to our payer mix and also try and understand what's happening to our payer mix a little bit more carefully because I know some of them that, you know, Matt, you commented that trends are continuing. But if the trends continue for some of those hospitals, we're going to be in trouble, right? I think, I'm just thinking we need to do a deeper dive. I think statewide and what's happening with payer mixes across hospitals and some hospitals seem to be increasing their commercial, but it looked like through the quick look through that there's more of them that are seeing significant drops in commercial. And I think that's obviously going to be a problem as we think about sustainability moving forward. I just also want to just say I agree with the staff recommendation on enforcement for the reasons that we're allied. So thank you for that. And thank you for the presentation. One, I'm just looking at my notes here. One thing that might be helpful when we're posting about days cash on hand is always for SVMC to have that asterisk with the parent because it looks really troubling for SVMC. I think if you pull up that slide, actually, could you pull up that slide because I had one other question. I think it was maybe slide 52. Yeah. So, you know, SVMC is not in, you know, 37 days cash on hand is not a red flag yet. If we knew what the parent company days cash on hand, that would be helpful. So I think that just would be helpful to add to future slides always that asterisk with perhaps maybe in parentheses, what the parent has, I think that would be helpful. But I did notice and I wondered as I was looking at this slide, for most hospitals, the days cash on hand is is coming back to what it was pre pandemic. You know, I know we had these infusion of cash federal dollars and 20 and 21, but for the most part, hospitals are coming back to or frankly below what they were in fiscal year 19. But the one exception and I was just curious about was Mount of Scottney. So Mount of Scottney was around 130 140 got the big infusion of cash but are still up there at 200. So I was just curious since that was unique relative to the other hospitals if anybody had insights into that. How they were maintaining the higher cash. Yeah, we can do a deeper dive on that one. That's part of it. I know that's not what their days cash on hand is today. But we can just could be a timing of the reporting, perhaps those costs reports, the way those get booked. Also a lot has changed since fiscal year 22. Unfortunately, for some of these facilities, but yeah, we can get some more insight about that. That's great. I appreciate it. I think those are my. Jada downloads. I think that's it for me. Thank you very much. So piggyback on just his first comment. It would be kind of interesting to see if we can untangle and this may not be possible the how much is population aging and how much is Medicare Advantage versus I don't know if there might be other factors in there too. Yeah, that's a really important point. I do think some of this mischief and payer mix has to do with inconsistent booking of Medicare Advantage so we're working on getting that cleaned up as well. Thanks. And I'll just say I'm also comfortable with the staff recommendation. Any other board member questions or comments? Yeah, I just. I had a few questions about the pair mix as well, which I think we kind of may somewhat have touched on, but just 1, 1 quick question when looking at the pair mix slides. Is that by patients or the percentages, percentages of patients or percentages of revenue? Dollars. Yeah, yeah. And we're, you know, we only showed the net. Payer mix. It looks a lot different gross. So we're working on trying to kind of develop some clear visualizations about that. Also notably. Historically, well, we go back and forth on this, but there are years where we put dish in with Medicaid this year. It's kind of omitted. And we just need to figure out how to account for some of these other payment mechanisms and figure all that out. But yeah. And then the other question I had on that. And I think you kind of touched on this is how is Medicare Advantage? Where are the Medicare Advantage plans in here? I guess there are some hospitals reporting this as commercial and some reporting as Medicare or is there? Yeah, it's tricky. They are a bit of a hybrid product for hospitals to deal with. So they're administered by commercial plans. So some keep it there, but obviously the rates are tied to Medicare. So that's probably the more sensible place to try to book it. So, you know, in those cases, you know, I think we should do a better job of trying to isolate it, especially with the recent increases in the penetration rate in Vermont. And then the other topic related to this, but I think, you know, when we look at this deep dive and try to understand this is maybe how this Medicaid reattribution and potentially either shift to uncompensated care or commercial insurance is going to affect all of this over the next year or so. One other question I was going to ask is, Matt, can you re-explain what you were talking about with North Country and the free care bad debt impact on their actuals? I wasn't quite able to follow that. Yeah, so it's part of their EMR conversion. They had to make an audit adjustment in their net patient receivable for, I think it was affected bad debt. So basically, I'm probably being imprecise for my language here, but they basically had to write off $6 million. Sarah, could I be if I'm really mistaking that? Yeah, and so essentially some outstanding funds were determined to be unrecoverable in their audit. And so it's $5 million. They were expecting to have a chance to collect that the audit found is not appropriate. And so that is a huge material shift for them. And the cash flow issues are indeed driven by the implementation of their EMR. And I think those cash flow issues are really common. I've heard the EMR they're implementing can be one of the most difficult on that front. Meaning that the EMR isn't getting the revenue capture or charges that they would collect? Yeah, like these systems are intimately embedded in billing infrastructure and they were having a hard time getting it to work in some practices and they're working their tails off to get it going. But yeah, it's a tough one. So in that regard to re-expecting this $5 million to be a one-time hit, but also that as the EMR gets, I would assume they would be able to still recapture billing charges. So maybe they would end up having some revenue capture in this fiscal year that is for care. Yeah, as I understand it, that ship sailed and that this is determined to be unrecoverable. Oh, so that's the $5 million. Okay, but that should be a one-time and hopefully they're able to capture that moving forward. Yeah, it's a very rough start for fiscal year 23 at North Country. They're not alone in that statement, but that was a non-expected last-minute adjustment is pretty material for them. And then the one last question I have, which I don't know if we have this information through this data set or if you have insight into it, but it sounds like contract labor. We all know that contract labor is this huge impact in budgets right now. And so, but do we have an idea of the variance in that impacts sort of proportionately to other labor costs within hospitals or other nursing costs or whatnot by hospital? And if this is an equal impact to all hospitals across the state, because we're kind of seeing contract labor for each one, but is this an equal impact or are there differing impacts at different hospitals? I'd say there's variation in the number of travelers that institutions are currently using. We're trying to get a better sense in our data model of isolating those expenses in a systematic way, but right now it's not easy to do so. But I'd say it came up, I think, in every single narrative, if I'm remembering correctly. I mean, I would think so. I just, you know, some institutions are big, some are small. So, you know, really it's trying to understand these proportions of the workforce that are contract labor and trying to, I mean, and maybe that makes some sense in institutions to have more contract labor and others have less, you know, because the other costs are associated, but it would be I think interesting to try to understand that dynamic. Yeah, and some hospitals have a little bit more flexibility in terms of leveraging immigration to try to fill some of these roles and the route there. However, often those placements also take longer to actually fill. So it's a bit of a mixed bag. But yeah, I think that we also share your desire for a little bit more nuanced understanding of these dynamics. I mean, and again, this is just my perspective, working over the last couple of years is that the, and where I could think that the long, you know, one of the advantages of contract labor is that, you know, there's been a lot of variance in the volumes. And so if you can time it right and get your contract labor in when your volume is high, it's reasonable, but if you get it wrong and the contract labor comes when your volume is low and you, and you start, you know, initiating the process from the volume high, then you got labor when you don't need it. So anyways, that's that I don't I don't know how we think of what we have to do with that, but it's just an interesting observation. I think. Thanks. I support the staff recommendation as well. Thank you. This is Tom. Thank you for the background. And I don't have I have no trouble supporting the staff recommendation. Thank you, Sarah in floor very much. This is insightful and it gives us a good sense of where things are. I support the staff recommendation. I don't think enforcement would be appropriate in this environment. And I have no other comments. I'll turn it to healthcare advocate. Morning everyone. Sam push healthcare advocate usually to introduce myself, but look, I should do that so people know who I am. We don't have any comments. I'm still digesting a lot of this. A lot of the actual so thanks Sarah Matt and floor for that. And yeah, we support the staff recommendation. They can make sense. And yeah, I mean, I think the main thought I have is just how this impacts the guidance and I know we're talking about that next. So if I have questions or comments there, I'll ask it then. Thanks. Great. Thank you, Sam. And I'll turn it to public comment via the raise your hand. Mike Del Treco quick on the trigger. Go ahead. Thank you. Just want to raise your hand for the next one or for this one. This, this one chair foster just want to thank the staff. Sarah team for really comprehensive review. There's a lot of things moving here. And, you know, clearly appreciate sort of your lens on the pressures we're facing. So thanks. Thank you very much. Thank you for your comment. And the other public comment. Great. Well, thank you everyone for your presentation today is very helpful. And Miss Lindbergh, I feel like you're up every time I'm doing a board hearing these days. So you're up again. All right, are the slides coming through for you? All right, so here we are 24 guidance. Before we kick in just always try to make sure that while we have a lot of difficult problems on Tangle taking time to recognize some some really I think notable work and one that stands out to me is that despite all these challenges that the, you know, compounding annual growth rate in NPR from 2017 to 2022 is 4.3%, which is our goal. That's impressive to be constraining that growth, but expenses in that same time grew 6.8%. So I think some of that pressure is. Bubbling up, not just in Vermont, but anyway, very concerning to see those 22 actual so. Sir Lindberg director of health systems finance here to talk about the draft guidance for fiscal year 24 always a treat to be dealing with three fiscal years at the same time. So we closed out 22. We're in the process of that 23 is underway. Hard to say how that's all going to sugar out. And now we're thinking about fiscal year 24. So we'll take a minute to recap what we've talked about so far. Review a few of the final proposed factors that we're recommending the ratio of bad debt to free care financial indicators and no pricing changes for Medicare Medicaid. Take a minute to discuss some potential opportunities to change the way we do hearings and deliberations. Take a moment to actually walk through the guidance and its entirety at a high level. And then we're proposing a set of four motions as decision points one related to the benchmark one related to the factors and affiliated data sources. One to adopt the required budget policies and then finally an overall approval of the guidance. So, speaking of broken records, we're seeing fiscal year 24 is a bridge between the way we've been doing things for 40 years and how we're kind of hoping to do things in the future. We talked about different ways to kind of cross that bridge. But after feedback, we decided that it would be preferable to stick with the traditional benchmark of net patient service revenue in this bridge year. And the idea would be that factors associated with expense growth and commercial price growth would be assessed for each proposed budget, including the data that we mentioned. And that hospitals would just indicate how these factors were accounted for in their budgets and they don't need to necessarily tie to the same data. We just need to understand the assumptions they use to build their budgets. As I've said a million times, I feel like a million people. The work isn't going to stop March 31. We're just going to keep plugging away to get some of this underway for implementation and fiscal year 25. So some non exhaustive examples of areas we're still working is trying to figure out how to incorporate quality more directly in the hospital budget review. And staff are recommending that we continue to develop that quality framework and think about how those outcomes can both be monitored, but also directly incorporated in a hospital budget process. Productivity, we have kind of a start on a few measures, but we would like to see some more. Um, sophisticated work in that area that's going to rely heavily on data constraints. So we're still sorting through some of that and making sure we. Not only can develop out measures, but think about balanced measures so that we're not over incentivizing something to hopefully mitigate any perverse incentives. As far as patient access, we have, it was suggested that we use the question that was used last year related to referral and scheduling leg. And in the case for hospitals unable to do that provide the 3rd next available. We think that this needs a ton of work and we really as a as an organization should have a comp comp comprehensive look at access that doesn't leave out people who don't go to get seen at all. So we really need to kind of think about that on a population level and there will be components of that that may be relevant to hospital budgets, but it's a much bigger. Issue in my mind than 1 regulatory process. Equity is also another critical issue. So there's many measures that are being proposed both by CMS and in other places. So we think that that's critical to system monitoring again, figuring out the piece that's relevant for hospital budgets is just a piece of that work. But we just should be monitoring that as a regulator system wide. In my judgment, I would make the same plug for consumer affordability. That's a very difficult component to isolate just for hospital budgets, but it's also a critical part of the board's mission. So determining how we measure that in a systematic way and can apply that across our regulatory work, I think is is another really important piece of our punch list makes me tired to think about all this in a good way. And then for per capita budgeting, I think that this also is a statutory obligation that we have to work on fulfilling and that has, I think, a lot of cross pollination with efforts in kind of the technical advisory group and other payment reform initiatives. So we're trying to tie work in that area to that work stream. But just want to make sure everyone knows there's plenty on our radar on this is not meant to be like where we're going to land for forever, but it's again a bridge year and there's lots of work that's still ongoing. So uncompensated care. This is a tricky, tricky one. So the healthcare advocate recommends assessing the ratio of bad debt to pre cares, a measure of operational effectiveness and efficiency. In last year's comments, they suggested that the board might consider building to a specified ratio, such as moving to a one to one ratio by fiscal year 25. The kind of, I think they acknowledge clearly that, you know, this wouldn't be a typical kind of fiscal analysis in this space. And so we're still kind of trying to understand the evidence and make sure that we're, you know, producing this information in a way that the evidence suggests will be meaningful. So I think that 424 we're that staff will be happy to perform this analysis and continue to review that evidence, but there's a lot that happened in the Medicare costs reports in 22 related to trying to capture the cost of uncompensated care. And so I think that I personally think that that might be more where we want us try to dig instead of using kind of more of an accounting measure related to charges on that's designed to get at kind of the cost of the care versus the charge master amount of the care that was delivered without being compensated. And so basically it's a factor that I think should be considered, but I'm not prepared to recommend necessarily setting a target or any other ratio to move towards for fiscal year 24. As far as financial indicators so as you just saw Vermont's hospitals are in really rough shape by and large and that's not unique to Vermont so given that we believe that relative indicators are probably what are going to be most important for this year but we do want to continue to develop some standard metrics to get assess financial health for fiscal year 25 challenges there just like figuring out how to do those in a way that's flexible enough to account for the different financing situations of different hospitals so you know if you are largely designed to be reimbursed based on costs from Medicare you know maybe these ratios look a little different than a PPS hospital. That's the type of thing we really need I want to make sure we have a sufficient input to make sure that objective benchmarks are appropriate and customizes it appropriately so at any rate places where we'll be able to get a sense of relative indicators and how they're being assessed. So the rating agencies, the big three are Fitch, Moody's, S&P, we do have a subscription to Fitch it seems like we can find some of these others in publicly available sources but may consider moving you know figuring out what subscriptions are necessary to get the full tool set of objective or relative benchmarks from them. National flash reports are mostly a convenient data source it's one of the fastest ways that we can kind of get a sense of how hospitals are doing that's built on a third party proprietary tool but they release this high level stuff. Even though it's really current it'll change a lot month to month so we just need to keep in mind that you know no source of truth is perfect for any of this. We also for the critical access hospitals both the flex monitoring team and the SHEP center have some indicators that we will track. And then we can also this is you know really only backward facing but we can look at Medicare cost reports to get a sense of standard kind of historical benchmarks for our hospitals compared to peer groups. Similarly situated hospitals. So the kind of key staff will be looking at many indicators but the kind of key ones that we recommend focusing on for the board review are. You know some basic margins which is kind of the overall story of your ratio of revenue and expense so we'll be looking at the operating margin which is your operating expense. Compared to your operating revenue the operating a bit which makes some adjustments for. Immortization and depreciation and tax and kind of gives a more holistic sense of that margin and then the total margin which is one of those that's a little bit difficult to interpret sometimes for hospitals but is an important one to keep our eye on and especially as. Those investment losses are bringing down total margins or at least didn't 22. Days cash on hand that's when you saw is looking pretty scary for a lot of our hospitals but that is essentially just a measure of given the current expenses how many days they could fulfill those with the available cash they have today so. That's a solvency measure that's that's important to kind of see how how far. How once I level compares to water. Debt service coverage ratio is like OK we know we have certain payments that we owe for principle and interest on existing debt. Can we cover that this is one that's commonly used in debt covenants and if it hasn't already been breached for our hospitals it's that high risk of being breached. So that that's one where that's that's another concerning sign about financial health. And relatedly we're adding long term debt to capitalization ratios because that's kind of also likely to swing that's into kind of indicating how likely or how. The relative kind of choice between financing and lending to try to keep up with capital improvement. We have a lot of deferred maintenance out there so I wouldn't be surprised to see some major swings on that one for fiscal year 24. And then the average age of plant is just kind of again getting a sense of like how old the infrastructure that our hospitals are are using is and that's one that we also have on cost reports. We can also see how we look relative to other markets. So I think that you know like I said there's many other measures staff will certainly look at but I think this will help encapsulate kind of the headline for board review. As far as the known pricing changes for Medicare and Medicaid we will certainly monitor this information keep things as current and up to date as possible. We're all but guaranteed that Medicare will release some proposed and final rules in the process between when budgets are submitted and when they are approved. Those changes can be material in calmer times there hasn't been a lot of variation between a proposed rule and final rule but in recent years a lot of the kind of 11th hour hand wringing has to do with congressional congressional decisions at the federal level. So some institute some measures that were put in place to help keep hospitals hold during COVID are starting to expire and so if they they have to take action to kind of not make that happen. So all that to say I think that proposed proposed rules are tricky to apply in a budget adjustment and that staff would suggest considering sticking with those final rules will certainly also be monitoring state appropriations and any impact that that would be on Vermont Medicaid reimbursement whether it be through claims dish other kind of sources that they might provide funding. So again it's a factor and I think that this factor makes the most sense to consider vis-a-vis the commercial price assumptions, right wrong or indifferent that's the way it's written in statute right now is that we are obligated to kind of look at the Medicaid expenditure and making sure that everything's kind of been done to defer increases to commercial payers. Hearings and deliberations. So staff recommend that instead of requiring hospitals to prepare presentations that the GNCB staff would lead the board through a standard process to review proposed budgets and their accompanying narratives. Hospitals and the HCA would be there with the board and that you know everyone be participating to ask questions provide clarification engage in discussion during the review but the idea would be kind of like a more focused factor based kind of setup. We also would suggest that hearings be no more than two hours per hospital. That if there is need for kind of clarification or responsive exhibits that GMCB and the HCA would provide those questions in advance and allow them a chance to provide those materials so that no one's scrambling to provide information that might be helpful to make a decision in that moment. So that's quite a bit different. I know that presentations, it's mixed some hospitals really appreciate the opportunity to tell their own story others I think we'll find this a massive relief to not have to prepare these things so. But I think for me, it's like, if we can systematically remove remove things things the same way, you know that can help I think keep us focused. That's all. Oops. And so here is that proposed schedule so we still have to the August 11th date we had initially proposed is not going to be possible so we're kind of looking for an additional date to sneak in there but. This is all subject to change but right now we would recommend starting with the staff overview on Wednesday August 9 and then kind of have these slots for hospital presentations. You know, there'd be a kind of relatively smaller slot for let me potentially more straightforward hospital in the mornings with longer slots available other times in the day. We have time for deliberations as needed so that we can get those decisions completed by September 15th. All right, do we are we interested in a recess or anything before we walk through the guidance or is this a good time to it's just a little dry so I don't know if people need a little bio break or anything. I think we can keep going unless anyone makes an indication otherwise. Why don't we keep going or you know, sir, why don't we go till 1130 and we'll just take a quick little break at 1130 sounds great. All right, so I. All right. Are you seeing guidance. All right, great. Here it is. Times New Roman apparently people feel strongly about that so. So here's again that timeline subject to change. So March 31st is when we have this do. Thank you to the industry for accommodating a little bit of a tweak to the submission date. So we're going to ask for it on June 30th. It's traditionally do July 1st. That's a Saturday. If we had gone with the next business day that would have been July 3rd and with the fourth being a holiday. It just wasn't going to be a good scene. So we appreciate the flexibility and getting those in a bit early. So then staff are going to be developing all our good stuff in that July to August timeframe. You can expect staff analysis before hearing start this year. We'll have binders to you. Probably right in the middle of rate review hearings that you won't be ready to look at that they'll be there. And we'll be touch base with all that kind of logistic stuff. We do ask for this capital expender sheet expenditure sheets to be updated and adaptive by August 1st. And then again we launch on August 9th at this point is what we're thinking. And those orders are due to the hospitals on October 1st. So we have kind of that time between August 9th and the 15th to hear from hospitals and make the decisions. So just at a high level. This is just reminding everyone that this is a bridge year. The second paragraph feels important to me like just being clear that this is designed to further focus our process, communicate changes that we're planning and how we approach assessing hospital performance. And really providing an opportunity to engage in some foundational conversations that I don't think we've really had a chance to have before. And what we're looking to do through all of this is develop measures supported by evidence so that we can strengthen our regulatory approach. So that really is the goal here. These are very complex times and problems. And I think it's going to require a lot of creativity across the spectrum. And so, but I think these could be really constructive conversations. And then, you know, we will be executing our statutory duties. So a lot of section sites that probably mean something more to other folks than I. But that's that's encapsulating what our duties are, but making it clear that, you know, testimony and public comment are certainly part of what the board will consider. So notable changes is that we're taking instead of using kind of the budget to budget approach as you saw some of the drawbacks in very crazy times is very difficult to budget is that we're recommending kind of starting with fiscal year 22 actuals as a reference point. And we know that the there might be adjustments to that base that are appropriate to make them more appropriate to trend forward to fiscal year 24, such as provider transfers or if there's kind of other material changes. So, you know, that should be addressed in the narrative. But we would fully expect those adjustments to be needed. And then this is assuming that if you are voting to extend the benchmark from fiscal year 23 that would be an 8.6% growth rate over. And that'll be covered later, but essentially it incorporates the 23 guidance there. Just a note that, you know, we're going to be refining everything, but any technical refinement would not be designed to alter its intended use. It's just to make sure we're getting things as right as we can. So, you know, that would be socialized with everyone will be completely transparent in our methodology. We also are making some updates to the accompanying material so the uniform reporting manual now actually just be definitions of terms and making sure that we're collecting things in a systematic way. And instead the kind of step by step of filing will be in the adaptive user guide. And then we will also have an Excel workbook that just has the data that as we're using it so that anyone anyone anyone can actually use it themselves. But due to the kind of tweaks, we're going to provide these all in their final form by May 5. It sounds like that shouldn't be too disruptive to workflow. And we will be spending may kind of doing trainings to make sure people are comfortable with the changes and understand what we're trying to do. A reminder that the HCA by law is incorporated in all these processes. And then here are the policies related to budget enforcement as well as amendments. So we have an enforcement policy. That's one that I think we're going to be revising, but because that we didn't want to revise it just a little knowing that it's going to need a lot more vision so we're keeping that largely intact and then the amendment and adjustment policy is also largely the same. There's a little new blurb here about requests for confidentiality. This is pretty standard operating procedure for rate review. It's not historically been used by hospitals, but just so you know, there is a process to request that some materials are maybe requested to be treated confidentially. It just needs to make sure that it complies with the Vermont public records act. So here's a very low enhancement, but just a filing checklist making sure everyone's aware of what exhibits we're expecting and when. So note that there is a new addition here for a data collection period for the first two weeks of May, related to the wait time measure that has been asked so I know some hospitals missed that last year so trying to make sure that's obvious. We have eliminated some exhibits the narrative has been shorter than it's been in recent years and then we are going to get a few tweaks to a couple exhibits feedback on the payer revenue exhibit is it's really how we think about it but not the way that it actually seems to work in real life so just trying to accommodate that and figure out how we can get the information we need and be accountable to the way the world actually works. So that should also be helpful in terms of efficiency in this process. So here. So again this is presupposing some motions that's just a draft but here's where we have our kind of budgeted our budget guidelines and benchmarks. So first is that will kind of be officially providing a review of for regulatory compliance so our exhibits filed on time and completely so is all are all the questions answered. We will let you know who is, you know, meets this bar gets the green check mark and those who did not or needed some more help to get there. So we'll be providing that we also will be looking at kind of historical budgets for everybody like how well have they performed. In terms of closeness to actuals and you know are there any, you know, overall expense and revenue growth on a long, longer time period. So then the benchmark here again it's incorporated through the 23 guidance and that's 8.6% from fiscal year 22 actuals to the 24 budgets. And there is an important. I just want to make sure it's here. Yeah, so staff will review every budget to for the factors to make sure everything looks reasonable. If that's true, and the budget is under the 8.6 benchmark. I promise you staff are going to recommend that budget is approved without alteration. The board will still have a decision to make, but we will be recommending that budget is approved without any adjustment. Just want to make sure that's clear in the guidance. I hope it's also clear that the board understands that not all submissions will be under 8.6%. And in those cases, the expense factors will be reviewed, including the commercial price factor. And that's where kind of the hospital is to kind of help us understand the need for the additional NPR. So, and then kind of a vague, not vague, but that's for the commercial rate increase just making it clear will also be reviewing those and may request adjustments to commercial rate increases. So, the factors that we've outlined and some data sources that staff have identified as relevant. So, for labor expense, it's the per FTE growth and salary and benefits from the base of 22 to the budget in 24. Just as a comparison, we'll look at the US labor, Bureau of Labor Statistics Employment Cost Index to see how that's been performing. And to the earlier conversation, we want to hear about those contractual labor expenses and kind of understand how those are being approached in the 24 budgets. Utilization. So we kind of talked about how wild and crazy some of those numbers can be, but essentially just looking for hospitals, they've got the best information on this. So looking at their previous submissions and some other places we can kind of check to see that things are performing as indicated in the narrative. So we can look at hospital discharge records through the hospital discharge data set. The patient migration report. So where are people going to care? Are we seeing any changes in patient care patterns? Demographic changes. So, you know, that's the aging of the population and movement. That'll be from the census and then wait time information, which will be in submitted in the narrative. So the idea being that if you have high expectations to increase utilization and it looks like you've got people waiting for appointments, then that makes a lot more sense. We also might be looking at that to kind of look at relative utilization in market share across the system. So for pharmaceutical expense, there's no like perfect indicator for kind of the hospitals purchasing costs here, but for it to truly get the effect on cost. We're recommending this commodity index for prescription drugs, which does include drugs manufactured that are largely in certain hospital settings. This is designed to isolate the price change associated with these pharmaceuticals. There may be other increases or changes could be decreases related to volume or the types of pharmaceuticals. Those should be, you know, isolated separately. This is just designed to look at price cost inflation. Similarly, we're talking about price increases. If you need more stuff or fancier stuff or, you know, different stuff, that's a little bit different exercise than the cost of the current stuff. So the producer price index for general medical and surgical hospitals was recommended to the board and we concur. We also will be kind of looking at some of relative performance on cost, relative cost performance as much as we can gather from cost reports. And here, I think this is a little bit hard to interpret, but essentially we're saying there will be five different peer groups identified to compare Vermont hospitals to the University of Vermont Medical Center. We'll actually have two different comparison groups, one among academic medical centers and one among community medical centers for communities similar to Burlington or Chittenden County, I should say. We're just finding that it's just hard to find a comparator for UVM, not just in Vermont. And so we're just trying to get the full picture of them as both kind of a community hospital and an academic medical center. Mid-sized community hospitals for Vermont hospitals that Rutland and Central Vermont will be in that peer group, small rural hospitals, Southwestern, Northwestern and Brattleboro, and then our critical access hospitals. That's the one that's often the hardest to kind of find the signal critical access hospitals look all sorts of different ways. So we, you know, that's an area where that technical refinement might come into play and we might end up thinking if there's more than one group here at the end of the day. But yeah, so we'll be limited to information on cost reports, it's backward facing, but we'll look at volume costs per discharge staffing levels, case mix, pair mix, quality, financial metrics. Also be looking at salary allocations between clinical and administrative FTEs. We will develop these lists of hospitals, but it's, I hope it's clear here that we're happy to add hospitals upon request. We'll be using, you know, measures of position, median and percentiles. So always happy to add, but not going to take away comparators. And then other relevant analysis. So we expect to have Burns & Associates update their recosting and repricing of claims from our APCD just to look at cost and payment variation as well as cost coverage variation. That will also be part of the analysis that might be helpful as we assess the commercial price change. All other relative price and variation sources that we may consider include the relative pricing project conducted by RAND, the Yale healthcare pricing project in our own reimbursement variation report. We also will consider previously approved changes in charge and or effective commercial rates by the Green Mountain Care Board. Financial indicators. I think we just went over those. That's just talking about those. One note here is that, you know, this might be assessed at both the hospital and the consolidated level. I think we need to think through more systematically toward 25 about how we want to think about that. But I think for now just getting a sense of how they might look different at those two levels is really important. As we said, we'll monitor those terms and pricing changes. Uncompensated care. So we're going to review the assumptions and, you know, Vermont Medicaid actually has a pretty sophisticated unwinding plan on their website right now. So if hospitals haven't already looked at that, they should consider looking at that as they consider how this might affect their bottom line. We also have a list of other factors. So, you know, there may be other publicly available data sources that we think would be helpful to understand trends or other factors identified by hospitals. So ones that have come up Dartmouth Atlas of Care. The total cost of care is measured by the all pair model. So measures of potentially avoidable utilization. Notably, there's a rural health dashboard that Mathematica put out. But the intent would be to supplement our understanding and, you know, as needed, I think, I guess. There's also a class here about other productivity and efficiency indicators. Some of these I think were identified to get above. And then the board's review process will promote the general good of Vermont is set forth in 18 vs a 93 72. It will be consistent with the principles for health care reform and 18 vs a 93 71 as required by 18 vs a 93 75 a and be seven. We will conclude considerations to the extent to which a hospital's budget advances the principles that all Vermonters must perceive affordable and appropriate health care at the appropriate time in the appropriate setting. The principle that the overall health cost health care cost coverages must be contained and growth and health care spending in Vermont must balance the health care needs of the population with the ability to pay for such care and will adhere to the hospital budget review requirements including a budget shall be remote efficient and economic operation of the hospital. The board may review and consider other relevant factors, proposing the budget review process. So then additional filing that's got 10 minutes. I think we get through this. So the main one here is the narrative. So this is. This is going to maybe have more focus than in previous years. If we're not doing a presentation in addition to us. So this will be the meat of the record that the board will be using for his decision making coming from the hospital. So I want to encourage, you know, the hospitals to be succinct and focused, but not feel constrained with the need to tell their story here. So, but yeah, for an executive summary, you know, hopefully keep those to a page. But making sure that we get the elevator pitch about the budget. This is also a place where they should highlight any adjustments to the base and also kind of think about that consolidated versus individual hospital look for cases where that might be material. Um, so the questions, uh, question, the first question, just what, what adjustments are you making to your base? The second question is, hey, how did these factors go into your budget? What were your assumptions? I'm outlining those for that. I've just included the eight factors that we've outlined, but make hope. Also say that hospital should include other material factors like that. This isn't meant to be exhaustive. So they might have other important components of their story to tell here. Um, give them a chance to summarize their known budget risks. So budgets are guesses. They often involve cost saving targets. So just hospitals, the more that you can communicate that in like the magnitude of dollars. Um, in the kind of categories of expenditures that just makes our job easier as we consider the risk already embedded in a budget. Um, we would like a org chart. Um, just understanding the corporate structure of all our hospitals. I think this maybe has only been asked occasionally of a few hospitals. I think it'd be good to have that as a matter of course. Uh, we're repeating the wait time or the, um, referral and visit leg question from, um, last year, we're asking to do that the first two weeks of May have 2023 for each hospital and primary and specially care practice as well as the top five most frequent imaging procedures. Um, for those who are unable to produce the referral leg or visit a metrics, we're just asking what's preventing it and when they will be able to report them and getting that third next available for those scenarios. Um, statutory requirement for the known depreciation schedules. Um, curious about any planned expenditures related to cybersecurity. Um, and then here is where we're trying to quantify the costs of that uncompensated care. Um, for the inability to transfer patients to post acute or other more appropriate care settings. Um, so asking them to kind of give a sense of the magnitude of that and. Um, proportionally how much of that is related to folks with a primary diagnosis related to mental health. So started to get some more kind of information on those critical issues. Um, asking for net revenue above cost on pharmaceuticals and I'm hoping to hear some. Um, get more understanding about how those funds are flowing through systems. Um, and then, uh, we did get some comment about this question related to facility fees. Um, so I believe that this definition of a facility fee is not necessarily a standard one. So we might want to consider. Uh, how we want to handle that making sure that we're getting the answer to the question we need to ask. Um, a set of questions related to patient financial assistance. There's efforts underway to standardize free care policies. Um, so that's some of that material to that. Um, and then administrative costs. So some of this is captured on 990s, but there's thresholds to report there. And this is to make it in a little bit easier way to digest. Um, and then the only but the goodies. Uh, most recent 990 and community health needs assessments to be submitted note that this is being requested by June 30th. That seemed to be closer to historical timelines. Um, but that is. It's all she wrote on that one. So, um, yeah, it might be a good time to take a break before we move on unless there's any kind of clarifying questions we should address first. Um, why don't we go ahead and take a break? We'll come back at 1130. And I believe a couple of board members have 12 o'clock meetings. So we'll go 1130 to 12. Thank you. Okay, it looks like everyone's backs. We can call the meeting back to order there. Please continue. Um, so we won't have time probably to do any motions this morning, but I'll go through kind of the four motions we're recommending. Can answer questions. Have you think about it over lunch and hopefully vote this afternoon. So, uh, the basically four different categories, the benchmark, the factors, the budget policies and overall guidance. Um, so the decision point on the fiscal year 23 guidance established a two year growth rate in that patient service revenue fixed perspective payments and reserves, which I call NPR, sound lazy. Um, but looking at that to grow from 8.6% from fiscal year 22 to 24. Uh, we do recommend extending the practice, um, from the 23 budget review of using actuals in place of budgets. Um, the 23 order technically says growth of the budgets. Um, and I think as we already flagged, um, we, we think that this target is extremely ambitious and that many hospitals may have difficulty achieving it. Um, you know, it may be, it certainly seems possible for some of the regulated entities. But again, stat, if, uh, a budget comes in under this benchmark and is based on reasonable, uh, assumptions, uh, staff will be recommending it be approved without modification. Um, it's my understanding that the board is expecting that not all, uh, requests will necessarily be under that benchmark and that the request will still be considered using the factors outlined. So the suggested motion language, uh, thanks to Russ move that for the fiscal year 24 hospital budget review process that we have on care board maintain. The NPR growth guidance established last year of no more than an aggregated 8.6% NPR FPP growth over two years, but modified to measure growth from fiscal year 22 actuals to the 2024 budget. So that is for you to chew on. Um, we did get public comment kind of talking about how ambitious this is and, um, again, uh, so expenses grew 10% more than budget last year. We, you know, not to say that'll continue, but if you're leaving the system growth of 0.1%, we know that, you know, inflationary growth is almost certainly more than that. Um, so just knowing that the target is, um, quite low compared to the approved budgets in 23 in some cases. Uh, so this is just summarizing the factors outlined in the guidance and the related data sources, um, that may be considered. Um, hopefully goes without standing that Vermont law is omnipresent in all of these decisions. So they would, they would all that would also be applied, but, um, just trying to get a sense of the factors. So again, labor utilization, pharmaceutical cost, cost inflation, commercial price, um, financial benchmarks, no pricing changes on compensated care and kind of other data sources as needed. Um, again, that's not meant to be exhaustive of things that might affect a hospital budget, but these are some of our biggest drivers. And as we learned last time, you know, just labor, just labor, pharmaceutical costs and medical supplies, you know, accounts for more than 80% of budgets right now. So, um, and historically more than 85%. So we're, we're getting a lot of kind of the expenditure categories in these factors. Um, so here that says to move to approve the factors and related data sources identified in the hospital guidance as presented by board staff leaving a placeholder in case any modifications are identified. Um, Corporating the existing policy on how hospital budget enforcement, um, as well as the draft budget amendment and adjustment policy, which renews a previous policy with a few tweaks, not material really. And the motion there would be to approve those. So that one. So maybe straightforward. We can walk through the policies if that would be helpful. Um, and then finally, just a movement motion to approve the guidance in its totality with a little placeholder if there are modifications identified. All right. So that took a lot less than 30 minutes. I don't know if we want to take some time for questions and make sure we can address that. Anything you need to think about this on your recess, but here we are. Yeah, since we have the time, why don't we keep moving along? We'll go right up to 12. If that's okay, maybe, maybe a couple minutes early, but why don't we start with board member questions and comments and member homes. Sure. Um, thank you, chair Foster. And thank you, Sarah and team. Huge help. I know this is a big lift. Um, and, you know, from that 1st slide or 2nd slide that you put out there, it's 1 that's going to clearly continue as we move towards. Fiscal year 25. So I know this is a work in progress. Um, and I was actually really glad to hear about some of the streamlining and improvements and adaptive. I think that's going to be really helpful to the hospitals to reduce the burden. And get the data that we need. Um, so I think, um, I mean, I'm happy to start talking about chair Foster. Do you want me to start talking about that 1st decision point? Or is it more? Questions and comments at this point on really, I mean, I'm not sure if we should start the process of moving towards making motions with respect to the, say, for example, the NPR benchmark. I think because of the time, it'd be best to just do any questions or comments now. And then after lunch, we can take up the motions and discussion we need on the motions after lunch. Okay. Um, then I just, I think I only have 1 process question. Um, Sarah, which is about, um, the movement away from having hospitals come and present. Um, and I'm just kind of curious. There was a slide up there that talked about there'd be questions that would be sent to the hospitals. But there also was an opportunity for board members to ask questions. Of the hospitals in the hearing. So I guess I'm just curious is the process that we would look through the book, the binders that we're getting the analysis submit questions to you. Prior to the hearings that would go out to the hospitals, but there would also be an opportunity for follow up questions in the board hearing for board members to make. I'm just trying to figure out where where we're making questions. The timing of our questions, whether we'll have opportunities both in written and in the hearing itself for questions. Yeah, that's the vision is to both provide written questions in advance, particularly those that might have a heavier lift to answer. And then also having the opportunity to answer and discuss things when the hospitals are here. And I think like the mechanics of that whole process. We can likely sort out. I think the main pressure right now is getting some dates certain so people can start scheduling. Yeah, that makes sense. I would just say that given you did make the comment about the binders may be arriving on our desks at the time of rate review. So I'm also just recognizing our ability to do both simultaneously may be tough. So when we get those binders and how we do that will be important for the timing for us to be able to ask questions. So, okay, that was my, my sort of process question. I will just, I think I'll talk more about my other comments after lunch. Member lunch. Yes, thank you, Sarah and team. This is a terrific amount of work and really appreciate it. I had one question related to the facility fee question because the definition used in the draft doesn't is not the standard Medicare facility fee definition. And so I think that could create confusion. So I'm trying to understand the purpose behind the question and what we're hoping to get from it. And happy to help on maybe wordsmithing that term. Maybe we can come up with a different term. But it would be helpful to understand the wire. Why what or what information are we trying to get. Yep. Um, okay, I'm happy to take that as a action on the recess to propose kind of a new draft of how to kind of clean that up a little bit. Yeah, and I, I mean, I'm happy to do that in real time as we talk, but I need to understand the why which. Yeah, yeah. This one is courtesy of the healthcare advocate. I know they get a lot of questions from consumers related to this. I do think that the effect that this has might be due to more than one thing. So I agree. I want to make sure that we are understanding exactly what we're trying to get at and ask the question to make sure that's what we're getting. Yeah, and maybe I don't want to put the HCA on the spot or, you know, ask them out of order obviously, but it would be helpful maybe for them to speak to it directly if that's okay with chair foster. And it doesn't have to be now it could be after the recess if that makes sense. Eric, if you have Mr. Schulte, I see you'd like to go ahead. That's that's fine. Yeah, I see. So I will reach out to Sam to talk with you Sarah and if there's still questions Robin. I know Sam is covering the afternoon meeting and so I will ask him to prepare for that. Yeah, if that makes the most sense, thank for us. Yeah, I think it's just a term of art and Medicare billing is getting everybody's wires crossed so we can we can make sure we're getting ready. And I think it makes sense like I had. Yeah, I mean we it's definitely not the Medicare billing it's something very specific that comes from consumer complaints and a some I think health affairs articles so I think it, it's a good point that it needs word smithing because it suggests something that doesn't really isn't as clear as possible given overlap with language. Thank you. That was really my only question or comment at this point. Thanks. Thank you chair. Thank you Sarah and team for the presentation. We heard from throughout the actuals and through the guidance inflationary pressure and I realize that we're talking about hospital budgets talking about what affects that budget and the inflationary pressures that hospitals have to deal with. But I also think it would be helpful for us to have some on our part some assessment of hospital price inflation through the same period. I know from some of prior work that we have reviewed from the BLS Bureau Labor Statistics hospital price inflation has been more than triple overall inflation. More than double wage inflation and more than double for other service things like childhood. Child care services. So some context around the inflation measures would be helpful. It's one of the two as everybody has. Thank you for your review of the process. We've been doing this the board's been doing it for more than a decade. And during that time we've had a pandemic. We've had an affordability crisis. We have access backlogs suggesting the system is full. But we also have declining hospital financials. So some things not working and revising our review of the system seems. Good. And what we're undertaking so far you greatly expanded our ability to assess and benchmark how hospitals are allocating their revenue. You built a statistical model and I don't know that we really appreciated this last week. That's based on an analysis of expenditures. And that outperformed or more closely predicted actuals over the past three years than any other way of assessing that we looked at. So the model really works appears to work well. But these steps are new. They'll give us a more accurate understanding of hospital budgets and help us forecast needs. They're new. So for consistency it makes sense that we keep some of what we have been doing while we add in the new and continue to build it. So I just I think you and the staff have just done a really super job and I appreciate that. So thank you. Dr. Merman. I think some of my comments are probably more appropriate for for this afternoon. But yes, thank I mean like everyone else and I actually am at the office. So I just popped it and said thank you so much. Thank you so much. And all this so. So we can continue to do what Tom was talking about and through the process of continue improvement, try to improve what we do. So I guess there's two things that I wanted to bring up that may just be 2025 issues and not 2024 issues. But affordability is this elusive concept that we can't seem to figure out a clear definition of. But one thing I think would be potentially appropriate to look at with regards to affordability is that when a potential rate increases requested that we somehow could see what that would do to an average commercial pay or family. So that's like super complicated because there's not a one to one. And these would be aggregates but I do still think maybe an aggregate assessment of that might give us an idea when we look at a 3% rate increase for one hospital what that's going to just cost the average for one hospital or at that time. You know it's still just a part of what all 14 hospitals would cost but I think it might be helpful. I mean, I think we're up 68% increase in charges from 2013 to 2023 and I believe inflation was like 29% and 29% during that time. So insurance is somehow I got muted. So insurance prices are increasing at increasing rate. So that's just one thing I think might help us understand affordability. And the other thing that I think we may not need to wait till 2025 on is some sketch of equity indices. I mean there are there's the loam data on equity. And to start start looking at that again, you know, I appreciate that 8.6% is going to be a very, very challenging if not impossible target for a lot of hospitals and that and I appreciate the idea that of using expense growth when evaluating kind of moving to the next view of how to consider hospital budgets in that above 8.6% group, but I think so but I do think kind of having a lens of equity and affordability and that 8% above 8.6% group would be helpful. Yes, so that's what my thoughts are this far but thank you. Thank you so much. Thank you. I just wanted to emphasize that this NPR growth cap from the 23 guidance the way you've structured this allows for flexibility right so it is an ambitious target like there's no denying that for where the hospitals are today it will be difficult for many to achieve. But that's when we then go into all those other factors that we can look at for the expense growth and we can look to the hospital narratives and explanation for the need. And I really like the comparison data to understand how our hospitals are doing versus others. Right. I think our hospitals do an excellent job of a lot of things and we want to see that and we want to applaud where they do well and we want to recognize where there's room for improvement and where we can achieve at a higher level. Right. So I think this will start giving us that ability and I really thank you guys for for putting this together and making it like this because I think it's a good step. Like Dr. Mermin I agree consumer affordability and the productivity and the equity issues are really important for 25. And we're not there today but those will be really important because an unaffordable system is not an accessible system and an affordable system is not a sustainable system and a sustainable system is not sustainable is really bad too. Right. So these things all are the conundrum of what we all do and having that fuller picture in this process is really critical. So I'm really glad that we're going here. I have nothing else but thanks and gratitude for you and your team and Ross. So thank you. I'll turn to the health care advocate. Nothing for me. Thanks Eric for stepping in. I mistakenly thought we were coming back at noon. But I know there's a question around facility fees and you know we can get some more information to you about that. So thank you. Great. Oh sorry. I just wanted to add in quickly hearing what Dr. Mermin said I think you know we might be in a situation that it might be useful to look at various scenarios kind of like, you know, as if you were in a statistical model and you were talking about it and you plugged in certain variables to talk about it like prototypical person. But in this case you're not going to have a statistical model. So you're kind of drawing on from kind of scenario planning and urban planning and that may be the closest we can get because of the variance in folks health insurance status. So like an aggregate may not be meaningful in this context because it's, you know, it's garbage and right. So that's something I think, you know, with United States of care and Sarah. So that's something that I'm kind of putting on our radar and I will say, you know, the level of rigor that's brought to this now is wonderful. And, you know, I've told Sarah she is one of the people who makes me happy that I pay state taxes. So that's my opinion. Great. And we will turn it to public comment via the razor hand function. Seeing none. We will adjourn for this meeting in recess rather and we'll come back. Does what a clock work for everyone's schedule or do we need a little extra time built in? Okay, we will be back at one o'clock and we are in recess. Thank you. We'll call the meeting back to order and continue. And what we're going to do is we're going to take up the discussion on the hospital facility fees. And we had gone through the presentation a little quicker than I think people anticipated. So I'm going to give it another opportunity for any healthcare advocate comment or public comment after we do the facility fee issue. Okay, Sarah, I'll turn it back to you. Thank you. Wonderful. So we have a new question here drafted. I hopefully you can see my screen here. It looks like I'm freezing. Great. All right. In my back. Can you see stuff? I just froze for a stressful few seconds. Okay. So yeah, we've so we have refrained this hopefully making it clear the intent of the question. So does your institution charge facility fees to patients who access your emergency department facility fees having to find as the cost of walking in the door that are built separately to cover overhead and other costs provide care in addition to the charges for specific services received by the patient. If your institution charges facility fees, provide an estimate of the total sum of facility fees based bill and collected. So it sounds like this is specifically related to ED utilization cases, which is the issue that consumers are calling an advocate about. So I think that hopefully adds clarity and makes it clear what the ACA is trying to get there. And these should include then the Medicare facility fees because the Medicare facility fees are separately charged from professional services to cover overhead and other costs. So that. So we are looking to get Medicare facility fees in answer to this question. That might be a pair that uses this billing methodology. Yes. Yeah, Medicare for sure. And yeah, Medicare advantage. It's mixed. I think from my understanding commercial pairs by and large are moving away from that. And I believe that Medicaid did away with this billing approach a while ago. Yeah, by statute. Yeah. With Medicaid. Yeah. Okay. So I think MVP still uses. They still based on Medicare. So they would be captured. I think I don't know of any other commercial pairs that do that. Although I could have gaps in my knowledge certainly. So, okay, great. Thanks. I just wanted to make sure we were focused on Medicare since that's largely I think what we'll get. Yep. Great. So that was kind of that housekeeping issue. And I think if it pleases the board, I'm happy to pull the draft motion language back up. That'd be great. I will open it up for any public comment on this. Or the broader guidance that we discussed more thoroughly this morning. Mr. Draco, your hand was up. And it still is. I apologize. I raised it very fast and lowered it very fast. So I just think I know I. Hopped in on the facility fee conversation a little bit late. By walking through the door, you know, this is a very technical conversation of facility fees. There's UB billing, which is. Which is facility charges. There's 1500 professional and I don't want to complicate this. But when you walk through the door as a. A patient that works into the emergency room, there's 1 of 6 CPT charges that are charged to your. You on the UB, and that's a facility charge. You get that charge. If you're blue cross, blue shield, MVP, Medicare, Medicaid. No matter what facility fees are a very. Defined piece of business that doesn't. That I don't think is reflected properly here and it's and by the way, it's very complex. And I think we just need to be very careful of what we're asking for, because. A facility fee is every 1 almost every 1 of those gross charges that you evaluate in your budgets. So we we need to understand what we're trying to get after here and I'm not so sure that this conversation. To accomplish that. Yeah, I think that's 1 of the to your point complexities is that in cases where there is a facility fee associated with service, the professional charges reduced accordingly. And so. I understand that it's a driver that and there's some research cited in the question to kind of help hopefully guide where people are trying to get that information from my understanding. These portions of the bill might not be covered for a lot of the folks calling the HCA and so it's causing a lot of. Financial hardship and so just getting a sense of how these are growing. It's a very complex topic and I appreciate hospitals doing their best to provide a little insight, but I do think that that will probably end up with more questions than answers. Like a lot of these thorny issues. Mr, please go ahead and thank you for allowing me to speak again and it's not directly public comment, but it's once again my offer to the HCA. To evaluate what is happening in this space work with our. CFOs where necessary and frankly, not make this a very complicated conversation within the budget context because I don't, if you ask this twice, you'll get 5 different answers on what it means. So, thank you very much for any other public comment at this time before the board moves to the staff recommended motions. Okay, great. Sorry. Yeah. Mr, please go ahead. Yeah. Thank you. And I, yeah, I think this is an important conversation and thanks Mr Bill Treko for your comment. I mean, I think it won't. I think it's an important question and I think it's a yes and. I think that we can definitely through the process work to understand how to best answer that question. I'll just briefly kind of provide a little bit more context on why we're asking it as Sarah outline. We do get calls from people and I. I mean, it's not uncommon that a facility fee is something that people are unfamiliar with. And it's often cases where consumers have called the hospital or called their insurer. And they've been told that it's not covered. So they expect your cost or bill of like $200 and it's often, you know, 1000 or $2,000. The Kaiser piece, which I encourage all folks to read, which is cited in the guidance. It really documents how facility fees have been rapidly increasing over time. There's a fourfold increase in the last 15 years. And within that, there's actually no real national standardization around how facility fees are calculated or how they're derived, which is unlike professional fees or other fees that are familiar to the board. So that's, it's a real area. I think of it's a real gray area. It's a real black box, which is essentially why one of the many reasons why we think it's critical to get more accurate data on it. There's a lot of inherent limitations with any metric, but with the Medicare costs report, a lot of it derives on unaudited financials and accounting elements that are not incorporated in stronger audited financial statements. So we don't believe that it's necessarily a duplicative question. One, I mean, only a third of hospitals nationwide have actually reported facility fee data, despite being required by the feds through price transparency rules to report it. We think it's an important question. I mean, happy to talk more about how to best answer it and so we can better understand the complexity that you talk about. But we do think it's an important question to ask. Thanks. My goal would be to get those patients that you have questions get their questions answered. So that's primary my goal. Is there any other public comment? Okay, the staff has suggested a motion and any board member interested in making the motion. I'll go ahead and move that for the fiscal year 2024 hospital budget review process agreement and care board maintained the net patient revenue fixed perspective payment growth guidance. Established last year if no more than an aggregated 8.6% NPR FPP growth over two years but modified to measure the growth from fiscal year 22 actuals to fiscal year 24 budgeted NPR FPP. There are a second. I'll second second. Is there any board discussion on the motion. I made the motion. I'll just jump in. Sorry, Jess. Did you want to go? I thought I might since I made the motion talk first, but I would say that the I last year when we were talking through the NPR guidance. There was a lot of discussion around how to account for the uncertainties of the pandemic. And so part of what I think the board was attempting to do with the guidance was to provide some certainty over a two year period. And while I completely agree with the prior statements that this seems ambitious and that many hospitals will not be able to achieve it, it does provide us with a consistent and anticipated target with which to make the first cut for staff's recommendations in terms of approval versus a deeper dive into the into the budget assumptions. So while I recognize that many hospitals won't be able to meet the target. I still think it's worthwhile to provide to maintain the certainty and consistency from last year and to use this as really a first a way to take a first cut. So that's why I propose the motion. Thanks. Thank you. Member Holmes. Yeah, I was just going to say something similarly, you know, having this 8.6% two year benchmark on the pro side, it's predictable. We said this last year and hospitals have requested more predictability and consistency and many. I believe liked the fact that it allowed for longer range plan planning to do a two year benchmark. So that's the pro side. I think, you know, the predictability is on the pro side. I think on the con side, I agree. We're in unpredictable times. And to some degree, I think many of our hospitals are not going to be able to achieve. You know, this 8.6% and I think it'll be for legitimate reasons. I think that, you know, there's still pent up demand from COVID that we're dealing with. There's higher acuity. Probably related also to a COVID and we know that there's demographic shifts related to population growth. So I just want to sort of echo my colleagues comments. There's the board always reviews every budget and thoroughly and we'll continue to do so with this budget process and provide every opportunity for hospitals to explain why it's not possible to meet this target and review those submissions carefully to understand both the challenges that hospitals are facing and opportunities. Potentially, the statute requires us to set a benchmark. So this seems like a reasonable one to start with for that predictability rationale. For me, if hospitals are coming in under the 8.6% and their budgets, otherwise the components of their budgets are deemed reasonable. Then I support the staff's projections that they will approve those budgets or recommend approve those budgets. I think that's reasonable. So for the other hospitals that don't meet this 8.6% benchmark over two years, we're just we're going to review them. That's what we're going to do. So I'm comfortable with this motion. Any other board discussion? Hearing none. All those in favor, please say aye. Aye. Aye. Aye, the motion carries unanimously. Next motion. I'll go ahead and make this motion. This relates to the factors that were identified. that the board would review for hospitals that were having the full review that weren't able to hit the 8.6 percent. And I move to approve the factors and related data sources identified in the hospital budget guidance as presented by board staff. Second. Is there any board discussion of this motion? I just have one comment to make. The factors looked right to me. I really like the comparative look at other hospitals. The data sources really thank you Sarah and team for identifying so many multifaceted data sources for us to have a really good look, more data than we've ever had. There was one data source that I was actually thinking might be helpful to add to the maybe in the other category and this is if and when the AHS primary care wait time study becomes available. I think that would be really informative and it would be helpful to see and think about in the context of hospital budgets and where the pain points are. So I was just going to suggest that that perhaps be added as we're looking at access and wait times and all of that. If that data becomes available to add that to the other category. Yeah, I was unaware of that pending deliverable. So I'm certainly can add that if there's support here. Any other board comment or discussion on this motion or member Holmes's suggestion? I'll go ahead and add that I support member Holmes's recommendation that if such data becomes available that it be added to the factors. Oh sorry go ahead Russ. I we might be saying the same thing. I just wanted to clarify that that was an amendment or ask if we're correct that that was an amendment to the motion. Friendly amendment? Or you know to the degree that it's highlighted and says end with the modifications identified during this meeting. That's that could be the modification, right? Right, but I think procedurally Owen has to say it was a friendly amendment and then the seconder of the emotion would have to agree or we could withdraw the motion and start again. Why don't we withdraw the motion? Actually sorry let me stop there. Is there any other board comment on member Holmes's recommendation? Other than mine? I'm supportive. I'm supportive. Supportive. Okay great. I'll withdraw the motion and start again. I move to approve the factors and related data sources identified in the hospital budget guidance as presented by board staff and with the modifications, modification identified during this meeting relating to the primary care provider wait times study. Second. All those in favor please say aye. Aye. Aye. I remember I'm sorry I didn't hear your response. Yes. Great thank you. The motion carries unanimously. Ms. Lundberg could you pull up the next proposed motion language? Is there a motion? I'll move we approve the oh go ahead Dave. Oh please. I move we approve the budget amendment and adjustments policy as presented by board staff. Second. Any board discussion? All those in favor please say aye. Aye. Aye. Aye. Motion carries unanimously. Thank you and I believe we have one last motion Ms. Lundberg and this motion relates to the entirety of the guidance with the modification we made earlier to the factors that we're evaluating. I'll go ahead and move that for the fiscal year 2024 hospital budget review process the Green Mountain Care Board approved and adopt the fiscal year 24 hospital budget guidance as presented by board staff and with the modifications identified during this meeting to be effective as of March 31st 2023. Second. Is there any board discussion? I'll just chime in and say that I think that the guidance this year makes an important step forward in terms of modifying our process and I'm looking forward to seeing how it further evolves for next year. Any other board discussion? Concur with member Lunge. I feel the same way and all those in favor please say aye. Aye. Aye. Aye. And the motion carries unanimously. Ms. Lundberg and Mr. McCracken thank you guys very very much to you and your teams for all this work. This is a big effort and I really appreciate all that went into it so thank you. Hopefully we won't see you till August. You deserve a little bit of a break. Is there any old business to come before the board? Any new business? And is there a motion to adjourn? So moved. Second. Those in favor? Aye. Aye. Aye.