 I'll call the Green Mountain Care Board's meeting of May 3rd to order. Today we have two primary agenda items. We have a presentation from Mark Hage relating to reference-based pricing, and we also have a review of OneCare's final budget submission. So thank you all for being here today. We're excited about hearing more about reference-based pricing, and I'll turn it to Ms. Barrett, our Executive Director for her report. Thank you, Chair Foster. I'll start out with some scheduling updates. As a reminder, we will be back meeting on Friday, starting at 8.30 in the morning. We will be hearing from OneCare Vermont, and they'll be reporting in on their revised budget. Today we're hearing just from our staff. Then, exciting news. We, the Green Mountain Care Board, are going out on the road. We are going on June 7th to the Morrisville area in Lamoille County. As folks may recall, at the end of last year, we had a traveling board meeting to Rutland, and we'll be using the same format where board members will separate out in their 2x2, so as not to have a quorum, and visit health care entities, as well as some non-profits and some businesses in Lamoille County. And then at 1 o'clock, we'll have our regularly scheduled board meeting, which will be live and in-person. Yeah, I thought you guys introduced a pass with a youth price. Excuse me, I think if you're not speaking, could you just mute? Mr. Hoffman? Can you hear me? Here, I'll mute. Can you move? I can't mute him. I think I can. Oh no, I see. I see. The youth season pass. Thank you very much. So, as I was saying, we will be in Lamoille County and in Morrisville on June 7th. More details will be posted on our website very shortly, so I'd encourage folks who can attend to please attend our meeting in Morrisville. We have a couple of public comment updates. We'll be extending the public comment period for One Care Vermont's realized budget till May 24th. If we do not vote at the, I think the next week is the voting scheduled vote. If we are extending that, we will extend the public comment period accordingly. So, please, if you do have public comments on One Care Vermont's revised budget, please get those to the board in order for them to consider it before they do have a vote on the budget. And then we also have an ongoing public comment period on the potential next all-payer model. We share all those comments that we receive with the Agency of Human Services and the administration as they are leading the negotiations on that potential model. So, with that, I will turn it back to you, Mr. Chair. Thank you very much. We'll take up the meeting minutes from April 19th, 2023. Is there a motion to approve the minutes? Go moved. Second. Any board discussion? Those in favor, please say aye. Aye. Aye. Aye. There are four ayes and Member Lunge is not here today, so the motion carries and the minutes are approved. Next, we're going to turn to Mark Hage. For those of you who don't know Mark Hage, he is the Director of Benefit Programs for the Vermont NEA. Vermont NEA is the Educators Union. I'll let Mr. Hage explain a little bit about what they do, their membership numbers, and the scope of their work. And presenting with Mr. Hage is Marilyn Bartlett, who's a senior policy fellow from the National Academy for State Health Policy, which we call NASHP, and Chris Deacon from Versand Consulting. And she's the former Director of State Benefits for New Jersey. So, Mr. Hage, I'll turn it to you. And thank you very much for doing this. And just for everyone's awareness, the board is doing a series of educational roundtables. And this is part of that series. The last board meeting, we had a presentation on primary care provider issues in the state. Before that, we had some on what's traditionally called the cost shift. And this is part of that process. And what we're trying to do is ensure that we're informed and the public's informed of strategies we can use and things we should be thinking about in Vermont for curbing some of the challenges we have in healthcare. So, I really appreciate Mr. Hage putting this together. It's a huge effort on his behalf and the team's behalf to do this. And they do it out of their own interests and in helping the state. So, thank you very much, Mr. Hage. I'll turn it to you. Chair Foster, thank you for the kind words. Good afternoon all. I'm Mark Hage. As Chair Foster said, I'm the director of benefit programs at the Vermont National Education Association, where the state's largest union with 12,000 members. So, while I'm here today in that capacity, I'm also a trust administrator for the Vermont Education Health Initiative, which serves 35,000 school employees, active and retired and their dependents. And we offer a range of health insurance benefits. My remarks today will be brief and then I want to turn things over to Marilyn Bartlett and Chris Deacon, who will introduce themselves and who will kick off this presentation. So, first, I want to thank the board for inviting Marilyn and Chris and myself to speak today. And also, I want to express my gratitude to Susan Barrett, who worked with me over a long stretch to make this event possible. She was very patient and gracious. In May of last year, while addressing this body with fellow healthcare reform advocates, and we spoke to a variety of topics, at that time I urged you to consider reference-based pricing, benchmark to Medicare rates as a way to reimburse our hospitals fairly. My position on this matter has not wavered. Indeed, it is even more resolute. And I was inspired to make that recommendation last year in large measure because of what Marilyn Bartlett had accomplished in Montana. When I received news of that event, I must confess, well, there's very little that surprises me anymore in the world of health insurance and health care. I was stunned by that news. And in part because I had been told for 20 years, it wasn't possible to actually lower healthcare costs and hospital costs in particular without compromising access to care. And Marilyn proved that that was not indeed the case. In due course, Marilyn introduced me to Chris Deacon and her exceptional work, formally on behalf of the state of New Jersey, and now as an independent consultant in other domains. Both of these individuals have been incredibly valuable to me as counselors, and I have a great deal to thank them for. They've been very gracious with their time as well. Since the Montana Initiative, other states to varying degrees have followed Montana's example. Oregon, North Carolina, Colorado, Washington, and Nevada. And more will be coming. I have no doubt of that. And this is because hospital prices, as we know, are a major driving force behind escalating healthcare costs, causing an immense amount of financial and medical harm to individuals, families and employers, both public and private sector. And I'm someone who takes calls every single day from school employees and their families, or from school district personnel who are struggling with this reality. We certainly need our hospitals, and we need them to be adequately and sustainably financed. On those points, there's no disagreement, but we need prices to come down. We need hospital care to be far more affordable and transparent and without the wild and irrational price variations for the same services statewide. What you'll hear today from Marilyn and Chris affirms that we do not have to find ourselves trapped every year, ritualistically, in expressions of anger, freedom or hopelessness as hospital prices continue to rise and as healthcare becomes less affordable and less accessible. The systemic problems in healthcare are human made, which means they can be overcome by human resolve and by empirically grounded reforms and public regulation that's dedicated to the well-being of all and to models of financing that are sustainable and accountable to all. So I will end these remarks where I began last May. I still continue to believe passionately that reference based pricing deserves our service and sustained attention. So thank you. And I'll let Marilyn and Chris, as I said, introduce themselves and get to the heart of the matter. Marilyn, would you like to start? Yes, I'm Marilyn Bartlett, Senior Policy Fellow with Nashville. And I'll be doing a little bit of a presentation today about the Montana story and some things that we're working on further with a focus on reference based pricing. And I just wanted to add that we've done a lot of work from Nashville's level to support Indiana. Indiana really worked hard and they just both parts of the legislature, the house and the Senate just passed HB 1004. Capping hospital prices is a multiple of Medicare. The original intent at the original language was 260%. I believe that's now 285%. The economic study that was done shows that that would save the citizens of Indiana close to 1.3 billion. So that now is at the governor's desk for hopeful approval. So I just wanted to add that to the bucket, but Chris, you take the lead on this. Sure. Thanks, Marilyn. And thank you so much. It's such an honor to come speak with you all and the important work that you're doing to bring change and innovation and promote high quality, affordable healthcare for Vermont. So I'm just going to do sort of a brief intro to what is reference based pricing and in particular, how does reference based pricing fit into the current political regulatory dynamic with some changes being discussed in Washington on site neutrality, transparency, etc. and really see how reference based pricing fits into that and can fit into that. A little bit more background about me. I'm a lawyer by training. I'm not a clinician. Don't throw things at your screen. I came to healthcare sort of later in my career after being engaged in private practice as a deputy attorney general for the state of New Jersey and then assistant counsel to the governor's office where I was then asked to run a state health plan for about 820,000 public sector lives, one of the largest health plans in the country. And we did some really good work, but I was able to see firsthand really, you know, some of the misaligned incentives in healthcare and how difficult it can be for policy leaders to stand up and make difficult decisions to make healthcare more affordable and accessible for their citizens and for members. So with that, I'm going to jump right in. I'm going to give again a bit of background about reference based pricing and then I'm going to turn it over to Maryland to really review the Montana story and share some more specific financial information with respect to hospitals, hospital system in Vermont specifically with the reference based pricing background. So reference based pricing is a healthcare strategy that sets limits on how much a payer will pay for certain medical procedures, treatments, services, drugs, etc., based on a benchmark or reference price. You know, in this approach really can be beneficial for a few reasons. First, cost control. By using reference based pricing, payers can set a limit on how much they're willing to pay for certain medical procedures, treatments and services. Obviously, this helps to control costs and prevent price inflation and certainly in the sense of hospital prices, runaway price inflation. Transparency, reference based pricing really lends itself to a more transparent world. It allows for transparency and pricing and helps patients and payers be able and payers, I mean, self-funded entities in this purchasing on members behalf to compare prices across different providers, hospitals and medical facilities. We can then make informed decisions about the healthcare that we're purchasing for ourselves and the healthcare that we're purchasing on behalf of our members if we're an employer purchaser. Competition. Reference based pricing can promote competition amongst healthcare providers by encouraging them to offer services at a competitive price, a competitive and transparent price, that falls within that reference price range. They can then differentiate themselves based on things like quality, right, and member experience, which is something that I think we all can agree we want to improve upon. Inevitably, this leads to lower prices for patients. And then finally, value-based care. Reference based pricing doesn't supplant or sort of, it's not mutually exclusive with value-based care. In fact, it can incentivize healthcare providers to really focus on delivering high cost, I'm sorry, high quality cost effective care that meets the needs of patients. And in this way, patients and those that are purchasing on their behalf receive the best value for their healthcare dollar. So in summary, reference-based pricing can be an important tool for controlling healthcare costs and promoting some really key characteristics that we want to see in the market. And that's transparency, increased competition, and this increased movement towards a value-based care model. And I believe that the Green Mountain Care Board's cost containment efforts can really be augmented, if you will, through these healthcare cost control mechanisms. I also want to address, as I mentioned briefly, how reference-based pricing can fit sort of into some of the national conversations about additional cost control methods, and one of them being site neutrality, site neutral payments. I had the privilege of being in Washington with, both with Maryland and with another team before the House Energy and Commerce Committee, as well as Ways and Means, and site neutrality was the issue du jour in addition to beating up on PBMs, but that's sort of old news. Site neutrality definitely took a close second. So it's important to note here that site neutral payments and reference-based pricing are models that can absolutely coexist in the healthcare system and the payment system, although they are not the same thing. Site neutral payments refer to a payment methodology in which medical services are reimbursed at the same rate, regardless of site of care. So for example, if a patient receives an MRI at a hospital, the hospital may be paid more than if the patient receives that MRI at an outpatient imaging center. So site neutral payments are intended to really address this disparity by paying the same amount for the exact same service, regardless of the setting of that service. And reference-based pricing, on the other hand, as we just discussed, really sets a limit on how much the payer will pay for a particular medical service, whether that is being done at a site neutral level based on a reference price. So while site neutral payments seek to eliminate the payment disparity based on setting of care, reference-based pricing is the tool that we then put in place to control the cost by setting a limit on what we will pay for that particular service. So these two payment methodologies, which are innovative and have been proven to reduce spend, can absolutely be used together to promote a more efficient and cost-effective healthcare delivery model. So that's really it for me, sort of setting the stage. And I'm going to turn it over to the star of the show, Marilyn, to discuss the Montana model. And there will definitely be time after, you know, for questions and discussion. Marilyn, over to you. You're on mute, Marilyn. You know, I was going to say, Chris talks about being an attorney and don't throw things at the screen. Well, I'm an accountant, so don't fall asleep, okay? Because we tend to bore everyone. Chris, could you do the slideshow for me or Mark? I don't seem to be able to see how to bring it up. Maybe. Do not have it teed up, Mark. Do you? Oh, did it come up? I'm seeing something coming up right now. Is mine coming up? I do see that while somebody is a presenter. I think I am. Is my slideshow up? Not yet. It looks like we're looking at your screen. It says, I think this is your screen. Do you have this screen saver? Can you see the screen saver? Oh, darn. I went ahead and stopped sharing. Marilyn, it's Vicki. I don't want to interrupt you, but hi, folks. I'm with Nash P, so I could maybe help Marilyn a little bit. You're seeing on the top, it says teams, you got to go to your apps and pull up the PowerPoint. I hit, I'm on share and just pulled up my, I pulled up PowerPoint. There you go. Is it up? Now you got to just go to the file, whatever it is, probably. Or you can go to share and go to Windows. If it's up on your screen in a window, you can do that too. You guys make this sound so easy. I seem to be able to do this in Zoom, but I have a heck of a time when I try to do it in Teams. I really apologize. I know all your time is so limited and then I seem to have a difficult time. Mark or Marilyn, if you want to send me those slides in an email, I can put them up on the screen for you. Great. That's so great. Mark, do you have them handy the email I send or I can send the email? Why don't you just, I don't know if I have the most current version, Marilyn. Great. I will definitely send it. And again, I apologize. No, no apology needed. I should have thought of this beforehand and asked for these so we could do it. So I apologize to you. I should have thought of this before and I didn't. So Ms. Bartlett, do you have Kristen Logenes' email by chance? Yes, I do. Okay, great. Send it to that email. Yeah, that would be wonderful. Yeah. Okay. I apologize. I'm actually with my sister, we're on a little bit of a trip at this condo in Lake Tahoe and which we just got about a foot of fresh snow last night. So I truly do apologize that it's not going quite like I thought. And we can see your screen still. You might want to share your screen, Marilyn. This is Susan. Thank you. Nothing like 10 people sharing ideas with you. You are so great. And I think there are very probably jealous people from Vermont who would like to be skiing in that snow, believe it or not. Great. Well, I think you're probably right. Okay. So I need to stop sharing. And I think that happened. And I so apologize. I have very slow internet connection. It appears. It's okay. It's giving a couple board members time to book tickets to Lake Tahoe for the season. Come on up. I switched my, Marilyn's Chris, I switched my computer so that I now have access to be able to, if I, somebody could allow me to share, I can pull the slides up. Great. And how do we allow Chris to share? Can you do that, Susan? Oh, there we go. Oh, good. Got it. Gosh, see, we got to have the lawyer do this, not the account. All right. You guys let me know when you see, on my end, as soon as I'm presenting. We see a serene scene of a river surrounded by, it's not the Colorado because it looks full, but it looks like the Colorado. You got it yet? My, my screen shows I'm sharing the, it looks like you are, but I don't see a PowerPoint presentation. Okay. If it's nothing yet, my screen shows that I'm sharing and the PowerPoint is pulled up. So we definitely see your screen. It has this picture of this river surrounded by mountains and trees and, but there is no PowerPoint presenting it. I think, Kristen, do you by chance have it? Because it might be easier if you just do it, Kristen. Not yet. Why don't I send Kristen what I have? That'd be great. I'm just having really internet connection problems, but I think I could. That's so strange on my end. And it is on mine because it, I didn't. Ms. Barley, why don't we do this? We can either take just like four minutes to get this sorted out, which is totally fine. Why don't we do that? Why don't we just take five minutes and we'll get it. It'll be easier, I think. I still appreciate it. Okay. So we'll come back in five minutes. A little just 131 and we'll call you and make sure we have it okay on our end. And I apologize for not having got this in order. We'll call you in a minute. Okay, and we'll be back in five. Kristen, Susan, I just sent it to both of you. Okay. Thank you. Let me know if you don't get it. Okay. We're going to be in five minutes. I'm so sorry. Don't worry. Don't worry about it. It's okay. This happens. It happens in our virtual world. We have to see the red, the red thing around the screen when you're sharing it, when you're in Teams. It shows up like red around the screen. If you're not seeing that, then it's not sharing. I've never been able to share in Teams. I am so sorry. It has never worked on this. Kristen, did my get through to you? No, not yet. Jesus. What's crazy is, like, I see my desktop is sharing, but my desktop, I had then the whole presentation up and it's just stuck on my screensaver, which is so strange. Susan, did mine get through to you? I didn't see it. I just checked. If somebody could send your slides to Kristen Lajunas, that would be the best course of action. Okay. I'm going to do that right now. I just sent them, Chris, 126. Kristen Lajunas, why don't you just let us know when you receive them? We'll do. Susan, you didn't get mine either? My God, what the heck's going on? I sent. Oh, wait. I just thought I have it now. It's okay. Okay. And Kristen received it too. So we have a copy of the slides. I don't know if they're final, final, but I just sent it also. Okay. We'll take what you sent, Marilyn, when Kristen gets that. And we have backup from Mark. It seems like everything's going to work out, but it reminds me, I had the same trouble one time doing a presentation in Teams and I had to change the view, the PowerPoint view. I had an in presenter mode. And for some reason, if you have two screens, sometimes it gets messed up. So I just reverted to the mode where I build slides and that worked better. And I don't know why. And I can't promise that it helped now, but the view, the mode of PowerPoint seems to make a difference sometimes. Oh, that's good to know. Yeah, try. But sometimes the gods are just finicky. Chris, I really liked your comments on site neutrality. And I thought that was the clearest explanation I've ever heard of bringing the two together because even with site neutrality, how do you know how to set the price? Yep. Yeah. So. There are really two sides of a coin. Yeah. Yeah. I really appreciate it. I mean, neutrality means nothing if the price is set. Yeah. So just to report on the internet action here, we received Mark's copy, but apparently we haven't seen your, we haven't seen yours come through Maryland. It should be the same, right? And we'll just use Mark's copy. Yeah, use mine. That's fine. It's close enough. Yeah, they're close enough. Exactly. Okay. I just received Maryland's. Give me two seconds. Okay. White things are slow, but if we are going to cross the country, I guess I can't. In a snowstorm. No, I should have put it in a balloon and sent it. Sorry, that was probably incorrect. We got a lot of rain here. It might not have made it. No. Yeah, you got snow. We got rain. There we go. Oh, thank you. Thank you. Thank you. Kristen, I really appreciate it. And I appreciate you taking care of the slides. So just let me know when you want me to start talking about them. I'm ready when you are. Okay. And everybody's back online. I think it looks like we have everyone. Yes, please. Sorry about that. So the issue was you're on Macbooks and I guess it doesn't work well with teams. So it looks like it's working well now though. So please go ahead. Thank you very much. Thank you so much for saying that because you have solved my dilemma. I am on a Mac. It does not work. Excuse me. Well, thank you so much for inviting us to present and Marcus. It's been a pleasure working with you and knowing you over these last couple, three years. So and Chris too, but I want to talk a little bit about reference based pricing and our focus has always been that it's got to be driven by data. So you're going to see how we did this in Montana and that it was driven by data. Next slide, please. So what happened in Montana was in early 2015, I was recruited to take over the plan and my sole focus was to turn it around financially. And what you see here is the red line was the projection that the actuary gave the Montana legislature of the state employee health plan. It had just come off a year of losing 28 million and it was projected to have reserves of minus 9 million in just two years. And so I was given the directive to turn this around. So we did several things. The biggest of course was reference based pricing contracts with the hospitals. We did contracts because we did not want any balance filling. Knowing that when you do contract, you probably do give up some of that cost savings with all Montana hospitals. We also did a transparent pass through pharmacy benefit. We actually eliminated CVS from the pharmacy chain because they would not accept our pricing. We did onsite primary care clinics. That's a was a great savings and an improvement of access and quality. But to do this, I needed a new TPA, a new PBM, a new consultant. We formed our own data warehouse and our own administration system. So the blue line shows you where we actually were in December 2017, a spread of 121 million. And this was all driven by data and pretty fast because we had to save the plan from bankruptcy. So as a result, there's been no rate increases to either the state or the members for seven years projected through 2023. State employees were able to receive pay raises. We ended up with more money in our reserves in 2017 than the Montana General Fund. So in 2017, the legislature passed a bill to take a premium holiday for the state agencies in effect returning 25 million to the state. And then in 2021, it was done again for 27 million because the plan has remained overfunded. So it really was successful financially. Next slide. So what we decided to do was 43% of our plan span were the Montana hospitals. And of that, only 13% was the critical access hospital spend. 87% were the 11 larger acute care hospitals. We chose Medicare price because it was a common reference to overcome charge masters and difference in billing practices. Medicare is the largest healthcare payer in the world. The Medicare payments are intended to be fair through DRGs, APCs, outlier payments, etc. And the payments are adjusted to factors outside hospital control. So they're adjusted for wage rates, case mix severity, outlier transfer cases, teaching intensity, interest, low income shares, a variety of things. And I had read thoroughly the MedPak report to know how those rates were set. And they're basically set to allow an efficient hospital to make a small profit up to 2%. And the reason that Medicare does that is that they want hospitals to continue to focus on cost structures and on their expenses and become more efficient. Now, the most recent MedPak report of March 2023, they expect the margins to be minus 10% on Medicare payments, but break even for efficient hospitals. And I contacted CMS to try to learn a little bit more about efficient hospitals, but they have made that data private. I wasn't able to access exactly their measurements. But it is in true in what we have found many hospitals make a profit. Here in Montana, our most efficient hospital, they manage it to be able to make a profit on Medicare. And they also have high quality numbers too. Next slide. So the first thing I did was run my claims through a Medicare repricer years worth of claims. And this is for the larger facilities. Now, this shows you what they came out on the claims, what they were charging as an overall multiple of Medicare for that specific hospital. And I knew my utilization patterns at these hospitals, and I knew the prices. And so we thought, okay, we've got to get this in fast. We've got to negotiate. Can we kind of target on outpatient somewhere around 225% would be our goal. But we knew that we needed to contract separately with each hospital. And that some would need a glide path to be able to come down from that 611%. So there'd be all different rates, but we had a target range. Next slide. Inpatient, we had quite a variety. And we targeted that particular one around 210%. Now, what is interesting with our strategy is we approached the fourth hospital, hospital O and hospital N. They're in two different cities. And both of those hospitals are doing very well managing their costs. And they have the highest quality ratings too. So our strategy once we had this data was to come up with a template that we wanted to use for a contract. And we approached those two hospitals first, because they had lower cost and higher quality. And in those negotiations, we began calling them the efficient hospitals and trying to get the others to come to that efficient range. We also made arrangements that the governor would announce our initiative when it went live on July 1st, 2000. God, I can never remember. 16. That he would announce at their hospitals and praise them. And those two hospitals helped us work on our method. Next slide. So this became our strategy. 17. How can we take this range of 271 points? This is blended inpatient outpatient costs. How could we take that and bring that blended rate down and narrow that margin and bring those higher costs down to the lower that we knew were that were possible? And how can we do that through contracting in the hospital association will come back and say that balance that there'll be balance bills? Well, there's not. We did contracting. There was no balance billing. Next slide. And even more important was once we got that range down, we were no longer going to be tied to that trend. The actuary put this sheet together for us. And at that point, we were calling it transparent pricing. We were not calling it reference price reference base pricing. So you'll see the dark bar is what was actually achieved in 14 and 15. And then in 16, what was projected with that annual trend the plan was experiencing. And you'll see that we brought it down. But then also you benefit as the rate is only going to go up unless the multiple is renegotiated by whatever the Medicare rate goes up. So you've got secured future savings you can count on. Next slide. Oh, I must have put that in twice. Sorry. Next slide. So what came from that is the Nashville hospital cost tool. And while I was working on this with our TPA and with our actuary, we delved really deep not only into our own claims data, but into Medicare cost reports. Because when I sat across this table from a hospital, I needed to know, are you really losing on Medicaid? And if so, how much are you losing? Because, and I'm glad you've had your presentations on cost shift, because that's what we would hear and or price shift. That's what we would hear from the hospital. So I needed to know that I needed to know what they were losing on Medicare. If they were losing, I needed to know the supplemental payments they were getting. I needed to know their other investments. So I delved into all of their Medicare cost reports and their audit financial statements so we could have real data. So from the Excel spreadsheets that I had, Excel that I had developed, Mathematica funded by the Arnold Foundation, and then working alongside Mathematica and Rice University, we developed the Medicare or the NASHP hospital cost tool. It pulls on the HICRIS data, which is 11 years of hospital filed Medicare cost reports. And our particular application is calculates about 300 different metrics. And we have probably about 100 in the actual tool, but through NASHP, we can get access to all of them. So we put this together to help states and to help employers kind of have a beginning to an approach like we had used in Montana. Next slide. So some of the things that you can see, I'm looking at one particular, this hospital here, is UV Medical Center. And I apologize, I think I used the wrong initials than you probably use in Vermont. And so one of the things we look at is operating profit. This is to provide direct patient care by the hospital. It's not going to include physician direct patient care, as that is built separately. So we're looking at operating profit. And I know the numbers are kind of small, but you can start seeing that it's been around 20%, but it dropped extensively during the COVID years, and then coming back up. And a lot of that is a function of the revenue and the expenses. Now, within the Medicare cost reports, any federal funding there or state funding that came for COVID relief, such as the PRF funds, FEMA funds, whatever, are not included here. They'll be included in net income. Next slide. So this is net profit. This is the net profit margin of the hospital as they reported it. And this will include any of the federal funding that came in. It's going to include their 340B profits that they're making and several of their other facilities that are right, or entities that are right under the hospital. So you'll see it's up to about 7%, but you can see the range has bounced quite a bit. Next slide. Now, this is interesting. This is uncompensated care. And uncompensated care, the purple line is net charity care cost. And the blue line is uninsured and bad debt. And we're showing it here as a percentage of net patient revenue. So how much revenue did that hospital take in that they had to use for the cost of uncompensated care? And it's consistently been under 1%. So you're going to wonder, what's that big drop in 2021? And it's actually to, they made profit because of the federal uninsured pool funds that came in, the COVID uninsured pool funds. And this isn't unlike any other health system. But part of what we're using this for with different states is working on the whole area of community benefit and wanting to get a real picture of the cost. So this is cost. This isn't charge master. This is cost. Next slide. Now, this is a little confusing, but we look at payer mix. This is really critical. When I was negotiating in Montana, I remember one hospital that actually went to the press and said they were losing 40% on Medicaid and the state could not do this to them. So I needed to know what is your payer mix? How much of your payer mix is Medicaid? Because if you're losing 40% on 50% of your payer mix is a whole different story than if your payer mix is really 9%. So I needed to know those two. You've got to weigh them together. And we have the charts that do weigh those two. This one just shows you payer mix. Then there's a chart that shows you profit loss by payer mix. And then there's a chart that weights them. So you can kind of get a feel. You need to understand that mix of what's going on with the hospital. Now, this is UB Medical Center. And again, you'll see the lower line, which is the orange, is lower. And that's your uncompensated care basically. And then you start getting a view of Medicare. It looks like Medicaid's been running under 15%. But then I like watching what's happening with Medicare and MA plans. Because as you see MA plans become more the market, you see the decrease in the Medicare. And consistently, you're going to see commercial is the highest. But you need to kind of get a feel and every hospital is going to be different and getting a mix of that. Next slide. So one thing you really should be looking at is the cost-to-charge ratio. And we frequently hear hospitals say we're doing great at lowering our cost-to-charge ratio. But what does that mean? Because there's two components to it. If charges go up because it's the dominate, denominator, your cost-to-charge ratio is going to come down. So that's not always a really positive thing. So we urge you to look at both sides of it. And if you look at the chart on the right, you'll see that blue is the operating cost. Now, the operating costs of this facility have been going up faster than I typically see. And we can get to the medians for different states, the medians for different size hospitals, etc. But this one, that blue line is showing a little more trajectory than we usually see. But then the yellow line is showing you what is happening with charges. So I use this chart a lot to say to insurance companies, why am I going to pay a discount off a charge? I would much rather pay a cost plus and then get more knowledgeable on what those costs are. To pay an arbitrary discount off of basically a made-up charge number never made sense to me as an accountant. Next slide. So now we're getting into some labor metrics. And I just throw this out there as an example of things to be looking at. With COVID, we started hearing hospitals talking about the high cost of contract labor and labor costs going up now. So we needed to figure this out. So we delved more into the Medicare cost reports. And we've separated costs out by direct patient care. Now this does not include direct physician patient care. It will include the 24-7 doctors, physicians that are in intensive care units or emergency care units. And then overhead will be hospital dietary maintenance, administration, they do lump executive management and admin together. And then home office. And then we're also able to split these out by is it contracted or is it hospital staff. And in looking at this with everybody's data, I'm amazed at contracted administration. We see rates up to $500 an hour. And so then you dig into, well, who owns that contracted agency? And that's been interesting too. So what happened when pulling all this data together, we only put direct patient care charts and data out on the hospital cost tool. We've got some deeper research projects underway. We're looking at FTE staffing ratios. We're looking at contract versus staff executive comp. And we're working very in depth with two specific states, Department of Labor, Mathematica and RICE to get more into staffing. So that's more to come your way. Next slide. So I did look at this hospital, UV Medical Center, direct patient care. And the thing that's interesting is if you look at the slide on the left, that is the percentage direct patient care labor is a total labor cost for that hospital. Now, the green one will show you it includes contracted and hospital staff. And then we've got further charts that show you the different rates and shows you the FTE counts. But then if you look on the right, this is how total labor cost has gone up. So while total labor cost has gone up dramatically, direct patient care as a percentage of it really has kind of decreased. So this is what our research projects are working on. Where is the bulk of the labor cost going to? Next slide. So breakeven analysis is what we used in Montana and what other states are using and what has been used in conjunction with RAND numbers. And we used extensively with the recent Indiana project for their bill. But we calculate what the hospital would be required to receive in revenue to meet their expenses. We actually have four levels of breakeven that we calculate, but we're only showing one on the online version because that is what states requested. And the one that is being used is called the commercial breakeven. And it's how much would you need to pay as commercial payers to cover your own patient expenses, any losses from other payers, so any shortfall for Medicare, Medicaid, any uncompensated care, and then also all Medicare disallowed costs. So Medicare will disallow costs that they feel are not directly associated with patient care. We'll pull those in, but we're also pulling in other income and other expense. So now physician direct patient services are not included in the breakeven because those are billed and reimbursed through other methods. Now the breakeven rates we calculate and we show as a multiple of Medicare rates for comparability. Next slide. So this is Vermont hospitals compared to at the median of Vermont compared to national. And you see the national line is purple and it's interesting because most hospitals will level out at a point. So I'm cautious about using a breakeven number for one year. You kind of need to look at that trend. Now you're going to see it dropping over these last few years because of the large amounts that came in from the federal government to supplement payments. Now you can take a look at Vermont then it's more the pink line. And you can see it spiking up around a 160, but it kind of leveled out coming down more close to the national average and then dropping below that national average in these recent years on that. And we can look at the details of the report to see, you know, reasons for that. Next slide. Now I drilled down to 2021, but again I say that caution, you want to look at years and on the tool you can. This is a chart from the online tool because I like to look at it by bed size. The breakeven number for bed size and of course you have only one hospital in that higher range and that breakeven point. Now it's not surprising to me that the breakeven point on critical access hospitals is lower. And the reason being is that the Medicare rate that is charged to hospitals or paid by Medicare is the 101% of allowable costs. It's not under the PPS or the O PPS system. It is different and then also you can kind of follow it depends on every state is different. There is sometimes additional funding that goes into other income for these critical access hospitals. But it's interesting to look by bed size and specific hospitals if that's of interest to you. Next slide. So this is the commercial breakeven for the hospital that I was presenting as an example, UV Medical Center. And of course it's the largest hospital in it parallel, but it's coming in around 160%. And as I dug into this a little bit more, it appears that that they're cost arising a little faster than other hospitals. And so I did not do research into as to why or look at it deeply. But that might be something I'm sure your care board is well aware of what those cost drivers are. Next slide. Oh this is really, I thought this would be easier to understand but it didn't. I wanted to compare the hospital to Mary Hitchcock Memorial Hospital and Albany Medical Center because these seem to be closer to you and kind of the same sort of a teaching hospital center. It was interesting that Albany has run pretty flat and I did not again go into it. I was it was interesting to me that the other two the one in your neighboring state New Hampshire and then the University of Vermont, they're up and down, up and down. There's kind of not a flatter trend, but I thought that this was a fairly interesting comparison when you look at the detail of the numbers. Next slide. So the next thing I do is I go into the audit of financial statements and this is for UVHN University of Vermont Health Network. And here I just summarized when the audit of financial statements they will include all the holdings. So if you look on the left there is just a lot of different holdings that this company has or that I'm going to call it a network house. Hospitals, nursing homes, foundations, imaging centers, physician centers, just kind of a variety of different things. You'll see a lot of ownership of some of these will have they have a company called Health Network Venture Holdings, an investment firm basically. You'll see some of them will have management that they'll own contracted management staff and you'll see a lot of that. So it's interesting to look at what the ownership is. Now also within this ownership is UV Medical Center and then UV Medical Center under it has these companies listed that they own these companies, a Medical Center Condominium Association, Executive Services. I did not delve in to know what that meant but I'm sure you know from your Green Mountain Care Board anyway whether that's an executive service where they contract out management services. I'm not really sure but that all rolls up to that one company. Next slide. So if we look at the whole big conglomerate you can see that the whole big conglomerate of all the companies I compared net profit margin is running like between around four a little lower than four percent but has taken a big drop and that big drop it shows a ten percent drop but nine percent of that is from unrealized investment losses. So they have a large investment portfolio and with a stock market as we all know from our 401ks as well as our own investments we saw those big drops so it's it's particularly that. So when we hear in the news of all of the losses that these big systems are experiencing it's important to know a little more it because we are seeing increased expenses we're seeing reduction of COVID funds so we need to be attentive to that. Next slide. I wanted to look at their financial assets so this is the market value on that day over the years and this is including the 240 million in unrealized investment losses that happened in 2022 and this shows you cash and cash equivalents as well as financial investments and this is what we're consistently finding is that the level of financial investments is back to pre-COVID levels. So yes a lot of money's been lost but a lot of it was COVID funded money. Next slide. It's interesting because the Fitch I read the bond filings because the they have municipal bonds and the Fitch report cautioned they said they have a highly they have a high reliance on their 340B drug program and I think you know Green Mountain Care Board I'm sure looks at that closely but I personally got stung by that I felt as a state of Montana plan because I was paying $5,000 for Unera for my patient or my members but I was getting a pretty good rebate close to $2,000 and all of a sudden in Helena all my rebates went away for all those patients and I couldn't understand why so of course I'm on the phone calling Abbie and they it turns out that the hospital in Helena had become 340B which meant I lose my rebates so now I'm paying $5,000 and as I tracked it down with the hospital they were now considered a covered entity and they could buy that drug for three cents. So you basically have shifted that savings that you had as a health plan over to the covered entity so I do a lot of work in the 340B program and Chris is doing a lot of work in it too so I dug in to see what exactly are the three what why is Fitch saying this and they disclosed that over time the system as a whole is kind of but I carved out just the lighter green part is what the one hospital is so 340B is something to look at it's a funding source for hospitals too which I'm sure you look at and I'm bored everyone to death with my accounting stuff. Next slide that's it so I hope that it's been somewhat helpful that I guess my parting words would be that we were very successful in Montana in meeting our goal improving access but we did online centers and stuff and we've taken it to a new level of data. I think any decision has to be data driven and Chris back to you. Chris I think you're muted. Mark do you want do you have any comments? No I'm just waiting for Chris to respond to your invitation. Miss Deacon you can just shake your head yes or no. I'm here sorry I could hear everything you were saying and I could not locate the unmute so I apologize. Yeah so I think you know with that the Montana story and with the background on reference-based pricing generally you know I don't know if Mark if it's an appropriate time to open it up to discussion and questions I think that Marilyn and I are prepared to you know walk through any concerns you know we both run major health plans and certainly understand the complex dynamic between the hospitals the carriers government and the state all stakeholders involved in such a process. I think questions would be appropriate right now please if folks have them. Okay so I think I think what we'll do is we have a normal process where we go through the board members first the healthcare advocate and then we open up to the public so we'll go in that direction if that's okay with you all. So I'll turn it I'll turn to my fellow board members to go ahead and ask any questions or make any comments that they may have. I have a couple questions basically to clarify for myself. Thank you Marilyn and thank you Chris. Marilyn on your slide 18 it showed and maybe our Kristen could bring up the slides so the breakeven analysis and with this it there are several places where the red line dips below 100 percent in 2013 2020 and 2021. Is it correct to interpret that as the hospital shown here could break even with commercial prices less than 100 percent of what Medicare reimburses? Yes that's correct and this is the median for all of the hospitals and that's absolutely correct and what's going to influence that quite a bit is if they're making profits on Medicare what is really influencing that also is bringing in other income and other income will include investment income it's not supposed to include unrealized it's only supposed to include investment income and then any of the federal payments or state payments that were made through COVID any of the supplemental payments that came in we find like with well in teaching hospitals you're going to see a lot of funding supplemental for teaching facilities and that so you're right and probably the biggest is other income that they could make it on the Medicare reimbursement those those times. Great thank you and I think that's it's important I always need to remind myself that Medicare payments to hospitals are adjusted upward for morality of a hospital's world if a hospital is a teaching hospital their Medicare payments are greater than if a non-teaching hospital if a hospital has what's considered a disproportionate share of low-income individuals that hospital receives higher payments from Medicare so Medicare is already paying more for those things. Yeah and then initiatives on quality or they had HIT for their information there's some different supplements coming in. Yeah the um I'm not sure which slide it was but the slide on ownership in different companies yeah um you may not be able to say more but I'm interested in that the um there that one in twenty-two um could you say more about the um what's the executive services company? Well that's interesting I picked this up from the audited financial statement it just listed that and I would think probably Green Mountain Care Board would have more information on exactly what that is but it the audited financial statements are a wealth of information and this showed that these five companies rolled up to that now what I've seen in others and I can't say this is it but what I've seen on executive services is I've seen a health system owner company for executive services or management services and then they sell their services to go manage different hospitals and sometimes it's managing hospitals within that health system and I typically see much higher uh rates paid than I see across the market so that that's a thing to look at you know it may be a source where they're selling to outside and making an income but it's it would be interesting to know more about that. And oftentimes and again I'm not speaking to Vermont specifically but what I've seen with these executive services arrangements is when a hospital is either purchased or there's a merger or acquisition the executive services contract is a way that the the purchasing entity or the selling entity can continue to pay some you know if I've now I'm no longer the CEO but I'm consulting too I can now be paid as part of an executive services arrangement so these are also really common in those instances when you have mergers and consolidation or mergers and acquisitions in hospitals. Thank you. Similarly you made some points about the 340B program. Yes. Could you walk me through that again please? I want to make sure that I understand how how that works with a larger facility consolidates or acquires smaller facilities. What happens with the 340B program? Yes and Chris I'll ask you to supplement if I skip something. The basis of a 340B program is that uh first the hospital let's say there are several types but let's say the hospital is registered as a covered entity and if you're a disproportionate share hospital a rural referral center like Cleveland Clinic there's several categories but the hospital is a covered entity and if a physician is either employed or contracted under that covered entity then any scripts that that doctor writes for what is considered an eligible patient when an eligible patient is someone whose medical record is maintained by that entity etc then that script becomes eligible for 340B pricing wherever it is filled so the issue there is that a health system or a hospital that purchases smaller hospitals or purchases especially physician practices and rolls them into their entity they then become eligible to have 340B scripts from that so that you end up with um that savings right across the board and I don't know if that was clear Chris can you help me out there oh Chris you're on mute I've kept it easy now no I think it's captured at Maryland it's you know there's and the one cautionary note here is that you know the 340B drug program I would say beating up on pbms um site neutrality 340B was also a hot topic in Washington and so the reliance on the net income from the 340B drug program is is interesting because there there's a lot of discussion on that um that profit and whether or not it's being used prudently by um or should be used by the hospitals in this manner so I would just add that caveat that this is also a very hot topic to keep your eye on it's yeah I we need to double check and and with our staff I'm just saying this to help us double check but my understanding of the program is that hospitals that qualify for the program are able to purchase medications at a pretty steep discount that's great and then receive back full price payments yeah so as a large hospital acquires smaller entities or private practices it will receive discounts for purchasing the medicine but receive full reimbursement it's meant to help hospitals that are struggling or treat a disproportionate share of low-income individuals but I don't know enough about our state yet but around the country um this has led to um it's generated a lot of concerns with mergers and acquisitions is is that a correct statement yeah 100 percent and I mean just to give a very concrete example I think everybody on the call likely knows the cost of humera and what that's cost the country in terms of for health plans and and payers um humera can be purchased by a 340b covered entity for about three cents a month right and that drug is being charged at full price often to the commercial payers and the spread between the three cents a month and the full price of humera is is being kept by the hospitals essentially sometimes it is you know to provide disproportionate um you know because they're in a low-income community and they're providing additional benefits or uncompensated care but I think we know again as mergers and consolidation have sort of eaten up um a lot of these smaller entities uh that's not always the case thank you one final thing um we've talked about reference-based pricing a earlier speaker um Chris Whaley from Rand you I think you might be familiar with him he talks about caps and I think it's um they're it's similar um I'm wondering if you've heard of or seen places set different reference prices for primary care versus specialty care in a sense to incentivize primary care providers to move to a state if the reference the overall reference for payments to hot to hospitals was set at 175 175 percent of medicare have you seen any any place or do you know any reason why we could not try having 175 for one set of providers and 200 for primary care yeah um I will just and I think I've got this right when I did this in Montana and I said it all differently we did this I just showed you what we did with hospitals but with providers we did run those claims through and Montana was really low on what we were paying and we increased primary care providers to 165 percent of medicare we gave them a big bump and then uh we went ahead and left that same pricing for those within the health system for the direct for the pharmacy or I mean excuse me for physician services so we did increase that and we did but we did that specialty and primary both but you raised a good point and I know other purchasers have considered also in the behavioral health space because in order to make the network more accessible the network can't pay behavioral health specialists you know pennies on the dollar for what their time is worth and so increasing that rate but other states have also not just reference based but you know they set investment targets for primary care and you know we need to spend at least 10 percent of our spend on primary care those types of models exist as well yeah so this type of model can um there can be a lot of flexibility in it yeah I think so definitely and what we did was we then took a lot of our savings we were getting and really put it into our onsite health centers we had five across the state that serves 73 percent of our members and that was our primary care home and that we put uh that that's where referrals occurred and then we did contracts with those health centers at 125 percent of medicare for independent standalone radiology ultrasound lab with independent groups so that became our primary care center thank you very much member merman or foams do you make questions or comments I can go for a few oh thank you all so much for these presentations really really interesting topics um we often talk about vermont being sort of an exceptionally different state as far as the health care landscape both within our hospitals primary care competition our reality um I imagine you might have heard some of that about Montana I was just wondering if you could sort of describe the the landscape of hospitals and hospital competition in montana oh certainly I'd be glad to we have 11 acute care hospitals of course we're a very very large state with uh our population is a million but our land mass is amazing so we have 11 acute care short term hospitals and 48 critical access hospitals but I think when we delved into it we saw that the 48 critical access hospitals were only 13 percent of our 43 percent spend so it was not that large and as we delved in there we looked at our utilization and we looked at the location and we looked at the services and we negotiated with those facilities we actually uh probably about four of them we raised the rates that we were paying three of them we lowered the rates because they were actually owned by the larger hospitals and it turned more into referral centers and charging high rates so we lowered them and modern one we didn't even make any change because we were paying 10,000 a year to them and every time we tried to get ahold of them the controller was out haying or taking care of the cows so you know we couldn't really get with them but um we did immediately legislatively because this was a state employee health plan every one of the rural areas had a legislator and the hospital association was very vocal that you're going to lose your critical access hospital the state's going to make you go broke etc so we worked very closely with the legislature that was my job and I reported to them quarterly and to one group of the rural areas monthly on what we were doing with specific negotiations and pull them in uh for Montana uh our critical access problem hospitals weren't our problem they were being uh funded fairly well uh they were going through different transitions what was a problem for us were those that were being purchased by the larger hospitals now we don't have a teaching hospital in Montana we have uh 11 acute care hospitals the major health systems were Sisters of Charity of Leavenworth and Providence and then uh about four were independent and with the health system ones those were the harder negotiations and um they were concerned about this moving across state lines but um I think uh we probably had some of the similar things legislatively or politically would be the same and I would my only advice would be look at each hospital separately stand alone and what your what the utilization was but even then more the financial picture. Chris do you have some to add to that? No and I wasn't on mute um I just wanted to make sure uh no I don't have anything to add I think that there are similarities but there's also a recognition that no state is the same and that this is can be a very flexible approach um that can be targeted and shaped um directly to your market and to your your very unique needs as a state. I agree and no matter what what option you choose or whatever thing you do I really can't speak enough about how much we learned by looking at hospital costs and hospital expenses not focusing on the revenue but what we learned by getting into the expenses 340B mergers and acquisitions I know it's painful but getting into that level of detail was really critical for us. Thank you for that um when you talk about the commercial break-even point um I think if we put up any of those slides you know it's some 120, 140, 160 percent of Medicare spend would be the commercial break-even point but yet uh I think in Vermont where are we about 225 percent or more of Medicare spend as our average um what is it Tom? 215. 215 what's the gap because that's a lot more than a 2 percent margin what what is 215 what was that or our average uh our average Medicare uh our commercial rates are about 215 percent of Medicare over the overall in the state so what's the difference between that 140, 160 percent and that 215 percent of Medicare where's that money going? Well our break-even is what the hospital would need to break even um with the rates there I would say you'd have to look at what else the hospital is spending the money on or whatever they're acquiring. Right yeah no I think that's right I mean I think it's the it's the question of the day right or you know the year um what where why is there a need to charge 250 or 215 when you're you could break even at 140 account for a healthy margin even at 10 percent we still have a delta and I think um if you look at some of the larger systems that are driving that higher rate the commercial rate at 215, 250, 300 um you'll probably you know drive down any highway and you'll see some some building occurring you might see some new wings you might see some um uh you know really renovations big new machines that need to be fed so I think that uh it's a cynical answer but it's the right one um you have to look and see where they're where they're spending their money um uh that might not necessarily be the most efficient use and I think a lot of it's going to that consolidation. That's a good point Chris and I think our our focus of break-even was we were saying we're not saying a hospital should break even but that spread is room for negotiation or room for really kind of figuring out what to do there but I think you're right going to mergers and consolidations lots of money going that direction. Do you when you look through the NASHP database do you find hospitals that are um successful and thriving with high quality and you know good access at those 100% Medicare break-even levels? Yeah we do. Is it common? I have not looked at it massively I usually look at the uh states you know uh because what I what what what our tool is is looking at the break-even but when I bring in the rand information is when I can start seeing those spreads and should they be yeah you know I've got one in Montana like I said that their goal was to make a profit on Medicare they are efficient and their quality is high so I I do see that um it's interesting and when you read read the MedPAC report well if you were a boring accountant you'd read the MedPAC reports but when you read those and you look at their methodology and what they're looking at and what they consider an efficient hospital you start getting a feel for what things the hospital could be doing to become more efficient and that's eye-opening but I think I'm gonna have to I'm gonna have to dig in. Okay and I think there is some data that one of your fellow members has done here Tom that is taking a look at that that specific question you're asking. Yeah well um thank you Marilyn it's I'm not an accountant but I also like MedPAC reports it's the easiest 600 page report I ever read um they're they're long but once you get used to them they're repetitive and there's a lot to lot to learn um the thing that interests me Dave that builds on your question is what proportion of hospitals across the U.S. could break even with commercial rates less than or equal to 100 percent of Medicare and that number according to the NASHP cost tool is about 39 percent of hospitals in the U.S. Many of them have outstanding quality measures. The one other question that I wanted to ask you is um I'm not quite sure if I understand with the 340B reliance how that adversely affects the commercial insured patients could could you you're the one I'm asking you though so yeah. I sure can answer that one. How it adversely affects is that the commercial pay person whether it's the employer health plan or the insurance plan they're paying the full cost so where I used to be paying in that situation I gave you I would be paying about three thousand for Humira because I paid the five thousand but I got a rebate so net of my two thousand rebate roughly I was paying three thousand and doing just fine but once that hospital became 340B and they owned most every physician in the town then every single and this was Helena Montana where 60 percent of the state employees lived in retirees too then all of a sudden I lost my rebate on all of those and I was paying five thousand for every single one and so what I had to do your rebate was from the pharmaceutical company or a direct rebate okay and for a pharmaceutical company cannot give a rebate on 340B drug and why would they they're selling it for three cents they're not going to give me two thousand and then yeah it hurts the commercial markets seriously there's also some studies about out there about questioning some of the types of drugs there with the 340B program there's definitely the incentive for a prescriber to prescribe a 340B drug knowing that that big savings is coming back to the hospital would there be other drugs that maybe could suffice that are not 340B and I am not in the pharmacy area I have just read the study so I can't really speak to that Chris now I think that you're right I mean I I've read studies I believe Harvard conducted a study where this exact phenomenon was observed and that was when the price of the medication dropped and fell off of the 340B list the prescribing patterns went like nosedove when it made it on the list and the price for all the other commercial plans was higher but was on the 340B list prescribing patterns way up so it is it's a real phenomenon and something we should be you know very concerned about and cautious of I thank you guys so much I that's all the questions I have for now but I really appreciate the the presentation and you're coming here and interrupting your vacation to do it so this is great it's great talking with you thank you so much I had a quick question I know we have I want to make sure Owen also has some time and healthcare advocate and others to ask questions but I'm just wondering in Montana or in other states where this has been implemented as the as the caps are put into place or as these reference based prices are put into place I'm assuming that the relative prices of services will shift potentially depending upon how close they were initially to the reference based price cap so I'm just wondering is there been any evidence of reallocation of resources shifts in service delivery mix anything like that in response to changes basically in the prices that you know are being charged under the new system I really don't have a response for that now ours was not necessarily cap ours was a full price so we no matter what the service was it was a multiple of that I do know that the Oregon plan the Oregon state employee health plan put in the cap and they have a cap I believe of 180 percent if it's out of network 200 percent in network and they would be a good source to find that out from I really don't know and then Indiana we'll see if this law passes what happens there there are several other employer health plans in different markets that have done the cap route and I am not as knowledgeable on that Chris yeah I would just say like with Oregon and certainly Indiana even though they might well Oregon happened a couple years ago we haven't seen in my to my knowledge empirical studies that are looking at utilization shifts I think you'd have to be at least a couple years out from a claims experience perspective to start to look at that and figure that out but I mean it's a great question and I hope one that you know the researchers that are smarter than me are looking at great okay thank you that was my question um I have a couple quick ones first I really thank you guys this was extremely informative in all these roundtables have opened my mind to a lot of things that it wasn't before and Miss Bartlett your name and reputation have been something I've been hearing a lot about since I got here eight months ago and so I was really excited to have you here today and thank you for doing it because you are a star in the Nash P world and so I appreciate doing this for us it's extremely helpful thank you my my first and biggest question is what are the downsides Helen you go first go okay I can give you the little technical downsides that some of the downsides when you put this in I can give you lessons learned but that's probably not what you're asking for lessons learned our Medicare doesn't have great rate setting for maternity or pediatrics so we kind of got stung on that and so we went back and I've seen a couple of employer plans on certain codes price them as a multiple of Medicaid that was just lessons learned I would say um we then were paying a multiple of Medicare for the J codes which are the infusibles and uh we had a lot of pushback from the hospitals they felt that was an area that we were coming in way way way low so we did a deep dive on the pharmaceutical prices what were the infusibles that actually were considered 340d outpatient and what were the rebates the hospitals were and and we had to do a lot of work in that arena to prove that we were not going to change it so mine are more lessons learned but as far as I was concerned about uh shift to the private sector what was going to happen because uh so when I when we first started doing this we approached the Montana Association of Healthcare Purchasers which is private and public large payers large companies and I wanted to do it through them as the state of Montana health plan the Montana purchasing rules did not allow me to contract directly with hospitals I had to find an intermediate area to be able to do that so I thought gee if we could get all those contracts in this purchasing coalition then anyone Washington Corp Northwestern Energy anybody could get into these contracts but I wasn't ready for the heavy hit of the lobby of brokers and insurance carriers that had those large employer plans and did not want this so they voted it not to participate so then I was concerned is there going to be an issue that the private employers are going to come back or others now the Montana Association of Counties and the Montana Cities Group their payment plans followed what I did they didn't want to do it when we did it but they liked what they saw so they both had moved to reference space pricing both these the teachers or not teachers the county and the city workers with great success their their trusts have we have seen two private employers move to this but I didn't hear any pushback from any private but that was one concern I had Oregon was just recently asked if that had happened and the state of Oregon said they have not received any feedback on it but those were some things considerations I think for me it was a political battle because this was a state employee health plan and taxpayer dollars and I had heavy heavy lobby from the hospital association and insurance association that that was one but Chris can you help out with this yeah I mean I think the common the common arguments you're going to hear again reference based pricing are that it's a cost containment strategy that shifts rather than addresses cost and shifts to the patient and the provider which I think you know for the reasons in the in the hospital cost tool and showing the break even I think that doesn't hold water and the way that you can pull off reference based pricing it's not a model if there are different ways to do it you can do it without absolutely without shifting any cost to the member so that's one I think another argument that you'll hear and certainly this is an argument that the American hospital association has made against our reference based pricing is that it doesn't take quality into account when it you know when it sets up when we set a price right but I always sort of push back and I say we don't really take quality into account now when we have these broad provider networks you know whether it's with a blue United Signer etna so normalizing price will actually allow us to also look at look at quality but certainly it's not something that we're taking away from quality we're we're solving for an issue and can also include quality metrics again it can be flexible on how you do this another pain point that the lobby often brings up is that the the information that consumers and purchasers need in order to navigate a reference based pricing world are not available yet I think that that argument could have held water three years ago but today in light of the hospital transparency rule the transparency and coverage rule and all of the new data that's been made available as a result of the Consolidated Appropriations Act and some of the the rules that have been put in place of transparency that argument just doesn't hold up anymore the tools exist and and we as a country have you know sort of indicated that that's a direction we want to head in the transparency and then finally I think one of the broadest arguments and sort of a stretch but that I've heard made in multiple venues is that shifting to a total like focus on lower cost will limit a hospital's ability to do all of the other things that its mission statement says it does right so training the workforce conducting research carrying her under and under uninsured and you know doing the community work that you know hospitals like to to do and say they do um but again you know whether those dollars should be spent to have a hospital redeploy them with a food bank versus you know keeping money out of that system in order to you know address those social ills like that's a policy decision of who you want to be in charge of allocating those resources is it a hospital is it a different state agency um that's a policy call but it is an argument that is often made against a cost containment strategy that looks to to reduce price and cost it's really helpful um you know when the board has made cuts in the hospital budgets in the past there's been concern about hospitals having to respond by limiting services and I think if we were to implement in Vermont the program that you're proposing you know 165 185 percent of Medicare there'd be a lot of money out of the hospital system potentially and that would be potentially a large cut and I guess the concern we would have is how do we do that without causing disruption such that the hospitals finances are um not sustainable or two that they have to go and cut services because I don't think we want that so I guess the question is sort of jumping off with Dr. Merman asked how can you make it more affordable without those downside consequences of removing services or really harming hospitals financial sustainability so if I might if I might offer a thought and that is that today and as you looked at Maryland's like you know the labor numbers that were put up there one of the areas that these hospitals have had to grow um from a cost perspective is administrative costs right for every there's some statistic out there like for every physician they need for billing administrative professionals to deal with the carrierism the negotiation of the price and all the rest of it but when you have a price right when it's clear and transparent of what that price is there's a lot of administrative ways that can be cut out of a system and that those funds can be redeployed to reinvest back into the hospitals and I think we need to be very clear that the goal of reference-based pricing is absolutely not to you know drive hospitals out of business it is to provide incentives to both make them more efficient but also not to give away whether it's a commercial payers funds taxpayer funds etc and it's a starting point for a conversation it can be phased in you know we all know that we need our hospitals and we need the folks in our hospitals the question is do we need them to maintain our non-profit hospitals to maintain a 15% operating at your profit margin right probably not Chris that's well said I think that um what we did was a hospital saying I'll have to cut services well we really got into the numbers we were really able to get into uh using Medicare cost reports we really looked at their different costs what what we found in some cases is varied very high lab costs and the hospital owned the lab and so we started asking unfortunately for us we had to really get into the detail so I would just say that um the hearing the concern is very very important but then delving into the substance of the concern is equally important to really validate that what services would have to be given up and why but when you start getting into the costs like Chris said um you know with one particular we were working with and and it's it's the hospital strategy cost certainly isn't mine to make but it was good to we were able to get into a little bit more detail of what was being spent for community benefit and should a hospital spend 1.2 million on billboards maybe maybe so but those are questions where like you as a care board you know what what is being get into the detail of what the expenses are one of the great things about Vermont amongst so many if you ask anyone from Vermont is we do not have billboards in this wonderful field oh my gosh I love it it's a it's a trade off for our crummy weather oh my god I would take it any day oh my gosh that's wonderful yeah because to me that was like is that a community benefit or is it advertising but it was considered community benefit to educate the public on doctors and services and so there's a lot of really just interesting dialogue they had oh I love that of Vermont I want to move there you're welcome to we need people but we don't have that many houses so one last question I had was Vermont is studying and evaluating and working towards global budgets what is the role if any in reference based pricing and designing and thinking about global budgets are actually having global budgets if any I would um and again there's a whole section of NASHP and Vicki's on this call and maybe can answer I don't work on the global budget side but one thing I have been been thinking about is when you set a global budget how do you set it do you set it according to the expenses or are you setting it according to revenue or they're maintaining it's how do you set a global budget what do you base that on that's all my my only limited knowledge and there are NASHP resources much more knowledgeable about global budgets but when I've looked at what other states have done or cross growth benchmarks whatever I always question where did what was your starting point yeah I mean I would just very simply put when you sit down to write a household budget you know you list out the things that are you know what does it cost me to do this what does it cost me to do this and and I know that's very simplistic but at the end of the day until you understand those inputs it's very difficult to get to a principled and sustainable number for a global budget thanks and comparing those input costs analyzing those comparing them to others are they reasonable are they not you know I think I'd like to I'd never thought of using the word input that's it got absolutely right thank you lawyer that's really helpful um so thank you guys very very much and I'll turn it to the healthcare advocate for any questions or comments that they may have go ahead just at least for me a quick comment and a question I think your the slide about the corporate structure Maryland was really oh it's always a pleasure to see you again it's great to see you very kind of jealous about all the snow you have um so we were I was happy to see or interested to see the slide about the corporate structure of the health network just we are um currently working with Nancy Kane at the Harvard Chan School to look into the structure and the flows of monies within the health network and I look forward to having a robust discussion with board staff about the findings and you know whether presenting them to the board or talking with staff or however we decide to do it I think it's um useful she's been super helpful in the Massachusetts and the regulation of mass health um so it's really it's a field leading analyst that we have access to and not to interrupt you but she did um it was the principal author of Nashby's uh financial uh model legislation with and really used audited financial statements so you really got great research I'm glad you're now anxious to see what you can learn um and and the other question I guess this is really a question for sir you and Chris Maryland is how do you see reference-based pricing in the Nashby tool being applicable not just to um negotiations say of a rest of plans self-funded plans but also to regulation and uh state involvement because you've talked a little bit about your experience negotiating the Montana plan but how that translates over to regulation I think would be helpful to understand thank you certainly a couple things that uh we have seen happen one is we've had hospitals come and work with us and say wow I didn't come out very good on that how can I yeah I mean we've had very few but we've had some hospitals want to become better in that realm but we've been working with states directly on regulation and we've been working with um one state in particular we did a lot of analysis of pre and post merger and uh pre and post acquisition and what happened with costs and what happened with revenue what happened with break even we've done a lot of that type of work we've had uh one particular well two particular states that are looking at public option plans and how would they price them that we have done supplemental work for we have worked with um a little bit from behind the scenes on summit like I mentioned uh we haven't had a lot of uptake but if uh state is looking at uh vicki who's on the call right now is working with one particular state that wants to really understand the cost structure more they're the only one I've seen this one state that vicki's working with that really wants to know that more before they move into any kind of a global budget or a cost growth benchmark so they're using a lot of the data from the tool to kind of understand that um indiana we were critical of course with uh doing all the analysis to support their move to capping the prices uh chris you've been working on this I would say what's key from a regulatory perspective um that we should be looking at is ensuring that there is a environment that is that makes this information like the cost information the financial the ownership structure more available so that when you know because if we then have an environment in which we're able to see this information of course it makes sense to pay this price as opposed to one plan paying a hospital five thousand dollars for the same service that they're paying 50 that the same you know the variability um uh you know is is so great but again I think the regulatory environment um is really important not necessarily um regulating or dictating in a prescriptive manner without shelf engage in reference based pricing but there's a there's a huge role to be played in making an environment that makes this makes sense and when I say this makes sense it's really you know more reasonable and fair and transparent pricing you know less information asymmetry for purchasers that's a good point chris and that really kind of sums up which I wish I would have phrased differently was that really states are using the data in the data is what's being used in multiple different ways not just to do reference based pricing but to really gain more knowledge of transparency thank you so much sam's have any questions yeah I'm glad we have a matching hca uniform unofficial uniforms on Eric thank you maryland and chris this is a really wonderful and important presentation and I want to echo what Eric said about the importance of using audited financial information I think it's critical and so I just wondering if the two of you could talk about how you think about measuring operational efficiency at a hospital I know there are a lot of different metrics in the literature I'm curious of how you think about that um and in your work and what you would recommend at the board how the board think about it I have not really studied it that much now you'll enjoy this when we contacted CMS I wanted to know the metrics and what they were studying what they were looking at to declare somebody in efficient hospital how are they calculating it because it wasn't cost only it was a lot of different metrics and it was interesting because I was able to talk to this first came out in their 2011 report I believe it was was the first they talked about efficiency and so I talked to one of the members of the team that really came up with that and is still with a group and uh he would not share the information with me perhaps you could get that he said that they were going to make it public but then they realized that they were going to get slammed by hospitals and saying well I'm a efficient you shouldn't measure it this way or you should so they keep that information private but it's been pretty accurate so I I have not really looked at that we've compared different costs for different uh procedures we've looked at different unit costs for lab services so we've done some cost stuff but the true assets of efficiency I haven't worked on Chris yeah nor have I um but I would sort of echo Marilyn's concern or sentiment that it would be really nice you know this is one of those areas we're having the key to the test might be a really good thing for the market but the problem the therein lies the problem right is if you were to make that public the agency would have to have a backbone of steel and the politicians behind them to say I'm not going to now capitulate to the industry and the lobby on what they want the metric still look like and I don't know that we live in a world where that is the case today thank you great um and one of the things we do next is we take public comment um and so I'll open it up to that and if anyone has any questions just use the razor hand function um the first hand up is mr ham davis please go ahead mr chairman um just a comment first uh I think that what's missing what seems to be missing from all of this is the whole question of volume um and that cost is obviously important but volume is huge and is especially in vermont with it the volumes have been so so widely variable and so the question really to me is how how you play you you put that factor in it's it's being done actually in a sense by on the one hand stacking up wenberg's very small area variation data against a different kind of system which doesn't worry for so much about volume which is uh being picked up by cmmi by arlene ash of umass wooster but in any event like my personal feeling is having watched this system for a long time that the chairman's on the money you put this system into vermont it's not going to work the second thing I would have is uh the second thing I I have a question for maryland and chris I did I've done a lot of research in the pacific northwest and I especially based around udub seattle and yeah they they used it back in the day they ran something called the wami states with because washington was had vastly greater vastly greater resources especially in the seattle area um then uh then uh or then uh Idaho and montana so the wami states washington asca et cetera does does so when you have looked at your system the system that you you've analyzed in montana uh curious how that now we that those results in that process how has that been informed if at all by the wami state by by what they what's coming out of udub seattle which just in my you know no credential view is probably the best system in the country I don't quite understand the question I know montana participates in wami which allows us to send students from montana that want that will go study under a wami agreement and then they come back to montana to practice so maybe you could clarify for me I probably am not as knowledgeable on the program well I'm I'm not saying this any I'm I would just curious I was curious about it because I spent a lot of time talking to the the you know the dean of the medical school at the university of washington seattle and and and they they had they were running a system there that that was washington itself is huge okay but they were but their single biggest focus was was how to build a medical system that could that could support small very small rural very highly play very highly uh emphasis uh with very high emphasis on primary care I remember he told me once that there's a city in western washington called forks it gets 200 inches 200 inches of rain a year and he said his students out there would rather sell used cars in seattle than they would to practice medicine and forks my my point simply is montana is not a is not isolated montana is is uh is is part of a broader regional system now maybe there has no I would disagree with that I would disagree with that uh montana is very much a rural system trying to recruit its own doctors the whammy program only allows uh students from montana to go be educated uh the university doesn't and and then they come back and they do work within the system but then they move on too um the whammy program as far as its initiatives like you're talking about is pretty limited in montana thank you um I have just a first name Sharon Sharon please go ahead thanks um I uh want to add my appreciation and thanks to Marilyn and chris I I think that the presentation was excellent it was easy to follow I you did a great job Marilyn making accounting seemed easy and I appreciate the board for hosting you both um I think this is a very important discussion to have and I will say that there was a some question about um our hospital's ability to um um their need I would say to have prices what was it 212 above percent above uh medicare um I do know in the physical therapy world I'm a physical therapist provider with three with three locations of practice and um we are at or just a little bit above the medicare um payment so it can be done because I kind of am doing it doing it just barely but um I would love to have a hundred and five percent but the point is it doesn't cost the hospital anymore to do outpatient physical therapy I know this I came from there I know what their clinics offer and so forth um and they presently are making four to five hundred percent more in in each of the codes so while we pull in a hundred and like twenty dollars they'll pull in close to five hundred dollars per visit so um I am I'm I'm hoping that this discussion will allow for more challenging of hospital budgets I I love Marilyn your comfort level in um challenging the numbers asking questions you know um and really finding out where where their opinions of the hospital really are um I do think transparency is a game changer um especially with this new federal law there's no more secrets there's no more secrets to contracts it's all out there whatever commercial payer pays every provider in the whole nation is public knowledge and uh so that's helpful because before I would only give the information by hearsay you know I I I I did have that awareness that the hospital's payments were growing in the disparity growing but um the board really couldn't act on that because they didn't know and and so the veil of secrecy gone now will really help us I mean the whole point of all of us being here is affordability right it's it's it's basically allowing for the sustainable healthcare system in in our country and um I just wanted to dive a little bit more being a independent or private provider not associated with the hospital um we're on the verge of of going out of business uh because the commercial payers um have not raised our reimbursement rates over um almost 15 years they did a three percent bond I shouldn't say nothing but as the inflation rate is well into like 30 plus percent over this time period there's no way any business anywhere can cannot survive without the ability to um have the income from the services you provide or the products you provide at least match inflation so what I'm wondering and I don't know if you can answer this is to help a regulatory body because I do believe the green mountain care board I mean they're tasked with the healthcare system of Vermont as a whole the hospitals are just a part of that it's not the whole I think it's you know maybe half of the healthcare system but without sustainability of the remaining 50 or so percent how how is it going to work and what I'm thinking is I don't care to be rich here I've been in the mission of trying to make affordable healthcare if I go out of business and my my um colleagues private business go out of business and the only then choice is the hospital that's being sucked into a higher cost service so how does your knowledge of in experience help us to navigate the the board doesn't regulate the private industry nor I don't think they need to because we're really running on you know fumes so but how do you help the regulatory body to keep the sustainability of the whole system not just the hospital did I make sense yes now it's it's I'll respond first and first I want to say thank you for your commitment to affordable healthcare and I think this board is charged with both affordability and you know access but affordability is access right affordability is that absolutely access um with respect to reference-based pricing and the transparency that that reference-based pricing can bring um I don't want to say that it's going to level the playing field but it goes a long way to pulling back the veil um uh to a system that has by and large been able to take advantage of that again that information asymmetry to your detriment and to their advantage and that you know they're meeting the big systems right um just an anecdote I on my way to Washington last week I ended up sitting next to a woman she was happened to be a pediatrician and she spent on a lawyer and a therapist she spent two hours crying to me on the way to DC when I told her what I was going to go talk about on the hill um because of the moral injury inflicted upon her as an independent pediatrician and she was really you know forced for the decision do I engage in this corporate practice of medicine or do I stay independent she couldn't she couldn't stay independent so she left the practice of medicine something that she loved and wanted to continue doing um the importance of independent physicians is paramount and I hope that this board um not only sees that globally but can see how solutions like reference-based pricing and the transparency that it brings can absolutely begin to level the playing field if people know that it you know the price of you know going to a physical therapist's office that has you know maybe it's in a strip mall but it has a hospital name on it and that that's going to cost you three times more than if you go to an independent physician down the street right that matters that matters to purchasers and that matters to people and maybe we begin to like to bring those into line oh Marilyn if you have anything to oh I would agree with you and I I've been kind of having fun on first of all hospitals need to be compliant with hospital price transparency and they aren't when you when you look at the files I shouldn't say blanket they aren't but it there is when you get a really good file and you can look up the particular code the CPT code or a DRG or APC and you can look at that code and you look across the line and you see the variation in payments with those insurance companies and then you look at the minimum and maximum negotiated prices for that and then you look at the cash price and I mean a recent study showed that was published I think G Biner team did that show that 47 percent of the time the cash price was cheaper but when you look at a procedure the one I particularly was looking at was knee replacements and you can see the I mean thousands of dollars differences and I don't know Green Mountain Care Board's role but having been a controller at a large Bucca plan where does that fit into the negotiation into the work where does that fit into affordability really examining these network negotiations and Chris I'd ask your thoughts on that yeah I mean I think as a former purchaser myself who paid a tremendous amount of money to get access to a negotiated network right by a Bucca when you see that the network that you've purchased and the negotiation cloud that you think you have has resulted in a price that's five times more than the cash price 40 percent on average you begin to wonder huh what am I what am I paying for right like where is the value in this and again that goes to reducing the leverage that they have over you as an independent PT if if they're truly if we truly begin to recalibrate prices at a fair rate and put the intermediaries sort of not in their place but once again once sort of the price and the the is revealed and some of these negotiated rates are revealed I think it I think the market will do some self-correcting but regulatory you know regulatory involvement is very much needed because it's not moving quickly enough because I think a lot of the sort of industry insiders know that they're having the fight they're up for the fight of their lives here in terms of profitability um so we do need regulation and regulators and these types of boards to step set step in to help make sure that that process plays out and plays out quickly just one just one addition to that um because right now we don't have any negotiation with Blue Cross and Blue Shield or MVP they do I think with the hospital and others but but not with independent physical therapists and every independent physical therapist makes the same price so could a regulatory board at least require that I have the privilege to negotiate well when you say you don't have the privilege to negotiate does that mean they send you a letter and they say these are your rates for the year signed here on the dotted line or out of the network that's a lack of meaningful negotiation but promise I promise you that in their world and their universe they've no they've negotiated that price of you that is their understanding and I understand that you haven't had a meaningful negotiation and that's how it works almost in every state but when they represent the price that you've accepted willingly by signing on the dotted line because you have to um in their opinion that very much constitutes a negotiation but there's something because they yeah go ahead we really don't have competition so it's like if I'm to stay in business I sort of they've got me do you see what I mean I don't have the ability to go out of network so um I'm trying to struggle within that word but it probably will come to the same conclusion whether I go out or they they they they they force me to go out because they're not paying me what is needed to do the care um but is is a regulatory body at least able to set um bound you know like certain expectations like you can have this rate increase but you have to negotiate with each you know provider group at least or um or have it like a baseline like a boundary you know if if you pay the highest amount to one provider you can't go under a certain amount so the way that the regulatory agencies across the country of they think that they're dealing with this and I'm not saying it's wrong I'm just is through network adequacy right they the the thinking goes if and now I'm not sort of worried to do as an independent physician or practice but more broadly you have the ability to say I'm going out of network and so does every other PT out there and then the carrier would be left with nobody in network for these services so therefore you're exercising your power and the negotiation would be would be okay well what does it take to get you back in what is that rate and that's that's how regulatory bodies have dealt with this issue or have chosen to deal with this issue is it meaningful has it resulted in the intended benefit that we wanted probably not but that's that's what net network adequacy really was intended to make sure that there's a balance there and there is some um you know room for negotiation or place for it at least and I don't know the rules of Vermont to know whether there's something in your insurance commissioner rules or Green Mountain Care Board would know whether or not there is a regulatory ability to require direct negotiation but network adequacy is definitely an issue too but I think that's a question to ask I I don't know your laws. So Ms. Kevin thank you very much for those good questions I think those are really great and I'm watching the time because we have to do the one care presentation today um and so we have two more hands raised and we can try and move it along because folks have staff have commitments that they have to get to this evening um so Walter please go ahead you're muted Walter. iPad didn't click on sorry I have three things and I'll try to make them short one is the Montana I have been all across Montana and it is not a big state it is a vast state I was a hitchhiker all through the grain belt and the Rocky Mountains and Missoula and Bozeman and everywhere else another thing is when early in the presentation and thanks for it we talked about payers and as the care board members know I'm a metronome on that insurance companies are not payers we are the payers thanks the third issue is that I approach this from I'm not a I'm kind of an anomaly here at the board I'm on the advisory committee I'm an activist and I approach everything I'm a patient and one of the infuriating things about healthcare is that you need 25 PhDs to figure this out and listening to all this policy and I want to relate a little story I'm a believer in what you're saying the the reference based 16 years ago I was really sick dying and I was fighting for my life not only against the disease but against the insurance companies the hospitals and the medical system when you talk about the difference in prices it brought to mind a story that I had is that I had to have an three operate four operations the first three were insured and the insurance company which was an out of state outfit at the time paid $1,500 for that insurance for that operation it was something with the bile ducks then I lost my job lost my insurance something which only happened in America and had to have the same operation again exactly the same without insurance it was $20,000 now when you talk about accessibility and affordability that's the difference the hospital charge master said it was $20,000 then I said I didn't have insurance and he said oh it's you know $13,000 then and I had lived in Israel before which is a single-payer country so I knew and in Israel you negotiate everything you don't just buy an iPad you have to negotiate for it so I went down and I finally negotiated ransom my own life and what do you think about that and how would reference base stop that and another question is exactly what is affordability and I'll stop there one I love your story I and your experience you bring great value here one of the things I would say the board wants to shut me up but well I'm not sure Walter see me out of here huh no that's not true at all as far as charge masters reference base pricing completely ignores them charge master means nothing so that goes out you know I've got a bill here that was presented in an Indiana case of an ablation that a person went throughout patient and no overnight stay the charge amount 283,000 the allowed amount about 22,000 so charge master numbers I don't even pay attention to and that's why I don't I don't appreciate a discount off charge master so Medicare reference base pricing doesn't pertain to that as far as the second part of affordability on how much then that those rates keep going up each year not charge master I think that's the role of getting in and looking at the expenses and looking at the multiple investments that are made by health systems the multiple separate businesses the compensations it's really getting into the expenses so I guess two parts I'd ignore charges and I'd focus on those expenses and study those and see what's increasing and why lots of different things coming along with AI different things I think it's a good time to focus on the costs of providing service Chris yeah I would go back to to the the administrative inefficiency of the system that we have and I don't think you you know without I think there's a lot that we could sort of blame on the system and I'm not in a position to say what's right what's wrong but what I think is clear right and this plays out in the current litigation going on from payers across the country and hospitals across the country is they say we have to overcharge you because you underpay us or deny our claims or don't give us prior authorizations and then you know the insurance company says well we have to do all those things hospital because you're charging too much and you're submitting false claims or fraudulent wasteful claims and so there's this back and forth cut the noise let's look at the cost let's set a price let's be transparent about it and I guarantee you that you know projected one third of administrative waste in the system can be redeployed to making healthcare even more affordable and more accessible and perhaps we might even start to improve health outcomes as opposed to you know reducing our mortality rates is a hospital charging $60 for a three cent aspirin called administrative waste or called waste that's what goes on I know I think I've been on the receiving end over the $60 aspirin but I absolutely many times thank you very much Walter as always and miss Ridson please go ahead hi yes I'm Susan Ridson and I'm the director of an independent practice association so I just want to say I have not been so excited by a presentation in quite some time so thank you very much Marilyn and Chris and the board for having this really important discussion you guys are emphasizing all the points that we've been trying to raise for years so just very feel very vindicated in hearing all of this and the takeaways for me are what we've been saying is price transparency follow the money where things being spent on and I think that will take us a long way toward a more affordable accessible system thank you very much thank you Susan and thank you for what you're doing thank you miss Ridson was a presenter with mr. H actually at our last board hearing on issues relating to primary care and did a wonderful job themselves with their colleagues so this is the time timing is great Susan I would just to say our we never quantified it but putting in the primary care health centers and driving access there because it was no copay whatever and doing the contracts and having health coaches and on referral that to me that's what's really saved the money and really helped us out it that was that's just been a phenomenal for the patient experience and the patient outcome we should talk offline more about that thank you well thank you both very very much for your time today you're extremely generous with your time and it's clearly took a lot of work so thank you all that this is really appreciated why don't we take a quick five minute break and we'll turn to our next presentation on the ACL thank you everyone we'll be back thank you great so we'll resume we have a couple of we ran a little bit late so I think what we're going to do is we'll go till 430 and see where we are we may need to take a brief break at 430 and then continue after but we're going to push ahead and so I'm going to turn it over to Michelle Sawyer, Marissa Malamed, Jen Depolito and Matt Sutter to address One Care Vermont's revised fiscal year 23 budget thank you all thank you chair Foster good afternoon I'm Michelle Sawyer health policy project director with the Green Mountain Care Board today we are presenting a preliminary staff review of One Care Vermont's fiscal year 23 revised budget submission and their fiscal year 23 certification eligibility verification status update I'm joined in presenting today by Jennifer Depolito senior health policy analyst Marissa Malamed associate director of health systems policy and Matthew Sutter health systems finances principal analyst and I would like to extend many thanks to my colleagues at the ACO team and other staff who have contributed to this presentation today so here's the agenda for the presentation we will start with a review on the process and background information Jen will lead us through the certification section Marissa, Matt and myself will review the revised budget submission and then we will briefly review the budget order conditions and we will have time hopefully for board questions and discussion at the end and here is a timeline for the next month of this revised budget process on Friday the fifth One Care Vermont will have their hearing on their revised budget this meeting is starting at 8 30 in the morning on Wednesday May 17th the staff will present recommendations for their revised budget and there is a potential vote held for both May 24th and May 31st the public comment period is open until the 21st 24th of May and I don't the slides aren't up if you want to be sharing them I do thank you very much much appreciated okay perfect there's our agenda so as of this date there has only been a single public comment briefly describe what it encompasses this comment encouraged the board to consider alternative models of health care reform that cover a larger proportion of Vermonters it also recommended that One Care's operating costs be further reduced that the state should both implement fixed prospective payments and disperse population health management funds to providers instead of the ACO and that One Care should be held accountable for not expanding primary care capacity this comment also stated that because One Care executives have received 100% of the variable pay their positions are eligible to receive that this variable aspect of their pay should be disregarded overall the comment recommended that the board needs to address the most pressing health care issues facing Vermonters including access and cost and that the state provide leadership to address systemic health care challenges so the Green Mountain Care Board has been tasked with oversight of accountable care organizations as outlined in 18 VSA 93 82 and rule five oversight of ACO's includes the process of certification and the board also reviews the ACO's budget annually in the fall because payer contracts and attribution are finalized by the spring of the budget year the ACO submits a revised budget which is what we are reviewing today in this case because of the loss of a payer program between the initial budget and the revised budget the budget has substantially changed in addition to the finalized payer programs and the starting attribution figures the revised budget incorporates specific conditions in the budget order from December the budget adjustment process is established in rule 4.407 if performance has varied substantially from the ACO's budget then upon the request of the ACO the board can adjust the ACO's budget One Care has not submitted a budget amendment request at this time this slide is for reference I'll just point out that the board may take action to compel compliance with an established budget and currently the last approved budget was the one voted upon by the board in December of 2022 here's a list of items that One Care is required to present to the board during their hearing which is scheduled for this Friday in addition to these topics we have requested that they present on the issue of executive compensation as part of their ongoing certification eligibility verification for 2023 and on that note I will I will turn it over to Jen DePolito to walk us through the current state of certification thank you Michelle um perfect you can move to the next slide can you all hear me great um so the certification of One Care Vermont for fiscal year 2023 has been under review since august of 2022 when One Care submitted their annual certification eligibility verification form under GMCB rule a certified ACO must annually submit to the board a verification that the ACO continues to meet the requirements for certification under statute and rule and the ACO must also submit to the board any material changes in policies, procedures, organizational structure, provider networks, health information infrastructure or other matters covered by the certification requirements One Care is currently the only certified ACO in Vermont and it was certified by the board in 2018 and it has been certified since then so procedurally this year the board issued a certification eligibility form to One Care in June of 2022 and One Care submitted the form to the board in August on August 31st of 2022 One Care also provided responses to GMCB staff follow-up questions in October and following the staff's review of these materials the staff requested additional information from One Care about One Care's executive compensation under rule 5 section 5.203a One Care responded to this request in March of 2023 and these documents are available publicly on the GMCB website the staff is currently preparing a memo for the board covering a review of each section of the rule so the purpose of for the purposes of this presentation I'm only going to focus on the area of leadership and management and specifically on the additional information the board received in March from One Care regarding their executive compensation so as part of maintaining certification executive compensation as described in board issued guidance from May of 2021 they must be structured to achieve specific and measurable goals that support the ACO's efforts to reduce cost growth or improve the quality and overall care of enrollees or both so while some information was shared with the board regarding the executive compensation structure at One Care when they initially submitted their materials in September last year and when they responded to questions back in October the GMCB staff requested this additional information which included the final fiscal year 2023 corporate goals upon which executive variable pay is based all metrics associated with these goals a description of any numerical scoring used to determine how the achievement or partial achievement of goals are scored to correlate with the amount of variable pay awarded variable pay ranges for eligible executive positions for FY23 and all UVM health network policies related to executive compensation and variable compensation One Care's FY23 corporate goals upon which their executive variable pay is based are listed here One Care noted in their submission that variable compensation may consist of multiple components such as corporate goal achievement individual goals or other factors as determined by the UVM health network compensation committee these components and weights may vary from year to year and by level of leadership so for 2023 One Care noted that 100% of their variable compensation is tied to One Care corporate goal achievement variable pay ranges as a percentage of base pay for each level of leadership are listed here determination of the attainment of these goals is made by the next level of leadership and in the case of the CEO the executive committee of the One Care Board of Managers reviews and makes recommendations to the One Care Board of Managers and the full One Care Board of Managers must approve the attainment of these goals. You can move to the next slide please. One Care's fiscal year 23 corporate goals upon which their executive variable pay is based and their associated metrics are presented here as submitted by One Care and One Care also submitted their corporate goal variable compensation scoring methodology UVM health networks bylaws executive compensation philosophy and salary benchmarks all of which can be found on the GMCB website so in April of 2023 One Care One Care's Board of Managers meeting packet included a quarter one update on One Care's FY23 corporate goals which is presented on the following slide and the table here indicates that One Care has completed 25% of each goal per measure in quarter one and of note is that One Care's revised data and analytics transition date which is now projected for October of 2023 and also their ongoing selection and contract negotiation for an external national valuation contractor. So regarding next steps One Care will present on their FY23 revised budget on Friday May 5th and they may present additional information related to executive compensation then. The board does not need to take any action regarding certification eligibility at this time and as in prior years staff will send a memo to the board outlining a full review of certification eligibility verification for FY23 and action would only be needed if the board concluded that One Care no longer met the requirements for to be eligible for certification and in that case the board would provide notice to the ACO and an opportunity to respond before requiring corrective action. So now I'll turn it back to Michelle to go over One Care's revised budget. Perfect thank you Jen. So we'll now start looking at the FY23 revised budget. We have organized this section by budget order condition in numerical order but because not all budget order conditions impacted the revised budget we will not touch on every budget order condition. So I'm going to turn it over to Marissa to start off with condition one. Thank you Michelle and Jen. I'm going to walk you through a high-level review of what was required for the ACO benchmarking report by March 31st which we did receive and next steps for this requirement. As a reminder this condition is part of a multi-year requirement started in 2021 for One Care to adopt a performance benchmarking tool for their Medicare program to support network performance management and regulatory reporting. We anticipated that this might be an iterative process to land on the methodology and format of the report that the Green Mountain Care Board will incorporate into ACO guidance and track year over year. This is the second report that has been submitted by One Care and I will endeavor to describe the changes which we had spoken about it during the budget review process in the fall. The full report that was submitted and the narrative that a company is it is posted on our website so this is is an overview. You can go to the next slide. Briefly try to go through the requirements and the sort of current review of the submission. So the overall requirement is to allow the ACO and the Green Mountain Care Board to assess One Care's performance against peer ACOs or integrated health systems by comparing One Care ACO level performance metrics to a broad national cohort of ACOs in five key areas as available and appropriate and just I have to always remind people that this is a Medicare data only. So the submission we did receive on March 31st. The report includes a benchmark analysis for two national cohorts. I'll refer to them or they are called the peer ACO cohort and the all ACO cohort which is both our national sample. We'll talk about that a little bit more and the metrics were selected by One Care based on a broad list that were provided by GMCB in the requirements. Next slide. The next requirement is that the report compare ACO performance metrics to at least the 50th and 90th percentiles so comparison by quartile or deciles preferred by each metric to allow for identification of top performers by measure in each key area. So the submission to include an analysis of the 10th 50th and 90th percentile comparisons for the all ACO cohort for the peer ACO cohort just the average is provided. There's a note with the report that says that the 10th 50th and 90th percentile cohorts are calculated based on the 10th 50th and 90th percentile of each risk-adjusted metric calculated in isolation. So each metric that ACO performance is ranked. So this means that some measures of high performance may be difficult to interpret because they rely on an interrelationship of metrics for example inpatient and SNF admissions. And we'll have more time to talk about what that means and I expect at this meeting and on Friday. Okay. So I did have a slide that describes it a little clearer. The peer ACO cohort is a group of 20 ACOs selected based on exclusion criteria that's in their report. The outcome or the output of the report indicates where one care is performing green better or worse red than the average. And note there are inverse metrics in that report where higher is better and the color coding is not adjusted. So the report as it is posted is a little bit hard to interpret at least at first glance with the eye because some of it is reversed. That report also does not indicate top performing ACOs by metric or overall it's better or worse than the average. The all ACO cohort consists of the full Medicare fee-for-service data set which is 513 ACOs. Again the report indicates where one care performance is better or worse than the ACO at the 10th 50th and 90th percentile. So there's more granularity. However it indicates top performing ACO by metric and the best comparison ACO may be likely or is likely different for each metric. So you'd have to dig a little deeper to understand how those metrics are related and what makes a top performing ACO. Next slide. The next requirement is to enhance one care's ACO level performance management strategy including integration of best practices and priority opportunities identified through benchmarking and peer networking in the one care quality evaluation and improvement program. One care states in the narrative that intends to use the report to identify areas of opportunity and to work with its vendor to identify high performing organizations within its national ACO peer cohort that align with one care's priorities. So we expect to hear more about that from them. This is the second iteration of this report. Again the first was submitted and reviewed in the fall and we do I suspect that we've moved on to this new one but there are some pros and cons about the way that reports were about the methodology. So we do want to confirm which report one care intends to maintain for their performance management and improvement processes internally. And again one care and the GMCB continue to discuss how the report will meet this requirement. Presumably I would say I'll just make one more note you don't have to go back though. One care is provided information about top performers from the vendor who puts the report together and is then able to connect with those organizations to adopt best practices and lessons learned. Okay the report is also intended to improve regulatory reporting and performance assessment by providing the benchmarking comparisons to target at least semi-annually. So we are incorporating a spring and a fall submission. The FY23 guidance did lay out future expectations for setting targets for performance benchmarks at or above the 50th percentile. And this would be sort of included in their in their budget review. This was put in the FY23 guidance not in enforced way but in a this is the direction that we're trying to move. And so again this will be discussed as part of the FY24 budget guidance which will commence after this review in spring of 23. Next slide. This is the last requirement. The updated benchmarking report must be submitted to the board by March 31st. It was. It has to meet the standards and methods for the report as specified by this order and the ACO reporting manual and the GMCB board chair is authorized to delegate authority to one or two board members and the Green Mountain Care Board Director of Health Systems Policy to review and approve proposed revisions to this report. So again we're still assessing this report. We have been thankful to have board member Tom Walsh looking at this more closely with us looking at this report more closely with us as well. Okay so we have a couple of key questions for your consideration just to think about as you know in this presentation or kind of in the context of when we hear from OneCare in their review of this report. So I'll try to go through these briefly. So again I mentioned this is an iterative process. This is question one. The board needs to decide if it's ready to accept this report for use as a consistent performance measurement tool and also just a confirmation from OneCare that they do intend to use this report in creating their budget and then their quality evaluation and improvement program. One of the ideas for the report is that you know the board would be able to use a report such as this. It's kind of only one one report of several that could be used but to help the board understand OneCare's priorities how they're setting those priorities and how they are sort of measuring success and how those priorities show up in their budget. The board required establishing ACO performance benchmarks to help answer following questions sort of in plain English. We want to know how well can an ACO perform in each metric sort of like what's the what's the top. How does OneCare perform in each metric in comparison to an ACO that gets the best result in each metric understanding that there's a lot of complicated relationships between these metrics. Again the ultimate objective for the board is to have a valid report to use to track relevant performance metrics over time and to understand how OneCare uses those metrics to set clinical priorities and make budgeting decisions. Next slide. So we have a couple of practical questions that we want to confirm with OneCare and or their vendor and that is it sort of valid to use this report to allow GMCB to track OneCare performance over time. You'll see the way the report is set up. The different years are on different tabs. It's a little hard to track. I'm going to show you a template where we might put those together but we want to hear that this is you know this is sort of a valid way to use the report. Also we want to better understand the strengths and weaknesses of the report to show us the relationship between OneCare efforts and performance improvement and does this report allow OneCare to calculate a return on investment of population health investments, payment initiatives and administrative expenses. Basically an understanding of will allow you to track say if you implement this intervention how much does it cost what might your return be on total cost of care through improving outcomes. Then I think my final slide is a draft template report that I think is ultimately what we would like to see. So this is a selection of metrics. There's a lot of metrics on there. It's hard to look at them all at once so the board could determine what their priority metrics are and then to put the data into this report year over year and compare OneCare to the top ACOs. This particular setup here doesn't have compared to the average. It just says compared to the top. You could probably color code so you could get both in here and try to keep it simple. It's also important to know that the top 10 percentile in the way that this report is set up is not a static group of ACOs. So again there's in that cohort it's very large of 513. It's likely a different ACO that's sort of in that top group for each metric so that would be a lot of sort of tracking and understanding best practices. So we've considered a couple you know in a previous iteration of the report they did a top 10th percentile of only 20 ACOs which means two you know so then you're comparing OneCare to two top performing ACOs. We felt that group was a little small. This group is maybe a little large. We can talk through the pros and cons but I put this as a visual. We do actually have the data to fill in these files. I didn't do it now because I didn't want to focus on performance measurement. I wanted to sort of try to get to a consensus of what the board would like to see and how they'd like to use this report and I think that's all for this condition. I will turn it back to Michelle. Perfect thank you Marissa. Okay so this slide is really provided for context. Condition 5 itself does not directly direct change to the revised budget but the circumstances that the condition originated from do impact the revised budget. At the time of the initial budget submission in the fall OneCare had been operating under the assumption of a continued pair contract with Blue Cross Blue Shield at Vermont when in late December the board received notice that Blue Cross Blue Shield did not plan to continue its participation in OneCare for 2023. The board required that OneCare submit an updated budget no later than January 30th reflecting the effects of the Blue Cross Blue Shield's decision not to participate. There was a board meeting held on March 2nd to discuss this updated budget, the repercussions and potential paths forward. And as you can see from this slide that is pulled from that March 2nd meeting the loss of the Blue Cross Blue Shield pair program resulted in an unexpected $1.8 million in hospital dues being left over and it's left over due to the loss of those attributed lives. This slide is pulled directly from there to remind us of what the potential approaches could be for those dollars. The options as outlined in the slide were to reduce hospital dues so basically return the 1.8 back to the hospitals. OneCare could reinvest those fees into existing primary care programs or reinvest fees into other ACO programs. And in a few minutes we will be reviewing how OneCare chose to proceed with those dollars. Condition 11 required OneCare Vermont to submit a revised budget that included this list of documentation by March 31st, 2023. This was completed and much of what we are discussing today is a review of this submission. All right, condition 11A required that OneCare submit all finalized pair contracts. The contracts for Medicare, Medicaid and MVP have been submitted. There is an additional pair program that is currently undergoing contract negotiations so OneCare has not yet shared this contract with us. It is a new UVM Health Network self-funded program. We have limited information about this program at this time but we will share what we do know on future slides. Condition 11B required that OneCare submit updated attribution numbers by pair. This slide outlines the pair programs, participation by the number of hospitals and hospital types and also the starting attribution as estimated in the initial budget versus the starting attribution as reported in the revised budget. So you can see that on the Medicare line the attribution in the initial budget was 67,558 and that has increased by about a thousand lives. You can see on the Medicaid line that there was a significant jump in starting attribution with this revised budget. The Blue Cross Blue Shield live you can see that there are initially almost 93,000 lives and in the revised budget there aren't any. The UVM Health Network self-funded program were zero in the initial budget because it did not yet exist but in this revised budget we picked up about 11,000 lives and it's our understanding that of those 11,000 lives they were previously part of the Blue Cross Blue Shield cohort. MVP starting attribution did decrease significantly between the initial and revised budget and then the overall change between the initial and revised budget was a loss of about 66,000 lives which is a 22% reduction in overall lives which is actually smaller than what we had been anticipating in January. This slide demonstrates the change between starting attribution and average attribution over the course of the year. This is of particular interest in 2023 because of the Medicaid redeterminations that are occurring at a national level. DEVA began this process in Vermont in April and it is expected that the number of Vermonters with Medicaid coverage will decrease due to these redeterminations. By comparing what the change was between starting an average attribution in fiscal year 22 to what is anticipated in fiscal year 23 we can see that one care is anticipating a slightly larger drop in Medicaid lives. In 2022 there was a 9.75% drop between starting and average attributions. This is before redetermination started and in the initial budget they predicted a 13.2% reduction and in the revised budget there's a drop of 11.3%. The staff do want to make note that the starting attribution numbers provided by one care has fluctuated significantly. In the initial budget they predicted about 126,000 lives for Medicaid. In the revised budget they reported 142,000 lives and in their quarter one reporting which we received at the end of April it appeared that the starting attribution was about 131,000 lives. The staff have asked one care to clarify this variation. For more information on Medicaid redeterminations anyone can visit DEVA's redetermination webpage at www.deva.vermont.gov. And I will now turn it over to Matt who will walk us through the ACO's financials. Can you all hear me fine? Great thanks. So looking first is at a really high level income statement just to orient you you can see the revenue rows at the top and the expenses at the bottom. This one I kind of point out you can see that $448 million decreased both lines mirrored on the expense and revenue side reflecting that there's no budgeted net income projected. We can go to the next slide. This is the same information I just wanted to kind of expand the expense side out a little bit more so we can see like a detailed detail of where things are moving. Here you can see the decrease in the program target revenue mirrored on in the expense line it's basically the pass-through dollars and then the operating expense cuts below is another major category. As part of their one of their conditions they were required to cut operating expenses by 2% and I'll speak about it a little bit more later but they've done so cutting 2.6% and we can go to the next slide. So the same as the other view except we've just condensed the expenses in Op-Ax and we're just looking at the PHM and payment reform programs there's quite a bit of movement between these lines I just wanted to make them available so you can see kind of the inner movement but the net was about $557,000 increase when you include FPP. Also I'll order you there's a $1.6 million on this slide you can see for mental health screening initiative that was not included in the original budget which is somewhat offsetting some of the PHM cuts which you're seeing kind of as a result of the the self-funded program and in attribution updates. Next slide. So just looking real quick just looking at operating expenses you can see they cut by 2.6% and here are some major categories that they cut in the amounts. We can jump to the next slide and kind of show the same information just in terms of a waterfall chart so you can kind of get a sense of the scale. You can see an increase in contracted services and part of that is a shifting of some previously staff duties to contract labor. And then the next slide. But this is again looking at the operating expenses this time just as a concentration so you know looking at 100 percent of their revised budget 100 percent of their initial budget what's the breakout along those categories you saw before and you can see that shift from salary benefits to contracted services and you can also see the executive salaries being reduced slightly relative to their initial submission. And this is just a table where one care is now providing us more detailed information in our budget system when they submit and we're able to look more at staff counts more granularly. This is just showing the change from FY 22 some of the movement and we're also collecting compensation amounts for along these lines too so we'll be able to provide more detailed reporting in future periods. And then just looking at the sources I guess the PHM programs by provider type so you can see some changes largely due to the movements that we've kind of discussed before but I just wanted to provide this information so you can see kind of where that's playing out and who who it's affecting and I think that was it. I think Michelle are you going to discuss this I can talk to you. Yeah I can get this thank you so much Matt. Great thank you. All right so this table outlines the changes in the number of attributed lives over the course of the ACOs operations and the amount of population health spending and operating expenses in each of those years. And then we calculated how many dollars per attributed life were spent on both population health spending and operational expenses and the next slide is a visual of this data. So the bars represent the number of attributed lives in each program year of the ACO. The teal line represents the amount of population health spending per attributed life in each year and the yellow line represents the amount of operating dollars spent per attributed life in each year. And as you can see in the early years attribution was low leading to higher spending per life in both population health and operations and the operational expenses really leveled off but with the drop in attributed lives for 2023 due to the loss of those blue cross blue shield lives the ratio of dollars to lives has increased a bit to 77 in operating expenses per life. Population health spending has varied and it seems to be less closely tied to the number of attributed lives. Michelle can you pause there for just one second. Absolutely. All right thank you. All right so condition 11 required that one care report on any changes made to population health programs. A new initiative was added to one care's population health offerings the mental health screening and follow-up initiative. In an effort to support both mental health initiatives and primary care practices the program offers incentive payments to providers who implement a mental health screening protocol and agree to electronically document the results of these screenings as well as treatment and follow-up procedures for any positive screens. The mental health screening initiative payments will be paid to qualifying primary care participants according to estimated mid-year assigned attributed lives for all ACO programs at the aggregate payment rate of $9.72 per assigned attributed life. The mental health screenings include the PHQ-9 the PHQ-2 plus the CSSRS the PHQ-A and the Edinburgh Postnatal Depression Scale. Condition 11G required that one care notified the Board of any changes to its risk model. This is tied to condition 16 which as abbreviated here states that one care shall hold at least $3.9 million of the risk associated with the Medicare Advanced Shared Savings payments and must not pass that amount along amount of the risk onto any one care network participants. It appears they have done so and now hold $4.4 million in downside risk and 861,000 in potential gain at the entity level. The Medicaid risk corridors have been expanded since the initial budget and are now at 3%. The MVP MVP corridor also shifted and for the UVM health network self-funded plan it's it's new for the since the initial budget. This slide shows the budgeted risk between 2019 and 2023 and the percent of the risk held at the entity level versus the risk delegated to the provider network. The budgeted risk is worth showing here because it is the risk level one care was planning for prior to the onset of the pandemic when the risk levels you know in response to the pandemic risk levels were significantly lowered in their initial budget one care brought the total risk level back up closer to pre-pandemic levels for 2023 but the loss of the Blue Cross Blue Shield payer program reduced the amount of risk held at the network level overall. The one care held a portion of risk in the initial budget was also quite a bit lower than it was pre-COVID but for context one care typically has taken on risk as a glide path to support HSAs who are newly joining payer programs but not ready to to take on the full risk themselves in the first year and in the revised budget you can see that one care held risk is at a higher proportion of the total overall risk as a result of budget order condition 16 that is where you see the Medicare advanced shared savings dollars. The one item that this is a look very similar to the last slide but the one thing that wasn't shown is the percentage of risk relative to the total cost of care. You can see that pre-pandemic it was right around 4% and since then it has not yet returned back to those same levels. Since we're calling out one care held risk we also want to call out one care net assets and equity which includes a reserve of 3.9 million that the board required in its 2019 budget order as well as net assets. One one care also has a 10 million dollar line of credit as required by Medicare. All right condition 11H required one care to report on the sources for their population health funding. Overall there was a decrease in this funding from 29.9 million to 26.3 million between the initial revised budgets. Additionally the way that in which DIVA supports these programs has evolved with the changing of the PHM program. When the VBIF program was active DIVA offered two million dollars in funding for participating providers serving Medicaid attributed lives under this program which was paid directly to those providers and not through one care. And now that the VBIF program has really just become part of the PHM program DIVA is paying all PHM bonus payments earned by providers for serving Medicaid attributed lives directly to those providers and not through one care. The mental health initiative is fully funded from hospital dues and funding for the Dulce program has shifted from DIVA in the initial budget to hospital dues in the revised budget. This is just clarifying that the 1.8 million in hospitals in the hospital dues or participation fees that were that that the board discussed on March 2nd have been allocated mostly to the mental health initiative with some also going to the Dulce and the remainder to the PHM program. Condition 11J required that one care report on their commercial FPP targets. They last reported these to the board in July of 2022 and the target had been set at 0% at that time where it remains still. With the withdrawal of Blue Cross Blue Shield all commercial FPP amounts were lost. And here are the key takeaways from one care fiscal year 23 revised budget. There is a new payer program the UVM health network self funded program. There were changes in both payer risk corridors and the amount of one care held risk. There is the new mental health screening and treatment initiative and the 1.8 million in hospital participation fees were fully spent on population health efforts and there was a reduction in their operating budget. The next several slides are basically a status chart where we can review where we're at in this point of the year with the budget conditions. Several of them are considered complete. Most are areas where we continue to monitor until the budget is closed out at the end of the performance year. No board action is required today but we will I just want to highlight the ones that we will be discussing at the next staff presentation on May 17th. So the first condition the ACO benchmarking system we will have additional staff analyses available on May 17th. Condition number eight there is a technical correction that's necessary which we will review and discuss on the 17th as well. We will discuss condition number 10 that has to do with the notification of any material changed to a budget and we'll discuss that then. And condition 15 we reviewed that today there will be a vote necessary so there will be additional discussion on the 17th and the other two are monitored. So now if it pleases you Chair I'll hand it back over to you for word questions and discussion. That was great thank you very much. I'll just open it up to the board members for any questions or comments they may have appreciating that we will have another presentation Friday and then another in a couple weeks here. Go ahead Dave. I have a quick question. Regarding the operating expense per attributed live do operating expenses include any fixed perfective payments population health payments any payments to providers or purely operating expenses? Purely operating expenses salaries software contracted services that sort of thing. Okay and so that went from 53 dollars to 77 dollars per attributed live in the last year is what I saw in that slide which is a substantial percentage increase but that's all I wanted to point out there. I think if I just understand that correctly. It sounds like you are interpreting that correctly. From the initial from the initial to the final yep okay that ratio is changed because of the loss of the you know the 22 percent reduction in attributed lives. Okay and then on slide 40 there was some funding to that went down do you know anything about the million dollars less to FQHCs and the substantial decrease to the designated agencies do you know if that's related to blue cross blue shield payments or is that do you aware of what led to that decline? I'll let Matt chime in but it is my understanding that these reductions mainly were around the loss of attributed lives but I invite anybody on my team to chime in if there's might be other reasons. I think I think one Carol have to speak to that a little bit more. Okay sorry thanks. I have one related to that on slide 40. Were these changes from initial to revised were they just proportionate to the number of lives before so I let they just spread across equally how much it was going down or is there some sort of adjustment to where they were putting spending after the blue cross withdrawal? That's a great question and not an analysis that the staff has done at this point but happy to get more information about that and look into that if it's not clearly addressed on Friday. Okay I'll just put a pin in it. I might I may ask them on Friday if we don't have other information. Oh go ahead Matt I see. Yeah chime in Matt. Sorry I just wanted to add just for just to be completely fair so this is looking at just the pH and programs without FPP. Now there was an increase to FPP and if you include that along these break it down along these categories also the decrease it does not look as significant. I don't have the numbers in front of me so I don't want to speak to it but I can provide that information provide that to you all after the call. That might be helpful to see. Okay I can provide the same table just with with FPP included as well. I can maybe provide a little bit just another way to think about this for for Friday. We had the hospital dues that are funding population health stayed they kept that level so they can continue to fund the programs which as Michelle said was part of the discussion on March 2nd. This decrease overall in PHM like like Matt and others said I think one curl have to speak to I would I would assume that it has to do with loss of lives but I don't totally know for sure in terms of the revenue side they did maintain the revenue side is my understanding in terms of collecting the hospital dues that they expected to collect in the original budget and allocating that to population health programs. I don't know if that helps or not. Yeah great. I think could you just pull up slide 39 and it's going kind of quickly. So fiscal year 22 this is the that what they submitted in the fall. Well that's from their their presentation slides. I don't think we required them to submit it as like an appendix in the past but it was presented in the past year. Okay. And then the change of 12 FTE's 11.1 to value based care is that because or 11.9 is that because that's due to the shift of contracting folks to UVM for the data. We don't we don't have exact details on that but at least a portion of that is our data folks moving over to the health network. Yes. Okay. I have nothing else. You all actually just got my questions. I had similar questions about the drop in population health expenditures that'll be helpful Matt to get that data had similar question about the FTC count and FTE count and then I also just really be curious to hear from them on Friday about the starting attribution for Medicaid. I know you've asked questions about that but you know the starting attribution seems quite higher in a year when we're having inner evaluations of that. So those are my predominant questions just to foreshadow what I might ask about on Friday if we don't hear more information. So in the meantime but thank you. Just one question and purely clarification for me on slide 47 is there's a statement about population health funding I think through DEVA and I want to try to square that with the table listing population health payments per attributable life. I think that might have been slide 41. So here's the thing that confused me that and then there's the table that has population health expenditures. Does the change to flowing through DEVA affect this table? That is a good question. It is my understanding that the DEVA money was not included in this table. So that that DEVA money in VBA IF would have shown up in 2022 and then for 2023 that difference in funding as well direct to provider I don't believe is captured but Tom I will double check and I can certainly let you know how those were calculated exactly whether includes that money or not. Thank you. Okay and am I correct that we need a break at 430 for folks? Just I need just five minutes and I'll be right back. Yeah yeah all right so we'll turn real quick to the health care advocate that's not to limit your time but please go ahead. That's okay. Thanks chair Foster. Most of our I'm well I'm going to say all of our comments questions and concerns I think we're just going to save for the hearing on Friday so we can keep it super brief. Thanks. Great okay so Michelle why don't we take a break now we'll come back at we'll take 10 minutes 437 and if you need more time send me a message and I'll I'll wait but so 437 thank you. Thank you. To public comment via the raise your hand function. Great. Seeing none. Thank you all very much. No hang on we got one. Ms. Wasserman how are you please go ahead. Yes thank you. I just had one interesting one point I'd like to question. It would be valuable if we were able to determine the percent of one care's population health management payments that were paid to hospitals who as we all know own the large majority of Vermont's primary care practices and then also contrast that with the percent paid to independent primary care practices for whom these payments are critical and additionally I would hope that one care on Friday could clearly account for the funds paid to hospitals and the main question is is did the hospitals primary care physicians directly benefit from these funds or did the funds go to the hospitals bottom line. Great question. Thank you very much. Any other public comment. Okay great thank you all for putting this together for us. Great job as always so thank you. And with that is there any old business to come before the board? Any new business? And is there a motion to adjourn? So moved. I will second it. All those in favor please say aye. Aye. Aye. Aye. And the vote carries and the meeting is adjourned. Everyone have a great evening. Thank you.