 Good morning, everyone. Welcome to the Green Mountain Care Board meeting. My name is Kevin Mullen, chair of the board. We're going to start shortly. We're going to start with an executive director's report, Susan Barrett. Thank you, chair. I have two announcements. First, a change in our agenda today. It is changed on our website, but just to remind folks that we did cancel this afternoon's meeting. We expected to hear from Secretary Smith, but we are rescheduling that to next Wednesday, September 9th at 1pm. In addition, we closed out a special public comment period on hospital budgets on August 31st. We have decided to extend that period to September 8th, Tuesday, September 8th. We accept public comment 365 days a year, but in order to have those comments considered in the hospital budget voting process, we would encourage folks to get those comments in by next Tuesday, September 8th. And we will update our website accordingly, both for the public comment period and the additional meeting next Wednesday. And that is all I have to report, chair. Great. Thank you, Susan. So we're going to turn the meeting over to Patrick Rooney and his team for the health system finance for what they've seen in the hospital budget hearings and just a general overview. We are not expected to vote on anything today, but basically to get a better understanding on what might be the easier decisions, what might be the harder decisions. And basically an overview of what has transpired over the last couple of weeks in the hearing. So Patrick, whenever you're ready, take it away. Thank you, Mr. Chair. And can you see the slide deck? We can. All right. Great. So again, thank you, Mr. Chair. Good morning, board members. This morning you're going to hear from the staff a presentation that prepares the groundwork for the FY 21 hospital budget deliberations. The staff will navigate through a system wide view of the submitted budgets and hospital metrics and move into a preview of the first six hospitals that the staff feel the board can vote on when they are ready. And as we just heard from the chair, there will be no vote today. So this is just a preview. Before we begin, we'd like to offer some perspective into why we made some of the recommendations that will follow. As your finance team, we focused on the information before us at the present time. The situation to date remains extremely fluid. And we have not concerned ourselves with any what ifs, what might be or other variables that lay outside of our control in the months ahead. The board may agree or disagree with our approach, but we believe it to be sound. And we have made every attempt to adhere to the budget guidance that was put forth before us in early June. We believe the hospitals have established the foundation for budget decisions by the board by unanimously presenting budgets to GMCB for a world where COVID does not have a resurgence. And I think we all believe and hope that this is true. With such been budgets, we have been given the ability to look at historical performance fiscal year 20 excluded engage the reasonable reasonableness of the budgets before us. We also feel that the discussion around Future State CARES Act or CRF funds as they are also known FEMA funding or any other transfer funds, which the hospitals may or may not receive in the future and are made are meant to make good on lost revenues or higher costs and fiscal year 20 should be commingled with forward looking operationally focused budgets. We have not considered these in our recommendations due to the budgets before us have COVID related operating costs under the moniker of the new normal. Yes, we believe they do as they would for any new safety protocols that a regulated healthcare environment have to absorb operationally to keep their fiscal to keep their patients and their visitors safe. You have a very difficult decision to make and that is not lost on your staff. However, just like in any other year, some budgets will play out as planned and others will exceed or miss their targets. With all that I've said thus far, we also believe you should provide yourself with the flexibility to correct budgets mid year should large disparities become present in time. Revisiting budgets in six months should need to occur on a hospital by hospital basis would provide you the time that is probably necessary in a very fluid environment to do a look back through a partial year as the hospitals emerge from the winter and a potential flu season that could exceed anything we've seen thus far. Using your flexibility you provided you are provided in the current state of emergency we ask that you consider adopting a policy before you begin deliberations that gives you the flexibility to correct any budget decision that may or may not be working as we proceed into the current fiscal year. In addition to correcting budget decisions and guidance on NPR and change in charge. This would give you the flexibility to rack to potential loan forgiveness is that some hospitals may experience, but it's too far out for accurate consideration at this time. The staff feel that by doing so you can mitigate the cost to ratepayers. You can ensure that one year from now you are making more accurate decisions on fiscal 22 NPR and change in charge, which is to the benefit of the hospitals so that they don't feel the pinch of the board looking back with the years time behind them. Finally, you can show the board's agility to adapting to changing events in a very difficult time just as you did for our state's hospitals by postponing and then overhauling this year's regulatory processes so that our health care providers could focus their resources on what they do best. We do think that the board owes that to themselves that flexibility at a time when your decisions in the next two weeks are nearly impossible to make accurately. So our recommendations this year. They try to encompass all of that we've tried to give a lot of thought to it, and you've asked us to help provide you some guidance so that's what we've tried to do here. And with that, I will move into our slide deck. Before the record, my name is Patrick Rudy. I'm the director of health systems finance team. And with me presenting with me today is Lori Perry our analytics or analysis director. Okay, what is going on here. That's not the one I want to share. Can you see my screen now I think I've got the right one up. Yes, we can see with Gifford medical. No, that is not it. No, that's not it. I'm sorry. Presentation Patrick you just have to start at the beginning. No, that's not what I want. Patrick the slide deck you have up is the 141 slide one not the abbreviated one. Okay, can you see this. Not yet. At least I can't get anybody see it. Nothing. Nothing. Okay, let's try this again sorry. We're back to the Gifford medical center slide. Yeah. Oh, now it's gone again. Can you see this. Not yet. Hold on a second I think I'm having some internet problems here. Could somebody else share the slides maybe and not on the team and then you could walk through them. Can you see the PowerPoint now. Yes, yes. Okay. It looks to be there it is. All right, I've got it now. I apologize for all of that. Okay. To begin, we put up some of the deliberation public comments that we received we kept them relatively vague some of these were expressed verbally during the hearings. While others were sent to the Green Mountain care board in a written format. We did feel that we should post these in some sort of context into this slide deck for consideration as we move through the budget. So staff considerations. We've looked at several items as we've moved through these hospitals and our in depth discussions that have occurred after the hearings on every day and prior to hearings. So hospitals overall financial health operating margins and key financial indicators, potential financial uncertainty due to COVID. Hospitals capital and infrastructure needs. We've heard that there's been some postponement yet some hospitals are continuing to move forward with plans that they put a hiatus on. But they are gearing back up to complete some of those projects participation in the all payer model. We've had some changes there in the last couple of weeks and we will continue to update those slides as we proceed through these deliberations and decisions over the next couple of weeks as necessary. The impact of change in charge on commercial ratepayers provider transfer and accounting adjustments and adequately justified requests. Budget guidance on MPR and FPP growth rates adequately justified request hospital specific risks and opportunities. As well as some additional topics around cost savings initiatives participation delivery system reform leadership turnover workforce and travelers utilization and some of the other revenues that have come into play around replacement funds. Here is a system wide look collectively at all of the hospitals in our system. You can see on slide five here. The total NPR and FPP budget to budget is 3.3% and projection to budget is 15.7% those high project 20 projection to 21 budget figures are going to be common throughout as fiscal year 20 has obviously been impacted by the cessation of electives for a couple of months back in the early and late spring. So we will see some double digit figures there from projection to budget across all hospitals operating expenses are looking at a 5.3% increase budget to budget and 6.3% increase projection to budget overall the system. It has submitted an operating margin of 1.8% and a total margin of 3% slide 6% provides the board in the public with a look at change in charges from fiscal year 2016 to 2021. That have been approved from 2016 2020 and those submitted for 2021 included including a COVID component. The as submitted the weighted average for the system is 6.8%. Again, that's a weighted average. So the larger the gross revenues associated with these change in charges. The more weight it holds on that overall average so UVM being almost 50% of the system certainly drives that weighted average up significantly with an 8% requested change in charge percentage. Slide 7 you've seen this from a few hospitals either in this format or in varying formats but the message is the same. The five year average for approved change in charges by hospital ranging from Gifford at the top from 2016 to 2020 averaging 4.5% all the way down to averaging a 0.6% rate increase over the last five years on average net patient revenue and fixed perspective payments from fiscal 19 actuals through the 2021 budget as submitted in the 2021 budget. You will see on slide 8 at the very bottom in fiscal year 2020 projections a quite a dip in revenue from the other columns on this page and then a return to higher revenue figures in 2021 budget. As we stated in our opening remarks these budgets unanimously were submitted to not consider a resurgence in COVID. So business as usual type of budgets were submitted but you can follow the trends and see the implications of COVID on fiscal year 2020 projections. Slide 9 here are the variances between fiscal 19 and the budget 2021 and the third column over fiscal year 2020 budget FY 2021 budget. You will see those hospitals who are budgeting up for their net patient revenue and fixed perspective payment and those who are budgeting down in red. We made a point to highlight the hospitals who are actually budgeting NPR revenues down in the coming year from their 2020 budget. Again, the projection to budget 2020 to 2021 you will see some very large variances there as 2020 revenues were suppressed by the onset of COVID. Moving to slide 10. We wanted to show fixed perspective payments as a percentage of NPR. The all pair model continues to move along in the state and we continue to track these types of figures we wanted to focus solely on 21 and not provide any historical context of this because 2020 is certainly its own unique year and we wouldn't want to make it appear that FPP revenues were a larger portion of NPR in 2020 nor we want to show in 2021 that maybe compared to 2020 they would appear to be less of a percentage of NPR just by the nature of the fact that NPR was suppressed in 2020. So we're keeping it strictly to this year's budget as a percentage of NPR to tell the true story of where fixed perspective payments reside as a portion of total NPR FPP. Slide 11 we've dug out total operating revenues you will see on the far right in the very bottom for all hospitals that fiscal year 2021 budget total operating revenues are set to surpass $3 billion as submitted to the Green Mountain Care Board. Total operating revenues also consider items like 340B cafeteria, etc. that aren't specifically derived from direct patient care like net patient revenue or fixed perspective payments. So this is all in operating revenues of Vermont's 14 hospitals. On slide 12 we're recording COVID funds reported another operating revenue for fiscal year 2020 and 2021. Most of the hospitals are forecasting the complete usage of the relief funds that they've received thus far by the end of fiscal year 2022. So we have a couple of hospitals who are forecasting potential usage for the remainder of their funds moving into the first part of their 2021 fiscal year. Some hospitals did not record some of the funds that they still hold simply for the fact that they do not know if they will use them or not. So the funds you see in 2021 are hospitals that do plan to utilize the remainder of some of their funds to cover COVID related costs in the first part of their upcoming fiscal year. But again, we have several hospitals on here who still have money left over, but those sums are relatively high and they are simply not sure if they will be able to use that in time so they have not considered it to be realized on their income statement for their 2021 budget. On slide 13 we put together a similar slide when we presented our fiscal year and 19 actuals report back in, I believe it was February, and the focus on and reliance on other operating revenues, specifically 340B and its importance to the hospitals and we can see that over the last few years. That importance has grown as a proportion of their total operating revenues and we wanted to keep that that graph in mind because it is it is a fact of their of their existence that these rev they do depend on these revenues to make at least a portion of their bottom line that reliance is growing and we are now up to about 9% across the system and of course in 2020 we've carved out realized COVID funding through the 2020 projections. So just to continue that that narrative as we work through our processes beginning with the budgets and through the actuals for next year. Operating expenses. Slide 14 fiscal year 2021 budget operating expenses are much like total operating revenues are expected to surpass $3 billion as submitted the approved budgets for last year were 2.86 so we're seeing a quite an uptick about $160 million uptick in operating expenses. Moving forward again the most of the weight of that is the University of Montt Medical Center just given their size. And that of course drives the entire systems fiscal year 21 expenses over the $3 billion mark as submitted. Operating expense growth these are the percentage growth. We'll see that again a couple of the network hospitals are looking projection to budget to grow operating expenses central not 7.5% UVM 8.8%. We've got a couple hospitals in Northwestern and Rutland regional where they're actually projecting neutral or below on on some of their operating expenses. But for the most part the system is is moving between 2 and 6.5% across the board. Operating margins as you can see on the far left column on slide 16 we all know the plight of the hospitals at the end of fiscal year 2019 and then the projections for this year given COVID. Largely the system as a whole has come out I believe better than any of us would have anticipated sitting here back in early April. A lot of that has to do with the taxpayers of the United States ponying up to assist their health care systems with covering the cost of providing care and covering the lost revenues that hospitals had to endure as they cared for and responded to. To the COVID crisis the negative $5 million loss is not optimal by any stretch of the imagination but when we look back at what could have been in April and May it's probably a pretty good picture. Moving forward into 2021 budget we see the hope that these margins will rebound and across the entire system hospitals as submitted. Our budgeting a combined $56 and a half million operating margin and that varies everything from Grace Cottage's break even to UVM's $40.3 million operating margin as submitted to the green healthcare board. Operating margin percentages on those dollars again the story is very similar to the prior page it's just in percentages so the we have several that are budgeting very very low under one for 2021 and we have others who are exceeding two and one that exceeds four and a half percent operating margin for the coming year as submitted the green healthcare board. Days cash on hand one of the financial metrics that everybody loves with this is without COVID relief funds so these are these are the days cash on hand that these hospitals have provided us for fiscal year 2020 projections and fiscal year 2021 budget. You can see the differences in some of these hospitals due to some of the losses that they've incurred or some capital improvements that they've made most likely very limited to date. So the situation continues to be pretty fluid we've also noted of course that Southwestern Vermont's parent company holds most of the days cash on hand in that event we always asterisk that so that it doesn't appear like they are in any sort of dire financial. Trouble again we carved out the COVID money these numbers are much much larger with some of the COVID dollars that still exist with regarding individual hospitals and we just wanted to provide a. Picture as we have in the past of where these hospitals reside the days cash on hand. Moving to slide 19 age of plant we did not ask for age of plant and fiscal year 2021 some hospitals did provide it for the most part the average age of plant does not shift in any extremes. It can in certain events where assets are depreciated and removed from balance sheets but for the most part it just kind of ticks up and ticks down as as items are added and and depreciated on balance sheets so. We just wanted to provide this perspective it is important in relation to days cash on hand the age of some of these organizations their physical plant we have several that are in excess of 18 years old and a few that are over 20 years old. And the time is coming very soon for some of those days cash on hand to be put into making physical improvements to those organizations whether it be efficiencies or energy savings or simply overhauling. Certain departments to meet new protocols set forth by CMS or the new challenges that they face and providing health care to patients on a daily basis so few of these organizations will be using some of those days cash on hand to make improvements in the near future when the situation that we're currently and begins to stabilize further. ACO plan participation as I alluded to at the outset this is still pretty fluid right now in our guidance we had asked the hospitals to begin to submit information on September 1 around participation. We've marked out through the hospital presentations those that we believe are committed to next year even though contracts have yet to be signed. So this is something that we will continue to monitor and update throughout this process as matters become more apparent to us at the Green Mountain care board. Hospital benefit plan participation the ACO this was the question that came up. Back in May, and we gathered this information from the hospital so as you can see we only have three hospitals whose insurance plans participate in the tribute lives to the ACO as of this time and again should this change in the coming weeks we will certainly update this slide for accuracy. This is a perspective we wanted to provide the board. Pretty much across the hospital submissions they base their budgets off of their year to date February actuals which is five months of their 2020 fiscal year. And the reason this is important is because this is what this is kind of the demarcation point between pre COVID and post COVID. Hospital finances. So you will see that the budget to actual variants in column three on slide 22. You can see where these hospitals were tracking as of the end of February and system wide the hospitals were budget to actual. They were off 1.6%. And that varies by hospital but that is the average budget to actual variance and this is the perspective we provided the board. Back in our presentation on May financials to give some context around how these hospitals were forming through almost 50% of their fiscal year before the onset of COVID and we hope that at least in part you will look at this and consider this is in your decisions around reasonableness for 2021 budgets. We also asked this year in the budget guidance to provide to us the revenue replacement funding sources and dollars that each hospital had received as of the budget submissions to us. And there will be some disparities and these numbers because we are gathering these figures ongoing and some of this information is very, very fluid. I don't know if anybody has a true handle on the dollars that have coming gone and we will make sure we round that out in the coming year as things become more clear. But this is there to provide a picture of which sources are grant sources and are not to be paid back and which which are largely loans or advances that are either undergo reclamation by payers or are are not when they're not positive they will pay them back or not. The SBA PPP loans are probably the primary example of that there is a forgiveness program that hospitals can take part in. But given the staggered nature of nature of how SBA rolled out some of those paycheck protection programs when the program became overloaded and had to be refunded. Some of the repayment is not going to be underway until later this calendar year. And even still some of that remains unknown. So this is just to provide a snapshot or best put forward in what the hospitals have received as a means to plug that cash flow gap that they were they would have experienced with the loss of their elective revenue. So complied with budget guidance we looked at this from a budget to budget perspective on 3.5% as the board set forth in the guidance. The hospitals on the left came in under the 3.5% and PR growth rate hospitals on the right did not however you will see. We've caveated a couple of these in that some of them have a COVID rate that pushes them over into quote unquote non-compliance status and Northeastern has a combination of a particular drug that pushes them over and their COVID rate and on several instances here other than that they would have fallen into what we consider quote unquote compliant. I wouldn't hold us to those that terminology. That's just how we decided to separate some of these hospitals out as I just alluded to the excluding COVID change in charge. We've taken their NPR request and backed out the value of their COVID related change in charge to arrive at what their NPR FPP request would be in 2021 without that ask and the only hospital who whose NPR growth budget to budget comes in over the 3.5% growth ceiling would be Brattleboro, Mattis Scottney, Northeastern and Northwestern all come under that. So again, the compliant and non-compliant is a very loose term, but that was a terminology we have used in the past and wanted to continue with that terminology. But again, very loose. So here's a look at what those budget to budget growth would look like without a COVID component. This year we also wanted to include standard budget order conditions. This comes from the budget orders. We broke it down into more simple terms. Last year, the board when making motion would say and you know, conditions to other standard budget order conditions. So we wanted to make sure that when we're talking about that this year if it comes up, this is what we're talking about. So this is out there and transparent for the board and the public to see when the board begins to talk about that. So we wanted to make sure that that was part of this budget as well. So that concludes the system wide overlook. Mr. Chair, I'm not sure if you if you want to have some dialogue about what we've just said or would you like Lori and I to begin to move into a preview of the individual hospitals. You're on mute. Okay, I was going to say, let's let's open it up to board members for any questions on the first part of the presentation at this point. And then we can move forward. So, board members questions comments. It's more and I have a few. Just a couple questions, I guess, on some of the slides. When we look at, I guess, first a comment on the compliance non compliance on page 24. I also set the stage that we had talked about, you know, looking at kind of a two year view and if hospitals maintained within that three and a half percent growth from 2019 to 20 to 21 that, you know, we would look at that from an understanding of the purposes as being in compliance. So I, I know you have done a slide on that Patrick or you've looked at that and I believe we can say, you know, none of the hospitals exceed the two years three and a half percent. Is that correct? That is correct. Okay, which just means for people listening that the amount they're, they're often 2020 is being somewhat made up in 21 but not enough to push them over the limit. So I just wanted to just just to kind of ward off any, any rig, you know, anything from the hospitals. When we look at that non compliant. When you look at the days cash. Do we know or can we figure out how much is funded through potentially investments and things like that because I know some hospitals liquidated some assets which may be, you know, keeping their keeping them afloat on the days cash on hand but it's they may have lower investments now so don't know if we know which hospitals did that I know specifically some had talked about that. And off the top of my head, I know of to that is all other than that no I can't say with any certainty that I know of any others that that did use some of their investments at the outset of Kobe to fund cash flow when federal funding was very uncertain. I only know of to that did that. Okay. And then another potential follow up and I'm not sure if you can get this information but when you look at the year over year change the 15.3% from the 20 projection to the 21 budget requests. Is there a way to calculate how much of that is rate versus utilization or mix. I will have to get back to you on that one. Okay. And another one and I'm not sure we can get this either but when we talk about the other operating revenue about as of not at 9%. You know, what the expenses related to that are, you know, we get a lot of messages about how much 340 be et cetera is contributing to the bottom line but we usually don't have clarity on how much of that is falling to the bottom line relative to I think it was really the other operating revenue. Your slide that had the 9%. It would be good to understand how much of that falls to the bottom line. We do have the increasing reliance on the top line and there's an probably even more so increasing the lines on the bottom line but you know understanding what that is would be would be good. And that's all I have. Tom, were you starting to say something I saw blue blue around your. No, at some point but I guess I guess my observations at this point or an interest is that the kind of macro level. You know, I feel very comfortable. And this has to do, I think with alignment I feel very comfortable with what we did, you know, with the QHP insurance rates because if you take those two and you know for MVP and blue cross blue shield and add them together and you know we're in at below three and a half percent and you know for me that three and a half percent is kind of the sustainability guiding star, you know, which is, I think important and budget to budget, as Patrick showed us in terms of NPR it's in at 3.3%, which is again kind of consistent with that three and a half percent guideline but what worries me about that is how skewed it is. So if you take out the UVM MC from the requested increase in NPR, which is for them $76.8 million, the remainder is nine tenths of 1% for the other 13 hospitals. And so I'm just interested as to whether or not that skewing makes sense because the apportion of with UVM getting, you know, asking for 85.6% is well beyond their normal run rate of NPR, which is I think around, you know, 49 to 50%. So, so I'm interested in that. I'm also kind of interested. This might not be the right form but at some point, I'm interested in that if we are looking at insurance rates going up three, you know, three 3.4 3.5%, you know, does that squeeze the non hospital providers and so. And you know, I'll be looking as we go through this to, you know, make sure that that we don't have an unintended consequence of, of having the independent non hospital providers get squeezed because the hospitals, you know, kind of draw the, the commercial attention. And I'm also, I think finally, just interested there's, you know, in our statute for budget review, there is section 18 VSA 94 56 and one of them is paragraph eight. And that says that the board shall consider the extent to which costs incurred by the hospital in connection with services provided to Medicaid beneficiaries are being charged to non Medicaid health benefit plans and other non Medicaid payers. And there's another paragraph nine that kind of parallels that interest. And, you know, for me, I go back to, you know, worried that the cost shift is kind of a fatal flaw in our hospital funding system I worry that it siphons off successes that we might have from investments in population health. And I also look at it in terms of the, you know, the, the state Medicaid program has had some very good years, their caseload has gone from Medicaid case though it has gone from 151,000 in 2017 down to 133,000 in 2020. They just reported year end 2020 amounts and they were the Medicaid program overall was to the good at the end of the fiscal year by $34 million. And so, in my experience, you know, when we got into the mid 90s and, and things were going well and we were watching caseloads drop then we had some capacity to expand and we did the have. And we were worried here that we were going through a very positive period and diva like they said a couple of weeks ago are flatlining their rates and I think that hurts a certain segment of hospitals that are more dependent on Medicaid than others. I'm missing an opportunity to rebalance the system in a way that is is is more equitable. So those are just a couple of thoughts that I have that as we go through this. I'm, you know, I'm going to you my interest is not so much getting into the detail of hospital budgets we have that sustainability process coming before us. There are more in the macro balancing of the system between and, you know, insurance carriers, the hospitals relative to their, their size of the total, you know, hospital population, and trying to at least we can't order the state to fund Medicaid, but there might be some actions that we can take to put it on the table that the Greenmont care board at least is not an enabler of the cost shift and and let others do do what they will. Thank you. Jess, Jess or Robin, do you have any comments or questions? I have a couple questions, but Robin, do you want to go first? No, you go ahead. Okay, mine are probably quick. This is related to Patrick. This is related to Maureen's point about the two year look at the hospitals. I'm wondering if it's possible. It sounds like maybe you already have a chart that wasn't in this deck. But that looks at for each hospital the two year average NPR 19 actual to 20 projected and then 20 projected to 21 budget that would just help kind of look at that. Help us see what you know the two year NPR performance looks like. Do you have that? Yes, I do. I can update the slide deck with that. That would be wonderful. Thank you. And then can you just go to slide six for a second. Okay, I just had a quick question about when you do the estimated weighted average for all hospitals for the 2021 submitted the 6.8. How are you dealing with the network hospitals like a porter? Are you giving them a zero or are you giving them a 5.8 in that calculation? Laura, you want to jump in on that one? In that one, I believe I'm giving them a zero. Let me double check. Well, you're double checking. It's against it is against gross revenue from previous year. Okay. But it might just be helpful for us to understand what's the average weighted average effective commercial rate this year, which would obviously unfortunately be higher than that. If we are including a 5.8 instead of a zero and an 8.5 instead of a six. So just. Thank you. We'll follow up with you. Okay. Thank you. Are there do you have a sense and I've been trying to keep track, but of all of the follow up questions from the from the board during the hearings are we we are still outstanding hospitals that we haven't heard from. I've got a lot of email yesterday looked like we got five or six, but I'm not sure if I've missed. Who is who do we still have outstanding questions from. Again, I'm tracking that. Right. We still have outstanding. I believe we just barely received UVM late last night. Okay. And I'm not sure. I would have to double check for you, but you're getting the rest of them the rest of them. We've received them. You'll be receiving this afternoon. Okay, perfect. Thank you. I just felt like there were some outstanding questions still out there and it sounds like they're coming in. And then my last point just Patrick I really liked your idea with all the uncertainty this year I really liked your recommendation to allow the board to do a mid year just assessment. And I'm wondering, do we need to have that as part of the budget, like a standard budget order on that slide that you had with the standard budget order conditions. Do we just add that as a standard budget order conditions that the board reserves the right to do a mid year assessment in this particular year of so much uncertainty. I would think so but I would of course defer to our general counsel on that question just so I don't get myself into any trouble. Okay. I'm not sure if Mike is on or not if that's something he'd be willing to weigh in on now or if he needs to give that some thought. Okay, yeah. Yeah, I'm on just could you repeat the question knows. Okay, sure I just I you know I appreciated Patrick's record Patrick and teams recommendation about given all the uncertainty this year, allowing the board to do a mid year check in reassessment if needed. You know, given what might happen with COVID or new tranches of money or who knows what. So I'm wondering if that needs to just be a standard that we add to this year's budget orders, or how we go about this process. Whether that's something you want to do is a is a board question legally yes I think you could do that I think the question that we need to think about and talk about is a check into to do what like if if a hospital is over trending over you have an enforcement policy that basically says you're going to deal with it in the FY 22 budget process and is is that still the cases is just a look or is it potentially coupled with some sort of enforcement action so But I'll think about some more and in anticipation of the deliberations. I think I mean it could be it could be a mid year course correction whether they're over or they're under right and so I think it's the idea being that given all the uncertainty, waiting until the following year to make a course correction might be too late. They're going to be in hospitals. So that was I think the spirit of what Patrick was suggesting Am I right spirit. My right Patrick you you nailed it, and you can call me spirit. It's okay. I think you'll look at the enforcement policy that you guys adopted with the budget guidance. Okay. Thank you that's right. We did have certain language in there about enforcement for 20, right? So this is looking forward. Okay, thank you. Okay, Robin. I think pretty much all my questions have been answered. I was gonna follow up as Jess just did on what for a little more specificity about what Patrick and team were thinking, but I think it makes sense to go back to the enforcement policy because we did have quite a discussion about how to handle that in March, which feels like it was at least two years ago. I went not. And other than that, I think all my questions have been answered. So thank you. Thank you, Robin. Patrick, you might as well proceed with the next portion of the deck. Very good. Thank you, Mr. Chair. All right, so now Lori and I are going to toggle back and forth on the six hospitals that we have prepared today. And I will transition over to her as we move into the next and then back and forth and back and forth. We will go. So the first one we have up here is Gifford Medical Center. Their FY21 request over their FY20 budget is a negative 0.6%, which is well below the 3.5% growth healing set forth by the board. You can see their budget to projection variance is negative 11%. There were times in years past where that would have sent off a red flag to us. But given what has occurred, that's kind of a moot point this year. Their justification was a continued diligence in their improvement plan, their extensive cost savings program that they've undertaken. They do have to make some future renovations for aging plants, some capital expenditures. They're not going to do anything major this year. It's more going to be upkeep and replacement and stuff like that. Their ongoing efforts to ensure access to their rural community and working to get their volumes back. They do expect their volumes to return to pre-COVID levels. So in the past, this chart here would have provided a little bit more context on their year, but given what's occurred, we can see that it's kind of out of whack. They had a very, very down MPR FPP in their third quarter, yet their operating margin came roaring back. We know that is largely due to the booking and realization of the relief funds and other operating fund funding. So we normally wouldn't see that type of trend where revenues are down, yet margin improves. So that's just to show that things are a little out of whack this year. This is one of the charts that we have focused on. As I said, by submitting budgets, and rightly so, that do not consider a resurgence of COVID because of all the variables and the impossible nature of having to budget to all of those. We took a good look at some of these historical performance indicators around how do they budget? Where do they come in in actualities and where has their margin been? And over the years here, Gifford has been budgeting and not quite getting to where they were and they've recognized that and the board has recognized that. So every year they're doing a little bit better on that. Aspirational budgeting is not something that they are continuing to achieve. They are working to get volumes back overall. But the real story about this, and Mr. Chair, I think you've put it well a couple of times is that this hospital was in some serious financial trouble just a couple of years ago and Dan Bennett and his organization have done a excellent job of pulling themselves out of that situation. And we can see last year they did lose money but they improved their bottom line by $5 million. That is an organizational wide effort to attain that type of change. So they've really done an excellent job of writing the hospital up there and they are looking to have a profit this year. They were profitable going into COVID. That was one of the hospitals that we were seeing. Some of their changes actually taking a real-time effect moving into the world of COVID. And then next year they're hoping to attain almost a $1 million operating margin. So we did look at that pretty significantly that historical performance. Overall, this is a breakdown of how they hope to apply them across hospital inpatient, outpatient, and professional services. I'm sorry, this is the court reporter. I think I missed a couple words there. You said overall, that is a breakdown. Oh, sorry. Overall on slide 30 here, we have a breakdown of their change in charge. We have the dollar value of NPR impact on change in charge and the dollar value of 1% change in charge. And as you can see, they plan to apply their overall change in charge of 4% equally across hospital inpatient and outpatient gross charges and professional and specialty care services. Across the board, they've made assumptions for increases in commercial Medicaid and Medicare. And their average five-year change in charge at the bottom of slide 30 has been 4.5%. Anyone recalls back to the system-wide effort they have been from fiscal year 2016 to 2020, they've been at the top of the pyramid as far as average change in charge is concerned. We also wanted to provide a system-wide, or a hospital-specific look at their NPR-FPP payer mix. These are, and their NPR-FPP has a percentage of gross revenue. This is a look that we began to provide in our fiscal year and 2019 report. And it was met with appreciation by visual learners, I guess I'd say, that shows you the shift away from commercial self-pay and other to Medicare. And as that goes, the margins on commercial can erode unless commercial rates are increased. This is the cost shift that Tom was talking about. So, but we also wanted to provide for the board to look at how much of their NPR-FPP do they collect from their gross revenue. And as we can see, as they budgeted, that is going down to 43%. So, to give a preview of our recommendation and Robin, we've included suggested motion language this year on all these hospitals and we intend to continue that so that you don't have to ad-lib on the fly. We wanted to make sure that we were covering you in that respect. So, as stated, their NPR-FPP request of negative 6% is within the budget-to-budget growth rate of 3.5%. We would approve that. As submitted, that seems conservatively optimistic. Moving into the next year, their change in charge of 4% would also be approved as submitted. That is a half percentage point below their five-year average. And of course, an additional recommendation in order to monitor the fluidity of the situation moving into next year, we would want continued timely submission of monthly financials to monitor their financial health. So, in sum, they've recovered from years past. Their commercial ask is lower than their five-year average. Their budget-to-budget growth is trying to get back to where they would have been for 20. We think that's an appropriate look forward for a hospital. As of February, they were exceeding their budget by about 6%. Again, that is only five months. So, we wanted to look back at that history of theirs. They have utilized cost control measures. That was one of the asks of the board from a couple of years ago. They have delivered in that. Their budgeting has become less aspirational. And with average age of plant in excess of 20 years, they're gonna need to continue to put cash in the bank so that they can make those appropriate investments moving forward. And again, they're probably planning a couple of years out now to make some of those just given the situation on the ground right now. But they do need to begin executing on some of those capital improvement plans. So we would approve this budget as submitted. And as you can see, again, we've set motion language forth there. Shouldn't the board choose to accept that? So with that, I will turn it over to Lori and Southwestern Medical Center. Southwestern Medical Center, as you can see on this slide was negative 13.1% below their budget when they projected 20. And they are currently a negative 3% lower than their 20 budget for the 21 budget. And they are requesting a 3.5% change in charge. We would recommend to approve this budget because they are well below the 3.5% growth rate ceiling. And this hospital's volumes are back pre-COVID based on their 12 month runway. And they have budgeted down in a couple areas. And as you've seen in previous slides, their average age of plant is one of the oldest in the state. They're trying to keep up with their improvements. They've also done an emergency department renovation that they're trying to do. And so a lot of their days cash on hand that you're seeing in their parent will be going towards this aging plant. Next slide please, 34. And their operating performance, they've been trying to be pretty steady through the fiscal year 20, but even though they had COVID and their operating margins were basically back in line with the COVID relief funds in their third quarter. And they hopefully that they will be just about breaking even on their fourth quarter. Next slide please. And for the Southwestern's historical operating performance from 2015 through 2021, they have basically been about budget. They are a strong budget management organization and they're not usually very far off on their actuals to budget. And their operating margins, they've been doing very well with their operating margins through the years. This is a, we think a strong performing hospital. Slide 36 please. Southwestern's change in charge. Again, they're asking for 3.5% change in charge. This is equal to 3 million of their NPR due to the change in charge. And they're expecting to increase their inpatient and outpatient change in charge by 5%, but they're not increasing professional services at all. And most of the change in charge is related to their commercial payer. They have averaged and approved change in charge rate of 3.2% to the last five years. Next slide please. And their payer mix, they started out in 2019 at 40% Medicare, 12% Medicaid and 48% commercial. They're budgeting 39% for 21 for Medicare, 11% for Medicaid and 50% for commercial. And this hospital's NPR to gross revenues started out in 2019 at 45% and now it's 53% of gross revenues. Next slide. 43%. 43%. And staff recommends that you approve this budget because their NPR FPP request of negative 3% is well below the 3.5% growth ceiling. And their change in charge is well average of most everybody else. We want them to continue to submit monthly financials to the Green Mountain Care Board. This hospital continues to have performance service agreements with Dartmouth. They call it the PSAs and they're expecting to budget to fewer FTEs with this contract. They're a heavy user of telehealth and will continue to use telehealth but they have the uncertainty of the reimbursement for telehealth in their budget. They're utilizing national recognized benchmarks for their staff and their February 2020 performance was 5% below budget. Their management is budgeting down in some areas in 21 to help offset this. And then they are planning to continue with the ACO in all pairs and they did not have any service line adjustments planned for 2021. And we feel this hospital has a strong history of budget management and we encourage the board to approve this budget. Thank you. Thank you, Lori. Okay, next up is North Country Hospital. Again, you'll see kind of a theme here. This hospital's 2021 request is budgeting down from their fiscal year 2020 budget. Again, the budget to projection variance is in double digits given the current situation. And that 1.1% negative request is less than 3.5% growth rate. They're looking for a 3.6% change in charge. North Country's justification was ongoing adaptive active management culture. Their volume assumptions as of February are with minimal COVID impact for this budget. They do need to generate healthy margins for reinvestment in the organization. And this hospital along with the next one, North Eastern, has made some service line changes. I'd say probably on the top of that would be they have divested from the Derby Green nursing home in the last year. There were conversations in the budget last year about the losses that North Country was incurring from that nursing home. But more importantly, the collaborative work that they're doing with other area hospitals around neurology, cardiology and ophthalmology and recognizing that the community need may not quite be there for them. So there's opportunities to be had in teaming up with other hospitals to provide those services. As you'll see here, they did close the neurology there wasn't enough volume to justify maintaining that practice. But in regard to cardiology and ophthalmology, partnering with Dartmouth-Hitchcock to reduce some of those wait times. And with ophthalmology, they're recruiting, they're not sure of their ability to land an ophthalmologist. So they're exploring a collaborative effort with NVRH who has a strong ophthalmology program. This does fall in line with some of the efforts by the Green Mountain Care Board to see some collaboration across hospitals to meet the challenges of delivering these services in rural areas. And North Country is making a sincere effort to move that forward. Again, you'll see in their quarterly performance, especially quarter three overall NPR-FPP down operating margins up, that is a similar trend that we're going to see. But regardless, they are planning to end the year in positive operating territory for fiscal year 2020. And that dovetails into some of their historical performance. Again, if you look at those operating margins from 2017 and 2018, it was not looking so great for North Country Hospital. However, they had a rough start in 2019, but rebounded to produce a 1.9% operating margin at $1.7 million. They're projecting to end this year in positive territory and hoping to continue that effort and really make it a trend moving forward into 2021. So they've had some struggles, but it seems that Brian and company and new leadership are beginning to transform this hospital into a positive operating entity. And they're budgeting to continue that work moving forward. Again, the slide 42 breakdown of the overall change in charge, it is 3.6%. The NPR impact, that is 2.2 million. 1% of that is $526,000. They are going to apply 4.3% across inpatient outpatient and physician outpatient to name a few. The overall impact of NPR is largely attributed to commercial with a portion of it $782,000 to Medicare. And again, their 2020 request is NPR decrease of $886,000 and the change in charge adds 2.2 million to that. Their five-year average of 4.2% is higher than their requests for this year overall. And again, the payer mix, we saw Southwestern was relatively stable. We're actually seeing commercial payer mix tick up year over year, 29, I shouldn't say year over year, I would say from 29 actuals through budget and 20 projection to 2021 budget and Medicare receding with Medicaid fluctuating overall. Their NPR FPP as a percentage of gross revenues is declined about 2% from 2019 actual to 2021 budget. So as far as our recommendations concerned, negative 1.1% is well within the 3.5% ceiling that the board has set forth in guidance. We would approve that as submitted. The change in charge of 3.6% is about 0.7% underneath their 0.6% underneath their historical average. We would like to see continued timely submissions. That will be something we have throughout. As of February, they were 2.7% below their budget as of February. We do not know the seasonality of the hospital could contribute to that, it might not. They may have just been missing their budget. However, they are projected to recover by the end of 2020 all of their losses that they incurred in 2017 and 2018. And that's a pretty impressive feat. As we stated before, they have made some service line adjustments and are collaborating with other area hospitals to meet the challenges of providing specialty services in rural areas. And that continued and growing collaboration, we believe is in alignment with GMCB's values. So we would approve this budget as submitted would be our recommendation. Laurie, on to Northeastern, slide 45. Northeastern is projecting a negative 9.6% against their budget for 20. And they are requesting a 21 budget that is 3.7% higher than their 20 budget. And this hospital is requesting a, excuse me, the 3.7% request for NPR is slightly higher than the 3.5% growth ceiling. The hospital is asking for overall total change in charge of 3.9%. This includes a 2.8% standard change in charge in commercial payer and a 1.1% for COVID, again in their commercial payer. The hospital justifies this budget by, they had a volume is being assumed at pre COVID levels, which would be before March or we'll say February. And they emphasize that they have a new infusion drug pass through that is contributing to some of the growth in their NPR, but also it's the growth in their expenses. And they're just passing through the cost through NPR and it's showing up in the expenses. So there's no real revenue for this particular drug. They are returning, having a return of their optimologists and audiologists, they are expanding their express care services so that it doesn't go through their emergency department. And they are trying to recruit additional primary care providers. And like all the other hospitals, they have cut their capital spending costs due to COVID and are putting things on hold. Next slide, please. Okay, yeah, I just wanna jump in real quick for people following along. You may be looking at the 2.8 standard and 1.1% COVID and wondering why that doesn't match some of your materials. Bob Hershey and Sean in their testimony noted that with updated projections, they had changed their COVID and standard requests. They still want the 3.9%, but as initially submitted to us, it was 2.1% standard and 1.8% COVID. And we went back and forth with Bob yesterday to confirm what they said in their presentation and their testimony was an updated 2.8% and updated 1.1%. And I believe board member Holmes was questioning them on that change and their needs still for 3.9%. So we just wanted to highlight that real quick before Lori continues. And Northeastern's NPR performance through 20 was not too bad. Of course, like everybody, they were down in their third quarter and they're projecting to rebound in their fourth quarter. And the same thing with their operating margin. But they did have quite a drop in their operating margin in quarter two because of COVID. Rebounded a little bit in three because of COVID relief funds and then expect their fourth quarter to be about 400,000. And this hospital is usually about at their budget or sometimes it's a little bit higher than their budget since 2015. Their growth has been, as you can see, 2.1%, 8% in 19. They are projecting a negative 6.9% growth and then a 14.8% growth for 21. Their operating margins, this is a strong, seems to be a strong hospital for operating margins. They've been about the 2% operating margin level and that's what they're budgeting for for fiscal year 21. And as we noted, Northeastern's change in charge for a total of 3.9% which is made up of a COVID rate and a standard rate. And most of all of that rate is gonna be realized in the commercial payer. So for the standard rate, they're asking for 2.8% and for COVID, they're asking for a 1.1% COVID change in charge. And the change in charge is equal to 1,690,000 of their NPR and this is about 52% of the change in their NPR. This hospital has realized 3.6% five-year average on their approved change in charge rates. And so they're asking for a little bit more than that for fiscal year 21. Next slide, please. So Laura, I'm just gonna point out real quick and maybe you have the answer for it and maybe we gotta look into it, but their standard change in charge in commercial do not add up to the 1.69 million dollar value. So I think we gotta look into updating some of those numbers. Correct, thank you. Northeastern's payer mix has been 45% in 2019 for commercial and it's about 44%. So it's been about the 44% average for NPR for commercial and between 41% to 39% for Medicare. They have, their NPR is a percentage of gross revenue was in 47% in 2019 and they're asking for that same percentage in 21. The hospital is requesting a 3.7% growth from their fiscal year 20 budget to their 21 budget. And they wanted to make sure that the board was aware of the infusion drug that is causing the most of this growth in their NPR to be over the 3.5% growth ceiling. They are asking the 3.9% change in charge which includes the 1.1% COVID. And we would like again, this particular hospital to submit timely monthly reports to the Green Mountain Care Board. This hospital like we've mentioned about North Country is collaborating with other hospitals to make sure that their area have access to primary care and appropriate specialists. And as of February, 2020, they were operating at about 2% below budget. And also at this time they had lost their ophthalmologist. The 1.1% COVID related change in charge is worth about $15,000 to NPR. If they did not have this COVID related NPR, they would have 3.3% growth on NPR. And they have been, as I mentioned previously there, consistent historical margin operator. The 3% request as submitted is slightly higher than the 3.6% five year average. However, this is driven by the new infusion drug without which the request would be 2.9% NPR growth. We advise the board to submit, approve this budget as submitted. Thank you. Thank you, Lori. Moving on to Grace Cottage Hospital on slide 51. Their FY21 request as submitted represents a 5.3% NPR increase over their FY20 budget. That definitely exceeds 3.5% growth ceiling set forth by the board. Their requested change in charge is 3.2%. Again, budget to projection variance is negative 9% so it is relatively high compared to other more consistent years that hospitals have experienced. Their justifications were that their primary care practices, the new providers have ramped up. They have part-time residents that are moving towards full-time residency in the state, potentially as a result of COVID and their volumes are assumed to return to pre-COVID levels with no additional growth. Again, similar trends here in quarterly activity. Overall net patient revenues down, operating margins up and they are projecting as of this budget request a $435,000 positive operating margin, which would be the first time in many years that they have produced a positive margin for the hospital. Again, we look back at the history of their performance. Below you can see as I just alluded to the profitability that they are projecting at the end of that fourth quarter. For that fourth quarter, I should say, I think I misspoke, they are projecting a break even but $453,000 in profit for that quarter specifically. We look back at their operating performance here, trying to see if they have made their case for a 5.3% growth rate. And we can see from this, from 2015 to 16 to 17 to 18 to 19, there have been some years where they have exceeded that and other years where they haven't. So we went and took an average to kind of smooth that out and their average annual growth from those audited financial statements has been about 4%. As far as the justification around part-time residents moving to full residency, that's a relatively new phenomenon, I guess I'd say. So that's something that we as staff would want to see actually play out and have a lasting effect on the hospital. We probably would not consider that on a one year or even a few months now, for a few months perspective. So we just don't see the hospital growing at 5.4% moving into the next year. Their NPR, budgeted NPR of 21 million is well in excess of anything that they've actually put up. As you can see in 19, $18.7 million in NPR is the highest that they've attained in the history of the hospital. So a jump to in excess of 21 million, we don't find to be accurate at this point in time, especially with some of the volatility, regardless of COVID, even flu season volatility could cause an impact to that. And again, this hospital, as they've stated several times, often does not make any money on margin. Where they do make themselves profitable is by the generous donations from their community members contributing to their total margin. We have not displayed that here, but I think all board members recognize that they have strong community support and those dollars, they do depend on to contribute to their total margin. So slide 54, the breakdown of their change in charge. Again, 3.2%, the NPR impact of that at 635,000. 1% of that value is just under 200,000. They will apply their 3.2% across hospital inpatient and outpatient gross charges. The total combined NPR impact consists of $35,000 to Medicare, almost $48,000 to Medicaid, and $202,000 to commercial. And the overall change in charge as a percentage of their NPR increase is almost 60%. Their 3.2% request is well below, a full percentage point below their five-year average is 4.3%. This is a hospital whose payer mix is reportedly operating in the opposite direction from 2019 actuals through this budget in that their Medicare percentages are declining at rates faster than most of the rest of the system. Medicaid remains stable and the offset there is that commercial portion of their payer mix is actually increasing according to this budget. I see I have a spelling error there. I will make sure I fix that on other. It's not authory. It should be other. Grace Cottage NPR is a percentage of gross revenues. Although this chart shows it bouncing up and down is relatively stable around 63%. So the 5.3% request is above the budget to budget growth. We would recommend reducing that rate at average actual growth rate from 2015 to 2019. They may attain 4.4% this year. They may not, but the story is, as we've seen through our collected financial information, it is a 4% growth rate at this hospital. They're changing charge at 3.2%. We would approve as submitted. Again, continued timely submission of financials. They were in full transparency operating about 6.8% below budget as of February. That is a five month sample size. And we took that in part as part of this consideration. We don't think that's the whole story. We don't know what their cyclicality is as far as revenues from patient care. They are a tourist area and chances are, when they provide budgets in the past, that they are accounting for a surge in population in their area and therefore more care being delivered from May to September, with the influx of folks from out of state. So we took the five months, we discussed it, and we will look back at their actual growth rate of 4%. And we decided that's probably more appropriate for now, even though they were operating at almost 7% below budget. We do acknowledge that. We do not believe that volume will solely contribute to this MPR request. As I said, we'd like to see the potential change in permanent change in demographics there from part-time residents at full-time. We'd like to see that play out before we acknowledge the potential growth there. And therefore we believe the change in charge should be approved along with the 4% MPR FPP growth. So our next slide will be on June 20th, 2020 for Grace Cottage. Lori, back to you for Springfield. This will be our last hospital that we will present today. Springfield Hospital, as you're seeing from the slide there. FY20 budget to projection is down, it's down 16.5%. Their requested budget is 51.5 million dollars, which is 5.4% higher than their 20 budget, is 26.2% higher than their projection. The 5.4% NPR request is higher than the 3.5% ceiling that the board asked for in guidance. The hospital is also asking for 4% change in charge, which is made up of commercial of 1.1 million, 200,000 for Medicaid and Medicare is 600,000. The hospital's justification for this is this is a recovery budget and they expect to get back to their volumes pre-COVID and are doing a restructure based on their bankruptcy and hopefully it'll be finalized by the end of this year. They're assuming normal volumes as of October 1st and the pre-COVID levels are at about 5% increase is what they're expecting. Their surgical case is affected by new full-time surgeon. So that helps with their volume. And we heard they have a $9 million expense reduction from 2018 to 2021 budget because of this bankruptcy. They've been working very hard on their cost containment, but they also we know have expenses for the bankruptcy that has to be absorbed within their budgets. As we presenting like every other hospital, they're quarterly operating performance from the beginning of the year to when COVID hit to what they're expecting for their fourth quarter. And this hospital began at 11.9 million in the first quarter, they're expecting 10.7 million in their fourth quarter. The operating margin, this hospital has been struggling quite a bit. The COVID relief funds helped them dramatically in their quarter three, and but they're expecting to have a negative operating margin in quarter four of $2.4 million. Next slide, please, 59. This hospital has not, we found has not been meeting their budget. They've been struggling to meet their budget every year. And so that will be shown in our recommendations. They are budgeting 51.5 million for their 21 budget, and they're only at 40.8 million for their projection 20. The operating margins have seemed to mostly be in the red for most of these years that we're showing from 2017 through 20 has been negative margins. And then for fiscal year 2021, they're basically trying to break even. Next slide, please. So Springfield is asking for a 4% overall change in charge, which is equal to $1.9 million. And this has a value of shy of $500,000, which is 1% change in charge. They're expecting to increase their hospital inpatient outpatient and professional services through the gross revenue of 4%. And they're gonna be increasing their payer mix accordingly with the 4% change in charge. They're commercial Medicaid and Medicare. So commercial is about 1.1 million. Medicaid is 200,000 and Medicare is 600,000. Their change in charge we found is about 74% of their increase in their budget between 20 and 21. And this hospital has had a 3.9% five-year average of their change in charge from 16 to 20 that the board has approved. In their payer mix, they have been about 34, 35% for Medicare. They've been up and down a little bit for Medicaid and then up and down for commercial. Right now it looks like they're trying to be at about 51% of their payer mix is in commercial for 2021. And then they were in 2019 and we just received their audited financial statements, 44% of their NPR is NPR percentage of gross revenue is 44% for 19. And they would like to budget 46% of that for 21. So staff recommend based on what the hospital is requesting which is 5.4% NPR growth that is higher than the 3.5% budget guidance. And we recommend that the board accept the 5% ceiling in guidance as this hospital is already in restructure and is exiting bankruptcy. They're 4% change in charge. We are asking that to be approved as submitted. And we emphasize that this hospital should be reporting timely monthly financials to the board and to present their financials and their budget when they exit bankruptcy because there are gonna be a different entity. This is our recommendation for the board. Everything might change because of bankruptcy. So in this hospital as of February 2020 was operating at a 2.7% below budget. They are like we mentioned are still in chapter 11 bankruptcy and they plan to exit at the end of this calendar year. So 2020 and we think that as I mentioned they're a new organization at that time. So then there might be room for growth or dramatic changes. So we would ask the board to revisit this budget at that time. And we also know that this hospital is planning to separate from the FQHC and there might be different expenses or revenues that will be realized at that time. So this hospital is also looking for opportunities to collaborate with other hospitals for services so that they can continue to serve their community. Thank you. And just to piggyback on Lori's point about 3.5% because they are essentially a different organization especially when we look back at some of the figures here we just like to see them try to attain the at least the growth ceiling set forth by the board before NPR goes anything beyond that because they're different. They've shed their birthing center and with that no doubt some of the other items that attach to that with pre and postnatal care and pediatrics and stuff will no doubt have been affected by that. So we'd just like to see them try to attain 3.5% before we look any further beyond that as far as annual NPR growth. So we're bringing that back down and setting that mark for this organization that is coming out of bankruptcy a totally different organization than when they went in and we just like to see those goals be lowered a little bit before going into a little over 5% growth. So let's see what they can do this year. If they come back and they show us that yes the growth is actually real then we can have a conversation again in another point in time but we would just like to see them attain that 3.5% we think that's pretty generous for a hospital in their situation but that 4% change in charge we think does need to be submitted because this hospital cannot deal with another year of seven-digit losses. So the margin that they need to earn on that is important to them. And with that Mr. Chair we conclude our presentation and we welcome questions and dialogue by the board. Thank you Patrick and Laurie. I'll start out just by saying Patrick that on most of the slides you have the continued timely submission of monthly financials and I think it might be better if that was just one of the standard conditions. I think there's a new normal now that we're not gonna be able to go back to the days where hospitals aren't submitting on a monthly basis until we achieve some type of normalcy. So just stating upfront that that would be my preference that it'd be a standard condition of all budgets. Okay, we can do that. Okay, board members, questions or comments? Sure, I just have a couple. One thing on these slides to the extent we know it which might not be until next week but if there are COVID funds that request outstanding whether that's through FEMA or through the state if we could footnote that because I know some hospitals we know didn't request some hospitals we know requested but we don't know they weren't sure how much based on the formula that they requested. Just a comment on your calculation for Grace Cottage on the 4% that you put in there. One thing I would caution on that is I think you're mixing apples and oranges which is we'll go to that slide for a second right there. So Grace has notoriously missed their budget every year. And the 4% your calculation you're going on is based on actual but then you're applying it to budget. So just giving you a forewarning on that because I'll definitely have a problem on that. I would be okay with the 4% off their actual trend but I wouldn't be okay with the 4% off their budget since in 19 they missed their budget by half a million dollars in 20 they were tracking 8% off their budget through February. And so to put an increase again off of budget I think is mixing two things because you were talking their actuals. So I think if we trended their actuals forward that'll be a different number which would probably bring them below the 3.5% potential. So just as a comment there. And then this question is probably more for General Counsel, for Mike we know that only four hospitals ask for a COVID increase and do we have flexibility to bifurcate requests if we want to be a permanent and then a temporary whether we call it COVID or not not necessarily for these hospitals but as we move forward I don't see why we wouldn't be able to and I think it would probably be if we went that route more advantageous from hospitals versus us just cutting the rate if we decided to put some of it in as a COVID or temporary we would then be able to revisit that either we could maybe put it in for six months or for a year or what we could revisit that. So that's a question to Mike that we're going through and deliberating whether we have the ability to do that. Mike Barber, could you answer that? I can try. Yes, I think you probably have the ability to put a COVID rate piece into your approval of a hospital's budget. And I think remembering what the guidance said I think the guidance was pretty clear that we could revisit those COVID rates mid-year. I guess the question you guys need to think about is on what basis like would you be doing that? Like expenses in FY 21 that are related to COVID because I think the COVID piece was, COVID rate piece at least was to make up for lost revenue in FY 20. I don't, so I think we need to just as collectively revisit the guidance and think about that a little. But yeah, I think you do have the authority to do that. Okay, thanks. That's all I had. Thank you, Marine. Other board members? I have a couple. Go ahead, Tom. So as of three out of the six, as you went through them, half of them received additional revenue from their change in charge from Medicaid. And I remember asking that question through one of the hearings, but I forget the answer. And so if Diva is not increasing their rate, how can an increase in charge generate additional Medicaid revenues? That would be a good question for the hospital who compiled this. You can certainly ask. Brigitte Frater was 190,000 and that was probably their original submission. But we know now that Diva is saying that there will be no rate increase except for those that are federally mandated. So that's one. Two is I maybe, and maybe Kevin or Robin or my fellow board members remember, but during the rate review process, we were waiting for hospital budgets to come in. And then because some of the insurers were kind of building into their requests, the increases requested by the hospitals. And so we ended up kind of finding a line down the middle there where I think it was one half the distance between the 2020 increase and the 2021 requests. But I forget where that number fell. I thought it fell around 3.5%. So I'm wondering if maybe Mike or somebody can remember where that number fell that we used in the rate review for MVP and Blue Cross Blue Shield. So Tom, this is Mike. The question is where did, what was the assumption for the unit cost increase in the QHP decisions for GMCB regulated hospitals? That might be it. I know that the insurers built in the rate increase requests from the hospitals. And I think we all felt that, well, that was being a little aggressive because we may not approve their rate increase as requested. So we ended up kind of in the middle of the road. And I'm just, but I can't remember the number that was the middle of the road in terms of an overall average rate increase. We can figure that out later on, but it's just, I do remember, I think I remember it being in the 3.5% range. No, I think it was later than that, but it was the midpoint between what you approved last year and what was submitted this year, which I think was higher than that. But yeah, we can get that number. Yeah, I'd like to know that number because that's what we get. And if we're trying to link available commercial out there in the real world, and it's clear in the rate review process that what we do has a significant impact in terms of the contract negotiations between hospitals and the insurers. It'd just be nice to have that as a kind of a background figure. Me, my only other one was on Grace. My computer had a brain cramp when you were presenting Grace, I couldn't see the slide. So I was trying to, but my computer just got overloaded here. So the 2021 budget, as I recall, Grace had did very well with the CARES grants and the COVID money. And that allowed them to have quite a bit of carry forward into 2021. And I'm just wondering, if how much one-time money is built into Grace's budget or revenue expectations based on carry forward of CARES money and that when it's gone, it's gone. I just, I'm always concerned about one-time money kind of getting an entity through the day, but then in the day after the day, they're out there with weakness in their budget. Yes, so I've put up the system-wide COVID-19 funds reported another operating revenue and it looks like you're right, they did. They received a lot more cash than they have the ability to use at this time, but they are budgeting for realization of about $882,000 of those funds in other operating revenue in their 2021 budget. I don't believe from what they said that that is the total amount they have left. I think they have concerns that they will be giving some of that back because they have not been impacted by the pandemic in the way that other hospitals have. Most hospitals, as we stated, have either exhausted those funds already or will by the end of this fiscal year. And I think North country was one of them who has about $2.5 million left, but they didn't budget for using any of it because they're not positive they're going to be able to use any of those funds. So what we have is on the screen in front of us on slide 12 is about $882,400 for Grace that is built into that 2021 budget in other operating area. So what that means is that when they move into 2022, that one-time money is gone. And I'm just wondering how much we want to think about that in terms of getting through 2021, but 2022 it becomes a big hole because that's a significant part of Grace's budget. Yeah, I don't remember what the terms of the CARES Act stimulus funds are. If they have to be used by the end of this calendar year, that rings the bell, but I'm not positive. So we will- That's right, Patrick. Okay, so that is right. So Tom, this $882,400, they would be planning to exhaust in the first quarter of their fiscal year 2021 budget if they are to use it or lose it by the end of calendar year. Thank you for that. Those are my questions. This is Robin. I just had one question in terms, just in follow-up on Maureen's comment about Grace and the 4% off actuals, could we get that sort of calculated so that when we're talking about it, we can actually see the numbers and what that would look like? Yes, we can do that. I think I'm gonna look back over my notes, but I think that was my one additional thought. So Jessica here, last to think about, I really appreciate all of the hard work that the team did in compiling all this data, making it easy to see format and giving thought to recommendations for us for this year. I think this is gonna be a tough year. And so the more inputs we have into our decision-making, the better. So I really appreciate all the time and effort you all did. I had the same Grace question. So that's been asked twice. That's great. And the only other comment I was gonna make is for the hospitals where you're recommending NPR reductions, I wondered whether the motion language should make explicit that the hospital should make commensurate reductions in expenses. We assume that they would, but to the degree that we're cutting their NPR, should there be some comment about expectations around expenses? Otherwise we're gonna have some operating margin concerns. So I just wanted to throw that out there for comment conversation. Jess, that is definitely what we used to do in the past. Thank you. That's it from me. Thank you. Thank you. Thank you. At this point, I'm gonna open it up for public comment on all the slides that have been presented so far and on the hospital budget process to date. So as Susan stated at the beginning of the meeting, you can put in written public comments through next Tuesday. And at this point, we will hear any verbal public comments that anyone wishes to make. Kevin, this is Ham. I've got one. Go ahead, Ham. And for the record, that's Hamilton Davis, Kim. Yes. I'm sorry. Kevin, should I go? Yes. Okay. Kevin, this whole, especially the top of it, not the individual hospitals, it's horrific performance. It just sort of reeks competence by your Patrick Rooney and Laurie and her team. On the other hand, I think it would be that Patrick might consider the following. The, this blizzard of numbers can be cut all kinds of ways. And it serves the needs of the board who are as expert, or nearly as expert or maybe more expert on the issues and all the ins and outs and the nuances as the financial staff. What I would think it might be worthwhile to consider, forget about the board for a minute, and to ask Patrick to put together one slide, just one slide with the actual numbers that you believe, that he believes, or the board believe, defines the performance of the system. If you don't do that, what happens is that you get all kind of freelancing from outside about the numbers. And if you don't think, you don't see that, you've got right now, you've got the state auditor saying that your whole board is doing a kind of a decent job and they're just adventuring around with the numbers. And so I think if you can, if you can put out just one slide, just one, you can put 150 or whatever, take one slide and say, okay, this is the system. And you get NPR, for instance, you've got NPR with prospective payment and NPR without. Okay, what really counts? What really counts is what the, is the total spending and that is net patient revenue for P for service and the total amount of spending for FPP. So take the real numbers, the real numbers, how much money, okay, from one year to the next or for two years, I think that the Maureen's idea was really good, okay? So what you have is you have three or four, five numbers max, okay, to find the performance of the overall system. Here's the way to think of it. It's one thing, it's gonna take somebody, even somebody pretty good. It would take them five or six hours really studying all these numbers. They just saying for the first time, in order to write a text, it would explain to a non-expert what was happening. Think of an associated press recorder in the old day when they used to be real recorders, that is gonna have to go to your meeting, come out of your meeting and produce a piece that gets the top of it right in 10 minutes, okay? You cannot do that unless you get a, unless somebody like a heavy duty, industrial-shrank finance guy like Patrick Alour, they can say, okay, there's 7,000 numbers there, but here's the five you really need to know. That's my comment, thank you. Thank you, Ham. Other members of the public? Okay, we have a lot to think about board. And before we end for today, we have several items of business that we have to take care of. The first item being the minutes of Wednesday, August 5th. Is there a motion? So moved. Second. It's been moved and seconded to approve the minutes of Wednesday, August 5th without any additions, deletions or corrections. Is there any discussion? Hearing none, all those in favor signify by saying aye. Aye. Aye. Any opposed? Motion carries. The next item I'm gonna call on general counsel, Michael Barber to announce a rate decision, Mike. Thank you, Mr. Chair. On August 28th, 2020, the board approved the association health plan rating program filing of Blue Cross Blue Shield of Vermont. It's a bit, there's no rate increase that I can announce because there is no approved rate for these products. It's a formula and factor filing. So there's no premium to announce either, but the board made several modifications, adjusted the FY 2021 unit cost assumptions for GMCP regulated facilities, which as I was telling Tom for the QHP to the midpoint between last year's approved hospital budget rates and this year's submitted hospital budget rates, reduced the trend component of the administrative charge increased to zero, corrected the administrative charges to remove TBHP billback amounts included in the base period and used updated unit cost trend calculations which removed an immaterial formula error. So it's don't have a rate to announce, but that was the board's decision. Thank you, Mike. Susan, are you still on the line? Yes, I am. And could you just update the public? Cause I think people expected us to have a meeting this afternoon at two with Secretary Smith and you could update on when that is going to occur. Yes, thank you, Mr. Chair. So we will not have our meeting this afternoon. We were expecting to hear from Secretary Smith some updates on the COVID relief funding. They need some more time to process those applications and we have re-scheduled that meeting. So Secretary Smith will be here virtually in our meeting next Wednesday, September 9th at one PM to give us an update on those funding applications to the hospitals. Thank you, Susan. Is there other old business to come before the board? Is there any new business to come before the board? I just have a question on, I know our meeting next Wednesday starts at 8.30 and Secretary Smith, I guess they couldn't come in the morning. Is that true, Susan? So I'll be here till one. Right, that's right. We're kind of waiting for some of the information as we go through the hospitals, but. Yes, that's right. Thank you, Maureen. Maureen, are you suggesting that we start that meeting at one instead of 8.30? Oh, I guess we'd probably just have to go through the same thing with other hospitals with the recommendation piece, but we wouldn't necessarily be able to entertain approvals and things like that until we know that piece. So I'm not opposed to- I think we need the time. I would say still, we should still probably meet in the morning, but. Okay. Is there any other new business to come before the board? Hearing none, is there a motion to adjourn? So moved. Second. It's been moved and seconded to adjourn. All those in favor signify by saying aye. Aye. Aye. Any opposed? Thank you, everyone.