 So it's one o'clock. So I'm going to call the meeting to order. And the first item on the agenda is the Executive Director's Report, Susan Barrett. Thank you, Mr. Chair. I have a couple of announcements to make as follow-up items from previous meetings. The first one is that we will be posting Certificate of Need Bulletin 004, which is the Adjustments to Certificate of Need Monetary Jurisdictional Thresholds later today. And it may already have been posted. And you recently voted to raise those thresholds. So that is the updated document for CON. Second, I wanted to let folks know that last Friday I received a response to the request that you all made through me to AHS and DEVA for them to share any information that they had on the availability of Medicaid rate increases or potential one-time state funding to help address the mid-year commercial rate increases that are before us, that have been before us and are before us. I did just want to make, just read a few bullets from the letter as a summary. And Patrick also will have that in his slide presentation. So, and thank you to Secretary Samuelson and her team for the response. She says, speaking directly to the board's interest in whether Medicaid can increase its rate to offset the mid-year rate adjustments as requested, I emphasize the following three points. One, the state is required to manage spending within a budget neutrality cap for its global commitment to help 1115 demonstration waiver. The budget neutrality cap is a primary concern when considering any new investment or adjustment to Medicaid rates, particularly as AHS is actively negotiating the terms of renewal for Vermont's waiver. I do not anticipate final terms prior to June, 2022. Second, the Department of Vermont Health Access has already increased Medicaid payments for services offered by hospitals in 2022 and provides disproportionate share hospitals payments to address a portion of the shortfall that hospitals experience from government payment rates. And third, DEVA is leading the way in the transition to value-based payments through providing fixed perspective payments for hospitals. This creates a predictable and stable revenue stream when service patterns are disrupted as evidenced by COVID-19. And the last paragraph, I will read aloud because I think it summarizes the letter well. To this end, I encourage the GMCB to carefully consider the proposals from the hospitals for mid-year adjustments, particularly in light of the available FEMA funding and extensive support that has been provided by state and federal funding mechanisms and waive the need for short-term stabilization versus long-term sustainability. That letter is posted on our website under What's New and I encourage the public to read the entire letter. Of course, the board has seen that when it came in last Friday. And then I will also just remind folks as I have for the last year and a half or so that we are accepting public comments related to the next potential model with CMMI. We share those comments with our partners at AHS and the governor's office so that they can see them and be made aware of them as they are leading the negotiations for the next model. And I will turn it back to you, Mr. Chair. Thank you, Susan. The next item on the agenda are the minutes of Wednesday, March 30th. Is there a motion? I moved, I don't have anything else. So I don't do motion, I don't do minutes. I will move on approval of the minutes, Chair Mullen. Thank you, Jessica. Is there a second? Second. Okay, it's been moved and seconded to approve the minutes of Wednesday, March 30th without any additions, deletions or corrections. Is there any discussion? Hearing none, all those in favor of the motion please signify by saying aye. Aye. Aye. Any opposed, signify by saying nay. Let the record show that the motion carried unanimously. Before we start this afternoon's meeting and get into the discussion on UVM, I did wish to make a public announcement at this time. And that is after months and months of soil searching I have announced that I am retiring on July 9th. And it's been an incredible experience working with almost everyone on this call over the last five years in this particular role. And where the years went, I'm not really sure. I started in public service in 1981 getting elected to the board of Alderman in the city of Rutland and have held so many different positions at the local and state level that it's gonna be unique to have some time just to spend on family and travel and doing some things that I've always wanted to do. So if anybody knows a great candidate for chair of the board, it will be the normal process and names can be submitted. They will go through the nominating committee and the governor will choose the next chair. So with that, I'm gonna turn the meeting over. Yes. We're gonna, this is Mike for sure. At some point we're gonna need a public comment period on this announcement. So I just wanna go on record saying that. I'm not sure I wanna give you that opportunity, Mike. Thank you, Mr. Chair. Thank you. With that, I'm gonna turn it over to Patrick Rooney and Patrick, whenever you're ready. So Mike Fisher, the only thing more difficult than a public comment period is the fact that I have to follow that announcement with some sort of professional presentation here, but I'm gonna give it a shot. I wanna make sure Kim Sears is on and that she can hear me. I can, thank you very much. Great, okay, we'll get right in. Mr. Chair, can you see the presentation? I can. Great, all right. So I'm assuming everyone at home can see it as well. So we're gonna get started. Welcome everyone, good afternoon board members, members of the public and stakeholders. We're here this afternoon to discuss the mid-year budget modification requests of the University of Vermont Medical Center and Central Vermont Medical Center. We have received some public comments on this particular topic in part or in total related to UVM and Central Vermont. And our staff did a great job of breaking down some of the contents of those public comments that were received by the board. You can see here, 58 in total. And then we acknowledged some of the common themes that existed throughout those public comments. And so the ones that gave us permission to share are located on the Green Mountain Care Board website. But all of these have been shared with the board members themselves, even if we were not given the authority by the commenter to produce those on a public setting. So we have 57 in total on this page. And as Executive Director Barrett alluded to, we did receive an additional one from the Agency of Human Services. And we've posted a portion of that response that she spoke to here. The totality of that letter can also be viewed on the Green Mountain Care Board website. And I'm not going to reiterate what Executive Director Barrett stated, but we have the synopsis of some of those points here on slide three. Again, covering as we did with the Rutland Regional Medical Center's request, some of the budget performance review and adjustment factors that the board shall consider just to level set. It's been a while since we went through this with Rutland. So providing that here for public transparency purposes and as a recapture for the board, as they consider the two mid-year requests that are upon us today. We wanted to start by highlighting UVM Medical Center's history here, history of change in charges and history of commercial effective rate, what they submitted, what they were approved for and some of the differential. We went through on the gross charge level and calculated the NPR value of those cuts that would be the left-hand graph here. And in total over the years that are exhibited here 2017 to 2022, the total NPR value of those rate reductions has been a little over $17 million. And the values are derived from the submissions outlining the dollar value of 1% of the requests. That's something we ask each hospital, every budget cycle to provide for us. And so the differentials there equate to about 17 million aggregate for NPR for the Medical Center on the whole. A different perspective of that, looking at the NPR effect here, we can see that the history here is that the Medical Center had a few years from 17 to 19 where their budgets were approved, lower than submitted or at submitted and the Medical Center actually outperformed their budget. Some years it was more significant than other, but that is the three years leading up to the pandemic and we're level setting here. So we're showing that the years of the pandemic have not been very kind from a net revenue perspective to an organization that was at least meeting and sometimes exceeding its approved budgets in the past years. And of course 2022 here does not have a column for that. It's a bit early to provide a projection. There is some of that data built into this as well. This was more about the historical perspective here about where UVNMC has lined up over these several years leading up to and through the pandemic. So the request, we received the request on March 18th. The reasons cited were unanticipated demand for services, adverse effected pair mix and workforce challenges and recruiting and maintaining staff. These are themes that are common to in part to the Rutland presentation that we heard. These challenges have an adverse, excuse me, effect on operating expenses that are projecting to exceed the 22 budget by nearly 93.3 million and 7 million respectively for UVNMC and CVMC and margin erosion has been a factor due to those items cited above. UVM and CVMC also noted that they continue to experience higher than normal inpatient needs as well as patients presenting with higher acuity conditions due to delayed care from the pandemic. They also continue to have difficulty discharging patients to lower acuity beds or psychiatric care also known as appropriate levels of care due to insufficient numbers of available skilled nursing facilities and psychiatric beds in the community. UVM's financial update, the reason that they brought their request to us is the decreasing volumes, higher margin services, increasing average length of stay, cost inflation, growing traveler FTEs, cost per FTE as well have contributed to their net patient fixed perspective payments falling by 74 million or 4.9%. Other operating revenues are 36% over budget, unbudgeted federal relief accounting for some of that and also the receipt and acknowledgement of cybersecurity insurance payment in the amount of $30 million which are aiding and offsetting portion of the rising costs and constraining further margin erosion. The operating expenses driven by workforce pressures and rising costs are projected at 5.6% over budget which equates to about 93.2 million dollars. The result is an operating margin that's currently projected to be negative $39 million or a 2.2% loss on margin at a $90 million variance from what they had budgeted. Central Vermont has many common themes with the Medical Center in Burlington, decreasing volumes, higher margin services, increasing average length of stay, cost inflation and growing travelers and cost per FTE have contributed to the net patient revenue falling by 7.7 million and missing by 3.1%. Other operating revenues of 40% over budget due in part to some of the unbudgeted federal relief which is aiding and offsetting a portion of the rising costs and constraining further margin erosion. Operating expenses driven by workforce pressures and rising costs are projected at 2.6% over the approved budget. The result, however, is the margin that's currently projected at a loss of 4.9 million or negative 1.8% loss on margin at a $7.6 million variance from budget. So some high level financial updates they are working through the income statement as to why we're here to discuss UVM's request. The request itself, both hospitals are looking for 10% change in charge to gross charges from the 6.05% and 6% that were approved in September of 2021. The new rates they have requested be effective April 1st and a brief recap here of what the impact would do to their net patient and fixed prospective patient revenues of each hospitals. You can see here, both hospitals as just discussed are projected to miss their approved MPR FPP figures and the projection with the mid-year rate request will only claw back a portion of that revenue gap. And we're going to discuss that in more detail later on as we work towards a recommendation. The financial impact of this, the net patient revenue impact is about $28 million over the current projection. Again, clawing back some of that revenue gap that they're currently projected to experience. This is mostly to be recaptured in outpatient services. Again, we'll talk more about this later on in the presentation. If approved, net patient revenues are still projected to be under budget by about 46 million. If approved, the operating margin is estimated to be a loss of 12 million or a 0.07% loss on margin and a $64 million variance from budget. So some mitigation to the margin situation that they're projecting as of right now, lowering it from 39, 12 million. CVMC's financial impact, if approved, net patient revenue is an increase of four and a half million over the current projection, mostly recaptured in inpatient services. If approved, the net patient fixed perspective payment revenues are still projected to be under budget by 3.2 million. And if approved, the projected operating margin will fall to a $690,000 loss or a 0.2% loss on margin and a variance of budget of $3.4 million. So capturing some of that in a compacted income statement here, we can see the situation through Q1 as provided by UVM Medical Center and the UVM Health Network. And we can see that the year to date to that first quarter was about a $23 million loss, the year, the projection for the year being about 39.2. And then also some negative experience happening below that operating line in non-operating revenue, which would compound the loss from the net operating income to the total margin, as we call it, or excess of revenue over expenses at 51 million. Whereas through the first quarter, there was some positive activity in the investment portfolio that was offsetting some of those operating losses. Looking at the modification here, the projection, the projection with the rate increase and some of the variances that exist in that space, you can see here, if your eye is drawn on slide 13 to the net operating income line, there is that $39 million loss that is being projected and the mitigating effect of the requests that UVM has made would be that that margin shrinks to just under a $13 million loss. However, the real story here is the variance from budget for the projection and the projection for rate increase. UVM had originally budgeted a $51 and a half million operating surplus that is not materializing and will not materialize unless something significant occurs between now and the end of the year, in addition to any regulatory rate impact that this board may approve. So it would have to be a significant turnaround for the hospital to achieve its budgeted expectations and that goes for not just the operating margin but also the total margin with the activity that is expected in the stock market according to UVMMC based on some of their investment portfolio activity. So all in all, this rate effect would not bring them whole at a break even, they would still be operating at a loss for fiscal year 2022. Moving to central Vermont, again, similar story here. The difference here is that what was provided to us through first quarter was that this hospital was operating at a break even. Their budget, however, had them operating at nearly a $600,000 loss through Q1 but their overall budget for the year was about a $2.7 million operating surplus. What we're seeing with the projection is that currently as things stand, if nothing is done, that loss will sink to about $5 million for the remainder of the year. And of course, some of the activity that they're expecting in their projection in the market, not having much of a mitigating effect at all with the total margin sinking to over a $6 million loss. Whereas through the first quarter, they were reporting some gains on their investments that were bringing that total margin into positive territory. So very different from the budgeted experience that they brought before the board back in July and August and that the board deliberated on, which again, just highlighting why we're here to have this discussion today. A similar look to the UVM Medical Center here, providing the budget, the projection, the projection with rate increase so that the board and folks following home can see the impact that this request is going to have, especially on some of those bottom line figures. And as I stated, we'll get more into the net patient revenue impact as we work towards our recommendation, but very, very significant losses here being projected by this organization. However, as we'll see in the next couple of slides, they're not out of the history of central Vermont. So they do fall in line, even though they are significant and the reasons for them are affecting all hospitals. The losses for this specific hospital is in line with some of the historical performances that it has had, just to be clear. So again, providing some of those variances here, a very different story from what they had budgeted to what their reality is and what they're projecting their reality to be as they work through fiscal year 2022. So getting into some of that historical perspective, you'll note that this is a version that we have provided year in and year out showing actual versus budget and the change between the two. You can see here that UVM has struggled over the last couple of years as I alluded to to meet their budgets, COVID being one of the primary causes. However, some of the items we discussed in our fiscal year end report about a year ago, also being the Fannie Allen difficulties that they've experienced and the cyber attack in 2021 contributing to those missed budgets as well. And again, this year, we have another set of unique circumstances that is impacting the UVM Medical Center and it appears that once again, they will be missing their budget here for net patient revenues. So at the top, it's where things currently stand with the projection and at the bottom, you can see the orange column there is the only element of change here and that is the impact of what this rate request would do to that MPR. So looking at that in comparison to the history, you can see that this is an organization as I discussed before, net or exceeded its budget in three years leading up into the pandemic. And since that time, it is at a hard time getting back to that level of net revenue generating activity that it once had in comparison to its budget. The same look being provided here for Central Vermont Medical Center over the same period. This is again, is the hospital that you can see from top to bottom here, showing the net revenue impact of this rate increase. It's about four and a half million dollars, but it's still not gonna get the hospital to budget. Now the difference here is this is a hospital that has struggled to hit its budgeted marks over the years that we have here in review. And of course, 2021, even with the rate adjustment is still going to keep in line with some of those historical budget misses. That being said, 2017 being the only year that the organization has exceeded its budget during this six year look back. Looking at some of the statistics here for UVM, I'll first note that on the far side of this, we did not ask for an age of plant projection for these individual hospitals. So that's missing. That is the reason why we see that nose dive there. It's not because they've made major improvements to their assets. It is because that's not something that we asked for. However, we did wanna build in the day's cash on hand projection that they provided us so that we could align that with some of the history here. We can see that for the most part, UVM's days cash have been in excess of 190 days. There's a slight dip in 2019. But following that, you could also see a dip in average age of plant. UVM made some significant investments in infrastructure in 2019, which did dip into some of their cash reserves. But then you can see that average age of plants falling the following year as those assets were brought online. Central Vermont, on the other hand, with several years of losses that we'll get into, has had a little bit more of a difficult time with days cash on hand. They do have a spike in 2020. As you can see, as did UVM, most of that related to some of the federal relief that was coming in at that time, to help bolster the position of these organizations and others like it throughout the state and the country as they combated the COVID-19 pandemic. But those days cash have been whittled away through some of the reclamation that has occurred that we've discussed, but also ongoing losses are taking their effect as well on that day's cash on hand. But we wanted to provide an update to that projection as UVM provided to us so we could align that with the history of days cash on hand for these two hospitals. Looking over the history of operating margins, very different stories for each of these hospitals. The University Medical Center produced some very generous margins back in 2016 and 2017 and 2018, but we have seen those erode and really up until this year, the bottoming out point really was 2020. They took some pretty significant financial stresses during the pandemic, which caused that. 2021, as we discussed in our fiscal year end, is largely bolstered by federal relief money that was received in 2021 and recognized to produce that operating margin. As we discussed about a month ago, that is not along with several of the operating margins in the state, a margin that you would consider organically derived from operations. That is being bolstered by an immense amount of federal relief money that's helping keeping the system afloat. So it's no different for the University of Montenegro Center in that regard for 2021. And then we built in the projection and the projection with rate increase, which we've already discussed. So again, you can see that getting back to break, even as things currently stand, even with the 10% request on top of what they received in September is not going to get them back to hold. The story with central Vermont is significantly different. They have a history now that is beginning to stretch back of some significant operating losses. And as we've said before, if this hospital were a standalone institution and it were not under the health network, we would have a lot more concerns about the operating performance of this organization. But similar to the medical center as it relates to the projection for 22 and the projection 22 increase, still not getting back to hold and to a break even status. But as I alluded to, you can see that that projected $4.9 million loss is not necessarily out of the ballpark of this hospital's recent history. So it does fit in with 2019, but is an improvement over the low point of 2018. But there was some progress being made here and we should account for that too, that from 2018 to 2020, this hospital was able to begin to shrink some of those losses and 2021 proved difficult and they took a step back and now we have the unanticipated consequences of the current environment wreaking havoc again on the operating performance of the hospital. Another perspective that you saw as it related to Rutland here around central Vermont and UVMC in central Vermont's five year average, you can see average change in charge and median. These hospitals are operating at the lower to middle end of that over the last five years. So we have the 3.5% average for central Vermont and UVM respectively. And then over on the other side of the median, we have 3% for central Vermont and UVM. So both of them have been paired pretty closely over the last five years. Looking at that five year history and what that five year history would be with the 10% adjustment, we can see that again, the five year average has been 3.5%, the median at three. If this 10% were to be approved, the five year average would move to 5.51 and 5.5 respectively, the median does not move. However, this does put them up at the top, near the top of the 14 hospitals in Vermont for highest five year average, if this were to be approved. Another perspective similar to Rutland is we took their first quarter financial results, compared them to the first quarter results of the other six or the other four, excuse me, Vermont PPS hospitals. So the Vermont PPS first quarter results compared to UVM and CVMC. And then as we did in the budgets last year, comparing them to their counterparts in Northern New England and the Northeast as far as geographical footprint is concerned. And so we can see that through first quarter and it's important to note, this is a point in time. Those comparisons for 2019 are full years in which their first quarter could have potentially resembled some of the activity we're seeing here in 2019, but throughout the year changes were made by leadership or performance turned around naturally and they ended up in a certain position. But it's important to recognize this is just a snapshot to show you where they would be should their year end today or as a first quarter across the few of these high level financial measurements here. And so we wanted to provide you with that perspective as well for these two hospitals. A couple of items of note, historically the days payable and days receivable for these two organizations in the inter-period reporting that they do to us always come in very high and throughout the year those numbers begin to fall. I am not entirely sure why that is. It is only related to, I believe these two hospitals in maybe Porter. So take that with a grain of salts. I can tell you year over year their days payable and days receivable are right there with their medians or they outperform their medians. So inter-period look maybe not the best for days payable and days receivable admittedly. A few follow-up questions that we had kind of boilerplate questions to UVMC and CVMC around third party payer contracts and whether or not they had reached out to them in advance of this request. And the answer was no, not as of March 18th, 2022. We did ask as we did with Rutland around the contingency plan if this is not received UVM responded will use the same process for this mid-year adjustment that we used to allocate or approve any budgeted rate increase for exam and all codes looking for opportunities to standardize around a consistent multiplier compared to Medicare, opportunities to bring various commercial rates more in line with each other and where the rates compared to market should be adjusted. The state of the above, yes, if this mid-year adjustment is not approved we'll need to scale back service which will impact wait times. Getting back to some of the other questions that we had we did wanna know about specific financial covenant triggers as it relates to bond covenants. And as we discussed last week or as Mr. Gobi and Mr. Vincent discussed, I should say it's the network that carries the debt service coverage ratio and board member Holmes wanted to know how each hospital in the network contributes to that effort. And you can see here at the bottom the results from UVM are that the medical center no surprise carries the predominant leverage there with central Vermont coming in second. So all told they carry about three quarters of that debt service coverage capacity. So and so you can see here as UVM outlined 2022 projected as is would bring them to 1.90. A consultant call would occur at 1.9 and they've been gracious enough to tell us how much more of a loss it would take to get them there. And the default level as well which is the kind of the nuclear option here would be an impact of another $51 million in loss to projected margin. So looking at that, they have responded to our request in that space but it is important to know that the debt service coverage is not at an individual hospital level it is carried at the network level which means it's the network that borrows and it's the network that is lent to. And although as you can see here UVM Medical Center contributes the most to that. It is more likely than not that when they do borrow money it is for asset replacement or revitalization at the UVM Medical Center surely based on its size and the variety of services that it offers. Getting back into the revenue piece when we initially received the request from UVM there was a lot of focus on the expense side. And that is something that of course needs to be understood given the environment that currently exists. But the one thing that we wanted to focus more on was the revenue gap, the miss in budget that's occurring. And so we did ask them to provide for us a set of tables that would highlight where that gap may be the largest. And we wanted to see that for Central Vermont and we wanted to see that for the University of Vermont Medical Center. Those tables are in the appendix of this presentation. So anyone who wants to fast forward to the end can do so and see some of those numbers. But we wanted to illustrate for the board and folks following along home where we anticipate or where UVM anticipates that landing. And what we wanted to see was what was your budget for inpatient, outpatient and professional? We wanted to see by payer and we wanted to see where your current projection is by those service buckets and also what your projection looks like with the rate request that you've made to the Green Mountain Care Board. So in the top left here on slide 25 you can see that the commercial component of this is where that net revenue impact is going to hit. You can see that the majority of that is on outpatient and this is without bad debt and free care. So those are some larger numbers that they ultimately will end up to be once those bad debt and free care offsets are considered. But you can see the majority of it is occurring in that commercial outpatient space. When we move to the right you can begin to see what that means by the category of the service buckets. So we can see that they're missing their budget on inpatient and that's highlighted by the light blue. And then with the green you can see some clawback based on the impact of this rate request. When you move over to outpatient you can see they're missing their budget on outpatient but more importantly where that net revenue is gonna land based on this rate increase it's gonna bring them almost back to whole on outpatient and then moving over to professional they're missing their budget. They're gonna bring back a little bit of it but they're still anticipating on missing their budget. And so we move down to the bottom table here the bottom graph you can see that in action in more detail. So the dark blue on the left hand side of each one of these categories inpatient outpatient professional they're missing their budget currently by $28.5 million on inpatient. This rate impact is going to provide relief in the amount of $6.6 million which means they're still gonna miss their budget by $21.8 million. And the same thing goes across the board here and we have the same look for central Vermont. They're missing their outpatient budget by 19.4. This rate request is going to relieve about $16.5 million of that miss resulting in a projected miss with the rate increase of 2.8 million. And you can see on the professional side that dollars for dollars that's the place that there's not gonna be as much relief coming from this rate component. So that's the detail that exists within the next couple of slides here where we're taking it from gross to net at a higher level but what we're showing is in that first one is the true detail of what that request is actually going to net out at across the payers and across those service buckets. So this is more of a high level approach that captures the figures in an illustrated form that are in the appendix. And we do that for each one of the gross to net inpatient outpatient professional and then the total. Moving to CVMC, a similar look. Again, you can tell here that the commercial component of this is going to bear the weight. What's interesting though is that they are currently projected to exceed their budget on inpatient. And this is going to add a little bit more to that not a whole lot. They are missing their budget on outpatient. They're going to claw back a little bit of that with the rate request and they're missing their budget on professional and they're going to claw back a small amount with the rate request. The SNF is a non-factor really in this discussion but as you move to the bottom of the screen you can see how that impact is going to affect their budget to projection with the rate increased. Again, inpatient, it's already exceeding budget. It's going to go up a little bit more with this effect. The relief that they're going to get in outpatient is about 3.2 million but they're still going to miss their budget by 12.6. And moving over to professional, a very similar story. They're missing their budget. The rate relief is going to be relatively minimal and they still anticipate on missing their budget. And again, very high level gross to net component here. The one difference is we've added the skilled nursing facility Woodridge that exists inside the central Vermont budget but it's the same factors being put together. So walking through our recommendation that I'll be right up front. We are recommending that the board approve a rate increase not to exceed 3.5% for both UVM and central Vermont. We were trying last week to solicit information from the folks at the health network around the inflation table similarly to what we did with Rutland. We did not succeed in getting the data in the way that we had hoped to do this. The reason being, we wanted to quantify where they had expected their ordinary staff inflation to be what they are experiencing now. Similar to Rutland, they've made contract agreements that are very, very different than what they anticipated in their budget with their regular provider staff or at least certain groups of the regular provider staff. And then we also wanted to see if they didn't plan for anything in the inflation category for contract labor, how has that changed? WorkForus has been the cornerstone of this presentation from UVM Health Network Hospitals. We really wanted to see, okay, what are the expectations here as it relates to inflation for their staff and as it relates to inflation for contract labor and how can we begin to quantify that in a way that can help us get to or even validate the rate requests that was put before us. And we couldn't do that. We could not get to that point. But that said, we recognize that inflation is a very real factor. For those of us who work and breathe in this space, it's not a secret. And so recognizing from the finance team that something is happening in this space is really the bulk of why we made a request that is more than zero. But the fact that we could not get around to the 10% that UVM proposed has a lot to do with the informational components that we felt were missing. So we recognize that inflation is a factor in this space. We recognize the need for relief, but doubling back on the 10% request in this environment and the volatility that exists and how quickly this situation has ramped up for hospitals, including the two making the request. We think it's prudent to provide some relief, but not in the amount that was requested of us. We have a more formidable and formal budget process coming up here in a few months in which things can be vetted with more time and more attention. And also perhaps by that time, the environmental factors have changed in a way that is not committing this board to a massive rate increase. So we think that there is some logic behind approving a small increase. Of course, when you build that into their current base, it does bring it up to 9.56 for UVM and 9.5 for central Vermont respectively, which in their own right are large base increases. We recognize that and what that means. However, those factors really are the reason why we believe in a rate increase, but not quite going to the full amount. Additionally, their five-year history, as I alluded to, puts both of these hospitals in a five-year average rate history of 3.5%. And so using that historical factor, which we do in budgets as well, is where we ended up landing and that we felt it was appropriate to provide a small level of relief built around that 3.5% average for both of these hospitals in their gross charge increases. So we think that as they move to a 3.5%, essentially increase for 2022 over 2021, that is a substantial base increase. We recognize the volatility and we recognize the environment in which this is being made, but we think it would be prudent not to go much farther than that until more information is clear, maybe things calm down in this space and the board can look back with clearer eyes in the July and August timeframe in their normal budget process where even more and consistent information is requested outside of the mid-year approach. So I'll navigate to central Vermont just to highlight the numbers that I just spoke to and the logic behind that. And then into the appendix, here are those numbers that we illustrated in the various graphs back on the previous slides. So that really brings us right to the end of our presentation and I'll turn it back over to you, Mr. Chair. Thank you, Patrick. And for the board questions and comments, I'm gonna go in reverse alphabetical order and start with our newest board member, Tom Walsh. Tom. Thank you, Chair. And thank you, Patrick and staff for that analysis. I had a chance to review the slides and consider the recommendation. And for me at least at this point, I'm interested in what the other board members have to say. I have a hard time getting to even the 3.5 we're transitioning to fixed prospective payments where people manage within their budget. And there's no mid-year increases that's part of any of the programs that we're looking at going forward. And the reason for that is to share risk, right? We've all been through a pandemic. We're all dealing with the after effects. UVMC has a $1.7 billion business and it's facing a 2.2% loss in 22. That's from slide 13. CVMC has a $270 million business and is facing a 1.8% loss. In 22, their days cash on hand are shrinking. The projection is 118 days on average between the two places. But if we consider the 2.2% loss and the 1.8% loss and return to slide 19 with the table with the graphs that were there, that chart shows that CVMC had a loss of a loss in their operating margin of 3.8% in 2018. They improved that to a loss of 2.1% for a difference of 1.7%. They improved their performance 1.7%. I believe that can be done again. And if that is done, if that were done, if both places were able to figure out how to do that, UVMC would be looking at a 0.5% loss. And CVMC would be looking at a 0.1%. So I believe that effort, whatever happened at CVMC, that effort, when they were faced with their biggest loss to date, bigger than what they're facing now with no relief, that effort can be done again. In the projected loss that they're facing right now is not unprecedented, but a mid-year request for a 10% increase is. And with that, I'll turn it back to you, Chair Mullen. Thank you, Tom. Next, we're gonna go to Board Member Pelham. Tom. Trying to get my mic to work here. Thank you, and thank you, Patrick, for all this work. At our last meeting on this topic, I said that I'm kind of trying to understand or get my arms around the short-term issue of addressing these problems for these particular hospitals versus the long-term. And kind of Jenny Samuelson said the same thing in that last paragraph of her letter, which is stability versus sustainability. And I think I'm coming down on the side of sustainability. I, $33 million in commercial revenue, which is, I think what's in play here is a big number. And when you look at the distribution of say margin across hospitals, the network hospitals, UVM, Porter, and Central Vermont, Central Vermont's usually been a drag, but between the three of them, they have over the past five years kind of occupied about 85, 86% of the total margin. It's always hard work, but when I think about pushing this issue into the arena with the concerns and issues and needs of the other hospitals in Vermont, that seems to me to be the better place to go. We've already started our 2023 budget process. We've improved guidelines that are available. And so we've kind of dropped the puck, so to speak, on fiscal 2023. And so what is there that will happen between now and acting here and what will versus what might happen or can happen in the summer months during the hospital budget process? Well, the legislature will probably have been left. So we don't know the results of what the legislature will do. They haven't adjourned yet, but there are issues of workforce initiatives and money for the hospital budget stabilization effort that are still in play. The 2023 budget process is slightly different, I think, beneficially different than the prior ones in that it stretches the decision-making by hospitals over a two-year period up against a cumulative target for two years. This request is basically not in accord or balanced with our healthcare reform goals in that it's substantially fee-for-service. There's no fixed perspective payment here or any of the elements that we're trying to work toward. And then this coming summer month, I was very happy to see, let me just find my quote here. I was happy to see Don George from Blue Cross Blue Shield in his letter opposing, not that I applaud his letter opposing this, but in his letter to us, he stated, we must turn determinedly toward value-based payments and global hospital budgets to think more holistically about patient health rather than incentivizing volume by paying for each service individually. Now, this is from an entity, Blue Cross Blue Shield, an MVP that collectively among hospitals has less than 2% of their payments aligned with a fixed perspective payment. And that is kind of comparable to Medicaid and Medicare. Back up. I'm getting some feedback here. Yeah, if you're not speaking, could you please put yourself on mute whoever is bleeding through? So Medicaid and Medicare payments are up to 43% and 34% respectively with fixed perspective payments. Although they're not true fixed perspective payments, at least they've got a couple of wars in the water in that regard as opposed to commercial. And so here we are looking at another $33 million in commercial that's totally divorced from healthcare reform. We have the hospital, hopefully the hospital sustainability project will be at least up and running by the time we get into the hospital budget process. The all pair model renewal, we have not received that yet but we should have that hopefully by the time we're into our 2023 budget process. The global commitment 1115 waiver is also up for renewal. And I just, when I read Secretary Samuelson's letter I went and kind of found the latest quarterly report of the section, Vermont section 1115 demonstration year. And when it comes to budget neutrality that quarterly report says, and I don't understand this but that we've got to understand this by the time we get into the hospital budget process but the report says overall the budget neutrality exercise indicates that for September, for the September, 2021 quarter the state's total with waiver expenditures were $95.5 million lower than the total without waiver indicating a quarterly surplus. This compares to a surplus of 73.9 million reported in the June quarter and a total calendar year 2021 surplus to date of $272.9 million. So there may be some gold in those hills. There may be no gold in those hills, I don't know but it's the kind of thing that we can explore in the normal organized disciplined budget process. And so I think that's my biggest concern is this ad hoc process just seems to me to be kind of positioned at a critical turning point which I think is fiscal year 2023 and takes a large chunk of commercial revenue and puts it in play now as opposed to through that budget process. And I've also been impressed with the many letters that we got from people, both businesses and individuals who say that this mid-year adjustment would be very disruptive in their personal lives or in their commercial lives and that weighs on me as well. So the 3.5% that's proposed by the staff today is new to me, I just think that it's small relative to the requests and I just think that we're we'd be better situated to deal with this in the normal budget process. That's my take on it now. Thank you, Tom. Next we'll turn to board member lunch, Robin. Thank you. So I actually did have some questions. So are your questions for Patrick or for UVM? Cause if they're for UVM, I'd like to have them sworn in. I think, well, I think they're probably for UVM because they're about the, or UVM or CVMC because it's related to materials that they submitted. I don't know if Patrick and team would be able to respond to it or not. So why don't we swear in the witnesses and last week it was Alan Rick but I do see Steve here and I did have a question for him when I get my chance. So is that okay that we swear the three of you in now? We'd like to stick with the two that we had last week, Chair Mullen, but if you have something for Steve later on, we could do that, but we're the presenters. Okay. So, Kim, are you able to swear them in? Are you in state? I am, yes. So I'm just swearing to people, correct? Yes. Okay. It's Al Gobey and Rick Vinson. Okay. All right, great. Would you please raise your right hands? Do you swear the testimony you're about to give shall be the truth, the whole truth and nothing but the truth, so help you God. I do. I do. Thank you. Thank you. Okay, so the first question that I had related relates to the issue of volumes. So you did speak last week to some of the issues related to volumes, particularly inpatient and the challenges with that average length of stay extending. What I would like to understand better is the dynamics in each hospital that are happening around outpatient and professional services, particularly, I would note that for UVM, the professional services is significantly under what was budgeted and I'd like to understand what's going on there. But if you could please answer the question for both hospitals, both for outpatient and for professional. Rick, do you wanna go? Yeah, I mean, I think Rob, if it's not in what we provided, which I think Patrick has, I think to give you, I don't wanna just kind of speak off to cough in terms of answering that question. I mean, the question that we were asked was specific around inpatient and breaking out some of the detail behind our net patient revenue number, which I think was in the presentation that Patrick provided, but if you want more detail to explanation on what's happening in each individual segment, such as something we'll have to give back to you. Well, you have the burden of proof. So if you can't answer the question or choose not to provide information, then I'll just tell you that from my perspective, I'm not getting the information I need to make a decision. I may be in the minority there, other people, obviously Tom and Tom feel like they have the information they need, but I'll just remind you that you have the burden of proof, and so it's in your interest to fully answer questions. Yeah, I just wanna make sure we don't provide you with information that is inaccurate or is just kind of generalized. When we provide the answers to these questions, we try to be as detailed as possible. And so we just wanna make sure that that's what we're doing in this case as well. Okay. Because your camera not working? No, I should be on. Do others see Rick? I see you, Mr. Chair. Yeah, you're black also, Al, so maybe there's... So I see Al, but I don't see Rick. I see neither Al nor... Oh, now I saw Rick, but I don't see Al. But either way, I'm fine. I don't need to see people. I'm looking at my notes anyway. Do you wanna finish this? Do you need to understand more about that, Kevin, or can I continue? No, go ahead. Okay. So my other question was related to days cash on hand in the materials. You indicated that the days cash estimates were without any remaining Medicare dollars. Could you please explain that? So we, that is a different subject saw in kind of the presentation in terms of the days cash on hand numbers for the staff. So we report days cash on hand without the Medicare payments that we're still paying back because they're not ours. We have to, they're taken out of our claims as Medicare pays us for services that we've provided. They started with 25% reduction in payment for six months and then it moved to 50%. So for us, that's not cash that we can count on because it's gonna have to be paid back. And it's also the way that we need to record, we need to report the days cash on hand to the rating agencies they're consistent across the country in terms of how we report that. The number in the presentation obviously includes, the presentation today includes those dollars that still need to be paid back. Okay, thank you. I just wanted to, that was my assumption, but I just wanted to confirm that what was removed was the Medicare dollars that need to be paid back. And then I know, I did read the email related to the inflation table that were provided for both UVM and CVMC. In that table, it indicated there is a 19.3% increase in wages and compensation for non-medical staff. Could you speak a little bit more to what the wage increases were to whom and when those were applied or will be applied during this fiscal year? And they're mostly applied to some of our entry, actually a lot of our entry level roles. So environmental services, security, nutrition, those roles we've had a hard time recruiting. And so the majority of those that are outside and that clinical area have been applied to those roles. They've been occurring essentially since December, January timeframe when we really started and even before that. But we really started to struggle to recruit those staff. They've taken the form of permanent salary adjustments. So we've made market adjustments to some positions. Some form of the increases have come from retention payments. And we use those retention payments to ensure that the inflationary pressures that we're feeling and then the lack of ability to recruit is it here to stay or not? And retention payments is a way to kind of bridge that gap to make sure you're not making permanent salary adjustments as you wait to see exactly how things play out. But those have all been at various times through this fiscal year. Those have all been applied primarily to those more entry-level roles. Okay, and it sounded, I may be misremembering, but from your answers to questions, it sounded like the retention payments, however, were not included in that 19.3. Am I not understanding that correctly? Sorry, the 19.3 that you're referencing, Robin? So that's in the inflation tables that you were asked to submit for UVM, MC, the fiscal year 22 mid-year adjustment. And I don't know if, Patrick, if you have those available and maybe you could pull them up. Yeah, so those retention payments are in there, Robin, I'm following now. Okay, and do you know how much those were? So in total, just going back to the email. So we provided more detail in the email as well. Okay, I did read the detail in the email, but it was a little confusing to me because it sounded like you had excluded those from the chart. So that's what I'm just trying to understand and clear up. Yeah, it looks like probably the majority. So the UVM Medical Center had 12 million in sign-on retention payments with the vast majority of that 12 million being retention payments. And CVMC had three million, again, the vast majority being retention payments. Okay, thank you, Patrick. And this is the CVMC chart you have off. Yes, because I can tell from the magnitude of the dollars. Okay, so of that 103 approximately, 12 million would have been related to the retention and sign-on. And the rest would have been the either market adjustments or other salary increases. Is that right? Correct, then traveler expense as well. Okay, and there was another document that you provided that had the traveler dollars broken out, I believe. Yeah. Okay. Okay, thank you. Those were my questions. So in terms of where I'm at, I am concerned particularly around CVMC's financial position as others have noted CVMC has had a number of years of missing the budget. I think we did have a discussion about that during the budget process in terms of ensuring that we were not approving what we've been referring to another context as aspirational budgets. I think mid-year it's difficult to really sort out how much of that miss is related to sort of the budget being too high and unrealistic versus how much of the miss in terms of NPR is related to other factors. I don't feel like I understand that. I would be inclined to approve some sort of rate increase for CVMC despite the fact that I very much agree with others that mid-year is tough. Other people have made budgets based on their expectations around health insurance. This obviously throws that off. The fact that NPR however is coming in under is a balancing factor in my mind because presumably the budgets folks made were off of the total budget and not this lower number. However to be frank I think the source of some of our questions including the inflation chart was to give us and staff a way to get to a number less than 10 percent and so not having that information clearly laid out in a way that our staff can analyze it makes it difficult to come up with a solid rationale for picking a number. So that has so that I don't know where that has left me. So I'll just say that. With UVM I would say that I think with UVM there's more ability to absorb the fluctuations and just to be frank I'm not really sure where I am with UVM as of this second. So I think I'll stop there. Thank you Robin. Next we'll turn to board board member Jessica Holmes. Jessica. Yeah thank you. So I guess you know my focus is on a few areas has been on a few areas with both of the rate requests that have come in from both Rotland and from the health network. So one of the focus areas is whether the unexpected inflationary pressures are temporary or permanent. You know in the case for Rotland most of the unexpected expense growth for Rotland came from one time retention bonuses and temporary staffing. It seems to me although I share the concerns that Robin and the staff had it's very difficult to parse out for both UVM and CVMC. What are the long term wage increases for their permanent staff versus temporary retention bonuses and contract staffing. It's all rolled up in there I know Rick you just mentioned what some of the retention bonuses are but you also said that some of the contract staffing is also embedded in that number. So for me I'm really trying to understand and unpack what are the costs that are going to be incurred indefinitely and obviously resulted from the need to retain critical work for us during this pandemic but that are going to be contracted now indefinitely. So I'm still trying to figure that out and I can't quite get at it from the inflation table. But I can ask a question perhaps at the end that may get us there. In terms of reserves I also focus on reserves right can these reserves cover the unforeseen expenses that are happening mid-year. Again in the case of Rotland Rotland had over 200 days cash on hand something like 244 and they were projected to end the year with at least 200 days cash on hand. So in my mind they were in a better financial position than either UVM or CVMC. According to the UVM's presentation last week the days cash on hand as in January was already down to 157 days cash on hand again excluding the Medicare payments that have to be paid back. So I think that's the appropriate measure that's not their money maybe sitting in their bank but it's not their money right. So 157 days cash on hand is where they were in January. To me that's well below the benchmarks for rating agencies that's usually around 250 right to get an A rating. Why do we care about that because ratings affect the ability to borrow and we do expect our tertiary care center to be able to borrow for capital investments. And so that's a concern of mine. CVMC is an institution that has not generated positive operating margins since 2016 and it's projected to end the year at 82 days cash on hand. Again pretty low and worrisome. And even if the board approved the full rate request both institutions are going to end the year in red. So these rate requests aren't even going to get them into the black right. They're still going to end the year in red. So that kind of gives you a sense of how badly in the whole these two institutions are in my mind. Is there room for increased productivity faster throughput of patients improved efficiency. Yes I think there is and my experience is on the wait time review suggests yes there's room for improvement there and I hope that in the budget process this August we could hear some of the steps that particularly UVM is taking to to improve that throughput and patient flow and reduce wait times. But I do think it's important to say that we rely heavily on our tertiary care center to have the resources to be able to invest in the most advanced technology the infrastructure and hiring the best doctors that we can in Vermont to take care of our sickest patients. And so I will say the predicted losses in the shrinking reserves at UVM are worrisome to me and CVMC is consistent and predicted losses and low cash flow position are also troubling. I also just want to note we were supposed to hear today about a new psych inpatient project that would be built proposed at CVMC largely funded by UVM. So this is going to take a significant capital expenditure. It's not likely to be a high margin center. In fact, it's probably going to be a loss center. But it's potentially we haven't heard and we will hear but potentially meets a very important unmet need in the state and will require resources to do that. So I struggle with the need to bounce hospitals having the resources to provide the highest quality care for our remoders with the need to keep health care affordable. I'm sympathetic to a lot of the all of the public comments received from small businesses and families who can't afford increases in health care costs where I was landing and where I was hoping I could get data was supporting a rate increase that would cover or at least defray the unplanned permanent wage increases that were negotiated on behalf of full time permanent employees. Right. So you know say for example you budgeted three percent for your nurses and you know you gave them three percent and then you gave them an additional 10 percent. That's unexpected increases in nursing salaries moving forward indefinitely. Right. So that to me could justify a potential you know rate increase but I can't figure out from the inflation table what are the average you know rate increases for employees in permanent employees. It looked like from the inflation table that there were no unplanned increases in MD salaries really where it came in was in the non MD salary and in the inflation table it suggests that it's a 19 percent increase in average wages of non medical staff but it sounds like that includes permanent and non permanent employees and and also includes one time retention bonuses. So if it's possible to get the average increase in wage for permanent non MD staff that would be really helpful to me if I'm making clear my request. Yeah I'm happy to answer that. I thought we completed the the the file as requested and we added some additional information in the email as well. We didn't get any we didn't get any feedback on what was provided but yes that is something that can be provided. Thank you that'll be helpful. Is that it Jess. Yeah I mean those are my thoughts that's the information that I feel like actually I have one other let me just ask one other question of you Rick I'm this is a curiosity to me but in that inflation table it looked like CVMC was seeing a four percent decrease in per unit drug costs where UVMC was seeing a nine percent increase in per unit drug costs and I'm just curious as to why CVMC was seeing a decrease in per unit drug costs. So if I'm and correct me if I'm wrong Patrick but I think that table was comparing to budget not not a trend factor so that that's just that the the the increase was less than what we planned in the twenty two budget is that how that was presented Patrick. Yep so you provided your budget version and then what your projection and experience is now. And the reason just obviously there's a lot more different types of treatments and drugs used at the at the UVM Medical Center that likely some of the more higher complexity drug courses or the ones that went up in price versus kind of more standard CVMC. Got it that makes sense. Yeah so those are my questions. Kevin and that one piece of information that I just need is is what I just talked about. Hey thank you Jess. So Al the question I was going to ask Steve but I'll ask you. You know UVM over the years during my time here has been great communicators and usually never see anything in the news before it's communicated to us. But recently and I understand the circumstances so I'm not trying to lay any fault on anybody I'm just trying to get some information about it. We saw the story about the broken pipes in the OR is that a quick fix and can you just run a little bit longer hours to get everybody caught up so that nobody's surgeries are left behind and does it have any impact on what you've already projected for your numbers for the rest of the year. Yeah so Kevin thanks for the question. So that happened on Saturday night late. We worked on it overnight. We worked on it all day Sunday. You know basically as of today we're we're we're getting back to you know what we think of as close to 100 percent could be could be tomorrow. We're working on the delayed cases and things that were moved to Fannie to try to you know take care of the folks over the next week or two so we're hoping that that it's just you know the impact of a you know of a few days and not not anything more than that. And so you know hopefully up to you know we have a little bit of optimism right now that it's going well and the cleanup is going well. Great thank you for that. Absolutely. On slide 24 there was information about the relative relationships between the different entities and the total health network picture. I guess I did I took the question that was asked by my colleague last week a little bit differently and that's probably my fault. I probably read more into it. But I was looking more to get an update on what what type of an impact the three hospitals that we don't get to regulate because they're not in our borders are having on you. Have you had to transfer any funds over. Are they helping or hurting with the current situation. So we haven't had to transfer any funds over. They actually so New York has a has a critical access hospital in our network just just like we have in Vermont. So they're they're doing fine just as our remote critical access hospital is doing because you know they're that you know the costs plus reimbursement there will help to cover the higher cost inflation that they're incurring CVPH and alzide or you know roughly you know in the same kind of general this and they may be even doing a little bit you know better than the the UVM Medical Center in terms of size and scale so they're not negatively impacting kind of where any more so than the Vermont hospitals in terms of where we're at as a as a network. Thanks Rick. So like Robin I was especially concerned with Central Vermont Medical Center and this has been a troubled entity for a number of years that predates UVM even being there and we heard I believe it was three years ago during the normal budget process from Todd Keating who had spent some time as an interim CEO at Central Vermont at the time that he felt he had the makings of a plan to turn it around and Todd has retired. I'm just curious if you were able to implement Todd's ideas for improving Central Vermont Medical Center and were they successful and where do you see that going in the future. Yes. Go ahead Rick. Go ahead Rick. So I think you know if you can go back to Patrick's chart I think you know showing the showing the margin impact over the years I think we you know we we have started to make some some progress but just like the UVM Medical Center and you know others the impact of the pandemic you know the cyber attack has somewhat kept back some of those improvement efforts not that they haven't been implemented and we haven't seen the kind of the fruits of that work but it's somewhat you know being offset by you know the you know the the impact of those two events. So once we get beyond kind of where we're at which you know right now we're in this workforce challenge issue which is why we're you know we're we're here today. Once we get past this this period in time I think those those things that we've put in place and some additional work that still need to be done will be much more apparent. But I think the pandemic the cyber attack and the workforce challenges of somewhat masked what you know the good work that has been done. So I think that's you know I think that good work is in part being you know somewhat hidden when you look at when you look at those results. Yeah and and Chairman Mullen I'd like to just add a few things. I mentioned back in August that CVMC has an underdeveloped pharmacy program and that's something we're working on and it sort of sticks out when you look at the just the raw numbers over time. But I'd also call out years 17 and 18 for both NPR and rate. They were there was a pre negotiated rate for UVM MC and for CVMC. So the budgets that were submitted were basically lower than would have been needed on a five year trend because of basically the margin of UVM MC the year prior. And so that had a huge impact on the rate structure of CVMC over time. And if you look at your chart from that time you put them together on a five year. Those years you know basically are you know almost zeros that you're averaging into a five year rate. And so they stick out and I would call that out to the out to the board. And last we did just put Epic into CVMC on November 6th and we are seeing positive signs from that. A lot of the hospital was still on what we think of as paper to some extent. And so you know that will have an organizing effect and will impact the finances moving forward. And so just a few points. Now to follow up on that you transferred a number of surgeries. At least that was the communication that what you could do at CVMC you were moving patients over so they weren't affected by the problems that Fannie Allen. And I'm just curious why that didn't improve the margins at CVMC. Well it's you know it's hard to move surgeries you know that's not you know that's not easy to do. Let me just say that. And so you know a lot of that you know you just can't you know make it happen that easily or that quickly. So you know it happened to some extent but not enough to really impact the margin. You know but also you know let's remember that you know the last three years you know we were I thought I think we were pretty clear last week you know we have been incredibly impacted our volumes our margin by the pandemic by the waves of the pandemic what we've you know we were we had to stop doing things at CVMC just to maintain beds you know during the two major surges of the pandemic and both of those were during the Fannie closure. And so you know we've just it's been a it's been an and an and and an and you know of tough cards out of the deck not you know with with very few easy cards. So you know sort of sort of a mixed answer there but that you know there's a lot to unpack but it all of it the cumulative impact is a sea of red here that should concern every Vermont citizen. It is very concerning. Now I'm I'm sure that you've read the secretary's letter on what help might be available. I didn't see a lot there. You were on television would store it led better sounding very optimistic that there would be increases and maybe you know something that this board doesn't. But I would just say this you know in the past week there was a significant article in the New York Times about whether or not the cost shift is real. The argument was made that it's not real and that where hospitals see reductions in government payments. There's also reductions in commercial payments. It doesn't really bring true to me. I've been talking about the cost shift for over two decades. I believe that I was part of the group that was labeled by then Governor Dean as a bone head and we probably wore buttons that said bone head for health care. And I think that over time it just continues to grow the difference between commercial and government payers and it's so frustrating because you can see that there has to be some cost shift. But the magnitude of it just continues to grow. So do you have any positive news for us at all. I don't have any positive news in that regard. I will say to support your the bone head pin team. Look at critical access hospitals. Medicare recognizes that costs have to be covered at least for the part of the revenue that is Medicare. And they're in a whole different situation right now. I mean we have two of them and they're fine and we have other hospitals that are paid differently and the only place to turn for you if you want to do anything today is to commercial payers. And so whatever we want to call it we could call it anything. The situation is real. And you know we're we're caught in this position where you know we're debating whether or not inflation is transitory or here to stay. And we're literally dealing with days cash on hand coming down as we pay the very real bills that we don't label them transitory or or real. They're they're just the bills we're paying. And we understand that the business community seeing the same inflation and their expenses. But you know we've got to cover ours. And and I just think that you know that that gets caught a mist that gets kind of missed in this conversation that you know these are real costs and you know they need to be paid or we end up with this red red. And then you know we're not healthy enough to do the things we need to do as member Holmes accurately pointed out. Thanks Al. Thank you. The points have already been made. But I just want to reiterate that UVM is where the lion's share of our providers are trained. It is our academic medical center. They have been leaders in value based payments and all the good things that you do on a daily basis. So I'm trying to weigh against the fact that I just don't believe in in a mid-year adjustment unless it's what I would call a situation that would place you in default. But let me ask you this question. Even if you got what you asked for today with that loss and what transpired last year do you anticipate the ability to keep your current bond rating. So you know they're waiting and they're watching this to be quite candid. They want to know how this goes. I have thought that we that we might get a either our bond rating affirmed or our outlook changed to negative. I would hope that none of this would lead to a negative to a downgrade. But again they're they're watching us and they're watching this to see you know what's going to happen. We are the only health system. We are the only state that has this kind of regulation. You know we're an end of one and you know it's very hard to explain why you know even though we're seeing cost increases we are our hands are tied to do anything to adjust to them. And so you know again hope we're affirmed we worked hard in the meetings to explain where we're at. But you know they're good at what they do. You know it is such a difficult decision. And I would hope that they would realize that even if the regulatory body didn't give you what you asked for today that the reason for that would be not that they don't recognize that you need it. It's that it's it's rare to do a mid-year adjustment. And so that weighs on me. What effect this is going to have on you. We don't want to see it going in the opposite direction. There's a lot into what is here. I do believe that Robin hit a very strong point and that the burden of proof is on you asking for the mid-year adjustment to justify it. I think for the most part you have I don't believe that to use your word Al. I don't believe that the additional cost inflation that you're seeing is transitory. I don't see how it can be transitory when you have locked in a three-year contract with your nurses that was necessary to do. You're not the only hospital that had to do it. And there are no money trees that you go out and pick the money off of just to bring people's pay up to try to create a better working situation so that they don't feel abused when they're standing next to a traveler that's making more. And so these are very hard decisions. And with that I'll throw it back to any follow-ups from any board members. Mr. Chair could I just make one comment before you before you move on. Certainly. So about Patrick's concern about our submittal or answering of questions to the best of my ability I thought we answered them all. I'm not sure if we missed something or or what happened there. Yes. So I'll weigh in on that. It was around the inflation table and I can bring that back up to share here. We had this broken out right here to have you separate Patrick. We don't see it yet. Oh there. Now we do. Oh sorry I pulled it down. Hold on. I'm with technology. OK. Let me know when you can see it again. OK. Is it OK. So this this bottom part here in the asterisk is exact as is the reason why we're having this discussion is that when you put in your budget you didn't have any contract staffing inflationary components. OK. Which is fine because you only know what you know at that point in time. But with your presentation you've acknowledged that the costs that you're incurring from travelers that is over what you budgeted is not just related to the amount of persons you're now employing from a traveler's perspective. It's also the added cost. So you had noted that you had 80 people in your budget one hundred and sixty seven thousand on average per for a budget of thirteen point four million in your projection you have four hundred and five persons at two hundred and eighty five thousand which is projected at one hundred and fifteen and a half million. So what we wanted to see here is you've had changes that you've discussed already and the wages and compensation of what board member Holmes said was your your permanent staff. We wanted to see in that contract and staffing line right there. What are the new components that are the inflation component of that traveler. So you have a need for four hundred and five persons. It's three hundred and twenty five more than you budgeted for. But we're not going to get into the need for those individuals. We want to understand the inflationary burden that that has put on you. So even if you had had the original eighty FTEs at the new two hundred and eighty five thousand it would have put you at about twenty two point eight million. That's not a budget buster by by by reason of comparison to what you're currently experiencing. So we want to see you break. We want to see you break that out as she described where we're seeing. What are those those necessary permanent wage inflationary factors versus the ones in your contract staff. Patrick totally understand. But to be fair to those listening we you know we submitted this at three forty three on Monday and we didn't hear anything back. We're glad to work to getting to your intent here. We don't you know we're as transparent as as anyone could be with our numbers. So I just want to make sure everyone knows that we submitted what we thought were answers to every question. And if there's any need for more information or clarification where we stand ready and are always ready to do that. So. Yep. All it had more to do with the turnaround between totally. And we when we receive that and the recommendation that we have to had to have to have into the board yesterday for this presentation. So we did not expect to vote to happen today. So there's room now to work on this between now and Friday and I can resubmit the tables you've provided to me for that effort. Fair enough. Thank you. Sir. And I meant to say at the start of the meeting that although I was hopeful that we could have a vote today that it was probably unlikely and that we have scheduled a meeting at eight o'clock on Friday. And my goal is to have a decision this week. And I would hope that any board members that have any questions that they would get them out now so that answers can be received tomorrow and people are fully prepared to come in on Friday to make a decision. So board members if you have any additional items that you would like from UVM or from Patrick please say so now. So there really aren't that many items Alan Rick. I think that you ought to be able to turn this around quite quickly and get it back to us the earlier tomorrow that we can get it the better off we are so that nobody says they didn't have time to take a look at it. And hopefully we can come to a swift conclusion of this hearing on Friday morning. So with that I'm going to open it up to public comment. Does any member of the public wish to offer comment at this time. Jeff Teeman. Welcome Jeff. Thank you Mr. Chair. Like you said I'm Jeff Teeman with Vermont Association of Hospitals. I do not usually wait into individual hospital budget discussions but I did want to make some brief comments today that I think apply to both this hearing and the broader hospital field going forward. You know if the pandemic proved anything I think it was that hospitals are really crucial and indispensable part of our public health infrastructure. And I do want to note that UVMMC which you know nicely pointed out Kevin is our only academic medical center and and a really important resource from that standpoint was a crucial component of our response helping resource and coordinate the work in countless ways from the start. And this is this is really important because whether it's the academic medical center or any of our other community hospitals and rural hospitals they just can't afford to falter. I certainly hope we never find ourselves in another similar moment in the future where we're facing a global pandemic or something similar. But if we do I think we'll all want to look back and say we made wise choices that kept our hospitals stable and that made sure they were resourced to meet the needs of patients and communities. I do think both Rutland and the health network also made very clear the effect of inflation and workforce issues which I would argue are in fact absolutely extraordinary and unprecedented. You can parse the details but the overall picture is not one we've ever seen or managed before or one that I think is likely to change anytime soon as I think a couple of board members pointed out. It was also mentioned in the staff presentation historical actions taken by the board relative to UVMMC. And I just want to emphasize here that all hospitals do everything in their power to meet the budget guidance which involves decisions upstream of when you see their budgets and those choices do represent opportunity costs. It could be a program that's not expanded a clinic that's not renovated a new piece of equipment that's not purchased or an EMR that doesn't get updated or even a new service that's put on the back burner. In the last several weeks we've listened to dialogue around three hospitals in need and from my perspective having worked so closely with these hospitals in all of our hospitals over the past incredibly challenging two plus years to underfund any of these organizations is problematic for the hospitals themselves and more importantly for the Vermonters they serve. So you know this board has rightly focused a lot of attention on sustainability of both our hospitals and the system and I think has the power to make choices right here that support that sustainability. So thank you as always for listening. Thank you Jeff. Next I'm going to turn to Walter Carpenter. Walter. Hey Kevin can you hear me now. I can. Okay cool. Just a couple things really more comments and questions I've read all of the public comments that came in and I agree with most with all of them. Good many of them. Tommy Walsh kind of said what I was thinking so I won't repeat that. And per Kevin I've also been called a bonehead many times. In fact I get called that more often just as often as not. And I think as I listen to this discussion and remember my time going through the system I think one of the hardest things to listen to is all this stuff about payer mixes and all the rest of it because you have a feeling that the patient is more of a product or commodity going through here. And this is not a health care system this is an industrial system. And I think that is at the the main problem of what's all going on here. And with there's only so much money that Vermonters have you know we make 15 16 20 bucks an hour or something like that. And you can't bleed us too much more. If you do it's all going to come crashing down. And you're bleeding us. So that's all I have. Thank you Walter. Next I'm going to turn to Rick Dooley. Rick. Thank you Mr. Chair. I just want to speak for health first for our independent practices. We've all heard a lot about the difficult circumstances that the hospital is faced. And I just sort of want to remind the board that those same circumstances have applied to businesses across the state. Indeed independent practices. All of our overheads are up. All of our expenses are up. All of our personnel costs are up. It costs us more to retain and recruit people than ever before we have to pay our staff more or we lose them to higher paying entities. Unfortunately independent practices don't have the option of asking for a rate increase halfway through the year. In fact we have the same stagnant reimbursement that we've had for several years now. We have patients who are requiring more care because of pent up demand. We've had to cut back hours in places because of lack of staff or lack of providers. We've adjusted our day to day operations. We have cross trained people to you know make up for staff shortages. We have put off projects or repairs or things that we could. We have parking lots that need to be paved that are not paved because we put them off because we couldn't afford it this year. We've prioritized seeing patients and providing the best possible care to our Vermont patients despite all these troubling circumstances. The end result of any increase spending with the hospital regardless of the reason is an increase in health insurance premiums which then falls back again on the business owners on the independent practices who now cost more to provide health care for our staff which increases overhead which again increases the chance that our independent practices will not be able to remain financially viable. We strongly encourage the Mount care board to reject this rate increase and ask UVMMC to look for ways to reduce costs without impacting direct patient care. We know that it's not easy. We know that it is easier to get a mid-year rate increase and it is to make the substantial changes that need to be made to sort of trim around the edges. But we strongly encourage that be the avenue that's taken. Thank you for your time. Thank you, Rick. Is there other public comment? Is there other public comment? I saw that Sam and Mike were on earlier from the health care advocate's office and I just want to give you an opportunity. If you had any questions for UVMM or any comments to let us know now so that we have everything that we could possibly need to make a decision by Friday morning. Sam or Mike, are you still on? Thanks, Chairman. I'm actually not sure if Mike's on, but Mike, feel free to chime in. Just to say no questions at the moment, I appreciate the conversation and the rigor with which the board is approaching this question and also appreciate UVMM Health Network for being so engaged in this process. I mean, I want to recognize that it's incredibly challenging position to be in. The HCA stands by our position. It's not a dogmatic one. It's a challenging dynamic, obviously, but we stand by the comments that we submitted and recommend that the board do not approve the charge request. Thank you, Sam. Is there any other public comment? Hearing none, is there any additional comments or questions from the board? If not, thank you, Rick. Thank you, Al. Kim, I'm not sure if it's you or Joanne on Friday morning, but I assume that Kara checked and we're all set on your end. Are you there, Kim? Yes, I am. We're all set for Friday. OK, great. I'm all set for today then, correct? Yes, we're all set for today. Thank you so much. OK, thank you very much. And for those who don't know, Kim and Joanne are retiring and that has been a nightmare trying to find a replacement to do the transcription services here in the state of Vermont. So if anybody knows anybody that would like to start a small independent business here in the state of Vermont, I think it would be a great one to start. I don't have the fingers to do that, so it won't be me, but OK. Hopefully someone will step into their shoes and in the meantime, it looks like the state will have to be using out of state firms for transcription after the Kim and Joanne retire. So with that, Al, we'll see you again at eight o'clock. Thank you again. Thank you. Good to see you, Steve. So at this point, is there any old business to come before the board? Is there any old business to come before the board? Is there any new business to come before the board? Is there any new business to come before the board? Just to follow up on a conversation that we had. I believe it was two weeks ago, but it might have just been last week about wait times. I did officially appoint member Holmes and member Walsh to be the two board members that will work with DFR, Diva and the Health Care Advocates Office to try to come up with the right language for wait times. So other than that, I have nothing else. So is there a motion to adjourn? So. Second. It's been moved by Tom and seconded by Jess to adjourn. All those in favor of the motion, please signify by saying aye. Aye. Any opposed signify by saying nay. Let the record show that that motion was carried unanimously. Thank you, everyone. And we'll be back on the topic of UVM and CVMC Friday morning at eight a.m. Have a great rest of your day.