 meeting. My name is Kevin Mullinger of the board and I'll call this meeting to order. First thing I'd like to do is announce that the agenda has changed in order for the RMC budget discussion to occur. We have to have a court reporter and so that is going to occur at two o'clock. So we're going to start with Clover Health and if that goes quickly we'll move to guidance but we'll break in the middle of guidance if we start it and then go to our RMC at two and then go back to finish guidance after that. So a little bit confusing but we'll get through. So with that the first item on the agenda is the executive director's report Susan Barrett. Thank you Mr. Chair. I want to announce some ongoing special public comment periods. First to remind folks that on March 2nd the board discussed the certificate of need dollar thresholds and the board's authority to adjust them so we do have an ongoing open public comment period for that item and we will be hearing next week from our general counsel Mike Barber on that topic. The second public comment period is regarding the FY 23 hospital budget guidance. Today if we if we do not vote on the FY 23 hospital budget guidance we will extend the public comment to Monday March 28. The public comment period ended this Monday and as a reminder the board takes public comment 365 days a year but we did close that period in order to be considered for the board if there was a vote today. The third item is that we are also taking public comment regarding the University of Vermont Medical Center's mid-year budget adjustment request and that information is located on our website on their mid-year request. I will also note that next week we have scheduled UVMMC to come in to go over their mid-year request with the board. And then last but certainly not least the board is holding an open public comment period on a potential next agreement with our partners at CMMMI. Any of the comments that are submitted we share with our partners at AHS and the governor's office as they are leading the negotiations on a potential next model. And that is all I have for today. I will turn it back to you Mr. Chair. Thank you Susan. The next item on the agenda are the minutes of Wednesday 316 and Thursday 317. Is there a motion? I'll move approval. We got to coordinate Tom. I'll second. So Tom has moved to approve the minutes of Wednesday 316 and Thursday 317 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. Any opposed signify by saying nay. Let the record show the motion passed unanimously. So next we're going to the discussion on the Clover Health budget and I'm going to turn it over to Marissa and Russ. So whenever you're ready take it away. Good afternoon Mr. Chair and members of the board can you hear me? We can. Great. I'm going to go ahead and share my screen and let me make this as big as I can for everybody. All right. Thank you. Again my name is Marissa Melamed. I am Associate Director for Health Systems Policy. I'm going to walk through the slides leading up to a potential vote on the review of Clover Health Partners FY22 budget. I'm joined by Russ McCracken from our legal team and he's available to help me with questions or any legal matters particularly around any motions that you might like to make for the vote. So to begin the Green Mountain Care Board received two comments from the public since we presented to you last week as well as comment from Clover Health Partners. The comments are posted on the Green Mountain website at the link on the screen if in case anyone wants to take a look at those. The public comments generally related to Clover's ability to operate in the state of Vermont, concerns about Clover being a for-profit publicly traded company and added administrative costs, concerns the model provides incentive for inappropriate utilization through delay or denial of care or upcoding or gaming of the system and concerns about patient notification and protections. So in response to the public comment and to frame the board's decision today we want to remind you of a couple of elements of the review framework that we went through last week. This framework is how we developed our recommendations and we've made some adjustments to the recommendations based on the comment and discussion within the last week. So the first point here is a reminder about the board's authority which Russ presented to you last week. Clover Health Partners is not subject to certification because they do not receive payments from Medicaid or commercial payers. So the question of certifying them to operate in the state of Vermont is not on the table because they're not subject to that part of the statute. Under 18 VSA 9382 B2 and rule 5.405 the Green Mountain Care Board shall review and approve or modify an ACO's budget. So the question before you today is approval or modification of the budget and you know we recognize that this feels a bit different because there's a not it's a multi-state company and there's not a lot of Vermont specific information around the budget but we felt like we put a review together based on the information available the board's and the board's authority to to regulate a company such as this. Other key points that we went over last week that are pertinent to some of the comments are around patient impact and general concerns regarding inappropriate coding or stinting on care. You know like like the comments we read the Green Mountain Care Board staff and board members I know have have followed the literature on on these new Medicare models and you know take those concerns seriously and finally you know resulted in our recommendations for reporting and monitoring. So I'm going to go through a couple of the slides just as a reminder to address those issues that came up in the comments. So this is the slide that we presented around how the direct contracting model impacts Medicare benefits beneficiaries costs and care. So again beneficiaries that are aligned to a direct contracting entity are still in traditional Medicare so they retain their traditional Medicare rights including access to the entire traditional Medicare network and it does not affect out-of-pocket costs and premiums or affect their use of supplemental insurance except in the case that there may be some benefit to help with cost sharing as which is a benefit enhancement that the direct contracting can can elect to participate in the entity. The next quote there is around direct contracting entity attributed beneficiary rights that are included in the direct contracting entity participation agreement these include beneficiary notifications their freedom of choice and their right to opt out of data sharing and again this is similar to the agreement in the other ACO arrangements that we review and we do have copies of a copy of that notification that we have examined and are included as part of the the materials submitted by Clover. And again they may have access to some additional benefits through the program including coordinated care and they can continue to go outside the DC network and their access to some benefits enhancement. Again we went over these things last week but we wanted to remind people of those. In addition there's been quite a bit of discussion around the transition of the direct contracting model to the new ACO reach model and this announcement was made like we said last week basically shortly before we got this presentation together but it did impact our review and recommendations. The the administration has taken a look at the direct contracting arrangement and made some changes based on stakeholder feedback you know provider and inpatient advocate feedback as well as concerns from members of congress around the you know the impacts or potential adverse incentives of the model and they have made some changes which will be implemented as of January 1, 2023. So this budget review and recommendations that we're looking at is is only for the remainder of this year and we will take a look at implications in the new model if Clover decides to continue to participate in the in the new model as as they have indicated they intend to. And again the changes in the ACO reach model are around governance, the addition of a health equity component, changes to the to the benchmarking which is which is intended to address some of that up you know potential up coding or other inappropriate risk score gains or other potential gaming of the system which is you know if people are familiar with from the literature. There's also additional monitoring and compliance requirements in ACO reach. I added this slide specifically to talk about the risk adjustment changes in ACO reach which include a coding intensity factor that limits the risk score growth across the entire model. The coding intensity factor applies to all DCEs to limit risk score growth to the average prior to the start of the model. There's also changes to the risk score growth cap which limits a DCE's risk score growth to plus or minus three percent over a two-year period and the direct contracting entity specific caps on over coding insured DCEs are coding appropriately and limit gaming. So reach model adopts a static reference year population for the remainder of the model performance year and it caps the reach ACO's risk score growth relative to the entity's demographic risk score growth. So this I wanted to to make clear we you know these are changes that Medicare has put in place. There were questions around this as we were reviewing the the proposal and if we or the application and if we wanted to impose you know Vermont specific monitoring on this issue I issue I think we could consider that. We did not include a staff recommendation around it because we felt that you know we wouldn't have the ability to monitor this specifically to Vermont any better than Medicare is current you know currently proposes so we want to take a look at you know this in the future but I wanted to make clear that you know there there have been steps taken by Medicare to further address this this concern in the model. So this slide just summarizes sort of the key points that frame our recommendations as as as we finalize them for today. The payer program arrangements are set by Medicare in the participation agreement. So again we don't have the ability to change or impact that. There's you know we have access to that agreement and we've looked at it against you know during our review against criteria but those are set set by Medicare and they oversee and audit their agreements. Like I said that participation agreement was reported to Green Mountain Care Board and is available on our website. There are new requirements in the ACL reach model around government health equity and additional monitoring and compliance. So we felt that these were a good step in addressing some of our concerns at least for the size and scope currently. Did you know did not feel like we needed to do anything additional here. Those seemed like good steps toward some of the concerns raised with the previous model. And finally to address concerns about any potential legal action and make sure that that was being clearly reported to us so we can we can monitor that activity. Hover Health is required to regularly report on any material pending legal actions taken against the ACO or its affiliates or against any members of the ACO's executive leadership team or board of directors related to their duties and any such actions known to be contemplated by government authorities. They're already required to report this and we're asking them to report it directly to the board as well. So that brings us to the final recommendations which have been updated slightly since last week I think mostly for specificity. So I'm going to go through that. There also has been some back and forth just even up to several minutes before this meeting. So I'm going to try to incorporate where I think we've landed here and Russ you can let me know if you think we need to change the way this is worded based on my understanding or if the wording is good here and but I'll explain by going through it. So the the final recommendations from staff are to approve Clover Health Partners FY22 budget as submitted subject to the following conditions. The red here are changes from last week. So regarding shared savings we are asking Clover Health to provide to Green Mountain Care Board its shared savings segmented for Vermont. We wanted to clarify that we'd like this by provider category so that is participant and preferred and then we added in a timing component since we understand the timing here to be that Clover that the preliminary shared savings results will be available for 2021 will be available in July 22 and final results for 21 and 22 will be available in July 2023 and or in each case within 14 days after CMS publicly releases the results. So this first recommendation is one that we had a little back and forth on because we originally you will see in the comments from Clover's representation David Alt that they requested that we that we clarify this recommendation because CMS only reports shared savings on an aggregate DCE basis which we understood as well and we we would like to see it broken out by Vermont. The way that they can do that is to provide the aggregate shared savings or losses divided by the total number of Clover aligned beneficiaries and then multiplied by the total number of Clover aligned beneficiaries affiliated with Vermont participant providers. What that would give us is a proportion of shared savings or losses that is attributed to Vermont but I do not I don't think that necessarily tells us the amount of shared savings that is paid to to those providers if that amount to my understanding is subject to provider agreements and I don't know if there's adjustments if it's a strict proportion or if it's adjustments. So I want to clarify that what I mean here as staff or what the staff intention is is to get that calculation of the proportion that is attributed to Vermont providers but we would also like to know the the actual amount that is paid out to Vermont providers for the performance year. We can all I'll go through all of these and then we can see if there are questions I think that's the one that that maybe is a little bit confusing. The second one is that Clover Health provides the Green Mountain Care Board quality reported segmented for Vermont if possible with appropriate restrictions to prevent protect patient confidentiality and again we added the same language here about the timing of the reporting. We put back in the if if possible to indicate that we would like to see Vermont specific quality reporting we recognize two things. One there it's a small it's a it's a there's a small numbers problem that's why we added with appropriate restrictions to protect patient confidentiality. It's only one participant provider. The other reasons that we added this is that with our other ACO programs we have quality results reported by payer program only. We do have some measures that end up getting broken out at an HSA level but I don't think that Clover sort of at the size that that necessarily makes sense. So can discuss how we feel about the way we change this but that is where we landed after thinking about this a little bit more at least for this year. Our intention is we would like to see Vermont specific quality reporting but are not confident that that's going to be available for 22. The third one is just had some clarification that is to collect the audited financials for Clover Health that include Clover Health partners balance sheet and statement of operations contributions and submit a standalone audit for Clover Health in each case to the extent required by CMS or if filed or required to be filed with the securities and exchange commission. So we're not intending for Clover to create a new audit that they don't already create but we would like to see Clover Health audit information and audit notes specific to the direct contracting entity to the extent that that is available required by their CMS agreement and filed with the SEC. And then the final recommendation didn't change so I don't think I need to read that again. So that we can probably pause here for questions. I'll just show the final slide just so people know we're at for today. Once I conclude my remarks it would go to board questions and any discussion public comment and then any motions or potential vote. And once a vote takes place we will draft a budget order outlining the process and the final any final conditions and then we are looking ahead to developing our Medicare only ACO guidance for FY23 which will be developed in the spring. So with that that's the end of my remarks and I'll turn it back to you Chairman Mullen. Thank you Marissa. We'll start with board questions and comments. Any member of the board have questions or comments? I have a question related to the audit. So my question is Marissa if you could actually go back to the recommendations that would be helpful. My question is so it seems to me what you're trying to do is say if CMS or the SEC require an audit of clover health partners we'd like to get it. Why wouldn't we want to get it if they just happen to choose to do it voluntarily? I understand you're not proposing that we require that they do an audit that they wouldn't otherwise do but and maybe it's kind of a loop point because they wouldn't choose to do that but that's my question. Yeah I think I could answer that and then I'll let Russ jump in if I don't have it quite right but my understanding is that anything that is publicly reported also has to be publicly reported to the SEC so we are going with you know information that there's already that they're already required to submit to the SEC either by CMS or other requirements. Is that right Russ? Yeah we could certainly say or if that audit is otherwise available it was my based on some back and forth with clover and their responses to our questions we sort of understood that they weren't going to do it unless they were actually required to do it by by CMS or or you know some public company auditing standard required them to do it. Okay but I think I don't you know there's certainly no downside for us to broaden this and say that they have to provide it if it's otherwise available to. Great thank you I think that's my only question. Thanks Rob and other board members. I have a question on the quality reporting. You know I did go and kind of track down the appendix D which is are the metrics for quality reporting in their relationship with CMS and I'm I just so let me just read them off quickly the three key ones that they are one all cause unplanned admit admissions for patients with multiple chronic conditions. Second is days at home for high needs population DCE and the third is timely follow-up after acute exacerbation exacerbations of chronic conditions for standard DCE or new entrant DCE and I guess when I read that I said what are they after here if these are the metrics that are going to define settlement amounts etc etc it seems to me that they're using the metrics that that basically relate to people accessing high end services and so if you're days at home if you have more days at home it means that you don't have days at a more acute care setting or if you have all cause unplanned admissions for patients with multiple chronic conditions if those are going down that's a good thing and it would be a good thing but I'm not quite sure what it tells us about the health quality of health of the beneficiaries and I'm just wondering if there if you have any thoughts about that Marisha. I don't think it would be a question for me to answer around how those quality measures are set I would if Dave wants to answer that I let him I also understand it's if not but we weren't in a position of you know telling them what quality measures or not would be included this is what is included in the agreement is my understanding yeah and this is Dave um in terms of quality measures and I'm sorry if there's feedback let's see if I can fix that is that any better one might need some mute I think you can't hear me okay now we can yes okay you on your phone as well as the computer I am I just muted my computer I think I was causing okay hopefully I have fixed it now my apologies for that I every time I think I have the technology figured out I do something else wrong with it so join the club today with respect to the quality measures you know this is something that obviously is stepped by the innovation center and that they adapt you know over time to try to make sure that the program is improving the quality of care and they've had larger measure sets and more narrowness measure sets and where they've landed my understanding of where they've landed with these measures is as you said they have the you know the hospital readmission measures and some of the other claims measures that they're looking at and that sort of gives the sort of that clinical experience of the patients that you know are are there patients that are being admitted and readmitted and readmitted showing that their care is not being controlled and and that they're not having good care coordination but then it's also balanced by the new addition of the CAPS measures which are which are actually a survey not conducted by the ACO or the DCE but it's a CAPS survey which gives a consumer viewpoint so this actually patients that are talking about the about their experience and the provider interaction experience and that's a quarter so it's one of the four components that are going to come comprise the quality scores what they try to do is sort of part of their recentering around the patient in addition to the traditional clinical measures and so that's what they've done I will say that you know it is something that can evolve over time within a model you may have noticed it with the Vermont model but it's something that I would expect every two years or so the innovation center very may well update to make sure they're capturing what they think is important to be gauging patient health and I'll say you know another component that they are capturing is the health equity piece that they want to make sure that there is increased penetration to underserved communities those that traditionally were not have not had access to high quality care so I don't know if that's helpful but that's what I can offer it is helpful all of it's helpful a couple of other things I had it just going back to the quality reports the preliminary quality results for 2021 those will be available July of 2022 but it's my understanding that there won't be any vermontness to that at all because there is no DC direct contracting entity in Vermont in 2021 so these would be and I think it's for three quarters of a year is is the basis for the data in terms of those 68,000 plus members in DC ease in 2021 so is that a fair assumption given our or a fair understanding of our discussion that at our last meeting about that I think I can clarify for you a little bit so clover was operating in Vermont in 2021 starting in April as we're all direct contracting entities the model that didn't start until April 21 so it is a shortened year and my understanding is that clover will be be given their quality you know they will have quality results available for 21 on a preliminary basis in July and now I don't know necessarily the reasoning why the that CMS has extended the first year results to for 19 months again maybe Dave knows the answer to that but they there will be quality results for 21 we can't we could we can well our recommendation asks for the preliminary results but the final results you know that are used to you know to do the final performance are you know are not going to be available until July 23 for both years right which are the only I understand there will be quality results for 2021 but because in 2021 there is no direct contracting entity in Vermont Vermont will not be part of that they were operating in Vermont in 21 clover was operating in Vermont from April through the end of 21 as a direct contracting entity or as a yes thank you a couple of other things do you do you have any when when you engage in the ACO reach program maybe this is looking too far ahead but I worry that Vermont small and that in terms of the board of directors you know I think it looks like a good thing here nationally that they're increasing the basis for board members to be 75 percent comprise 75 percent of the board as opposed to 25 percent now and do you have any idea how many board members there might be to clover partnership relative to the AC reach program again David speak to this if he's like I think I can't remember stop my head because I don't have it I think there's maybe 15 currently and you know that the makeup will have to be adjusted right now I might understand they're 25 percent of the voting rights are held by participant providers that would have to increase from 75 percent in the new model I do not know if they will change the number of board members or how those members will be selected but they will have to be compliant with that with that requirement by January 1 23 well my over and one more thing just an update here that I caught having to do with it might have to do with your recommendation having to do with any SEC violations or DOJ the there was a story in Reuters March 1st of 2022 and the headline was US District Judge Alita Trager in Nashville on money declined to dismiss the case allowing investors to proceed with allegations clover lied about the source of its growth and the existence of a US Department of Justice probe into the company so that's the latest on that my my overall concern is that Vermont is very small and this is a big entity and I just worry that I'm both the settlement and it seems that there's resistance to breaking out of Vermont unless CMS does it clover doesn't seem to want to do it these criteria that you've set forth I read the email to Russ yesterday and and as of as of that email there is an agreement to these provisions on the part of clover these are our recommendations but the handshake hasn't happened so you know this this is a difficult one for me because I the lack of transparency here for a program that might start out at 1800 remoders but grow just concerns me and I'll leave it at that for now thank you thank you Tom other board members hearing none I'm going to go to public comment does any member of the public wish to comment Walter hi Kevin thanks um all through this clover health thing I've thought of a phrase by Woody Guthrie in his song about pretty boy Floyd he said uh through this world I've wondered I've seen lots of funny men some will rob you with a six gun and some with a fountain pen the only difference between the two robberies is that one is legal and the other is illegal clover is the fountain pen and I thank Tom for bringing up his concerns about clover I was just going to do that but Tom pretty much said it I have several concerns or a mountain top of concerns actually but having had to fight flame denials before and multitudes of them simply to get a procedure done it bothers me that there is a middle person a middle entity inserted in between a physician and a medicare patient and let's make no mistake about this is that this is a scheme the whole dce or the whole aco's the whole aco reach etc are merely schemes to siphon our medicare off to wall street in return for political campaign donations for both democrats and republicans on the national level the insurance companies did contribute greatly to biden's election fund and this is part of their reward and to put a middle entity between a physician and medicare and a patient obviously that middle entity is going to start to deny they're going to want their profits clover is started life as a venture capital firm and so forth so that's what this whole thing is we on medicare which is our money that these people are using don't need clover health we don't need dce's whoever they are this is a scheme forced on us by cms we have absolutely no choice because if you get if your physician goes with clover or any dce for that matter you're automatically stuck with them and that should greatly concern the gmc gmc b it greatly concerns me both as a patient and as a being on the advisory board and that you suddenly have no decision no choice and then you get a note from clover or any other dce for that matter and all of a sudden you get a third party making decisions between you and your physician about this or that treatment um i also am nervous about the so-called quality measurements a the quality of one party is different than the quality of another so what might be quality measurements for clover might be different quality measures for me you know am i still sick do i still have the broken bone but someone some lawyer in clover could say aha well you did it that was enough so ts is your tough luck and i've had insurers say that to me so i'll kind of stop here to give others a chance to comment and i also wanted to ask if the green mountain care board through the various twists and turns of all these statues that are inflicted on us has the ability to take punitive action against clover or a not providing quality measures and the same concerns that tom mentioned about the lack of transparency um about carving vermont out for example but how many claims would they deny is there a way to find out if clover starts to deny claims for example um how can we track those because and how can we take action against them um again having experienced all this before clover is not in clover or any dce or ac or reach program is not the program that we need or particularly want but it's been inflicted on us simply through medicare's desire to sell it off to wall street i'll shut myself up now thank you walter the meetings are always made more enjoyable when you get a quote from a song lyric so thank you for that i would say that uh uh if clover was in violation of um their budget order that uh there could be um legal remedies that occur as far as to your more focused point on the tracking um i think you've got a valid point that that that will not be tracked but rust do you have anything to say um sure so the board isn't waiving any of its enforcement authority here we the board retains its enforcement authority the same way it does with other aco um i i think there's probably a clarification that's useful um as part of the model here cms remains the entity that adjudicates claims not the direct contracting entity um but i i'll leave it there and and say that the board retains all that's uh enforcement authority that has under under statute and rule the question rust the question rust is a if clover denies a health care claim for me let's say for a cancer or something or whatever do i have to appeal it to cms or that's the question because that could take years or do i appeal it to the board or do i have to stick the lawyer go to the lawyers and spend thousands of dollars on the lawyers i think david alt could answer this question but i don't think they would be in the ability to deny that claim go ahead david yeah now happy to jump in and echo what rust said that so there is no claims adjudication by clover clover has no say or any aco for that matter has no say over what claim may be um denied or otherwise so the the claims administration process for when um a patient goes to a doctor and the doctor submits the medicare claim that is completely untouched by sort of the the aco models and by this construct so the claims that are submitted by the providers for patients they go to the medicare administrative contractors or the max um the way they do now and and that process is wholly unchanged so it's not in clover's discretion whatsoever um to um to to change that right that would be a change to the medicare benefit in some way and and there's really no rights to do that um or or to say that you know a claim would be approved or you know if you went to one doctor versus another doctor right there's no ability to steer care in that way either thank you david next i'm going to go to the health care advocates office and sam feich thanks chair mullen i'll be super brief um just want to say that we support the staff's recommendation the final recommendations and express our appreciation for marissa and the staff's work and engagement with the hca on this obviously we've had concerns um which we've had a good dialogue and engagement with the board and the board staff um and thank the board's attention um to this matter before you so thank you thank you sam is there other public comment is there other public comment hearing none is a board member prepared to make a motion sure um i move that we approve clover health partners fiscal year 22 budget as submitted subject to the conditions outlined by the staff in today's meeting and represented on the slide is there a second second it's been moved and seconded to approve clover health partners fiscal year 22 budget as submitted subject to the conditions outlined on the slide that is currently being exhibited is there further discussion by the board i just wanted to jump in and also echo thanks to the staff this is the first time we've been through this process of a medicare only a co and certainly in this instance there's been some uh challenges in turn in terms of jurisdictional issues so um i just appreciate their work in doing this for the first time hearing no other discussion i'll call a motion all those in favor of the motion please signify by saying aye aye any opposed please signify by saying nay nay and uh russ or mike do we need a roll call because it's not unanimous yeah we should do it by roll call um would you please call it yes yes uh chair molland yes board member holmes yes board member lunge yes board member pelham no board member walsh yes so that uh motion passed four to one and i just want to say that as a yes vote it's not so much that uh an endorsement of what is happening here but recognizing the role that we have as the regulator and personally i have a lot of concerns when it comes to um this type of program and what the impact could be on the healthcare reform efforts that we have here in the state of vermont and uh generally i have um concerns about uh medicare advantage programs as well and so um i think though that we have to live within our statutory obligations and therefore the yes vote and um i don't want to send the message david that vermont is unfriendly i just hopefully you get the message that vermont is passionate about its healthcare reform efforts and hopefully you can figure out a way to help us in that endeavor yeah absolutely no that that has not been the feeling at all and in fact to echo what others have said i mean working with ross and marissa and others they have been you know nothing but professional and wanting to be helpful in figuring out what's best for the state of vermont and in answering clover's questions and figuring out you know based on the data that they get from cms what are we able to provide versus not provide and and so on and and just you know stepping back from my role in working with clover having been in the value-based care movement for a long time now you know i i see both its room for improvement and and the opportunity for it to provide better care um and so you know i i think clover is on that path and and clover looks forward to working with the state to to provide good quick care for vermonters um so thank you for this opportunity so like others i would like to really thank the staff for a very thorough presentation and we do have 10 minutes before the start of the ruttland regional medical center budget discussion so i think we will get started rather than take a 10 minute break and i would turn to the healthcare advocate if they could we received the comments from the healthcare advocate today and that is why i don't believe there will be a vote on guidance today but i do want to hear from mike fisher or whoever he delegates about the concerns and mike if you could take it away hello mr chair i do notice that your court reporter is here but i'm happy to proceed yes i am here yeah we scheduled ruttland for two so let's stick to the schedule okay um thank you mr chair and thank you board members um mike fisher here from the healthcare advocate's office and um i want to recognize and appreciate that um we've been at this for a while and in past years we've maybe done a bit of a better job of coordinating um our efforts and and appreciate that things didn't go exactly according to plan and that we can do better in future years um given that here we are today um and doing our best to let you know our thoughts about the budget guidance um so you you have our our document that we sent you today and i appreciate mr chair what you just said about making sure the board and board staff have an opportunity to um to look at our guidance before you vote and that a couple hours is probably not a reasonable amount of time to do so um so we have a couple of uh we've limited our questions this year in deference to hospitals increased workload um and the covid-19 pandemic and as in previous years um the hca will submit uh separate comments expressing our concerns well we will submit questions separately um that the board chooses not to include the hca also will submit separate comments expressing our concerns about the new methods used to calculate um the recommended npr budget we're not prepared to do that at this moment as remont potentially moves to new ways of funding our hospitals it's more important than ever to have reliable standardized and transparent hospital data as well as clear guideposts for achieving our reform goals with that in mind in mind uh the hca requests the board adopt a couple of recommendations i'm not going to go through each and every one of them here now but i will mention one very specifically um this is not a new topic um we continue to believe that it is vital that the board for the board to adopt metrics to understand base hospital prices uh we suggest asking hospitals in uh for their commercial prices compared to medicare um we have drafted uh a question in our um in the attach in the document that we included i want to recognize that that draft question worked for some hospitals and did not work for others um but that it is um important that we find the right language to be able to compare charges across hospitals especially as we consider new ways of funding hospitals so you'll also see board members um a couple of themes that um that you've seen in past years we we continue to believe it's important to uh focus on bad debt and free care we ask the uh we continue to have this focus uh in the context of the voices we've heard from vermonders that bad debt is a pushes in exactly the wrong direction the opposite direction uh of our goal of right care at the right time um and that many vermonders experience bad debt as a clear message that they um that they should not or could not um cannot get the care that they need um we also suggest a a set of questions about the about emergency medicaid and um and the new immigrant health um health insurance plan as well as deemed newborns we we uh we in our process of advocacy for people getting people without document without documentation getting the care they need we have learned quite a bit about um um hospitals not billing through these through this process and um that's both foregone revenue um that the hospitals are not collecting it um as well as um leaving these people with charges um and lastly um lastly we do include a health equity section I appreciate board staff for including a health equity question in in your guidance here uh we think that it makes sense to go a step or two further into into details around health health equity and have suggested a few um a few examples of how to do so and I'll know one in particular at that um that comes to us really directly through our helpline um and that's you know number c in that in that section um how hospitals handle complaints directly related to discrimination and um and that's a particular particular kind of call that might come to our office that is particularly hard for us to understand how um how to support those people um so with that Mr. Chair I think I'll um I think I'll stop happy to answer any questions and appreciate the process we're in and we're doing the best we can Super thank you Mike and um it is my hope board that we don't make a motion on guidance today that we thoroughly ponder and uh fully understand what the health care advocate has recommended and that we come back to this next Wednesday um but that's me as one board member so feel free to to roll me but otherwise uh I would hope we don't do a vote today so um with that I think this is the logical point to put a halt to the guidance discussion we'll come back to it after rather our RMC discussion but I see that both Claudio and Judy have joined us we have the court reporter and it looks like we could proceed with Rutland and I'd prefer to do that and come back to the guidance a little bit later this afternoon so with that uh Russ if you could help me out to um Claudio and Judy you have to be sworn in again um it would be best if we swore them in again yes okay Kim if you could swear in the witnesses sure would you please raise your right hand do you swear the testimony you are about to give shall be the truth the whole truth and nothing but the truth I'll help you God I do I do thank you okay and Patrick do you want to start out by giving Claudio and Judy an opportunity to respond to some of the questions or were you going to go through a staff analysis first or how do you wish to proceed Patrick we had planned to go through the slide deck with the updates as provided by Rutland for the board's edification it should be relatively quick as they've been in the loop throughout the past week or so and then if there are any lingering questions that Judy or Claudio need to answer to get the board to a comfortable place then we can proceed from there okay proceed okay Kim can you hear me I can thank you excellent all right so we are here today on the 23rd of March uh revisiting the uh mid-year budget modification request from Rutland Regional um a quick overview of some of the factors for consideration that Russ McCracken went through last week as part of the GMCB rule 3.0 we received three overall public comments on this particular request uh one was from Sarah Teachout of Blue Cross Blue Shield and then we had two uh unidentified members of the public who chose to submit uh public comment as well some changes from last week slide seven and eight have been updated to capture Rutland's total margin that was a request on behalf of the board to provide a deeper picture of the impact and projection that Rutland has proposed as part of this process here slide 13 looking at the fiscal year 22 rate impact and the five-year average and five-year meeting has been changed to capture the full effect of the approved nine percent which would be an increase of the base of 12.64 percent for the fiscal year 22 slides 14 to 16 indicate how Rutland plans to implement their requested increase on a service level and indicates where Rutland uh fits amongst their peers on various samples and that was some follow-up questions uh by board members last week that Russ Rutland divided by and on slide 18 we amended that to capture where Rutland regionals current margin projection places their debt service coverage ratio compared to their debt covenant threshold that they spoke to at their presentation slide five again just the the reason for the request kind of the chronological order of the process here the reason and the updates the financial components I won't go back over those from last week it's just capturing some of the impact that Rutland is currently experiencing from the increased utilization that they're seeing and the increased costs that they are being burdened with and the request overall for nine percent above the 3.64 that was approved in september the net patient revenue impact as approved and then as projected with and without that potential amendment and the financial impact potentially post approval should the board approve that nine percent effectively shrinking their operating margin from the 7.5 million that they're projecting now to near break even at a loss of 187 thousand so you can see that impact here on slide seven this is the update we've included the non-operating revenue as projected by Rutland and therefore the total or excess margin at the bottom there for their projection without the rate increase would be nearly 12 million loss but with the increase if approved would be around 4.5 million so a significant recapture there as projected by Rutland and here just the same type of perspective but with some variances looking at the differences between the budget the projection and the projection with rate increase and the difference between some of those measurables across the different variances here provided for the income statement again this slide is not changed here it's just capturing some of the revenue growth that Rutland is experiencing as they laid out in their written letter to the green mount care board and also where that would go with the modification should it be approved by the board bringing net patient revenues up to 307 million dollars where they're budgeted 270 the history of the operating margin for Rutland and the current first quarter experience that they've reported to the green mount care board and also their days cash on hand this does include the Medicare advances that they spoke of we have we do not break that out in our current collections so as a fiscal year end of the first fiscal quarter Rutland sits at about 244 days cash on hand and again capturing the history here of the last five years Rutland is about middle of the pack on the five-year average and the five-year median that was shifted significantly with the falling off of the 2017 negative 5.1 and the oncoming 3.64 that they were approved for in September of note two board member home specifically asked us to place the UVM health networks commercial effective rate back into this slide as we have in the past it should be noted though that that five-year average and five-year median are just for 2017 to 2021 they did not request an effective rate change in 2022 so that will not line up with the 2018 to 2022 perspective at the top however it does help counterbalance some of the figures in the change in charge where Porter appears to be relatively very low compared to their peers so that is placed back in there for some context again looking at the five-year this is the change that we made originally we are looking at the effective impact for 2022 but in hindsight realize that the base rate change is how we've assessed in the past so we've made that change for fiscal year 2022 and you can now see the 12.64 if approved and if they are granted that by the payer that would be the impact that they would have for fiscal year 22 which would bring their five-year average up to 5.77 and if I pan back to this slide here would effectively shift them up just under Springfield at 5.8 percent there you can see at the bottom as one of the higher rates over the last five years with this potentially approved rate here looking at how they distributed the rates these are the services that they plan to apply the rate to and the gross and net revenues that they intend to capture here with this request and you can see there at the bottom to the overall request of 9% and the net revenue per percent value that being over $820,000 for a grand total of about 7.4 million dollars in net reimbursement from the 9% request so gross they would take in about 31.8 million they would net from that after deductions from revenue contractual allowances etc about 7.4 they also supplied some samples of Rutland's rates versus those of other hospitals across various services so we can see here MRI MRI rates Rutland in 21-22 their targeted rate versus Southwestern Vermont Medical Center Central Vermont Medical Center and UVM and they propose similar looks for CAT scan rates lab rates and bed rates as it compares to their peers at those other hospitals and this was again requested by the board to show the impact of or the position of where Rutland currently resides on those various services this slide has not been updated this is just recapturing what they're had they discussed this previously with some of the third-party payers and then what was their contingency plan and Rutland noted that they did not have one as yet but it might potentially challenge their capacity to meet some of their financial debt covenants we'll revisit that on the next slide and that they believe the services they offer in alignment with the community's needs without the rate increased Rutland may have to limit certain services which could have further utilization and cost implications as many are tied to primary care we wanted to know originally if the mid-year request had any impact on wait time issues that they might be experiencing they said no this is entirely due to workforce pressures related to cost and inflation and then to outline the final piece here when we asked them about specific financial covenant triggers specifically that of debt service coverage related to their bond covenants that their projected loss and its impact on debt service coverage would would put their debt service coverage around 1.789 so as presented to you if nothing changes Rutland is projecting the loss of 7.5 million which would which as they've calculated would mean that their debt service coverage ratio would fall to 1.79 for the year their covenant trigger is at 1.4 so what that means is that their lender has said we require you to have one dollar and forty cents of cash generation from your operations to cover your current portion of long-term debt which is the principal interest balances you know the principal interest that you owe during the current period so Rutland is saying that at that 7.5 million that combined with depreciation interest and amortization over the the debt burden that they have to carry means that they would be able to produce one dollar and 79 cents per dollar of debt service that they have to cover and so they also went further and said should our operating loss projection for fiscal year 22 dropped to nine million that would be enough to trigger the 1.4 so if you if no change is made to their current situation they would fall to that 1.79 against the 1.40 should the board provide rate relief to any extent it would block them back from that 1.79 that they've provided for us as follow-up from last week's discussion so with that we've updated our staff recommendation in the sense that what the overall rate change would be and that's at 12.964 once again the recommendation by the staff is still the nine percent as we stated last week and with that Mr. Chair I'll turn it back over to you thank you Patrick and I think for the purposes of expediency before I open it up to board questions I'll allow Claudio or Judy to make any statement that they wish to make and then we'll direct our questions to the three of you after that Claudio did you intend to say anything yes if that's possible I'd appreciate just a few brief remarks to follow up also some of the conversation and questions we had last week you know we walked you through the reasons we're making this rate increase request and I think it's I don't think we've ever come to you before mid-cycle to do that but I want to make sure people know that we don't make this request lately you know in particular our board of directors who reviewed and approved us to submit this request before you include some of the leaders of some of the largest employers not just here in Rutland County but in our state and some of the largest commercial insurance customers in our state so they understand and maybe more than any of us in this virtual room the impact that these rates have on the cost of health insurance for for their struggling to continue to provide for their employees and and taking that into account our board unanimously approved this request because they also understand and have seen firsthand the extreme and unprecedented inflationary pressures that have caused us to take this action these are out of our control we've never seen in in my 30 plus years of doing this inflation happened so quickly and so rapidly and so extremely and we've had a lot of shocks in labor and so forth over the years they approved this request because they understand that our hospital needs some immediate relief and some time to pivot from pandemic crisis response activities to work on some of the human resource and financial strategies we're putting in place to mitigate the impact and they improve this request because they understand that the other options we face have much greater impact in our community and especially the most vulnerable in our community that we're proud to serve um you know I again it's just been um two months ago when we were in the middle of the worst part of the whole pandemic crisis um and the majority over the of our work over the past two years here has been um very simple protect protect our patients protect our staff and make sure Rutland Regional was able to continue to provide access to critical health services during the most devastating public health crisis in our lifetime I'm tremendously proud of all that our staff have done over the past two years to ensure we've accomplished this mission and that we were there for this community in the time of need but that's not I I think it's also important for you to know that's not all we did over the past two years we also looked and took advantage of reducing overhead costs where we could we had a painful layoff we downsized our staff um and and while preserving front line uh clinic clinicians and you know today we have one fewer vice president position than we had two years ago you know we've also taken a look at the service offerings we provide we've taken a look at you know what the contribution margins are for these and we took a look at the clinical and population health impact of that work and we found through this examination over the past year that there's very limited opportunity to reduce services without a significant impact to our mission to improve the health of our community and and let me just kind of give you just a couple of quick examples where Rutland Regional stepped up to address some of the most pressing community health needs not just for locally but on a statewide level and and um you know if you look 15 years ago in the midst of the opiate crisis Rutland regional responded to the community need by developing the west ridge center before Rutland regional took this action and started this new program there was no medicated assisted treatment program in Rutland county we provide methadone and suboxone treatment along with counseling and support and today there's about 400 people in our community that can now be gainfully employed and be present for their families because they're no longer suffering from the scourge of substance use disorder 10 years ago in the wake of the devastation of hurricane Irene and the overnight destruction of the Vermont state psychiatric hospital in water waterbury Rutland regional again stepped up and partnered with our with state leaders to expand our existing psychiatric services to include six six beds of level one inpatient psychiatric care and we provide care to some of the most acute psychiatric patients in the state through that program it's an essential part of our mission and we're extremely proud and we've made a big impact not just locally but on a statewide level in in the psychiatric crisis we're dealing with and then just five years ago we stepped up and and to participate in the one care accountable care organization taking on risk and doing a lot of work to revamp the way in which we deliver care to really work at looking at how we can improve value and lower costs without addressing access and for quality so these are just a couple of many programs and services that we feel are essential but are also higher risk in lower margin you know on the hospital side of the equation we could lower our hospital cost structure by reducing or eliminating essential programs like these but well this might make the hospital look good in the short term or the immediate term I don't think that these actions will help in the bigger picture that we have of and will actually increase health care costs and other less visible and shift those costs to other parts of of the health care system so you know we've worked hard and and if you look at our rate increases in our budget submissions you know Judy and her staff and and all the staff here at Rutland Regional we've worked really hard to play by the rules and to meet your guidelines you know in fact it dropped off the five year look but we were one of just a couple of hospitals back in 2017 that actually significantly decreased our rates so folks I mean as you make your determination I just ask you keep in mind you know Rutland County our hospital service area we serve some of the most vulnerable and socioeconomically challenged people in our state we also have you know I saw Mike Fisher on we also have perhaps the most liberal financial support program in in Vermont because of the community we serve so these are not normal times and we respectfully ask for your consideration give us the opportunity to address these challenges and rebuild our workforce and and to move forward and try to bring these costs down so thank you for your time thanks for the ability to say a few words thank you Claudia so we're going to move to uh board questions and comments and I'll start off um I'll ask uh you Claudio or maybe Judy this question is better for you but how confident are you in your current projections for the rest of the year sure so um those projections are tied with our ability to reduce our dependence on travelers and so they're tied with our workforce strategies and our investments in our compensation package and so we are seeing some relief that relief needs to continue we also as of May 7th will be eliminating all of our incentive programs to get staff to pick up additional shifts that is included in those projections so we are really you know banking on this investment in workforce to help us out and eliminate some of these high-cost programs for staffing okay my second question um Claudio is you were here last week when we heard Sarah teach out uh speak eloquently on on why uh they're opposed to this type of adjustment then they sent follow up um uh an official statement from Blue Cross again I'll ask have you reached out to your carriers are are we doing all this for not in that is there any indication that uh they will grant you these increases if we approve them uh we believe uh so um again we haven't done a mid-year rate increase but the um practice that we've had with our payers is uh you know after we submit our budget and the remount and care board approves it um we have the rate increase and and they follow suit so um sure they could come back and try to renegotiate this on a kind of a secondary market if you will with us that has not been our relationship or practice or experience so a couple of follow-ups to that um one is have you had any conversations since last week with your carriers and two um in the normal budget process when we approve a change in charge that that takes effect on january one and can they actually quickly turn around in one week's time um this type of change judy you know the mechanics of this better I can't speak for them mr chairman and and uh but judy you know the mechanics of how we put this in place better than I do sure I just want to gain some clarity on the term of them are you referring to the carriers or Rutland regional medical center I'm referring to the carriers because I'm sure that you could provide them with the um the new um charges but whether or not uh they could do whatever they have to do in their system to process up those changes is the question really I know that there's always been a matter of months in the normal budgeting process but we have been told in previous um request for a mid-year that the carriers needed at least 30 days which they don't have here so I'm just just trying to get to the bottom of this are you really going to get it by april first which is a week away even if it's approved today or are we really looking at something further in the future so I don't want to speak for the carriers um but we have um our plan in place that we can take care of our charge system here this charge uh process isn't any different than any other billing process I don't think it requires any development um or change in process uh for carriers it requires a conversation um but I don't believe there's a lead time but again I don't want to speak for the carriers on that you know we're currently in a situation where 1800 vermoners are using being used by ponds between UVM and united healthcare and for them it's a frightening reality that they may be without uh coverage as of april first if they want to stay with the same providers they've always been with otherwise they're going to have to drive significantly to go to a united healthcare approved location and so I do worry that there could be some adverse consequences if somebody says no we're not going to give you what the board has approved for you I have serious concerns about that I have serious concerns about the timing I also um judy you you scared me more today when you said that if you're able to cut down on travelers that's part of your your projection for the your your losses and I'm just curious if you have any any solid reason to believe that you will be able to cut down on travelers yeah so we just had a discussion today on um bed capacity and inpatient capacity and where we're at we are seeing you know that of softening with uh the reduction in COVID care particularly on the inpatient side that is a direct um influence on our need for travelers so we are matching that demand with the need for travelers um we have taken some travelers out of the system we continue to do that we also continue to advance our recruitment and hiring process we have 21 new grads uh that we have hired um we're waiting for them to graduate past their NCLEX and then they will be absorbed into our organization so so what would their start dates be uh it it will vary uh based on the individual throughout the summer um and their orientation period varies depending on what unit they land on could any be anywhere from a three month orientation on a med surge floor to close to a year in uh orientation on um an ICU floor Dean as well Kevin we we can't answer the question I mean we're in an unprecedented time in healthcare we've never been through anything like this we've seen supply shocks we've seen the ups and downs and especially nursing and you know uh physical therapists and so forth you know and respiratory you know pharmacists we've seen those up and never have we seen anything as rapid extreme and unprecedented where we've been paying a critical care nurse uh on an annualized basis a traveler $500,000 per year and it's between doing that or not having the bed available and having a patient in our emergency room asking for breath I mean um we you know we certainly are working as hard as we can with expanding the pipeline doing innovative things recruiting and retention is job one and without that none of this stuff quality finance anything it's all hinging on hinging on that so we're doing a lot of work but this these forces are out of our control and you know we are very hopeful and we're very working diligently and putting in the best plans that we can come up with but again this is just an unprecedented time and what we don't want to do and if we you know if we can't do this we don't want to shut down critical bed resources we don't you know we've worked like heck to continue to provide this because we've seen and I think this doesn't help any of our causes delaying care or not getting people to the right care increases our costs and some of our challenges down the road we've seen it very clearly with the pandemic so um you know we're the you know we have the only other ICU that is staffed by full-time intensivists and it's been a critical resource during this pandemic we want to make sure that we keep all those programs open so I mean I don't mean to sound defensive in any way but it's just the reality of the situation is this whole thing is unprecedented thank you I'll open it up to other board members for questions or comments from either Patrick or Claudio or Judy how about this how about I call on you in reverse alphabetical order beginning with our newest member Tom Walsh Tom thank you chair um I raised my hand when you put that down um I want to just start off by thanking Claudio and Judy for everything that they've done um taking care of Vermonters um I do I do want to push back against the unprecedented aspect yes this is a pandemic there hasn't been one in many many years um but healthcare organizations that are several hundred million dollar organizations have faced tens of millions of dollars of loss in a year that's not unprecedented and with the change toward more value-based payments capitation bundled payments um different um things like that there's a budget and you have to stay within the budget there's no asking for a mid-year correction in those plans um organizations that have in my experience that have successfully transitioned have dealt with um those capitated budgets they've come to see their charges um that they don't reflect accurately the time the activities and the location of care right they reflect they're more a reflection of market power and those organizations that have been successful have transitioned and learn new cost allocation methods to better understand the true cost of the time the activities and the location of care and they've moved away from disagreements over charges and reimbursement and so the that's the situation as I see that we're moving toward yes this is a pandemic none of us have ever been through it before but stepping back an organization that does several hundred million dollars of business facing a loss of tens of millions that's not unprecedented still I'm concerned that a rapid change in how an organization tries to deal with being paid that could be really damaging in a resource limited environment so I've tried to work with our staff and done as much research as I can on my own in a short amount of time to see what's your financial situation look at total margin operating margin days cash on hand any measure that I can and compare that to other organization other hospitals in Vermont the region the nation and and like I really want to try to get to a place where I'd be okay with a mid-year correction but your organization looks well above the median on all those measures and so I don't have a question those are just my comments I appreciate everything you're doing to take care of people I really do and I think dealing with sickness and death day in and day out is exhausting I've been part of it it's hard to get to a place with the way that healthcare is trying to change to agree to a mid-year correction back to you chair thanks Tom now we'll go to the next Tom Tom Pellum um this this is these are very tough times and uh you know I'm trying to think about them not only in terms of the immediate needs but in terms of the long-term needs and um and uh you know that you know so much is happening here outside our traditional budget process that it makes it more difficult for um you know in our normal budget process we kind of know what the legislature has done um but we have been through rape review with the carriers and there's some you know structure to it and this is this is kind of making it up as we go along here and I worry a little bit about setting a precedent here um but I also know both of you um and have a very high respect for your affection for the institution that you work for you know and that that what you've done for the Rutland community um I have a couple of questions here um in terms of the non-operating revenue that um that you've added now that we're kind of talking about total margin a little bit in your 2022 budget you had unrealized gains and losses at a positive 5.5 million dollar gain and now with your projected budget for 2022 you have um unrealized gains in law an unrealized gain loss at a negative 6.7 million dollars so that's a 12.2 12.3 million dollar swing I'm just wondering what uh what's behind that sure so um that's actual market performance um what you see in the numbers we presented are actual performance uh through February um and so we have suffered that loss what this projection uh entails and this is goes goes to chair Mullin's question we have not assumed any additional loss in the investment portfolio going forward so these are the losses today and we've just held them so these are paper losses it's not that you've actually cashed in the asset and it's gone it's just these are investment losses these are investment losses that's correct so since February they might have I mean I'm I'm not playing market here but the market's improved a little bit so these might be a little bit better than what what you profiled here I think we're in for a period of some great volatility and I wouldn't object to not going to argue with you about that and if I might if I might add um the paper losses but they but they do have to be marked to market on our financial statements that we submit to um yeah you know our lenders etc yep so my next question was um I think at near the end of the our hearing um on the last on the 22 budget cycle I um applauded your position that you did that that you were not going to raise rates as I would call it to non-hospital providers in the community who use hospital services that you were going to keep those flat and I was kind of being my conservative self at the time and saying why don't you get a little bit more money out of them and and uh and uh you you know you basically said that if you didn't have to do it you weren't going to do it um so have you if I have you gone back to some of your non-hospital providers and actually raised the rates since this pandemic has unfolded or have you are you holding the position that you held back during the 2022 budget hearing that you were trying not to raise rates on your non-hospital community providers um I I Judy can you I I I guess I don't quite follow I I think you know where we don't get much of rate increases when the hospital-based providers uh the clinics were paid off a fee schedule and so there is you know that is an area that we get very little yield out of um rate increases okay um and finally if maybe Judy can probably can't but if she can if she as you work through your 2023 budget um process the beginnings of it are thinking about it as to how all of this rolls out into 2023 um you the last time we talked to you you you said that um you would expect that you know the maybe the budget wouldn't go down on an absolute basis but the some of the pressures that you have built in that hopefully are one-time pressures it would would fall by the wayside do you do you have any more insight uh into that now um so so we are working through that budget process we've just begun looking at some of those high-level assumptions but yes you're right there are one-time costs uh that are related to covid or even some of our retention and recruitment uh that will go away um we don't have any chance to bring uh those programs back in in play obviously we have to contemplate what our um cost of living and our compensation package looks like um but we are looking at uh those costs that were related to um care that we may not need to provide or a service we don't need to provide and let me add one more thing on here um if we were to approve an increase uh but it's not a nine percent increase it might be an increase more tied toward your enhancing your your debt coverage ratio etc um do you think given your experience with the carriers that that would make any difference as opposed uh at at being say rather than a nine percent level it being at something less um is it six and one a half dozen the other and and oh or do you think the the carriers would be more amenable at a lower rate increase I don't think they'll be happy at any price that's all I have thank you thank you thanks Tom next we'll move to board member lunch Robin thank you um so I had a question related to the date debt service ratio and and what that is and I apologize because I could have probably looked this up um but I didn't have a chance before the meeting but where is it right now or you know I don't know how frequently you updated but yeah so so as of February it was 6.2 okay with this projection and unmitigated through a charge adjustment it would fall to about 1.8 Covenant is 1.4 perfect yeah thank you thank you um I just needed context for where we were now in relationship to the projections that you provided um I had a question also about um reserves so certainly in normal times seeing reserves on a one-time or ongoing basis certainly would not be a sound financial practice I would imagine but to your point that there's a lot of unique pressures uh in in the current situation I'm wondering if you could speak to reserves and why that shouldn't be an option for at least a partial offset of your request so what I would argue is it is part of our offset to our request if you look at our reserves and you look at where we were at the end of September our last completed fiscal year and you look at where we are projecting to end with this loss that's a 25 percent decline in in the measure of days of cash so it goes from somewhere in the neighborhood of 280 days to about 205 or so so we have used cash reserve and by cash reserve I really mean investments into fund operations we have not funded an operating margin we have had swim operating margins over the last five years and so uh you know for us to take care of our debt service pension uh improvements in capital we need an operating margin of about seven and a half million dollars uh from a cash flow perspective thank you Judy um and then I had one last question related to the answer to Kevin's questions around the relationship with the carriers and so recognizing you haven't done a mid-year increase but that in general with rate increases the practice has been for carriers to follow and before I ask the question let me just note that if there are confidentiality issues to this we can figure out another way to get the answer potentially and I'll ask Russ to help with that but is that because your reimbursement is calculated as a set percentage of charge so if you increase the charge that reimbursement automatically increases or is there is it just help me understand that I'm trying to understand if that's because the carriers have just been cooperative or if there's actually something in the contract which would automatically increase the reimbursement if if the charge changes so our contracts have a bit of both we have some fee schedule but we've taken that into account and then we're we're a percentage of charge okay thank you and then I don't have any other questions but I did want to recognize that you know it was unprecedented when Rutland in the past came in and asked for a rate decrease and I actually think that was a mid-year request prior to your time Claudio recognizing where you were in relationship to the NPR approved budget and so you know I do I have seen you as an institution be very responsive to your community and thoughtful about those issues so I do want to recognize that and thank you for that it is tough to as other folks have said you know the mid-year increase is just tough and I for me you know I think about certainly your needs but also trying to balance that against employer needs and the impacts of others so I'll just say this is a really tough decision thank you thanks Robin next we'll turn to board member Holmes Jessica yeah I mean I'm gonna echo the tough decision part obviously I think you can see us all struggling and I want to recognize I know you've struggled too and even the decision to come before the board would probably was a struggle I also want to recognize you know the great work done by Rutland regional and that you know these unanticipated inflationary pressures and COVID expenses clearly have compromised Rutland's financial health and I think through no fault of your own and in fact I think some rate adjustment may need to be made but and it's also worth pointing out I think that you know Rutland's budget was among the most conservative we had this year so the position that you're finding yourselves in may not be you know as surprising as it may be for other hospitals and I actually had I had written down in my notes you know to mention and to remind folks that you are the only hospital that I can remember in my tenure at the board that actually has come in for a mid-year rate reduction and so I do appreciate that you know you have you're working on both sides here for your community but you know I guess I would say well I'm open to the possibility of some rate increase I would say that I'm not quite ready to vote on the full rate request at the moment I think I need a little bit more information first in my mind a mid-year commercial rate increase should be taken as an absolute last resort as I we can all imagine it has going to have an immediate and significant impact on patients in your community on self-insured employers in your community who may not have the reserves to cover what now is an unexpected growth in prices so I guess I'm not yet convinced that there's been no stone left unturned and this is the last resort and in particular I would like to hear directly actually from Diva and AHS that there's no way to adjust Medicaid rates to account for these unforeseen inflationary pressures that are threatening hospital solvency contributing to hospital insolvency and that there are no additional state or federal funds available to shore up our hospitals you know some of this is one time expenses that's what some of that federal funding and state funding is for so I don't know chair mullen if there's a possibility of inviting diva and AHS to come to the board to help us understand medicaid's role here how that global commitment cap works whether we're really up against it and whether there are still state and federal funds available to offset COVID related hospital losses for me to approve a rate increase of this magnitude I need to be assured that there literally is no other stones that we can you know uncover to find some funds elsewhere so just I just answer that question I know that Susan did reach out and invite the commissioner of diva but it was a last minute invite that did not go out until late in the afternoon yesterday so it's I'm not surprised that we didn't get a quick response back Susan have you heard anything I have not heard anything at this point I can reach back out with that request from board member homes yeah and it doesn't surprise me I mean she's very busy and getting a request at the last minute I'm sure I'm wondering if they might be able to come in next week right if we're gonna if this if this vote is not done today if we do it next week is their time so and also from AHS to the degree that there are federal and state funds available to offset these losses I would want to hear about that as well just to know that there that's it you know the well is dry on both fronts would be helpful so I guess I would say that to me that's information that I need if others feel ready to vote today and don't need that information I'm I can happily abstain and I guess my second concern is that a commercial rate increase as we know is forever baked into the base so what I what I need to understand a little bit better is which of the increased costs that are driving these losses are ongoing and which are transitory to the degree that permanent wage increases that are higher than expected and are going to carry forward that's different to me than higher than expected travelers costs that are likely to be temporary particularly if utilization is already declining and the use of travelers is already declining you know in my mind the former you know these permanent wage increases that are now baked into into labor contracts going forward that might merit a rate adjustment because those costs are going to be permanent the latter this is where some of the other board members questions some of those might be better addressed by drawing down on cash reserves if the hospital is in a position to do that without breaking on covenants and or dipping below industry standards so I it would be helpful for me to better understand which of the costs going forward are permanent which of them are transitory and a third concern I have is that it's not really clear to me necessarily given some of the you know the feedback we've gotten from at least one carrier that that that this is going to be possible and a rate increase could even be operationalized so I suggest that I'm going to throw out there to other board members would be to suggest to Rutland to engage with the primary carriers in the state negotiate directly with them what is reasonable what is operational and then return to the green mountain care board when an agreement has been reached and we can make a decision about a rate increase based on that mutually agreed upon rate so those are some of the thoughts I have I don't know if Claudia and Judy you want to address any of them but that's that's where I'm sitting right now yeah I mean a couple of those most and I think we provided a breakdown in our information that we've submitted most of those costs that we're facing are are permanently baked in inflationary trends we had budgeted for a three percent wage increase and when we negotiated with our nursing union we settled on a ten percent this year rate increase along with an eight percent retention bonus um and these are um you know significant labor costs that are that are trending forward um and we felt we needed to be there keep literally keep the doors open and when you had traveler costs we would have you know you get into a downward spiral you have nurses leave or they move on to be travelers and come you know so um and I think that's I think that's worked um and and stabilized our nursing workforce first and foremost the pharmaceutical cost pressures that we're seeing um I would imagine I can't predict what's gonna happen but we've seen no relief on those over years over year over year and then all the inflationary pressures that every single business um you know we are getting it from our suppliers add-ons like we did back in the previous energy shocks that we experienced add-ons for delivery charges um cost of food has gone up um significantly all of those costs we don't see relief on on that front um and uh I mean healthcare isn't the only sector to to raise prices and costs I I understand your the challenges with this but um Judy you might be able to be a little bit more specific than I was yeah so what are the sorry I was gonna say specifically what are the travelers costs that you are anticipating you won't carry forward as you reduce your your travelers there that would be one example but go ahead Judy please yeah so in part uh they're you're absolutely right there are some one-time costs but we've had one-time revenue offsets so included in this projection is seven point four million dollars of federal funding that we had not anticipated that came in with that phase four funding and a second tranche of FEMA so those have been included in this projection to offset some of those one-time costs um in terms of travelers we're setting our our budget we'll have to figure out where we think our turnover rate is where our ability to you know our we can hire in and we'll come forward with travelers we will have travelers in our budget and then the second question is where a traveler salaries going um and that you know we're we're gonna have to make a a good estimate on that but thank you are there any follow-up questions from board members yeah i'm gonna open it up to public comment is there any member of the public who wishes to offer comment at this time Walter carpenter thanks Kevin as a member of the public as i'm someone who pays taxes and premiums i echo all of the concerns that every board member has has spoken of um i is also gratifying to hear everything that that Rutland has done over the years and i do want to remind them that the hospital exists for us not we for them and i think our healthcare our private business model healthcare which is partly responsible for all this forgets that i just wanted to end with a quote from our dear wonderful Maggie Thatcher in that as a socialist i'm always getting that Thatcher's quote the trouble with socialism is that eventually you run out of other people's money real problem is is that should be attributed to our capitalist model and eventually Vermonters are not going to be able to pay any more of these rate increases it's just not going to be it's just not going to happen that's all from Walter kev thank you Walter is there other public comment does any board member wish to make a motion at this time kind of with Jess i need a little more time to think about it but if somebody else would like to make a motion please do so i'm i'm listening very carefully to Jess's questions i'd you know i'd rather know more i'd rather know everything that we can know before we decide what we do and i don't think we're there yet okay in fairness to our mc i don't want this dragging out forever so susan if you could try to find the earliest possible date that we could have information either in person or written back from diva or a hs to answer jess's questions that would be very helpful and again time is of the essence um and i think that uh it's going to really complicate any possibility of an april one turnaround so with that being said i'll ask one more time it doesn't look like anybody wishes to make a motion so susan are you under are you clear on the questions that the board needs uh answers to yes i am great if you could work with patrick to try to get those and claudio i know i can't give you homework but i would ask you again if there's any way that you could try to confirm with some of your carriers that we're not just doing this for not that would be very very helpful to us and i apologize that no decision is likely to be made today but we will try to um be as expeditious as possible to let you know even if it's a decision that you may not like i think you you uh yeah we need to yeah yeah i mean longer this goes on you know the the less time we have to pivot i mean so that's the that's the challenge because we do need to react understood and and uh we will try to go as expeditiously as possible so with that we'll adjourn the uh our rmc um discussion and i don't want to say we'll take this back up on wednesday because susan if you could get someone in on monday um that could answer questions that would be better you could get someone in tomorrow or friday that would be better um but let's uh let's see where we end up and claudio will be in communication and uh we'll try to get you an answer so with that we're gonna switch over to a discussion on guidance and patrick i'll turn the meeting over to you excuse me this is the court report i just want to make sure that's all you needed me for correct was the right yeah it was just for the right one uh discussion that's all okay so i'll drop off thank you very much thank you cam appreciate it good to see you thank you and patrick we can see your screen so whenever you're ready proceed great all right we will switch gears here to the hospital budget guidance discussion where we're going to uh stick with the the theme from last week just discussing some of the changes that were made based on uh board feedback from last week's meeting and so i'm going to continue with the uh split screen look here to keep from toggling too much and making the folks following along dizzy so i'm going to start here by getting into the uh the slide deck here again it's just kind of recapping uh last week we took our initial look at this as as the board um here we are on march 23rd looking at the second iteration of this um we do have still the potential vote in here however um as we discussed at the beginning of the meeting uh the hca's contributions uh came in this morning after we spoke with them uh this past monday and so we don't recommend that the board vote until they've had time to consider that and i think that's the the narrative that we've heard so far so that would take us into next wednesday march 30th kind of the final iteration of the guidance and the vote we did receive one public comment uh by vaas we received that uh yesterday afternoon and that has been posted to the gree mountain care board website as it relates to the fiscal year 23 hospital budget guidance process as of last week just recapping some of the changes that had been made uh as we looked at that initial guidance i won't go back through all of these uh we're kind of taking a step by step approach here as we have in years past so highlighting some of the changes that were initially made to the guidance for your consideration and that includes some changes made to the uh appendices and then also uh the discussion around npr growth and the discussion around how the gree mountain care board would like to continue with the access to care and wait times monitoring for fiscal year 23 which brings us to the changes that we've made since the discussion last week and we'll start getting into uh the guidance portion of this as well to highlight that so you can see it in real time here uh so in section one uh we have in the guidelines and benchmarks we have added fiscal year 19 and 20 uh as a prescriptive addition so that the board may evaluate 23 based on the activity that's occurred over the last couple of years so that would be 19 20 21 and now the projection for 22 uh and the impetus for that was that with all of the fluctuations that have occurred in the covid 19 span of time it's important to have some context that takes us back to the beginning of the pandemic and also pre-pandemic as well when looking at some of these budgets as we move into a forward-looking perspective in fiscal year 23 in section one c factors considered for review we did add the including patient migration data language that was requested and we removed the context of sustainability as that work is now going to be pertaining to the hospital budget process and not hospital sustainability and the data that's coming out of that will be for the use here in this decision making and regulatory process so we've catered that language to meet that request but nothing else in that section has changed moving down into section three a which is the executive summary we have added language around specific service lines as something that the green mountain care board should know about changes specifically such as staffing specific service lines and then we built out the language as requested around sustainability planning to read covid 19 and engagement sustainability planning at the hospital specifically pertaining to sustainability planning please describe how the hospital is preparing to engage in sustainability planning with the green mountain care board as you recall we had taken kind of a vague or higher level perspective on that before but it was requested that we outline that a little bit more specifically to get an understanding from the hospitals about what their plans are to engage with the green mountain care board as sustainability planning moves forward so we've covered that request as well moving down into section three b number two we it was requested of us that we provide some productivity statistics around fte for adjusted occupied bed occupancy rate in average daily census for fiscal year 23 versus 22 and 21 so we can see your expectations for 23 compared to the last couple of cycles um these are in there as a request from last week's feedback to look at some of the activity that's occurring in that space as it relates to the utilization component of these budgets moving along to the next section here section three b three charge request we did add that the hospital should describe how the charge request affects the areas of service specifically in patient outpatient and professional services and that is for their fiscal year 23 request and then at the bottom with some of the following the follow updates that we were discussing last week around the approved charge for fiscal year 22 also discussing how that rate impact hit the areas specifically of inpatient outpatient and professional services the next component here is section three b seven and we built out a component here as a request around support for subsidiaries uh we're looking for the name of the subsidiary the budgeted amount of subsidy that will be required as part of the hospital's budget and the financial impact that will have on the subsidiary so if you are budgeting two million dollars in your operating margin that will be transferred to your subsidiary what type of impact is that two million dollars going to have on that subsidiary is it going to bring them to break even is it going to mitigate a three million dollar three million dollar loss to a one million dollar loss or will it return the organization to a level of profitability so a little more detail there if you're basing your budget and your request around the need to help subsidize another organization we want to hear a little bit more about it to give the board some fuller context around the request that you're making moving on to slide seven and continuing within the guidance document section three c around equity we were asked to build that component out with some definitions here so we used the rand definition around health equity measurement as an approach to illustrating or summarizing the extent to which quality of health care provided by an organization contributes to reducing disparities in health and health care at the population level for those patients with greater social risk factor burdened by improving the care and health of those patients so hopefully that helps provide a little bit of context to what we're looking for there and how we're thinking about health care equity so we've met that I believe we've met that request by the board as well moving into the wait times piece as I alluded to earlier we wanted to hear feedback from the board about how they feel we should approach that and so we've taken some an effort here to have the hospital report for each hospital on practice primary care and specialty care as well as top five most frequent imaging procedures specifically please report for each practice and imaging procedure the referral lag which is the percentage of appointments scattered within two days of referral and the visit lag which is the percentage of new patients seen within two weeks one month three months six months of their scheduling date and that could be found in section 3d under wait times which is a new ad in total from the prior week getting down into risks and opportunities here section 3 e4 we've added several topics related to workforce there was a lot of dialogue last week around how to approach some of the workforce components and as we've heard from hospitals through the fiscal year 21 recap and some of this so far and even the mid-year budget adjustments the topic is workforce workforce workforce so the board wanted to call out some of these areas here and looking at specifically the vacancy rate of primary care mds especially mds nurses nursing support and all other trying to get some of those levels we saw some of that in Rutland's mid-year request which is a pretty solid showing of the impact of vacancy current vacancy rates on an organization so being able to see a little bit more of that looking at the average turnover rates for primary care mds especially mdr and this is sport and all other from fiscal year 18 to 21 to capture some of that average turnover looking at the years pre and during the pandemic to assess for potential impact and increase of of those turnover rates report on initiatives and funding sources to reduce workforce pressures to recruitment and retainment and please comment on and quantify the impact of nursing and md travelers on your budget request and backing up a little bit on letter c there are certain bills moving through the legislature right now that would provide some grant funding to allow hospitals and other healthcare workforce providers to access funding to help retain and recruit and so that could be several sources from what we understand and trying to understand what hospitals are doing to seek out and attain some of those funding sources to help ease the burden that we all know too well of their experience in the current environment and finally moving in for the last piece of the guidance document here moving into section 3h one supplemental data monitoring was requested of us that we add some patient migration language around this specifically which links back to the criteria for factors to be considered for review so the a team has put some language in here the market share will be defined as percentage service line charges from local residents within a hospital service area versus non-local residents outside of hospital service area market share will be disaggregated by primary payer you can see the patient origin dashboard patient origin by hospital tab for example so we've had the a team build that language out and finally we altered the inflation table example to help serve as a point of reference for hospitals to populate the table above accurately and because inflation is becoming such a major topic if we're going to have to watch the submissions this year to make sure that they are accurate and can inform the board appropriately so hospitals will fill out their inflation table here this column E here should be the category percentage of the total operating expense budget so our hypothetical example here is that medical staff contribute 40% to the total operating budget example the increase there is 3% hospital provide the dollar amount for that 3% and then the weighted average will calculate based on the input from here and will sum itself up down here in the bottom line so those are the changes that we captured from the board request last week one last other one I'll turn here over to Russ McCracken as it relates to the budget and amendment adjustment policy so Russ I'll turn it over to you to chat through this document here that was sent out to the board and stakeholders along with the other documents sure Patrick I'm happy to do that I don't really have any changes to it from what I described in the meeting last week which highlighted the additional piece here that you can see on the screen that for any to add an additional step in the hospital amendment the hospitals requesting a mid-year amendment that if they're requesting an additional rate increase it has to notify the applicable commercial insurer if they're increased before the board takes action on it going through the the current mid-year budget requests this seemed like a valuable step to add to that process to help the board's deliberation I do also want to flag Patrick if you could scroll up on this document just a little bit um the HCA noted a couple of uh requested a couple of comment or changes under the yeah right there um the board has had um a policy regarding provider transfers which came out of session law from 2016 the HCA requested that we update this section to specify that the notice to patients is written in plain language and also offers a phone number along with the contact information neither of those seemed to be you know objectionable to us at all so I they're not I realize they're not updated in this version but that that's uh I think a small change we would make thank you Russ so to recap here the staff recommendation around MPR currently stands at 6.1 percent as we discussed last week the recommendation around setting an average change in charge ceiling is is still sorry is still not something we would recommend continue to elimination of the budget hearing exemption recommend sorry elimination of budget hearing exemptions is still under the recommendation also inclusion of added factors for review as amendment as of today 323 and I'm just recapping some of the changes you've seen here throughout the guidance so when I say as amendment it means as we've highlighted for you here in the last several minutes so addition of sustainability planning discussion component to narrative section a as amendment as amended today addition of change in charge results questions from FY 22 approved rate in the narrative as amended addition of health equity questions in section c so that is as amended with the definition the addition of reimagine database care participation questions that is as of last week no changes there addition of supplemental data monitoring pilot as amended with the language around the patient migration the continued affirmative quality component related to VQHC which is still as of last week update to the budget amendment adjustment policy as amended as of today obviously Russ has just suggested a couple of additional changes so likely to amend that again for next week and then they recommended other language changes on that we've already covered here on slide six and seven and finally we recommend no vote until the board has had time to consider the contributions from the HCA which is in line with our presentation from last week so that brings us to the end of our discussion here and looking forward as we talked at the beginning here March 30th meeting next week to do a final review of the guidance with everything considered and the final vote and once that is concluded we will send out the guidance on March 31st to the hospitals and that will take us to July 1st for budget submissions appendices and other materials as requested by the board and staff so with that Mr. Chair I'll turn it back over to you thank you so much Patrick and again just to reiterate we won't be taking a vote today but it will be scheduled for next Wednesday and hopefully we'll have all our answers by then and be able to move forward but I wanted to start off the questioning today with a question for Russ McCracken because a couple of board members last week made the argument that there really shouldn't be a number for NPR and the guidance based on the fact that each of the 14 hospitals has been affected by the pandemic differently and they're reaching a different situation and they each have their own store to tell and Russ you were asked to go back and look at legislation that allows for some loosening in the regulations because of the pandemic and I was hopeful that you could give us a report back on your findings sure I'm happy to do that the legislations that you're referring to specifically is Bill H 654 it was passed and sent to the governor earlier this month I believe the governor signed that actually yesterday it largely follows the COVID emergency authority that the board was given previously during the pandemic and then subsequently lapse this bill largely reinstates it provides the board with the authority to waive or permit variances from state law guidance and standards that would include the board's hospital budget review statute and rule as necessary to maximize direct patient care safeguard the stability of healthcare providers and allow for ordinary regulatory processes that are responsive to the evolving needs of the COVID-19 pandemic and the discussion that was had and that reporting back to the board on is that you know it might be the board could use the authority under H 654 or not to set an NPR FPP growth cap as the board has historically done and I think if the board wanted to go that direction H 654 provides the flexibility to permit that under the under the board's hospital budget rule thank you Russ questions or comments from board members I have some questions related to the HCA recommendations I don't know if you want to take those now or if you were specifically wanting questions for Russ oh no um any questions about guidance for Patrick or Russ okay um so and I realize folks haven't had you know that we are we did just get the suggestion so people may not be able to answer these but I thought I would ask my questions to start and they they may actually be more appropriate for the HCA but I'm just going to put them out there and go from there so I have in the past appreciated the question related to reimbursement ratios relative to Medicare understanding that not all hospitals can necessarily answer that question in the same way as a way of assessing quote unquote base reimbursement if you will what I'm wondering is that whether given the additional data request and actually it is on Patrick's screen up right now on the left related to the reimbursement analysis which will give us similar information I believe only perhaps in a more nuanced way whether that question is is redundant helpful as an addition I just wanted a little bit of discussion about that or thinking about that um so basically Robin I hear your question and I think that we could give Patrick a stab at it or we could turn it over to Mike Fisher Patrick how do you wish to proceed if we have a member of our analytics team on I would defer to them but I'm guessing they haven't seen what Robin's talking about so I'm not sure we would have any feedback today so let's go directly to the health care advocate Mike Robin good question I'm not going to be able to answer you fully at this moment but but do you want to just recognize that that what our interest here is that we have some confidence that all hospitals or as many hospitals as possible are calculating this in the same way um and so um you know I would look I'd be interested in your staff's analysis of that whether this question gets us there okay that sounds good I'm happy to I just was curious because I I think in my mind both what you're asking and and the question in the guidance are trying to get at the same thing so I just want to make sure that if we're getting it what we need in one place we're not asking for or twice essentially in different forms um on let me just pull up switch my screen here for a minute and the the other question I had um related to the HCA question so that's just one second oh um there is a question let me see if I can find it now um around the charge request where the HCA recommended asking each hospital provide a high level contingency plan or how I would amend its business strategy um I'm interested in that question and the answers I'm wondering if it would be a better way to get at the information would be for it to be a hearing question just because I think that um a written document may not maybe kind of cumbersome to produce and may not really get at the level of detail or information that we're looking for so I'll just throw that out there as a would it make more sense to ask that to be discussed as part of the hearing rather than a written document and those are my two uh questions or things I wanted to throw out on the HCA inputs um and then related to Vaas's suggestions I wanted to say that I very much appreciated their comments related to the reform environment um I would I'm wondering if not in relationship to the guidance but in a different uh type of meeting if it would make sense at some point in the future to have that discussion around some of the issues that they raised uh in a more forward looking way both as part or connected with hospital sustainability and all-pair model planning so that's really more a comment for our uh for Sarah Kinsler's team and Patrick's team to think about moving forward in terms of how we could start having that discussion um related to reform um also I was thinking we should probably share those comments with AHS um I would be interested in having a discussion about the NPR target um I I'm have to say I'm not entirely comfortable with the idea of eliminating the target not because I think that it can well I guess I should say because I don't think it actually constrains um the hospitals from asking what they need I think we saw that last year when most of the hospitals exceeded the target in their request certainly there are you know it makes it perhaps a little more confusing for public comparisons but we always I believe look at the hospital's individual circumstances and the purpose of setting a target is to really set a directional goal for the state and not that each hospital would be bound to it and certainly I think we've shown in the past that that we haven't bound them to it when it didn't make sense for their circumstances um so I'd like to have more discussion about that I think for me to get comfortable I would need to have us think through like what are the other metrics we're going to look at when we're approving NPR and those could include um around the price pieces um you know inflation certainly and extraordinary workforce pressures but I think also NPR is a measure of overall growth so what are the other measures of overall growth that we potentially could look at um in making that decision so and I don't you know I have some ideas but I wouldn't say that I'm the expert here so I would throw that out as a point of discussion and thinking for others. In Vaz's comment they also had mentioned workforce which I felt like was addressed in terms of including extraordinary workforce costs and the at least the version that Patrick just presented so I'll just say for myself I felt like that was addressed but if others don't believe so I'm interested in hearing about that in terms of wait times I I don't have I I don't feel like I have a good idea of the right way to do that so I'm interested to hear what other people think so I certainly think it's important to consider it given the attention that has been um and the issues in that area but the right way to do it I'm open in terms of how to move forward with that um and I think that and I on the and then the last comment I would want to just sort of respond to from Vaz's public comment is around the ACO and supplemental data you know one of the areas that Vaz has been talking to us about is aligning our regulatory processes and I think that these sections are important for that alignment and I certainly recognize that the new data components are a new part that will take time for hospitals but I do think it's also a forward-looking part of ways that we need to think about how to refine our process so um I would be open to maybe thinking about doing that as a pilot we're not every single hospital responds um but I we lose something there as well because different hospitals will respond differently and we'll have different issues so um so I just wanted to kind of throw those thoughts out there for other board members to react to thank you robin other comments or questions from board members I have a couple um one is I you know relative to the target I um I'm not quite sure that not having a target works um you know as the Vaz letter recommends um but I also understand that a one-year target um could be viewed especially in this volatile period could be viewed as a bit of a straight jacket and so I'm just wondering just for other folks to think about um if we did something like a two-year target and we said um let's you know our let's pick a growth rate four and a half percent apply that you know a little more generous than the one we have now given the circumstances apply that for two years that'd be a a cumulative nine percent forget about the compounding for a minute but a cumulative nine percent a growth rate over a two-year period and then let the hospitals decide how much of that they're going to apply in 2023 and how much of it they're going to apply in 24 24 and build their budgets around that um and says oh I think then you know an approach I mean one year is a short period of time two years is probably not long enough a period of time but it's better than one one year and to give put hospitals in the position of thinking down the road a couple of years that gee you know we have nine percent uh we have a nine percent increase to consider let's put six of it in 2023 and three of it in um uh 2024 or makes a match to to suit their circumstances because there are all these um personalities out there in terms of hospitals and they do and and they you know trying to kind of focus them in a one-year period on a single number uh it isn't a very flexible process so that Tom can I just jump in there and that um I would uh ask legal to weigh in because we've had this discussion in the past about having um two-year targets and at the time and maybe I have this wrong but um Mike I think you were here back then um wasn't it the interpretation that the statutory language specifically referred to a yearly budget and that it um was inappropriate for us to have a multi-year target or do I have this completely wrong well let let let me be clear it wouldn't be a two-year budget process we would do you know it we we would do a 2023 process and 2024 process in the next year but in the 2023 process we would be focused upon an allocation of the cumulative target amount in 2023 I also think actually that that language that Russ presented earlier would probably mitigate any any any uh legalistic path toward this I just I'm just trying to find out a better place for hospitals to have more breathing room um but for us to also have some guardrails around the process that are that that uh keep overall growth um yeah at at at a measured rate but I'm not I'm not advocating for a two-year budget process like any words of wisdom trying to remember that conversation but uh the the statute says that you the board will establish a budget for each hospital annually um but what tom is talking about is setting um guidance into the future beyond one year which is not you know that's a different different issue um I don't think you could lock yourself into uh like I think if you wanted to set guidance for two years I think that makes sense and you could do that um you could obviously change what that second year is if you needed to but um I think you can set the expectation for two years but I'll let Russ weigh in if he feels differently about that no I I agree with what Mike said um the and I'll just go on to add that the uh kind of we'll call it the COVID emergency continuation of the COVID emergency authority uh that gives the board some authority to waive statute and rules um extends through March 31st 2023 uh so it goes through the guidance but not the budget process not the whole budget process for next year but it seems like there's a way tom so it can be explored well I you know I'd like to hear from boss about it I you know if if I I just I just think if I was in their position I would like the flexibility I'd appreciate the constraint but just gives them more breathing room to bring um this pandemic or endemic hopefully you know into a soft landing the the other area that I just want to ask Patrick about is one of the um results or you know that that you learn from a but each budget process um kind of sticks with you and the one that has stuck with me is the fact that in terms of commercial payments a plus or minus one percent of them are structured as fixed perspective payments and so and and I don't think that we can be successful with healthcare reform if we have that major payer out there you know not participating you know in in in the infrastructure of reform and fixed perspective payments uh is one of those key pillars in the infrastructure so we're in this guidance um you know might one find a path to use the 2023 budget process as a way to move the ball down the court I mean we've got the ACO with their chart um and and they have um that was called condition 18 they kind of laid out a path um and is there and trying to kind of integrate um um you know the the the budget process with the carrier rate setting process to to to get to get the the carriers in the hospitals you know closer together I mean you may recall this you know where the carriers are saying they can't find any willing partners you know and and dr brumsted saying you know give me a population-based actuarial sound you know fixed perspective payment with the private carriers and he'd be first in line so there's this gap um and I just think that we need to find a path sooner rather than later to um to get hospitals participating um in with fixed perspective payments um with uh with hospitals so you won't find it here you won't find it here for all of the reasons you just mentioned in that you can't put the cart before the horse until those plans are in place and the hospitals can build their budgets to meet them then it's not going to be it can't be part of this process because it'll just not meet the the expectation so you're not going to see it here hospitals are already building their budgets and those plans to mine my knowledge don't yet exist and so until they do we can't build the guidance to fit that that need or that expectation there's got to be work in other areas first before we can begin to build our regulatory approach to meet that it's like we wouldn't have budgeted in uh we wouldn't have built fpp into this before any of that got going uh until it's set in stone and we could begin to move and their agreements in place was not much use in trying to build something into a budget process uh where expectations can't be met or or measured for that matter well i just worry then i mean we have moved uh you're down the road with uh medicaid um and we have moved down the road with medicare and hopefully we'll move further down the road um but to have commercial out there which is one of the largest parts of the pie kind of stalled um i think um unfortunately might jeopardize our overall reform effort and um so you know whether and i don't think the board is in a position to write the plan i think this has to be a collaborative effort between carriers and hospitals and uh you know we've had one good hospitals southwestern which you know has a pretty good proof and track record with the fpp that they're working with and um i i you know i'm just kind of looking for a way for these guidelines to um have us all stop talking about it and do something about it but those are my two thoughts yeah i'm i'm curious to think maybe a little more thinking around budget orders uh could be the place for that instead of the budget guidance um because we're looking so far forward here um things have to be better aligned and that infrastructure has to be built out so as that infrastructure comes online uh perhaps there's an opportunity to build it in the budget orders that will set the stage for hospitals so they can expect it um as they move into their fiscal year that hey next year in the budget guidance you can expect uh uh some new regulatory components that relate to um commercial fpp space well that's approach we we just have to mirror that on the rate setting side so that we're pushing the the two of them closely together thank you patrick other board members questions or comments i can hop up um so first of all you know to the hospital budget team thank you for all the hard work between last week and this week and i appreciate you're incorporating a lot of the suggestions we've made um i have to think more about tom's suggestion um hearing it now for the first time but i guess my my gut reaction is setting a target for this year is hard enough i'm not sure how we would set a meaningful two-year target given all the volatility and uncertainty that we're already swimming in uh so for me at least at the moment and i know we're still talking about this next week but uh given that tremendous uncertainty and the fact that every hospital is in a pretty unique position as we're emerging from this pretty highly disruptive pandemic i i'm just still not comfortable setting a meaningful one-size-fits-all npr fpp growth cap for this year so at this point my preference is still i could be maybe my mind could be changed based on tom's suggestion but uh i would have to really understand what that growth two-year growth target was based on would have to be grounded in some data some some evidence something so for now my my preference is to use this covid emergency authority that's outlined in age 654 to to waive that gmcb rule and standard practice of setting a target i think if we use our authority to evaluate each hospital's budget submission on a case by case basis i think we're going to be better off even though i recognize to robin's point that we do that anyway i do think that in the past some hospitals have used our growth target set their npr to that growth target aspirationally and set their expenses aspirationally and then been in trouble so i think i would like to see us actually rely this year given that we have some expanded latitude um to rely less on budget to budget evaluations and instead review each submitted budget in relation to their actuals for 1920 and 21 and their projections for what they're seeing in 22 i think if we don't set that growth target it'll be really important for us then to understand each of the assumptions the hospital is making about projected inflation and projected utilization change for fiscal year 23 relative to fiscal year 21 and fiscal year 22 projected so we're really going to have to hone in on understanding what exactly those projections are based on i think the inflation table that we use in the that we have in the guidance will give us a good indication of their assumptions about expected price growth and we can see if you know we can compare you know that those expectations to other benchmarks nationally about what you know expected inflation might be and see how they line up to what they're submitting but i also think we're going to need a clear understanding of their assumptions about fiscal year 23 utilization again like i said relative to fiscal year 21 and 22 i think for some hospitals we may see utilization growth right in 23 over 22 and 21 particularly if they're in areas of population growth but i also suspect we may see some utilization decline to the extent that pent up demand has been met or covid related hospitalizations decline ruttland is already seeing utilization fall off right so i think we want to see what of it what does the utilization look like and what makes sense for their projections so i think it's going to be important if we do wave the npr cap to make sure that the hospital submissions clearly outline their utilization assumptions for both inpatient and outpatient care so that's where i that's where i'm landing on npr fpp right now i just want to also say you know i really appreciate all those changes patrick that you and the team went through i have a couple of small minor adjustments if you don't mind me going through them they're really quick i hope on page eight with respect to the fte per adjusted occupied bed the occupancy rate in the average daily census i'm actually reflecting back on someizations we had with bg and the hospital sustainability analysis where there was some concerns about the occupancy rate per staff bed versus per licensed bed so i actually think both are interesting and important as and so i would actually suggest that we ask for occupancy rate per staff bed and ask for it separately from per licensed bed so we're getting both pieces of information uh under the charge request under part three i think there was just a minor typo there i think impacted should be impact it's just in my notes but i'll share that uh under wait times i welcome the conversation around how we measure wait times i was just thinking about adding a part three to that it occurred to me this morning that basically says specifically please outline steps taken to reduce referral and visit lag times in practices where the majority of patients are not scheduled within two days of referral or not seen within two weeks of scheduling something like that like to talk about asking them to talk about the steps they're taking to reduce those wait times i think is an important component of the wait time section um and then in terms of the workforce challenges we just heard a presentation we're hearing about these workforce challenges so i really like the addition to that section and i think as i was reflecting a little bit more this morning i think we need a deeper understanding of those labor costs and i noticed i went back and looked at the flex monitoring report and there are two measures in there that are maybe worth tracking to understand those labor costs one is salaries over npr and the second is average salary per fte and i think those are those are helpful certainly in the for the critical access hospitals we'll have some benchmarks that we can compare it to and we'll really be able to understand those labor costs and how they're unfolding over time and i thought it was interesting in the the monitoring report that i saw the critical access hospitals in vermont are actually above average on both of those measures so we might want to dig into that and understand a little bit more why and then finally um just in reference to um robin's question about the percent of medicare i just want to throw out there that uh interestingly if you all remember rand had done the study tracking hospitals and the percentage of reimbursements uh as a percentage of medicare and at the time um rand did not have our all pair claims database data in there they were using new hamsters data so it wasn't really an accurate reflection probably of the percent of medicare i did reach out a few weeks ago just to find out from rand bait we've given them vcures so they now have vcures and they are doing an updated study which is actually they're anticipating a mid-may release of that which should have all of our hospitals in it so this is you know this is information from a few weeks ago i think it might be telling and interesting and so i don't know if that might also be worth having the data team just look into and as they're answering robin's question about whether that data might also become available through the rand report so that's all i have thank you very much to the team for all the hard work here thanks jess other comments or questions from the board jess i don't want to put you on this spot but i'm wondering if you could speak to collecting the wait times data versus using the pri the report from ahs and and again i want to put this spot so if you want to think about that and talk about it next week that's fine i that would just be helpful for me to understand sort of the pros and cons of those two approaches yeah i mean i think there's a couple of issues i think that the most some of the data that was in the report that was you know come from came from the secret chopper exercise right where all of the practices were called and that was a point in time estimate and some of the pushback that was received was this was at the at the peak of uh covid and it may not reflect what's actually happening um on the ground we also collected some third next appointment data it didn't match uh in real time third next available appointment it didn't match in real time what was happening in the secret chopper exercise um and so that you know validated what we'd heard from other sources at third next available appointment is not particularly useful or reflective of the patient experience and i think um there's been no data out there that we've ever collected or seen on the referral lag and the referral lag is is real i'm experiencing one right now and um and so i think having that that's a new measure that we don't have that is not has was not collected as part of the wait times and so also to me cognizant of the data that was probably the most uh current data came from that secret chopper exercise in the middle of you know the covid pent up or you know the pandemic i think asking the hospitals for that data in as of july is going to be much more current and hopefully post pandemic and maybe more reflective of the experience going forward so those are my quick answers to that but i can think about it a bit more thank you other comments or questions from the board if not we'll open it up to public comment and i'll recognize healthcare advocate mike fisher thank you mr chair i think i put my hand down um so uh just very briefly uh i appreciate the question and the discussion about medicare benchmark approaches um and um we will also engage in taking a look at the reimbursement analysis question and our question and um and also happy to talk with staff about the various approaches and see if we can find a way to bring them all together and then uh also um member lunge i think uh there's pros and cons to the contingency question is in a written form or in the hearing um and so i'm agreeable to any approach i just think it'd be useful to hear from hospitals uh how they will will manage the scenario where they don't get everything they ask for thanks mr chair and also thank you board and thank you board staff for your hard work on this thanks mike next i'm going to go to jeff teamon thank you mr chairman um i appreciate the dialogue today and the hard work of the budget team as always and the attention especially from board member robin lunge to the letter we took a lot of time to write and which we sent yesterday articulating our our concerns and recommendations for the guidance and as always hope you take those points into serious consideration as you finalize it um you know as i've said in this forum um many many times i think the budget process should focus most on making sure hospitals have the resources required to meet patient need and be stable financially and focus less on mandates that may involve a lot of analytical and reporting work especially for small strained hospitals but deliver little value to the budget process um and i know you heard this as recently as a couple hours ago from claudio fort our hospitals continue to emerge from the pandemic and pick their heads up from rapid response and crisis management that has been going on for two plus years it was it was really only a few weeks ago that we had just a few icu beds available across the state of vermont and recovery from all that is is no small or no immediate task um hospitals have lost workers their staffs are exhausted and depleted their operations have changed as have their procedures and policies and infection control measures and obviously their finances and cost structures have been radically affected too so whether it is managing the regulatory requirements are moving to a new health reform model hospitals don't have extra bandwidth right now also just want to say um given the chance here that hospitals care deeply about how affordable health care is they think about it when they participate in the aco and work to move towards value-based care they think about it when they continue to find ways to cut expenses even as those options become increasingly limited and and they think about it when they build their budgets and attempt as best they can to balance the priority of meeting community need with their prices you know we are a uniquely non-profit system in vermont and the incentive is to deliver the best possible care to the people we serve and to keep our communities healthy um so with that just a few thoughts on wait times um you know i refer you to the letter obviously but this is a complicated space as today's dialogue demonstrates and and as is illustrated by the 100-plus page report that was already produced by the agency of human services and um as robin and others have pointed out there are significant challenges with identifying and collecting the right data which may be one reason that no other state i've been able to find has done this or requires this information from hospitals just to name one of the challenges it is really important to know about clinical appropriateness whether any metric that is selected correctly or or completely sort of um identifies or captures how urgent or important the wait time is for a given appointment many appointments may not be time sensitive or at least not as time sensitive as truly urgent appointments which can be and usually are booked much more quickly um we also need to really understand the the variable burden this kind of request can create for different types of hospitals with different emrs and systems and staff sizes um as we said in our letter and again as i think this conversation today makes all too clear sorting this out and coming up with the right measurement is not something we can do within the timeline of budget guidance it requires more time and more thought and conversation to find the right way to do this across our hospital field with minimal burden and maximum benefit if that's even possible so i think it does make more sense to work on that in coming weeks and months and not impose a new mandate right now until those details and nuances can be sort of figure it out and managed um and i would just lastly say mr chair that um given the dialogue today and this sort of constantly evolving conversation around guidance um if there are other changes um you know we make we make comment further but really appreciate the opportunity to uh to do so today thank you for the time thank you jeff is there other public comment is there other public comment okay we'll come back to this next wednesday hopefully we'll be able to finalize it but um and again um susan the public comment period is open till when monday that's correct march 28 thank you so the the quicker any comments come to us the uh better chance we have to digest them and be prepared to start making some decisions next wednesday so is there any old business to come before the board hearing none is there any 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 please signify by saying aye all right any opposed please signify by saying nay thank you everyone and have a great rest of the day