 Okay, good morning, everyone. It's 830. I'm going to call this meeting to order. My name is Kevin Mullen, chair of the Green Mountain Care Board, and the first item will be an executive director's report, Susan Barrett. Good morning, Mr. Chair. I have a couple of announcements. First, I wanted to let folks know that on September 23rd from 11 to 1230 p.m., the Vermont Agency of Human Services, AHS, is holding a virtual town hall meeting to discuss plans for seeking a one-year extension of the all-payer ACO model agreement, which is effective January 1, 2017 through December 31, 2022. The state is not seeking to add any additional services such as Medicaid home and community-based services, mental health services, and substance use disorder services to all-payer financial target services, which are subject to growth targets. Additional forms about improving alignment between the delivery and financing of these services with services provided through the ACO will be discussed. The meeting will be accessed through virtually, through teams, and the board is sending out that invitation to all of our advisory groups, as well as posting it on our website. I also, as I've mentioned in previous meetings, the board is continuing to accept public comment on a potential next agreement through our website, and we will be sharing any of those comments with our partners at AHS and the governor's office as they are leading the negotiations with the federal government. And that is all I have to report out this morning. Thank you, Mr. Chair. Thank you so much, Susan. At this point, I'm going to turn the meeting over to Patrick Rooney, and we'll get right into the business at hand. Patrick. Thank you, Mr. Chair. Good morning, board members, stakeholders, and members of the public. Welcome to the September 13, 2021 deliberations. Before we get started, I want to acknowledge the work that the team has done this year. COVID has produced immeasurable hurdles for both the hospitals and the regulators as we navigate these budget processes, and it's really caused the team to have to refocus its energies and find new ways to provide information and capture information for board members and members of the public. And Kate and Laurie have been remarkable in that capacity this year. I sincerely hope we don't have to be that creative next year in getting some of this information together, but 14 hospitals worth of budgets is a lot of information, and they've done a remarkable job. Russ McCracken, our staff attorney, who's been embedded with us throughout this process this year, this is his first go around, and he's still with us. That pleases me because he's been an amazing asset helping us troubleshoot throughout this process. So Russ, thank you so much. We really look forward to working with you in our regulatory processes moving forward. And finally, Abigail Connolly, kind of the unsung hero of this process, who is the reason that the documents that we collect and compile become transparent. She handles all of that as it relates to the website. She captures the minutes for the meeting, and she's going to be transitioning to a new role here at the Green Mountain Care Board. So this is probably her last hurrah, and we just wanted to give a big shout out to her for her support. So with that, board members, we are going to transition into deliberations on Springfield Hospital. Kate Hoffman will be walking you through that, and she'll give you a recap. There's been some amendments to their budget since they were in here for their budget hearing a couple weeks ago. With that, I'll turn it over to Kate. Good morning, everyone, and happy Monday. To start this off, we wanted to show Springfield's original submission, which is what you're seeing on slide 105 here. So their original request for their FY22 budget was about $54.6 million, which was a 7.8 percent increase over the 21 budget, and a 20.7 increase over the 21 projection. The change in charges were laid out as follows on the right with an 8.3 percent overall charge master increase. So with Springfield's revision, they realized that their Medicaid price impact was a bit high, so they revised that down. Their dish payments were reclassified, and the Medicare price increase was also adjusted down, which leads us to our next slide, which is their updated budget submission, which here you can see is about $53.6 million, which is a 5.9 percent increase over their 21 budget, and an 18.5 percent increase over their projection. As noted in yellow below, the revised increase over the 21 budget is still over the 3.5 growth rate guidance. In the change in charges, these did shift a bit. The 8.3 overall charge master increase did not. That has stayed the same. And then when we look at the bottom left-hand corner in our trending graph, they're much closer to where they're trended at 3.5 percent since 2019, but they still are over where we're trending there. There are justifications, whereas follows the MPRM rate increases that are needed to continue in their recovery. They need to ensure operations remain sustainable in FY22. They want to continue to ensure access to essential community hospital services. Their rate request will prevent, excuse me, the exhaustion of cash instead of increasing cash. They have workforce volatility, which we hear from all the hospitals, and it allows Springfield to fund high priority capital needs. So we look at their waterfall graph here for their MPR. So their MPR is increasing about $3 million from the 21 budget. $4.3 million of this is rate, which we showed on the previous slide. 2.8 is bad debt and free care, and there's a significant offset in utilization of $3.9 million, which you can see in the orange there, and then a slight little piece to dish. So this is with their amended budget. We're going to continue just showing their new submission. Sorry, I should have clarified that. So with their operating expenses, they're increasing about $3.4 million, mainly due to travelers of about $921,000. Inflation increases of about $843,000, other of $836,000, and new positions of $796,000. The expenses are consistent, at least materially, with Springfield's original submission. It is noted with the decreasing utilization, the increasing costs around travelers, local tenants, and new positions caused us to take a bit more of a look at their operating expenses. And when it comes to their quarterly performance, so we don't have Q4, we made these graphs in Tableau based off of their June 30th, 2021 submissions, and the projections that came with those. They did not provide a projection there, so we're only looking at three quarters here. If we use the submitted projection that they sent with their budget, it would estimate approximately $10.9 million in Q4, with the projected operating loss in total of almost $4 million. So they were operating kind of around Q1, I would say, with what they were anticipating in Q4. The next slide is their historical performance. So this hospital has not met their budgets from FY 2016 through the 21 projection. Since 2016, Springfield has not exceeded $53 million in NPR or FPP. Springfield has, on average, missed their budgets from 2016 to 2021 projection by about 13%. Operating margins have been negative since FY 2017, but the FY22 budget as submitted is showing a slight operating gain. However, the operating margin did deteriorate between their two submissions. Their original had about $1.9 million of margin and now has dropped to about $941,000. So to break down their change in charge requests, the amount of NPR increasing due to charge, again, is about $4.3 million of the nearly $3 million increase. Every 1%, they attribute about $513,000. You can see the increases in their service categories actually decreases and possible inpatient was going down about 2.2% while outpatient is increasing 11%. This shows the breakdown. The payer portion shows the breakdown between payers and you can see their average charge increases at the bottom there. So Springfield's average five-year average charge increase from 2021 is the fourth highest of all hospitals and the third highest in median, which you can see the 4.1% there. So our next slide, slide 112, shows the net revenue collection rates for all payers gross to net. You can see it slightly increasing in the FY22 budget from the projection with a large spike in 2020. As you see there, we do have a note that this is due to the inaccuracy of the FY2020 reporting as noted on the slide. We have some, we see some pyramid shifts that are pretty large between FY21 projection with a slight shift from Medicaid to Medicare when compared to the 21 budget. The 21 projection being in gray on the slide on the right. So now we have our recommendation. So this organization emerged from bankruptcy and is a new organization now. The hospital is providing fewer services and we want to ensure the hospital's costs are controlled, which caused us some concern upon reviewing the materials as they're budgeting for over $53 million of NPR FPP, which as I noted earlier has not been achieved since 2016 when they offered other services that they no longer do like the Berthings Center, for example. Since publishing the slides, we received Springfield's updated days cash on hand, which was 11.3 days. This assumes paying out $1.4 million for capital and all other budgeted costs. Excuse me, Caitlin, can you hear me? This is the court reporter. I just dropped off and I had to get back in. So I don't know, Mr. Mullen, if you want to go back, I can tell her where she left off. But I did miss some of it, obviously. That would be fine. Kim, go ahead and let her know where she left off and... Okay. So it's a little ways back here. So it says, so Springfield's average, five year average charge increase from 2021 is the fourth highest of all hospitals and the third highest in median, which you can see. And that's as far as I got. Okay. You can see the 4.1% in the bottom. That's their average. Okay. Maybe we were good on that slide. On this slide, slide 112 shows the net revenue collection rates for all pairs gross to net. It's slightly increasing from in the 22 budget from the 21 projection. You can see there's a large spike in the 2020 actuals. This is due to inaccuracy of the FY 2020 reporting, as noted on this slide. We also see some pyramid shifts that are pretty large from the 21 projection, but a slight shift from Medicaid to Medicare when compared to the 21 budget. So the projection is in gray. So you can see the movement. And then our next slide, I think I covered everything I said, our recommendations. So this organization emerged from bankruptcy and is a new organization now. The hospital is providing fewer services, and we want to ensure the hospital's costs are controlled, which has caused us some concern upon reviewing the materials as they're budgeting for over $53 million in NPR FPP, which has not been achieved since 2016 when they offered services like the Berthing Center that they no longer offer. Since publishing the slides, we received Springfield's updated day's cash on hand, which was 11.3 days. This assumes paying out 1.4 million for capital and all other budgeted costs. Upon consideration of the hospital's submission, we do not believe the hospital will be able to achieve an NPR FPP growth rate that was submitted. So we are proposing a 0% increase from the FY 21 budget, which equates to almost 12% growth from the 21 projection. Since bankruptcy does not support the organization operating at over $53 million. However, we recommend supporting them with a higher than average rate as the hospital navigates its way out of bankruptcy and with new leadership. This 6% increase would give them five, sorry, a five-year approved average change in charge of about 5.3%. The board has been supportive of Springfield through rate increases as this puts them at the second highest behind Northwestern who had a catch-up year last year. So of the proposed reduction of NPR FPP, which was about $3 million, the rate cut accounts for about $1.2 million, leaving about $1.8 million for the hospital to cut from NPR FPP. In addition to this, we are recommending commensurate reductions to expenses, improves timely and accurate submission of financial data, presents a revised budget to the board and have hospital management provide a strategic plan and to continue our monthly meetings with the Mr. Chair and the staff. And here is our suggested motion language. And I will turn it over to Patrick or Mr. Chair if you would like to take it. Do you have anything to add, Patrick? I do not. Back to the board for discussion. So, Caitlin, can you go over what the rationale is on reducing the 8.3 to the 6? 8.3 was a bit high. So we wanted to look at where we could cut them but still keep them in a relatively higher range just to support them as they continue in a new organization. So we thought 6 was a little better just like in light of everything going on and we wanted to make sure that it was affordable for everyone. So as I look at it, Kate, I see that with the revision lower on the revenues even at the 8.3 isn't it a break-even budget? It is. Well, we're hoping that they would reduce their expenses but they are at about $900,000 which I believe was about 1.7% of operating margin. Okay. It's the hospital with the lowest days cash on hand and everything. This is a very tough one for me. I'd actually hope that the consultants at Springfield that hired that were at the meeting previously were on today because I was going to suggest to Mr. Donahue that he rip up his bill and offer to provide his services for free. I thought it was very disappointing to see somebody being paid to do a budget revenue projection and to come in and try to justify numbers that absolutely were not within the realm of reality. So maybe that's why we don't have him on the line right now but I do see that Bob Adcock has joined us. I was concerned that I didn't see anybody from Springfield at the beginning and Bob I want nothing but the best for success for Springfield and you and Kate are really trying hard to make this work and I'm disappointed that your consultants didn't do a better job for you and at this point I'm going to turn it over to my fellow board members for questions or comments of Kate. So this is Tom. I just have a couple questions. So the reduction so basically level funding Springfield at fifty million six hundred thousand dollars which is I think what your recommendation is that's I can do the math and follow the math that's a two million nine hundred ninety one thousand dollar cut and so that's basically and then you reduce the rate so that you know that kind of like but that but reducing the rate doesn't reduce expenditures so they still have to cut two hundred and two million nine hundred ninety one thousand dollars in order to in order to meet this budget and there's nine hundred and forty one thousand in in projected oh and and so that would be wiped out leaving two million dollars for them to find in their expenses over the coming years is that a an effort read of what you're saying. We want them to yeah we want them to maintain their margin like they need they need a margin but yeah we would request that they need to look at their operating expenses if this budget is if the board moves to approve our recommendation that would be the staff's recommendation that they can they do cut and look at their operating expenses. So let me let me go back again just to understand I understand looking at their operating expenses but I'm trying to figure out in the end where where are they relative to that and I still see that moving to the level funded budget off of you know moving to the fifty million six hundred thousand dollar recommendation where you folks are still you know leaves them having to find two million nine hundred ninety one thousand dollars and they they were projecting at the higher budget a nine hundred and forty one thousand margin and you would like them to preserve that but in order to preserve that they need to cut in expenditures two point nine nine million million dollars. I think that's how the math works. That is how the math works. We're putting the emphasis back on the hospital to be very cautious if their revenues are going to grow from that fiscal year in projection of forty five point two to the budget recommendation we've set at fifty point six to keep a real eye and some pressure on the growth of those expenses because we have new position and traveler costs on their waterfall graph that are contributing a large amount to this expense growth and yet when we look at the revenue piece the utilization and volume is not a part of that so we want them to be very cognizant of the fact that if they need to fill new positions to meet demand that they give a lot of consideration to that and that we're not hiring ahead of our they're not hiring ahead of their ability to meet those revenue demands that are set forth in this budget request but we absolutely would like to see them get that positive margin but it's a challenging scenario to say the least. No I get that and thank you for that. I just was trying to figure out how high the bar is and it's a pretty high bar because even if you forget about the nine hundred and forty one thousand dollars in margin that still leaves and you end up with a margin at zero margin that's still two million dollars in cuts and so I get there between a rock and a hard place and there's no easy way around it. Another question I have is just I know that there is obviously this is the hospital that I'm sure has a fairly close relationship with the primary care folks at the Springfield Medical Care Systems and the last financial information I could find on that organization which used to be prior to bankruptcy joined at the hip was a 2019 IRS 990 where that organization had 33.6 million dollars in revenue and they had basically a three million dollar positive operating margin and I'm just wondering if the hospital, I know that there was a payment of 840 thousand dollars from Springfield Medical Care Systems to the hospital for services rendered and I'm just wondering does anybody have a sense as to whether or not that relationship could be up for renegotiation? I'm not sure I can answer that. Patrick. The staff does not know. Maybe Mr. Atcock is he there? Atcock? He is here now Tom. Bob could you answer that? Good morning. Thank you Tom for the question. That is something that we would have to discuss and explore. Right now we have spent a fair amount of time separating the organizations over the last 12 months although we continue to work very closely together so we would have to discuss and clarify exactly what you mean by that. Well I mean I get it but my sense is if the hospital doesn't survive the primary care mission of the Springfield Medical Care Systems would be severely threatened so even though that bankruptcy separated you there's still a symbiotic relationship that's pretty important and I'm just wondering given that and given that the last IRS 990 I saw was 2019. I haven't seen one for 2020 or for 2021 but we're drafts of those so I don't know it's a blind spot to me but it would just seem to me that if the hospital is in a really tight squeeze and hanging on by its fingernails it would talk to its partner, its former partner and its current partner in a way contractually to see if a better arrangement or a more balanced arrangement could be achieved. That's just a question I'm sure you can't answer it but just a thought I have. So Tom on that point we do have Tom Huebner on as well and I believe he probably could answer that point and I just want to be clear that Tom is representing the administration and Tom's opinion is that the type of cuts that are being asked for here are unrealistic and given all the cuts that were made in the last year but Tom did you want to attempt to answer Tom's question? Tom and Tom? Tom. Tom Huebner if you're speaking you're muted. Can you hear me? We can now Tom very likely. SMCS is doing fine financially during in good shape but they are an independent entity and the contract that Bob has with them is at cost so there is no opportunity for them to just transfer cash for the sake of transferring cash. It is important that they maintain a strong relationship so that they are not cheating with each other but are working in a symbiotic relationship but there's no real opportunity just to transfer money and I think Tom you're right that the F2AC would be put under greater pressure if the hospital were to fail and Kevin is correct that I support the rate increase that Springfield Hospital has requested and I do believe that they need to be careful about expenses but that the key for them is really to rebuild volume over time and that is really the most clear avenue for their long-term survival. Thank you for that. Did you have other questions Tom? I do not. Okay other board members? Yeah sure I'll have a few comments. I mean first of all looking at the NPR the reduced NPR to 11.9 percent against the projection which is the most relevant thing to look at at this point versus a budget which didn't materialize is the highest second to UVM so again you know I think the 11.9 won't be achieved but I'm willing to go with the hospital budget and again this is nothing that the board is doing it's just it's not showing that they're going to get that volume that they're expecting with the swing beds and everything else and that they're going to be higher than any other hospital you know other than UVM and just as an example if I go to the the 2.9 million in commercial that they're expecting to generate on an 8.3 percent increase which was built on the negative 2 on inpatient and 11 on outpatient last year in total or their projection right now for commercial is 28 million 182. As we all know the first quarter of their year October through December they already have a rate increase in there from last year of 4 percent so that's not going to get 8 percent I'm sure their consultants and everyone factored that in and then in the next three quarters they would get the 8 percent so just doing straight math on 2.8 million that's two million dollars so they're not going to get 2.9 million on commercial rate with one quarter at 4 percent and assuming three quarters at 8.3 percent the math they're showing in some of their backup has some of the carriers giving them 15 percent increases and things like that and their calculation it doesn't work so that's just an example of where 900,000 of a change will happen without us doing anything it's it's the math is not supported as well as getting a Medicare increase of a million one they may get that but that's an over 10 percent increase on their Medicare base and there so that that's a pretty high rate there but I know that's based on cost reports but just to put it in perspective that's that would be a 10 percent year over year increase on Medicare on their current NPR so that there probably is some adjustments there you know looking at the 8.3 percent request agree it's high but if I look at the past two years per this chart you know they had a four percent last year which was relatively low they didn't get any incremental COVID money last year and in the scheme of the approved rates that was relatively low and in 2020 they had a zero percent rate so so I do agree that in 18 and 19 they had high rates but you know the the 2021-22 what their request is would not put them in the higher brackets you know so I could be in favor of of the full rate request really only because of the financial situation that they're in and do not want to look back and have you know people saying well green amount of care board cut their rate and therefore that's what pushed them you know to not succeed in their bankruptcy I don't see them if they don't cut expenses I don't see them making it out of this successfully and again nothing that we're doing the the volume I don't see how they're going to be the highest hospital bar second to UVM as a hospital coming out of bankruptcy and getting a 12 increase over their year over year I just you know it's really hard to see that math happening so I think the the recommendation that we're trying to put forward is really saying the volume is not going to happen your calculations for rates still seem to be incorrect which is what I was addressing last time and you did reduce it but reduced it pretty modestly 900 000 and you still with your request at 18 percent we're still the second highest of all hospitals with that year over year request to projection so I think the message we're trying to send is we really want you to cut those expenses in line with where your revenue is going to come in again not because of anything that we're doing it's just the trends aren't showing that your commercial the rate requests are not supported with the dollars that you're providing I'd like to see someone tell me how 2.8 million which is over 10 percent on all of your commercial is equal to an 8 8.3 percent increase of which again one quarter of that you only get four percent so the math doesn't work so you know love to hear the other board's members perspective on the rate I know we don't you know 8.3 percent is certainly high but looking at the past three years combined and the situation that they're facing you know I could support keeping the 8.3 percent but absolutely agree still even even if we keep the 8.3 percent that go on record saying that even the volume we're reducing it is aspirational and probably will not occur and if there are not corresponding expense reductions they'll be out of cash so thanks thank you Maureen and like you I want to give them a fighting chance and I would say if it wasn't for the pandemic I think I would be saying that they don't deserve more than the 3.5 percent that was in the guidance but I think that the state of Vermont has some access issues to deal with and a hospital closing at this point in time I don't think is in anyone's best interest although I would say that this is a one-year thought that I'm looking at just to give them a chance and I would think that next year I would have a totally different opinion because I do believe that we can't be protecting small hospitals period just just for the sake of protecting smallness you have total new new leadership and you know there there is opportunity in the future under Bob and Kada to try to write this ship but I just want to go back to the anecdotal stories that I've heard from three decades ago when the last hospital in Vermont closed and what I was told when Rockingham closed that the board had some deep internal thinking and realized that they were all going elsewhere and particularly Dartmouth for their care and it didn't make sense to continue and I would say that this can't be done just by Bob and Kada that's the whole community that has to rally behind the hospital including fundraising quite frankly and this hospital does not appear to me at least to have a sustainable path forward if people don't start using their hometown hospital and I want to root for them I want to root for the underdog but I also don't want to root for inefficiency and I think that a one-year look during the times that we're in today is probably justified other board members. Maybe I'll jump in there because I have some similar thoughts I suppose and again I think what we're hearing from all of us is this is a tough one Springfield hasn't hit their NPR projections for at least the last five budget cycles. Utilization has been on the decline for several years likely related to that rural bypass that Chair Mullen mentioned shrinking population and the fact that it is have this proximity to four or five other nearby hospitals now it's closed its birthing center which is going to reduce its revenue potential going forward right that's revenue that is no longer getting and I suspect that their fixed costs are harder and harder to meet with that declining patient demand and my worry is I think people have heard me reference before is that volumes may reach a level so low that it compromises quality and efficiency which would certainly be a problem for community members in that area and certainly doesn't set Springfield up to succeed in a value-based world where hospitals will be held accountable for cost and quality and I don't think you know the change in charge increases of 8.3% are not going to solve the underlying structural problem there particularly given their payer mix so with direct relationship to a Chair Mullen was just saying I think our budget order should somehow encourage the new leadership in partnership with their board of trustees to take a closer look at possible affiliations of shared service agreements a re-optimization of service mix in preparation for that value-based world I would love this as an aside but I would love to see some out-of-the-box thinking we have an acute and dangerous shortage of mental health capacity in the state Springfield has excess bed capacity could Springfield for example leverage its experience and become a center of excellence for inpatient mental health in the state right maybe could they fill an incredible need we have for geriatric psych for example I don't pretend to know the answers but I know that Springfield's current trajectory does not seem sustainable and even more worrisome as we move into a value-based world so I think for me I'm with Maureen on some of the math and the aspirational nature of the budget to me the NPR growth and even in the revised budget is still overly optimistic in my mind and I'm extremely worried about the fact that Springfield really didn't adjust expenses to go align with their reduction in the NPR so now the result is just a reduced margin right they had an original margin projection of 3.4 now it's 1.7 if they hit that NPR target which I think many of us are doubting and the revised days cash on hand projection of 11 days to me is deeply troubling so at the end of the day where I sit actually I don't have a lot of confidence in voting for either certainly not the original I don't even have confidence in voting for the revised budget without more work from Springfield I honestly believe Springfield has to go back to the drawing board in some ways so how do we accomplish that I think it's possible that we could do what we did with Copley in fiscal year 17 I think when we had some questions about their budget and it was back and forth and at the end of the day we weren't prepared to approve the budget as submitted without some redo I think what we did with Copley was we approved the budget but asked them to come back so I think or some modified version of the budget and asked them to come back so one way we can achieve this is approve Springfield's budget perhaps with a temporarily modified NPR growth expense growth change in charge along with the condition that Springfield's come back with a revised budget I don't know what the date might be October 15th something like that November 1st I think that budget order that we would approve now would have to identify specific ways that they would you know have to come back you know some guidelines maybe in terms of what a margin expectation is or reduction in expenses alternatively I think possibly and I guess we'd have to ask legal here but could we use Act 91 authority to approve nothing today but simply extend the debt the deadline for resubmission provide those guard mails such as a recommended NPR growth rate for Springfield the margin of change in charge and then using that Act 91 authority to extend the deadline I think we would have to agree that you know we're meeting the Act 91 this is the COVID allowance that allows us to adjust our our our processes because of the COVID situation that we're in so we'd have to agree that extending the deadline is necessary too and I think this is a direct quote to prioritize and maximize direct patient care safeguard the stability of healthcare providers and allow for orderly regulatory processes so if we agreed that that was true we might be able to just extend the deadline and send them back to the drawing board so that's kind of where my head is at is that I don't feel confident enough and approving anything right now because I don't really know if we if we force those expense reductions I don't even know where they're coming from I don't know what the consequences are I don't feel confident in the revenue projections and I'm concerned about their days cash on hand and the margin that we leave them with so I need to know more before I could approve it okay to point that Jessica made reminds me did we get an attestation from the board chair in Springfield yes we did yep sorry yeah we did thank you other board members so I'll chime in since I haven't talked yet um this is a tough one um I think so I I think I you know I'm part of what's tough for me is similar to Jess I just feel like there's been a lot of revisions and changes kind of at the last minute without a lot of time to really understand them and digest them at least for me um so I'd like the idea and I think it is included in um Caitlyn and in the staff recommendations Caitlyn can you go to that slide your recommendation or whoever's driving could you please go to the recommendation slide um so my question was the in the additional recommendations the staff did include presentation of a revised budget and a strategic plan and I wondered if you could speak a little bit more in terms of what you had in mind with that I believe in Patrick can correct me if and Lori can correct me if I'm wrong but we were trying to kind of mirror what was done with Copley a few years ago um just to have them you know take a second look and come in with a revised budget but with like the guardrail setup that the board felt comfortable with yeah and I can add to that um also as part of that um management coming in we would want the board chair to be involved in that discussion uh so that this board the Greenmount Care Board can have a clearer understanding of where management and the board see this hospital going um to some of the points that have been made thus far we don't feel we have a clear understanding of that as they've emerged from bankruptcy and the farther and farther away we get from that emergence from bankruptcy the more important it's going to be for us as regulators to understand what is the future of this hospital and with new leadership welcome some of those ideas that board member Holmes made around perhaps getting creative with what this organization can be to be part of the Vermont provider network in the future thank you so I think for me um that's a key piece uh having a revised budget presentation at some point and again I don't know what the appropriate timing would be but um at some point to consider I think what I would probably be more comfortable with given the financial situation um and the revised particularly the revised days cash on hand would be to approve something now um and I think where I am with the understanding that we get more information and and basically look at a revised budget soon but the reason why that feels important to me is because of the change in charge and sort of the time between uh when that would get approved and when it actually flows through the payer negotiations and into um becoming reality um because I agree with what everybody else has said I have a hard time even with the increase in swing beds in the adult day seeing how the volumes are going to come back that quickly maybe because of to Kevin's point uh the access issues in other areas although you know the access issues seem to be for other types of services more uh tertiary care type services that don't really seem like necessarily would benefit this hospital um and normally I would agree with staff that the 8.3 is high but given the financial situation the pandemic and everything else that everyone else has talked about I think I am comfortable with approving the 8.3 percent um for now and uh and it or just I guess maybe that adds too much doubt I guess I would say I'm comfortable with the 8.3 percent overall I I just feel uncomfortable with the other pieces um and so what I would probably do is go with the staff recommendation for now and then um have the revised budget come in so that we can look at um take a deeper look I do agree that it's important for us to have a better understanding of what the future vision is for the hospital and to you know Bob is is brand new and I'm really sympathetic for to Bob and Kata's situation um coming in and trying to really uh turn the hospital around and but I think that vision needs in my mind needs to be created for a lot of the points that Kevin that Kevin and Jess and Maureen and Tom all raised um I I do have concerns that given that corner of the state has a lot of hospitals and a lot of small hospitals and without some real creativity um the community will end up you know with a failed hospital which may not be the best thing for that community given its demographic and the challenges that I think many residents in Springfield would have uh traveling so um so that's I think where I'm at Kevin I did have a question for you you said you would give them a chance on the NPR with the 3.5 and so are you saying that you don't agree with the zero you would go with a 3.5 no what I had said Robin was that if it wasn't for the circumstances that we were in I wouldn't do the change of charge higher than the 3.5 oh okay with the NPR okay sorry I misunderstood I just wanted to clarify to be quite frank even if um we were to reduce the NPR and they exceeded it I think that uh there there would unlikely be enforcement given the type of unpredictable year this is so um I'm just not that worked up over the NPR yeah I think it's unrealistic what they presented without a doubt okay thank you um so those were my thoughts and and where I'm at other board members does anyone have anything additional to say well I can just kind of sum up where I'm at um I'm kind of aligned where where Maureen was um I worry a little bit about the board getting too close to this um and uh basically absorbing energy that might exist in in the hospital to write their ship um and also give uh creating expectation in the community that the Green Mountain Care Board is going to assure the survival of of Springfield Hospital rather than you know the community knowing that uh they have a task before them so I just I would just you know I I think you know necessity is um very prevalent here and um I trust that the hospital folks will do everything they can to uh write their ship um and I so I I think that pressure is enough you know I wouldn't want to overlay that pressure with a lot of process associated with keeping the Green Mountain Care Board informed I think the monthly meetings with the chair and the staff are sufficient um and um but they shouldn't be structured you know that that we are going to provide the path forward it's just that we want to be informed and know what's going on but I I think um the pressure is there on the management of the hospital to solve the problem and um and to work with the community to solve the problem and I think that's where their focus should be but I can support the 8.3 percent. Other board members have any follow-up comments? Yeah I would just say that um you know I I think the points that Jas brought up and and Robin as well about really making sure that there's a presentation and you know for the board recommendation of the staff that we see that revised presentation that we see the strategic plan um you know I do think at least getting the change in charge and aligning on that um you know needs to be put in place so that they can be planning there and you know I think on the NPR um recommendations and where we're coming at is is just the convincing um you know boss that that that was achievable that you had in here and that was not supported and you know whether or not they can even get to the the new revised number which is still up 11 percent and as I said I think is aspirational um but I think we need to give them time to work really work through that um and then corresponding you know they would have to put in expense reductions or they'll be out of cash so I think we're just trying to prevent what what we you know the training we see coming down the road and um you know I I think whether it's conditional and we could do that I like just as points there about you know approving something now so that they can move forward and then having you know a specific deadline of when they're going to come back with um you know with the materials to support the top line and the cuts and expenses and and having that review time so I think that really needs to be in the conditions whether that's october 15th um and the ability you know I guess with the legal having legal's input on the ability to make those adjustments um down the road or you know again approve or bypass the full approval um you know per some of the acts that we could do until we have something that the board feels comfortable with so I guess I'm flexible to how we do something here I think we should put in something for change in charge um you know again top line I think is aspirational even with the you know reduction that we're requesting um and I'd like to give the hospital time to really come through with uh their support for reduced budget and reduced expenses so thanks Maureen and I just want to say that uh I think Tom made some great points as well in that um I don't know we we sent out a lot of questions to Springfield they answered them we don't agree with their answers um and so I'm not sure that if we ask them to come back in one month's time if the plan is going to be any different because it's not giving them the time to really flesh something out um so I would worry that if we um ask them to represent their budget in October that we're being unrealistic ourselves and I think uh you have to give Mr. Adcock a chance um at uh writing this ship I do think that it would be helpful if um their board chair came before us so that we could at least have some assurances that the board in the community are behind the management team and um are doing all that they can to make this this a success but I just worry that uh if we put too many conditions on it they're not going to be doing what we want them to do at the hospital so trying to figure out what that uh those right conditions are um is somewhat tricky and I know that Robin is uh probably stressing out right now trying to figure out how to make a motion in this situation but I know that uh she will make a great one when she does and uh we'll go from there. So I think uh I mean I so I think what I would do is start with the conditions and then do the change in charge and NPR FPP last even though I think we're probably closer on those two things but I think the conditions is where I'm hearing we may have some differences of opinion so let me try um and particularly around the revised budget um so so I think this is going to take a few motions maybe to kind of sort that out if that works for you Kevin. It does Robin whatever motion you make if it's seconded it's appropriate. Okay so I'll go ahead and make a motion so that you can get to public comment unless you wanted to do that first. No I wanted to get a motion first and then I wanted to go to public comment. Okay so I think we should start with um the budget revision and and I don't disagree with Tom I don't want to load on the work so that um you know so that the hospital can't focus on what they need to focus on. I just think that um I'm also uncomfortable approving something that I I just don't see how it's possible so that's kind of where I'm at so I'm gonna um move that we approve um move that so I'm gonna move that as part of our uh budget order for Springfield Hospital that we require a presentation of a revised budget to the board by the hospital leadership including a representative from their board of directors or board of trustees um at a date to be negotiated between the board chair and the hospital um which will include justification for NPR um and expenses as well as strategic vision for the hospital. Is there a second is there a second to the motion? Second. Can I make a friendly amendment? That will be a problem. I have to make the suggestion. I think that there should be a no later than date you know so the negotiation between staff and the hospital but a no later than some date that they would come before us. I'm fine with that I just don't like to Kevin's point I just don't know what the date should be that's why I punted quite frankly but maybe no later than if you if you give them 90 days from now it would probably be okay that's fine by me okay so that would be no later than well quite frankly it's gonna just thinking about our schedule I think getting so this is for the revised submission not necessarily hearing so what if we said no later than um January 1st or January 1st because it's almost October November December yeah. Does the seconder agree with the friendly amendment? Yes oh sorry my concern with the January 1st date is you're already through the first quarter of their the year by the time you get something but you know not sure how quickly they would be able to do something but this is urgent and you know not not how much change we'll be able to do after you know one quarter is already done so understanding time constraints and wanting to give them the ability to put something together but I think that may be too long um you know so I would prefer to put something in earlier and you know have them still work with the staff to see if that's achievable but again I'll I'll defer to the group for other reasons well you'd have to agree to the friendly amendment Maureen otherwise it's it would have to be a motion to amend but does anyone else have those concerns on the date? Yeah I think I do I think this should be a priority of Springfield to come back and really present a workable action plan to generate a real margin and and I think that should be a priority so I would like to see that happen before January 1st the more I think about it. Yeah so what about November 1st I mean 45 days I mean you know this this is make or break right and if if the quarter is already down in the road and if if what we're saying is what we believe is going to be a lower top line you know there'll already be a quarter into that um and a quarter into the additional losses at that point they could be out of cash by November 1st yeah I'm fine with November 1st I'm okay with November 1st. I just think it's a little bit unrealistic November 1st if you went November 15th it might be doable. I mean I'm okay to go November 15th but 60 days is a long time to to wait and be doing the budget um but let's go with November 15th for for a compromise and if they can do it earlier then then it could be. Yeah this is the tail end and I'll work it out with Mr. Adcock on when he believes it's appropriate to have representation from his board and his leadership team to come in. It's it's the end date it's not when it might actually occur so I'm good with that and yeah I will stress no later than sooner is better so yeah seconder agrees okay so with that I did see uh ham Davis had his hand up. Thanks Kevin I have a question a back question and a comment um the back question is I understood that the Springfield hospital got as much as 10 million dollars from the from AHS under the federal COVID money is that wrong. Patrick do you have that uh um spreadsheet with you by any chance? Not off hand I don't but I do believe they received 10 million dollars from the state of Vermont. I believe that number is accurate. Thank you um the uh and that that money is that was that's one time money that's going to have to be replaced uh in their run rate. My comment is I think that's right Patrick um but thank you for that. Here's here's my comment it's the reality is we've got 14 and a half hospitals in this state okay the 600,000 people and it's hard for me to imagine how you could have any more evidence okay that Springfield hospital is a failed business model just leaning on them and saying they've got to go to the community and they've got to get more support and so forth. Here's a question I would ask Kevin um this is kind of a long comment but I'll keep it as short as I can you say the community has got to support them the community is about a 29 minute ride from a from a an academic medical center with a level one trauma center if what you want to do if what the community you mean the community community should do is to start taking their new hips and their new hip replacements to Springfield instead of the Dartmouth that's a pretty risky thing would do that would would you do that with your knees the reality is that these guys don't have the volume to do this they don't begin to have the they don't begin to have the infrastructure you and yourselves it it would be hard to imagine if you took this five member board and put them in court and let them pile up all the evidence that this business model doesn't work at all that that decision would be a slam dunk if you can't do say if you can't take something as obvious as Springfield then I don't believe this board's going to have any credibility to get the ultimate job done which is to get this whole system sustainable to go into the next decade okay um without being if you can't solve if you can't figure this out if this isn't if this if this is not enough evidence if there's not enough information to tell you that this business model doesn't work what would it take that's my question so I think you directed it at me and I'll answer it that I tend to agree with you and the reality is though that we're in the middle of a pandemic the taxpayers of the state of Vermont have invested a lot of money in trying to give them an opportunity to make it go well and I think that I'm not looking for them to take on things that are the type of higher level care that you're suggesting but what I am hearing him is a lot of anecdotal stories of things that could and should be done in a community people are going elsewhere such as mammography and colonoscopy and things like that and so that's my comments to the community are based on if you want a local emergency room and you want a hospital to be sustainable into the future then your preventive care really should be with that institution and if you're not going to take your preventive care and have faith in your own local institution then don't expect us or the state of Vermont to keep it going quite frankly my recommendation would be to the state not to put another dime into Springfield I think that the state has done bent over backwards to do everything that it can to give them an opportunity and this is really the last opportunity ham thanks thanks for that Kevin I think here's a way to get I understand exactly what you're getting at but here's what I really think is going on but this is the kind of question that you've built a whole staff to determine look at what's going on in this hospital they ain't going to be able to keep going they're going to be able to keep their doors open with doing the kind of care that you've suggested that is totally easily to do at a local level or is what they are really depending on is fancy orthopedics just to get enough money in the door I asked the previous chairman of the when I forget his name you'll remember his name he was the guy that came in from quorum I asked him very sure people have forgotten but I asked him why do you have to do hip replacements and knee replacements and he was just he didn't even know how to answer the question was inconceivable to him but if you ever looked at new york okay where e-town hospitals a 25-bed hospital with a 10-year with a 10-year positive margin and and in the black every step of the way they've done that without without without any surgery at all here's the thing and there's a second question that's been raised here I just like to mention I'll shut up the one of the huge questions here is how much money you don't regulate fqhcs but who's taking care who's going to send any more money to make sure that primary care is there if somebody doesn't get the it needs a knee replacement or a hip replacement and they don't get it at spring fields it's a half an hour ride on the terrible road of i-91 okay but if they don't have primary care then you have a real real horror show and my question is this how much support has has the system provided the primary care things like fqhcs in this system so there are significant rural dollars that came in the initial rounds from the federal government that did help for example the fqhc in spring field and so the community is fortunate that they they do have what appears to be a healthy fqhc at this time and am i answering your question ham or you've helped me and one of the things that truth is i'm you know i'm writing a book on this and one of the things i've been trying to track in fact i spent saturday down at yours and ruck your fqhc it's hot i can just tell you you're at your fqhc the biggest one in the state get 40 000 people in it they think they need more money that that's what they think and and so primary care even if they're getting some money they need they don't they're not getting enough money they're not getting enough support so all i'm saying is ask this question take the stuff make a judgment i mean you have policy people not just money people make a judgment about whether the order of services you've got you've got uh you've got this whole consultant thing coming in supposed to be supposed to be in february okay these the service lines that they're delivering makes sense with the unit cost that makes any sense at all and makes any sense medically in the quality sense because the volume's too low that's what i i don't i don't know who's right here but but you've got a whole staff here take a look i mean ask the staff look into this budget all you'd have to do is call them up ask them but how much of this stuff that they could that is that people go starting to drive the people in springfield are starting to drive right by their own hospital for stuff like hip and knee replacements to go to donner in a there i would too take a look what what what is the what is the service line mix you guys get five people here with all kinds of expertise what you really need to know is what is the service mix does the service mix here in this hospital make medical and financial sense if it does then it's worth trying to save if it doesn't it isn't thank you ham other members of the public if not the motion oh steve gordon i'm trying to get uh can you guys hear me we can't leave so just i want to make a couple of points um one is uh rattle borough has been working with springfield we uh are working actually myself and bob and what else one of the specialties we can help with springfield as you know several years ago when the birthing center of springfield closed we established an ob practice so there wouldn't be an ob desert up there and we're going to look at other opportunities to work with springfield so i don't want you to think that you know springfield is look is in a vacuum right now bob and i are having those dialogues and trying to identify how we can help from brown borough's standpoint even though we're about 45 minutes away the the other point i want to make because i've heard jessica as well as a staff talk about the loss of revenue when birthing center closed down and no one should think that there's any money to be made in ob in this state especially um those of us that have served a uh medicaid population so they might have lost revenue uh by dropping that program but they also it was a very significant loss leader like it is in brad borough and most of the other small hospitals where you don't have a high commercial payer so there's a misconception out there that ob is a moneymaker and i gotta tell you it is not i've talked about it in our presentations that's probably losing us about four million dollars but it's part of our mission uh here and if we didn't do it down in brad borough you'd have a very significant problem in an ob desert in south uh southeastern vermont so those are the two points i want to make and i'll sign off thank you thank you steven just to uh uh be clear that the point that was being made is that um because of um that move which makes sense financially no one you're right no one is making money on ob gyn but the point was that it's going to that's a reduction to the npr and to think that you can um miraculously find um you know revenue coming in um that's going to replace that in a profitable area of your hospital um is unrealistic and i think that's the point that several board members made nobody was trying to make the point that they should not have um um done what was done because the reality is even with you doing all the services you are still losing money and i thank you for what you're doing there because um you're right if if you weren't doing it it would go to a higher cost um location for uh delivery so um we appreciate that steve but i just don't think that was the point that anyone was trying to make mr chair if i may um i just want to reiterate your point um because i was going to disrespectfully or sorry respectfully disagree with mr gordon's perspective that was not where we were taking that discussion what we were highlighting was exactly what you said this is a different organization now than it was in years past and that's why we had a very difficult time from a revenue perspective an expense perspective understanding uh where that organization's 22 budget was um going as presented to us other public comment kevin can i just go ahead since my name was mentioned in that um i just think that we we do understand there's a difference between revenue and profit and so we were all referencing the revenue implications of the closure of the of the birthing center not the profit implications of the closing of the birthing center and in the projections for npr so i think we've all reiterated that you know be the dead horse but we understand that birthing centers are not money makers and yet we believe strongly in uh um encouraging new babies because um vermont needs all the help that it can get with its population so with that um robin i'm going to uh truncate your motion but your motion was to require a presentation of a revised budget um and in that uh presentation including a representative from the springfield board um at a date to be negotiated between uh myself and uh mr adcock to be no later than november 15th 2021 did i truncate that okay yes okay is there any further discussion if not all those in favor of the motion please signify by saying aye aye those those opposed signify by saying nay let the record show that it was a unanimous uh motion robin i'll call on you again okay so i move that we approve springfield hospital's budget subject to the can the budget condition of a revision that was just voted on with an npr fpp growth of zero percent from the fiscal year 21 budget and a 8.3 percent change in charge continuing the monthly meetings between the chair and staff with the hospital um requesting improved timely and accurate submission of financial and financial data is there a second second is there board discussion i'll just chime in and say i did leave out the reduction to expenses because i thought that that would be something that would be addressed in the revised budget but that i just wanted to point that out in case others disagree with that thank you robin other discussion from the board if not we'll open it up for um public comment does any member of the public wish to comment at this time hearing none um those in favor of the motion before us please signify by saying aye aye those opposed signify by saying nay nay so i believe that i have to do a roll call and um russ mccracken are you on uh i am mr chair so i will take the role in alphabetical order member holmes no member lunge yes uh chair mullen yes member pelham yes and member use of her yes thank you and in bob we wish you well and uh i look forward to uh our conversations moving forward thank you kevin with that patrick i'm gonna throw it back to you thank you mr chair we are going to move on to the university of vermont medical center um currently with the projection received for this budget they are coming in 8.5 under their fy 21 budget of 1.15 billion 1.4 15 billion dollars which means their projection is just shy of 1.3 billion that fiscal year 22 request is 1.5 billion which is about 204 million dollars over the projection and about 84 million dollars over their fy 21 budget which results in a six percent budget to budget variance at a 15.8 percent uh fy 22 budget to fy 21 projection variance uh they are looking for just over seven percent in a charge master increase which is largely allocated to commercial and medicare payers as you can see from the graph below here as we trend 3.5 percent forward from the pre-pandemic year of 2019 uh they would be at about 1.4 2 billion dollars just to put in context where they're currently at projecting for fiscal year in 2021 and where they're hoping to achieve their fy 22 budget at 1.5 billion the leadership's justification was volume surge higher acuity of patience and capacity these are themes that we have heard from almost all hospitals throughout this process they need these budgets to make staffing and capital investments to improve patient access they are as with every other hospital in the state succumbing to inflationary pressures on the operating expense side of their income statement they are forecasting demographic changes and challenges coming out of the pandemic and the years ahead they want to be sustainable and affordable they're stressing positive margins and again their rate of 7.05 percent is for incremental inflation only and i will highlight with the provider transfers that were already approved the organic budget to budget growth of this hospital is 6.34 percent bridging their budgets are reconciling from year to year we can see um some npr suppressing activity from reimbursement and paramix of 22.2 million uh utilization reduction of 6.6 uh provider acquisitions that's that 4.5 million dollar figure uh and bad debt and free care on the other end contributing to the growth of their budget is covid testing revenues uh the rate impact of all those payers combined 42.6 million and then the uh line item they've identified as rate difference which i hope i'm saying this uh accurately is their reconciliation from past budget bases due to the um integration of epic and then the cyber incident incident that occurred last year that have impacted their last two uh fiscal budgets and that this is kind of a recapture of revenues that perhaps have not been able to be accurately captured in the past thus justifying that growth to the 1.5 billion no surprises on the operating expense side inflation uh at just over 41 million is leading the pack uh and largely uh outstrips even new staff positions at 19.6 million other at 14.1 and wages and conversations for non-mds of over 12 million dollars uh purchase services at 7.2 and fringe benefits 5.3 and on they go um in descending order right to left as we all know from uh items discussed the medical center had a uh underperforming first quarter uh as you can see the revenues they are just over 282 million in an operating margin uh in the red at 34.7 million uh the second quarter saw a rebound for them in january to march as the vaccines became a prominent in the state people's confidence returned as it did with several hospitals the margin there does not reflect that return of confidence and um higher volumes the the majority of that 69 million dollars is about 39 million dollars that was put on the books um that the organization was bypassed in 2020 and they have received that money in the first quarter somewhere around the first quarter but because of the cyber incident and the impact on financials uh they were not able to book that with confidence until q2 so that spike you see from q1 up to q2 is largely driven by those provider relief funds that came in uh from the federal government and we can see in q3 the numbers really begin to grow that's the best performing quarter to date and then q4 projections are forecasting a slight reduction over q3 at just under 340 million dollars and we can see positive operating margins are projected to finish out the year again the impact of the provider transfers this is nothing that we have to address today because it's already been done for anyone who needs access to that information the links are here at the bottom of the page and in the board presentation and the approved minutes from that meeting but you can see the overall net revenue and operating expense increases just to recap these were services that are physically offered at the central vermont medical center campus that has not changed what has changed is the tax identification number under which these services are built that is now under central vermont whereas before it was under the uvm medical center so the uvm medical center used to capture those revenues now central vermont is capturing those revenues and the corresponding expenses that go with them so um from a care perspective nothing here has changed this is an accounting item that has been made by the uvm health network to realign those revenues and expenses here's the history of the uvm medical center they did outperform budget over several years f y 2020 being one of the outliers as well as 2021 due to all of the circumstances that we have discussed and you can see here that 2022 budget they are looking to regain some of that lost ground as things hopefully stabilized for the health care system in vermont and we have a history here of margins that were very very high in 16 and 17 and have been on the decline bottoming out in f y 2020 and we can see here in 2021 that the projected year-end margin just shy of 53 million and again that is somewhat inflated by the 39 or so million dollars that they have received and were bypassed for last year if we're to take that out that margin is significantly reduced but f y 2020s is significantly improved if they were to align in the fiscal years by which they should have received that money and then f y 2022 budget the medical center is looking to get to a 3% margin or just over 51 million dollars the charge breakdown overall npr impact is 42.6 million they have identified the commercial component of 1% to be 5.6 Medicare to be 3.5 and Medicaid relatively immaterial at 785,000 they will apply the 7.05 across inpatient outpatient and professional services equitably you can see the breakdown of the npr impact so that 42.6 million dollars is broken down into 39.5 no change to Medicaid 4.2 million dollar allocation from Medicare and negative 1.1 million from self-pay other the overall budget to budget request is just shy of 85 million and change in charge drives about 42.6 of that 5 year average they've been approved at 2.3% for increases to their charge master but they also adopted the commercial effective rate over several years up to 2021 where they were approved at 3% by the Green Mountain Care Board this is a hospital that we know has a positive payer mix they are in demographically speaking one of the youngest counties if not the youngest county in the state it's also the most populous county as we know which helps drive some of those revenues that we see at a capture about 65% of their gross revenues down to their net and on average across the hospital it's about 43% with government payers coming in at 30% and slightly under that minor payer mix change from projection to budget 2% on commercial and that's being allocated for 1% increases to Medicare and Medicaid respectively so I'll start here with the change in charge because we are recommending a 1% reduction to 6.05% which would align with the 6% that they had received last year from the Green Mountain Care Board this would effectively reduce MPR of 5.6 million dollars we are asking you to approve the NPR growth as submitted but the provider transfers and we we do believe that this is a hospital that can attain that 1.5 billion dollar MPR figure and a major reason for that is we've heard from hospitals across the state about the higher acuity of patients that are coming in the volume resurgence that they're seeing in this hospital is no different but as the state's sole tertiary care hospital when a higher level of care is required there are a few places to go and this is one of them so if the acuity higher acuity is going to continue we can see that volume resurgence occurring over a longer period of time at this hospital simply for the fact that it is what it is and they provide levels of care that other hospitals cannot we also believe overall financially that investments do need to be made to the infrastructure and in staffing to help see this hospital through the next 12 months or so as far as an operational perspective is concerned so a couple of things can happen here if the NPR is reduced by 5.6 and they do not recapture that from NPR it would fall to the bottom line as presented which would shrink their margin from 3% to 2.7 I will point out in some of the materials that leadership provided us their range according to their A rating across the various bond companies is a 1.5% to 2.8% operating margin to help maintain as part of one of the risk-based qualifiers for maintaining that A rating so the 2.7% if things were to play out that way would still be within that range so we would be we would feel good about the fact that we did take into consideration their operating margin when proposing this but the reason we're looking at a cut here is this is a hospital that has many many resources it has the demographics at their back and a favorable commercial pair mix to match that and really we have not gone above 6 until the Springfield decision just now so we really feel that with all of the advantages that the UVM Medical Center has we would make that slight reduction but still supporting them in a significant way with back to back 6% increases year to year so we do feel that from that perspective the board is supporting the hospital financially we also recognize that this is an organization that's been a leader in COVID response it's been a leader in payment reform and from the staff's perspective we would really like to see them become a leader in cost reduction we've heard anecdotally that those reductions are being worked on as investments are made an epic premier connect workday etc we would really like to see on paper some figures coming in that show that those efforts are returning an investment to this organization and to the health network in general so we think that within this rate reduction that they can find 5.6 million dollars maybe not in the first couple months of the fiscal year but towards the end of the fiscal year as those programs begin to return those investments especially with epic and they will be on epic two years as of this November so we are hoping that this reduction can be met with offsetting operating expenses to help maintain that 3% margin that they're looking for so with that we'll turn it back over to the board for discussion on the UVM Medical Center. Thank you Patrick I'm going to open it up to the board for comments or questions. Tom. Hey you're forcing me to go first. We're you're square lit up blue so I thought you were trying to say something. No I mean I have something to say but I wasn't through I guess. So you go because let me wait to talk about what I want to talk about after we you know people responded to specifically to the slides that Patrick just presented because I have a tangent that I do want to spend some time on but I don't want to be first. Okay. Other board members. Maureen your lips are moving but we're not hearing anything so we're still not hearing anything Maureen so maybe we'll go to another board member and maybe you'll have to sign off and come back in. Other board members is anybody hearing me now? Yes. Yes thank you Rick. We are hearing you. So I can go ahead you know I think this year it's not like UVM is ever that easy but I think they're also particularly tough this year because of the access to care issues. I think that because for me because of the access to care issues and really a hope that they will be able to work on the various issues that are underlying that over this next year I would be comfortable approving the NPR increase because it gives room for the pent up demand. It gives room for those access issues to be addressed. The change in charge is a harder piece. Their financial situation is great now which is terrific but I do I really do worry about their affordability for Vermonters and so I'm hoping other folks will have will share their thoughts on the change in charge because I'm just not quite comfortable with 6%. I think that may still be too high in terms of affordability but I'm open to hearing other people's perspectives. I'm not I haven't made a final decision and then I would also at some point be interested to have the discussion about slide 125 but that doesn't have to be right the second either. Quite frankly I think that just like we did in the last situation it would be better to take that on as a separate discussion and I think we ought to go to that first. So I think that Dr. Bromstead laid out a very good letter to us and I think that the real thing now is to make sure that we're being regularly updated on the progress that is being made. And so I would hope that one of the conditions would be that we have some type of regular reporting similar to the reporting on the inpatient psych bets to occur on the progress that is being made by the UVM leadership team preferably in person unless there's some valid reason not to and when I say in person it could be through teams but I'm saying rather than in writing I think it's helpful for all Vermont to be made aware in an open and transparent process the progress that is being made on the access issues. So to me this is probably the most important condition of anything that we place on this budget is making sure that we continue the conversation with UVM to make sure that progress is being made. Russ were you going to present this slide? Yeah this is Russ. Shall I walk through this slide? That would be helpful. Yeah. So at the last deliberation Chair Malin you requested specific ideas from the team regarding a budget order condition. I think as you just alluded to it it is important that we include a reference here to the letter from Dr. Brumstead on September 7th that identifies the actions that UVM health network hospitals have taken and are taking to address staff shortages, use their technology to improve patient flow and adding our upgrading facilities and equipment to improve their capacity. A couple of elements here for consideration for inclusion in a budget order condition would be specific to UVM Medical Center, develop and implement a strategic plan to address access to care and patient wait times and share or present that plan to the board. UVM Medical Center and board staff work to identify applicable measures to track access to care. This was something that Dr. Brumstead alluded to in his letter as well and then have a quarterly reporting from the Medical Center leadership and potentially their representative of their board or board chair have that reporting to the board on progress on their strategic plan and their wait time measures that could be done, that you could specify that that be done at a public board meeting. And those were the conditions or the elements of a condition that we're presenting for consideration. Questions from the board for Russ? Comments from the board. So this is Robin. I'll jump in. I like the idea of getting a planning document to address the access to care and patient wait times and developing ways to measure appropriately the access to care. That's something that we have done in the non-financial reporting or I should say we started to do in the non-financial reporting pre-pandemic but then of course due to the pandemic kind of let go of the non-financial reporting on a temporary basis. So I think developing that so we can consistently track it is a great idea. And I like the idea of having the public information to kind of show how it's going and where there's improvement. I also think that these elements could help provide some background information and data to the group that's going to be from AHS us and DFR that's going to be looking into the issue. And so I guess the question I know that that hasn't really gotten started yet I don't think or I guess I should say I don't think that's gotten started yet but I just wanted to check in to see if Jess or Kevin knew more about whether there are additional information or ways that we can ensure that our order dovetails with that investigation. So just to be clear the investigation is a statewide look at access and so there has been behind the scenes work being conducted including from some members of our staff and led by our board member Jessica Holm. So Jessica do you want to say anything? Sure I think like you said that inquiry that that is going to be a statewide look at access across the state. We are right now kind of working on a scope of work that various teams at AHS and Green Mountain Care Board and DFR will be doing so more to be coming out on that scope of work looking at it across the whole state. I think that to the degree that we have learned and seen some data that suggests that there are access issues at our academic medical center and that the budget is designed in part to address some of those access issues and realizing how important it is to ensure that Vermonters have access to in particular specialty care and imaging and many of these services that we know have you know long wait times at the moment. So I think that this work would be coincident with the work that's being done by the statewide you know teams looking at access across the state. I think this would inform that work and I like the way Russ has outlined this and I think it's really important that that you know we as the board you know we do care about access. Access is a fundamental component of every regulatory process that we do at the board so I think keeping tabs understanding the strategies and tactics that UVM is deploying to improve patient flow is really important and again I agree with Robin and Kevin that having that information be available to the public is important. So I support this. Other board members just want to make sure that I didn't lose Maureen because I don't see her. Am I here? I support it as well. Thank you Maureen. I lost you for a minute. I was lost. Tom anything on this particular? I support it. I've read the letter and it all makes sense to me. Robin are you prepared to make a motion? Sure. I move that we condition included condition in the UVM hospital budget order uh which would require UVMMC to develop and implement a strategic plan to address access to care and patient wait times and to share that plan with the board to ask UVMMC and direct our staff to work to identify applicable measures to track access to care and to require UVMMC to make quarterly progress reports to the board. I think I'm going to leave out the public meeting part Kevin just sorry to interrupt my own motion with a comment but because I think that that gives flexibility should there be another spike in the pandemic for you and staff to work out the format so I'm going to leave it as provide quarterly reports on the progress of the plan and measurement as in a format directed by the chair. And since Robin has included me in the motion I just want to make it clear that whenever possible I really think that they should be in public. Is there a second to the motion? Second. Is there board discussion on the motion? I'll open it up to public comment before we vote on the motion. Is there any member of the public who wishes to speak at this time? And Ham Davis I see your hand raised. Thank you. Yes thank you Kevin there's been a lot of writing about this access problem which I think is actually is worse than is generally understood. So I have a fact question I wonder if you'd ask the hospital. There's been different numbers put out about the recruitment of new resources per you know people doctors and nurses that would be necessary to get the access problem under control. The numbers I have are 75 new doctors and 250 nurses. Could you ask the hospital whether those numbers are accurate? I don't know if Dr. Brumsted or Steve Leffler are on this call or not. Is there someone from UVM who would like to address the question? I see Rick Benson end up so go ahead Rick. Rick will know. Here we go. Good morning. Yeah I think those numbers are in the ballpark ham but we'll have to validate. I'm not sure where those came from but they sound like they're close. I think as a follow-up Rick one of the things that was troubling to some of the board members at least was in response to a question. It might have been Steve who had the answer during the hearing that most of them are already there as travelers and so we weren't convinced that there's going to be an additional capacity to meet the pent-up demand and do you have any information on that Rick? So yeah we do have a lot of travelers at the moment that are filling open positions so part of that recruitment certainly is in terms of nurses and other clinical staff is definitely to replace those higher-cost travelers that we have. So I'd answer your question Ham. Sort of but your question that was my second question because Jessica Holmes and the original hearing asked about that and I think she was told at the time that it was that on the that much if not all of the deficit in terms of available personnel involved that shift from travel at a permanent. I'm not sure the only so that's fine I'm ready to take Rick's numbers. The other comment I have that the comment that I have that this motion is perfectly harmless I mean it has no effect these if these people weren't doing what the motion calls for them to do they should all be fired tomorrow or yesterday and so they're obviously going to do that. My only thing the thing I think is missing is that I've heard is that I have heard not in this letter from John Bromstead but I have heard John Bromstead say the current situation would lack of that the difficulty of access to the services at the Medical Center Hospital amount are not justified are not tolerable. I think John Bromstead knows that my whether this motion is out there or not I know I don't think he knows that I know he knows that. I don't think anybody disagrees with you Ham and I could see pain in the face of Dr. Lefler when he was trying to address the issue I think if there was a magic way to find the providers that are necessary they would have been found and we're all going to have to work together to make sure that everybody understands that Vermont is the beckoning land right now it's a great place to work it's a great place to live it's a great place to raise your family and we need to do all that we can to get that message out to providers around the country to give consideration to coming here because they would have a great quality of life. That answers my question. Thank you Ham is there any other public comment? If not is there any further board discussion on the motion? This is Robin I would just chime in with one other point which is I think the staffing issues are absolutely critical and key but I also think that there may be other underlying causes and this is totally anecdotal so I hope that this is something that comes out of the planning efforts is a real understanding of what's pushing on the access to care but you know at least in central Vermont scheduling seems to be a real issue in terms of getting into UVMMC and so I have this inkling that there could be operations improvements that would also help with access to care I don't know what those are I don't pretend to be an operations person but I hope that you know that there's a close look taken at multiple potential issues that could be contributed to the access and that's not to minimize the staff and concerns because I you know that was something that I raised several times during the hearings is my concerns around that but but that I think it's a little more complicated and I hope that we can get a better understanding of that from UVMMC in the future and I think you're absolutely correct that it's a multi pronged effect that has to be looked at and anecdotally we've all heard stories of not just at the health networks central scheduling but other hospitals in the state too that have adopted the central scheduling we've heard some horror stories and we know that the whole purpose of implementing EPIC was to try to create some efficiencies as well too so I think there are operational efficiencies that can be achieved I think UVMM's already working on those I don't want to downplay the work that they've done by voting on this motion it's just that I think that it's so important that Vermonters have access to care that anything that just keeps prodding people is a good thing hearing no further discussion I'm going to call the question all those in favor of the motion please signify by saying aye those opposed signify by saying nay let the record show that it was a unanimous vote on the motion Patrick if you could back it up a slide is anybody prepared to make a motion on the remaining pieces of UVMM's budget I was hoping to hear from other folks around the change in charge request before I would have given us a preview that you had some things to say so now would be the time well good I'm this will take a few minutes but I just you know I felt as I was going to the network's budget said a lot of the time I was kind of looking at trees and there's a big forest out there that just that's just not being addressed and we saw this in rate review where the it seems that the hospitals and the commercial carriers are talking past each other on health care reform and I'll just give you a taste of that from from the record you know where during the blue cross blue shield rate review hearings and I referenced this in my discussions on the hospital budgets you know they say so I will say blue cross is fully committed to health care reform including payment reform as well but it is true that you know it takes two to tango we need willing partners in that and we have found some willing partners but you know even at the time of the downturn in hospital services we reached out and spoke to facilities you know would you want to set up a fixed prospective payment mechanism and none of them took us up on it so we do not have so we do have one facility and I think this is southern Vermont through one care who was involved in fixed prospective payment and I'm sure others will get there over time but it's you know it's different world for for the providers as well and mr. Lombardo from MVP kind of gave the same kind of tone that basically says so I just think you know those conversations it takes two it's either has to be both parties are willing to adopt a model and come to common terms or there has to be a mandate in place so those are the two items I think you can you can know without having somebody say so you must do this or else you're going to face some sort of penalty so that's one side of the conversation and then during hospital reviews here you know Mr. Vincent from UVM and I think rightfully so said I can certainly start just to clarify one aspect of how we are looking at the numbers and and that we do participate with in blue cross blue shield for all three of our Vermont hospitals we participate in blue cross and blue shield and MVP ACO programs but these programs are not FPP fixed prospective payments meaning the program has a spend target but we settle at the end of the year instead of having a fixed payment throughout the year and we have you know the place that we have been for a while is a is a fixed payment that reconciles to fee for service really doesn't have value all it does really is create administrative burden and creates uncertainty in our financial statements that we need to stay on top of and then Mr. Brumstead you later on talking about fixed prospective payments well I'll just say that we we would be first up if any commercial payer wants to come forward with actually derive total cost of care targets and are willing to allow us to have the portion of the premium that would flow through the ACO to support care management be first in line and then in response to a question that Robin had asked about Medicare advantage plan Mr. Brumstead said and that's why I said we are all in if any commercial payer wants to come to us with a an opportunity that that's in that construct I would hope it would come through the ACO but if it comes directly to UVM health network we will take that obviously it depends on the details but we you know it is actually early derived total cost of care target and we on the provider side can be held accountable for how the care is delivered and that's what we are all about and that's our core strategy so I mean so though there's the conflict but the numbers here to me are compelling so if you look at Robin that the system wide of of our staff view of these budgets you'll find that across all hospitals the FPP is 13.8 percent but Medicare is 33.8 percent Medicaid is 42.9 percent FPP and commercial is three tenths of one percent I mean that's to me is incredible they're the biggest number that they're 1.6 billion dollars but according to the information that hospital sent us we there's only a little less than five five million dollars in FPP and for the network just briefly for the medical center the Medicaid FPP is 32 percent of their total Medicaid the Medicare FPP is 29.8 percent of their total Medicare and the commercial is five tenths of one percent of their total commercial and for Porter the numbers are similarly 66 percent for Medicaid 38 percent for Medicare but one tenth of one percent for commercial and for central Vermont it's 36.2 percent for Medicaid 38.2 percent for Medicare and just two a negative two tenths of one percent for for for commercial so I basically think that we have a reform system that where everything flows downhill to the commercial carriers and this gap between hospitals and commercial insurers kind of coming to terms you know with with some methods and absent that you know you know I mean we spend a lot of time or spend a lot of time on slides 32 through 34 in UVM's presentation looking at the cost shift and and understanding it and and and how it occurs but that's not going to get fixed as long as the relationship between the hospitals and the commercial folks are on a fee-for-service basis so I just you know I kind of want to get that out there because to me it's huge when you have you know on a system wide basis commercial payments at 1.6 billion and only three tenths of one percent is FPP and I'm talking true FPP here it's it's it's it's a big hole in the system and I'm hoping that we can begin to address this through the budget process and when we get to the motion I will have an amendment you know to to try to do that but you know as long as you know the the commercial folks and the hospitals kind of cannot get together on of on finding ways to for payment reform between them I think that we will just be in a stall and that will be really unfortunate because the systems are in place to do what we have to do now you know we have the ACO we have experiences with Medicaid FPP we have experiences with Medicare FPP a whole variety of things but yet when it comes to the relationship between hospitals and the commercial carriers it's it's it's a non-annuity so that's that's that's my pitch and I will have you know some verbiage which I don't know how well crafted it is Robin is a my mentor on all this stuff and she wasn't around at five o'clock this morning so but I think I just don't think that we should let this go by by the boards I think that the board has to be the adult in the room and well I'll withdraw that the the board has to be the person that grabs both the hospitals and the commercial carriers by the scruff of the neck and say you guys got to talk to each other and come up with solutions because you're such a big piece of the health care payment system in Vermont that if you don't get together uh it's the opportunities that health care reform offers uh are just going to fall by the boards so thanks for the time other board so my suggestion would be for Tom to do his motion as as sort of uh I'm assuming I don't know what it is Tom but I'm assuming it's something like adding a condition um I think it would make sense to talk about that before we do the number piece and the rest of it like we did with the access to care um and my question for you Tom is was are you whatever your suggestion is is it just for UVM or for all three of the network hospitals um it would be for the network hospitals I mean they they together are 62% of all NPR FPP I mean they're they're a big entity and so if the network hospitals you know can use their negotiating power with the commercial insurance to fire up uh health care reform payments uh a payment system then uh it's huge the the scale here is extraordinary and the leverage is extraordinary and you know we're four years into health care reform and we're still down to less than a percent of commercial payments uh being pursuant to fixed prospective payments or some kind of uh payment reform that we're that everybody else is striving toward and that we have in place with Medicaid and Medicare but they're still cost shifting as we saw from those slides that UVM presented they're still called cost shifting uh onto the commercial payers and it's just not a balanced system and it's actually getting more and more out of balance every year Tom are you prepared to make a motion at this time yeah uh um I probably need Robin's help but this is what I came up with and so it's a further I'm separating this from everything else so it can be a clean up and down um or a non-entity whatever this ends up but so it would be further the University of Vermont Medical Center shall using best efforts negotiate payment reforms with commercial payers such that not less than 25 percent of such payments in fiscal year 2020 shall be true fixed prospective payments and that UVM Medical Center's 2023 budget proposal will reflect at least 30 percent of commercial payments as true fixed prospective payments and I picked those numbers because they are lower than the rates system-wide um and within the network for Medicare and Medicaid so um just trying to ramp up here um and and get the commercial payment system you know on the table and uh so that Mr. Brumstead and his folks and the folks at Blue Cross Blue Shield and MVP and others you know can uh tango is one of the comments was it takes two to tango and I'm I'm trying to get them to tango thank you Tom is there a second to the motion I'll second it for the purposes of discussion and board discussion on the motion so I have I have and I given your 5 a.m. comment I fully expect you have not had a chance to do this Tom but has legal had a chance to think about this and and talk with you about the condition in terms of the within the scope of our authority uh no they have not they you know it was one of these things actually that I kept thinking about and thinking about I said yeah this is this is absurd I mean here here we are nibbling around the edges in a way in terms of the financials having read the slideshow and then you've got this huge issue out here that's not even being addressed at all but no they haven't and that's that's certainly uh um they that you know I I knew that that was a flawed look 5 a.m. thoughts happen you know I'm glad you did not call me at 5 a.m. though thank you for doing that or for not doing that um and then my other question for you is would you be open to a mo to a condition that would ask for best efforts to to negotiate in a design a true f.p.p. commercial program without the targets and the reason I asked that is because the targets are directly related to the number of patients who can be attributed through primary care and personally I don't feel like I know whether those targets are achievable given the potential the potential of the attributed population so I would want more analysis and backup before I was comfortable agreeing to particular targets because I just don't know if that's achievable or not given sort of the primary care footprint in Chittenden County that it's a the demographics there are largely healthy and so with traditional attribution for example healthy people tend not to get attributed because they don't seek care because they don't need care and so there are those more technical wonky issues that I'm concerned about in terms of the targets and just to follow up on that I have the same concern Tom and it's not just about whether or not there it's a realistic number it's the fact that you're placing a condition on a party when really it involves more than that party and so if the carriers flat out said no we would have a problem and so I fully support the way that you're going about this and requiring some type of reporting or feedback on the best efforts to get fixed prospective payments but once you start to put in a target that could be subject to some type of enforcement it gets a little bit concerning to me when we haven't had a chance to fully flesh it out no I agree with that that's that's why I said using best efforts clause but just to soften it a little bit but I you know I'm kind of you know Robin's suggestion is fine with me I'm just trying to put some teeth into Dr. Brumsted's statement that you know we're all in and you will be first in line but I think the folks at UVM network have to sit down with the commercial folks and and say we're going to leave the room with something that we can work with rather than every year you know the water goes over the dam and this just this issue just does not get addressed so I'm just trying to get the two parties that we've seen in two sets of hearings to actually do something and it's got to be between them it's not something we can do for them because you know we're not a pair so that's what I mean Robin's suggestion is a good one and their criticism not criticism but her her flashing orange are all legitimate in my mind and one thing two times I would hope that likewise in future rate review hearings that you do similar language on the carriers as well so it's a two-way street well Kevin you may remind you may remember we actually uh had legal look into that and we we have some legal authority issues with conditioning the rate review but we did include in the um orders strong language that Tom helped legal work on in terms of encouragement to do exactly that yeah I mean if the opinion was legal is that we need to go through a rule process to to put that requirement in and I think that's something we can pursue but um you know I did and if you read my concurring opinions on the rate review decisions you'll see that I was very clear there about the weak capitation among the commercial payers yes I you're consistent Tom and just I keep in mind that we do have a large group filing in front of us as well um yeah just add I mean I think um I think the time to put this in would be more you know in guidance than then at this point you know in conditioning um and I think that the board could facilitate this throughout the year by getting the parties together and and having conversations about it so you know with the with the revisions we just put in about the you know in the last approval we just did I'm not sure putting this in at this time is the right time and place you know would just really be my concern but you know I'd like to hear if anyone else feels that as well I guess what I said is I share the same concerns that Kevin and Robin raised around specific targets and I think it sounds like you're already off that um part of the motion Tom but I support the spirit of the motion I don't know about the legality and the achievability of those targets but and actually I think Maureen now raises an interesting question around whether it belongs in hospital budget orders or whether it belongs better in budget guidance of course the concern about waiting until budget guidance is that that's next March and the work needs to be done now so that the you know we can move further on fixed perspective payment on the commercial sector so I guess I would love to hear from legal on this and where it belongs and how we might achieve this but also I would not be in favor of those specific targets so it would have to be the revised language that Robin suggested so I'll turn it over to legal but I will say that uh it sometime is unfair to um throw questions out to legal when they haven't had a chance to do the legal research but maybe they've done enough research on on this issue since Tom has continually brought it up that they're prepared Russ are you prepared can I also just add uh I think if we're going to get legal advice from our legal counsel that that should be done an executive session um so if Russ should when he says whether or not he's prepared perhaps he could say whether he agrees well I'll say that uh yeah a kind of full discussion of the board's um you know express and implied authority under statute might be something that the board considers appropriate for uh an executive session um having said that I'm not sure that I'm prepared right now to have that discussion in a really and and give you advice in a really meaningful way on this on this particular question so could I make a suggestion that um we and table the motion for now um and maybe come back to it after we give Russ a chance to look it in into it which may mean leaving the budget open on this condition until after you know after since it's going to apply to the next three um we may need to leave it open and come back later in the afternoon assuming we get through everything this morning otherwise or Wednesday morning depending on Russ's timing I I won't do this again in in central remods or porters because I just I wanted to make the point I wanted to get these this data out there about how wide the gap is and uh how unbalanced the system is and I feel that that's that's occurring here um but um I'm willing to work work with legal in terms of guidance or you know whatever whatever the path forward is that can you know coalesce us all around um a strategy here because I think we all see it as a big flaw in the system but it's a fixable flaw so I'm not even sure how to take that Tom are you saying that you're withdrawing your motion or are you saying that um you agree with Robin that we should come back to it later today uh no I agree with Robin that we should come back to it later today um and that implies to all three if and if if there's a simple way I don't want to make this too complicated it can get very complicated but if there's a simple way to to you know get rid of the specific targets and fold in some language that uh you know causes the parties to get together and come up with recommended solutions um um that would be fine with me as well maybe at lunch Robin I can talk well hopefully legal is part of that conversation right okay I expect Russ to be fully prepared by noon well I don't expect him to be fully prepared and if quite frankly if he needs till Wednesday I'm I'm prepared to uh wait till then because I don't want any rushed decisions from legal yeah okay so um with that Robin do you wish to make a another motion I'm considering the other motion tabled yes I move um that we table Tom's motion uh pending um a discussion with our legal team second there's a second thank you um all those in favor of the motion please signify by saying aye aye those opposed signify by saying nay with that Robin are you prepared to make a different motion yeah I'd like to make some comments to you on this super I think Jess and I have a comment so a couple things I guess first Patrick if you could go to page 121 and we can kind of be looking at that page um you know of course UVM is the largest hospital and has all the issues that we've been discussing so far with access and staffing and inflationary increases and stress workforce um the three network hospitals are requesting the highest commercial rate increases in comparison to the all all of the other hospitals which only increases the cost shift and individuals utilizing commercial insurance which factors into their personal care decisions you know often delay care and you know and so the one of the questions is you know what's what's the right balance and and how do we look at this you know the issues that were impacted UVM were not just COVID this year they included the issues at Fannie Allen and they included the cyber attack both of those contributed uh approximately I think the cyber attack was $50 million in losses and the Fannie Allen was $8 million in losses so we had almost $60 million and the reason I look at this page is where would we have been you know in this operating margin had those things not happened um you know we talked about certainly they got money from from the feds for COVID but uh 21 would have been significantly higher you know had had those things not not impacted um the bottom line and fortunately they stand to recoup about 30 million dollars in insurance money some of which they're going to need to invest in protecting against further attacks on the COVID but this benefit is not reflected in this operating income so when we look at where should the rate increase changes what one other thing on the um when we look at the NPR I'm not convinced they can get to them to the billion five that they're looking at um you know historically they've they missed significantly this year with the million three they definitely have you know impacted from the COVID uh from the cyber and from Fannie Allen so that's going to help achieve that um but but I do want to say I'm not saying we should adjust their NPR but but it is still potentially a stretch to get to that billion five um particularly since we've heard about not having the staffing and the ability you know the appointment delays things like that I mean you kind of need the staff in order to be able to achieve the the top line number so so that that could be um stressful when we look at some of the areas you know going back to commercial rate one percent is is six million dollars we're looking at um you know the recommendation by the staff of decreasing that by one point um I'm not sure that's enough you know I I still want to hear where what other people are thinking I mean you know five percent would still be high last year they got two percent extra for COVID um you know one of the areas we we did go back and forth and get some information on the commercial rate request increase and the buildup which is basically offsetting all the inflation of 40 million dollars um but there are some questions still on you know bad debt and free care and the the projections they have in bad debt and free care and what appeared to possibly be um double counting as they put the commercial rate in and to give the numbers for that in 2019 the the actual costs for bad debt and free care were 46 million dollars in 2020 the projection is 45 million dollars yet their their budget had been 58 million dollars but they're coming in at 45 million dollars and now in 2022 the projection is 61 million dollars so quite a swing going from the last two years actuals up 16 million dollars in in free care and bad debt so you know if I were to say where where would I think they may get some of the reduction if we did reduce commercial would certainly be in that area um you know another area that's always striking is when you go to the reconciliation sheets on their expense what the expense changes are year over year you know highlighted is is clearly the inflation but cost savings is zero on all three of their submissions um nothing for cost savings I'm not saying they don't have cost savings they're going to say that it's embedded in everything that they do and it's offsetting other areas but you know I know I've repeatedly brought up every year that you know we can't be the most efficient hospital you know in all areas and that there always is room to to save and your supply chain and efficiencies and you know I would hope we would have more and more of those we're supposed to be getting the legacy offsets from Epic and the staffing offsets um you know those have been somewhat delayed so I'm torn you know we're obviously it's still in the midst of COVID we have access issues we have staffing issues um when we when we do rate declines as we've done in the past um the network brings up how we're you know hurting the hospital and the ability for them to make up these losses and I understand that but I'm looking at what happened this year with Fannie Allen with with the cyber you know that's far more than any rate reduction impacts that we've done so um you know that that needs to be in consideration the fact that there's potentially 30 million dollars more coming in to the bottom line and the cash position is very strong um stronger than it's been in a dollar basis and in a day's cash on hand um does play into consideration when we look at this so you know that the dilemma is balancing what the commercial rate payers have to pay and knowing that people tell us repeatedly that they they don't go for care they delay care because they can't afford to pay their deductibles um balance with the access and quality and and everything else that we need to have at the network so you know I'm I'm somewhere between the the five and the six of the recommendation of the staff um and again I do think that you know when we ask for that commercial rate reconciliation the other thing I do want to point out on bridge is we keep missing the first quarter because the rate came in last year that that's still on a bridge is a rate change it's it's not utilization last year's first quarter impact from this year is a six percent rate increase so we're getting a six percent rate increase in the october through december time period and that needs to be shown in these bridge charts I mean we're only showing the impact of quarters two three and four on the chart and in some of the responses it's well it's it's offset by inflation that may well be but on an npr basis it's it's not utilization it's it's rate you still get that first quarter of rate this year and you'll get it next year on this rate increase so I just want to make sure there's some you know reconciliation um when we talk about that in the future so you know that's all I'm gonna say now and uh you know love to hear what what Jess and Kevin specifically have to say I mean we're in tough times and I understand that um but I do want to put in perspective some of the impacts that this year has had for other things beyond COVID that have dramatically impacted the bottom line and again fortunately some of that 30 million dollars should be coming back um in you know probably the not operating line but that was from operations so I think we need to make sure we're not somehow passing that on to the rate payers um because of the significant issues that the hospital had and the fanny allen was a repeat issue um and that was stated to be eight million dollars at the bottom line impact for that thank you Maureen and my apologies to everyone I should have asked for a bio break uh some point earlier I I know that uh we've been on this call for uh some time now and I think it's most appropriate that we do take a a 10-minute bio break before we continue because I think this is going to go on um just for everyone's knowledge what I plan to do once we come back from our bio break is to keep going to somewhere around 1245 and at that point we'll take a two-hour lunch break to try to give a legal and others opportunities to do what's necessary to try to proceed um we'll come back at approximately 245 depending on when we actually do go to lunch and then um we will keep moving through today get done what we can and whatever can't be done today we'll take up again Wednesday morning so with that I'm going to put this meeting in recess until 11 10 and uh we'll reconvene at 11 10 thank you so with that I'm going to reconvene the uh the meeting and uh we're under discussions of the UVMMC budget for fiscal year 22 and we're in board discussion on that and I'll open it up for um board members Kevin I I guess I can hop in here um and I want to thank Maureen for many of her excellent points I agree with many of them in part that's what makes this such a tough year uh literally this budget and the change in charge request has kept me up at night literally uh but ultimately I think my thoughts on this year's UVMMC budget are inextricably linked to access and the issues that we're seeing in our system in particularly um at UVM medical center so given the pent up demand throughout the state and the current pandemic conditions I'm comfortable with the NPR requests submitted in UVMMC's budget I look at that additional revenue that UVMMC is requesting as a reflection of the need for services right to meet that pent up demand and we see we know that there's documented population growth in Chittenden County that they're managing we're also seeing the acuity at many of the smaller hospitals being sent up to UVM so I I believe that it's possible for them to achieve that NPR growth and I think you know to the degree that we can't ask UVMMC to work harder to expand access to deal with long wait times and unmet need without recognizing the revenue that those services are going to generate for the hospital so I agree with the staff recommendation on NPR I also agree with the staff change in charge recommendation of six percent again like I said this this change in charge request has kept me up at night the seven percent ask that the medical center requested I did not find enough compelling arguments to support the seven percent but I can support the staff's recommendation for a change in charge request of six percent and I fully recognize this again what's kept me up at night that approving a six percent commercial rate is really tough to swallow but what's tougher for me to swallow I think is thinking that we as a board have will be limiting if we reduce it below that limiting the resources necessary for the medical center to address what I think we all see now as a patient access crisis I think UVM needs to hire more providers more technicians more non-clinical support staff frankly maybe even more than what's currently in their budget to adequately deal with wait times particularly if they're if as they said in their hearing they're already staffed up with travelers and they still can't meet the need they may need to hire even more than they've budgeted to deal with those wait times and that need I think to the degree that they're hiring more people they're going to need to expand office space right to accommodate those new personnel they're going to need to purchase new equipment to eliminate long patient backlogs particularly for example the MRI machine and I also think they're going to need the resources to build that inpatient mental health capacity that we need them to build to break through the log gems that we're seeing in eds throughout the state all of that's going to take significant resources we rely on the tertiary care center to do all of that I will note you know for example there's no other state or private entity that's stepped up to significantly expand inpatient psych capacity despite a well-recognized long-term acute need so the the UVM medical center is stepping up to do the health network is stepping up to do that and I think they're going to need the resources to be able to to accommodate that I want to make a comment about we're seeing these resources being constrained we're seeing expenses rising and this is to Tom's point about the cost shift public payers namely Medicaid and Medicare we know are not adjusting their reimbursements to cover the very real inflationary pressures that we're seeing right now so I very much appreciated Dr. Bromstead's recent letter to the diva commissioner requesting an increase in payment rates from Medicaid if Medicaid rates had kept pace with inflation these commercial rate asks would not be as high and I also suspect that patient access would be better I learned just last week that there are independent specialty practices in Chittenden County that are not accepting Medicaid patients that not only reduces patient access but it exacerbates the wait times that UVMMC specialty practices right so it's all they're all related so I guess I would say although it's a really tough one tough one for me to swallow I am in favor of approving a changing charge of six percent with you know I'd like to see some language in the budget order that UVMMC commit to prioritizing and mitigate the patient access crisis where it has discretion in its budgetary allocations which I think they will be doing particularly if there's this this reporting component as well but ask them to prioritize you know where they have discretion to mitigate this patient access crisis and I wonder if there's other language that we might be able to add to the budget order requesting UVM to ensure they have enough navigators on staff other personnel on staff to help secure insurance coverage and or facilitate reasonable payment arrangements for patients and families that are facing financial difficulty covering the cost of their care so ensuring that some of these patients who may be eligible for Medicaid can get on Medicaid for example things like that so at the end of the day I support this it's very challenging it's a hard one to support but I recognize the resources that are necessary to ensure that we have the access that we need as remoners and we rely on our tertiary care center for that if I don't know if this is possible but if NPR or margin looks minnier like it's exceeding budget how you know could we think about or I guess I would like to see UVM come in for a self-driven downward rate adjustment as Rutland has done in the past right we've seen that happen where when budgets are running hot Rutland has come in and said hey we're going to do a commercial rate cut so it would be nice if for some reason UVM finds themselves in that position or in the financial position or if they get the 30 million dollars associated with the settlement could they come in and do a self-driven downward rate adjustment mid-year love to see that happen and also love to see next time next year the commercial rate ask from UVM be much lower due either to the insurance settlements from the cyber attack better reimbursements for Medicaid strong investment returns cost savings initiative as Maureen mentioned the need for more of them but at this point I guess I recognize the crisis we're in and I'm in favor of providing the resources necessary to UVM to alleviate that crisis and ensure that we don't have patients waiting for three months for an MRI or six months to see a specialist so that's where I sit at the moment my computer told me I was muted believe it or not so I just want to weigh in as well in that on the NPR front I think that there are a number of things that are going going to cause upward movement in NPR and just to tick those off we've we realize that this year they were impacted as Maureen aptly pointed out by the implementation of EPIC by Fannie Allen by the cyber attack these are all things that kept their NPR down from what it could have been in the year plus this is a hospital that was one of the latest ones to have patients coming back and actually utilizing hospital care because of fear related to covid so because of that I think that there's going to be more pent up demand at UVM than any other hospital in the state in 22 because most other hospitals at some point during 22 should have caught up with the pent up demand UVM I'm not sure will have caught up so NPR I just don't see a huge reduction being appropriate at this at this point in time change of charge I agree with everything that Maureen said on the change of charge this is a hospital that was given a six percent increase last year they never got the full benefit of that six percent change in charge because of all the things that I just cited in the discussion on NPR and now as they are moving through that they should see the benefits of last year's change so I do think that a seven percent increase in change of charge is not warranted and I think that Maureen also mentioned already the possibility of thirty million dollars we don't know if that will come in this year or not dealing with insurance companies is not often the easiest thing to do but I think we all realize that at some point in time that money should be coming into UVM and so these are all factors in in my belief that there should be a reduction and I support the staff's recommendation at the six percent other board members I'll just chime in I can go along with a six percent although I do think it's still higher than what's warranted based on some of the comments that I had but with all of the uncertainties that still prevail I would stress what Jess pointed out which is whether there's an ability for mid-year adjustment or certainly next year the expectation that it's not just the simple map of here's my inflation and my commercial increase is just going to offset that because there need to be efficiencies we'll be able to see what does happen with bad debt free care which again is up 16 million dollars from their budget to from their budget this year to what they're forecasting in 21 and what they and their actuals in 20s that's pretty significant but I can support the six percent other board members yeah I can support the six percent too I come at it from a slightly different perspective and you know fully recognize all of the moving parts that the university has had to deal with over the last couple of years and just knowing that it's a not chaotic but a difficult situation and that there is a lot of uncertainty and that uncertainty will translate into the numbers but when I look at the staff recommendation and seeing the reduction NPR 5.6 million I go to one of my favorite places which is the provider tax and I noticed that in 2020 the provider tax was 5.3 percent of NPR FFP and this year they let and for 2021 projected they have it in at 76.3 million which is an 11.1 percent increase keeping in mind that the tax is taught is constant at six percent tied toward to NPR FPP and for 2022 they're looking at a 12.6 percent increase to 85.9 million dollars and which is which is a 6.66 percent so we have a 2020 actual over 2019 actual as a hard number 5.3 percent in 2020 and they're projecting for 2022 a 6.66 percent equivalent and that if you reduce that back down to six just six percent that's eight and a half million dollars in savings there so it gives me some comfort that you know there are reductions you know in this budget possibly that can be made that don't affect access don't affect quality of care and and paying the provider tax I think is one of those so I'm okay at a 6.05 percent so why don't I go ahead with the motion go ahead Robin and I'm just gonna explain this before I jump into it which is I'm going to so Jess had mentioned potentially wanting to discuss a condition related to prioritizing access which I think probably also needs some legal discussion so I'm not going to include that in the motion but I am going to leave I'm going to try to include language that will leave this budget open for subject to the future discussion around those two conditions that we currently have outstanding so that's what I'm shooting for just as a narrative description before I jump in Robin can I just make a quick comment I'm not sure that I meant it to be a condition necessarily but language in the budget order that strongly encourages prioritizing relevant conditions so to be fair not to put more work on the legal team okay great all right okay so I will move that we approve the University of Vermont Medical Center's budget with an NPR FPP increase of 6 percent from fiscal year 21 to fiscal year 22 budget which will be a 3.4 percent increase after factoring in fiscal year 21 physician transfers from UVMMC to CVMC a 6.05 increase in overall change in charge which is all of which is subject to the standard budget conditions as outlined on slide 36 the and the condition to address access to care and wait times as previously voted on and potentially subject and leaving it open to an additional condition after further discussion with legal is there a second second um russ mccracken so sorry just it was a 6.34 percent increase after factoring in a fly 21 position transfers is that right yes okay that's the way I understood it sorry if I misspoke and I think I heard a second did I hear a second yes from jess yes thank you is there a board discussion on the motion before I open it up for public comment uh yeah the only discussion I would have is whether we should put that separate condition as as a separate motion rather than hold this up with a potential addition to it I mean I'm indifferent but I just want to kind of put that out there should we approve this as we've gone through and then after lunch or when we come back have just a totally separate motion I think what robin was trying to do was create some fairness so people didn't think that we were finished but it could be handled either way okay I just didn't know which was if it was if there was a cleaner way if it was cleaner to do this more consistent with the other motions we've done for NPR and change in charge and then have a separate motion for the other item but we will definitely have to have a separate motion anyway for the other item but Russ if you have or Mike if anyone has I don't have a preference I just didn't to Kevin's point I didn't want people to think we were potentially done done okay then I'm okay if we continue with this okay so hearing no further board discussion I'm going to open it up to the public for comments on UVMMC's budget motion in front of us and Rick Vincent good morning I thought I'd just maybe highlight a few things as you contemplate this this vote here one just to provide some context I think two a couple things that were mentioned when the when the present when the budget was presented earlier on so one in terms of the FY 21 results the amount of federal and state funding that the UVM Medical Center has received is 85,000,000 not 39 or 89 so looking at that margin of 50 million the financial situation this year as has been highlighted would have been even worse so just to make sure that that context is is understood as we highlighted in our response last week as well like we have many times when we put together a budget this far in advance our Medicare rate increase assumption is no longer valid and so in addition to the rate reductions being contemplated today we also have about a $7 million rate assumption for Medicare that is not going to that won't materialize for FY 22 so if you were to combine both of those factors that's $12.6 million of revenue assumption that at this point would be different than what we than what we submitted the last thing I'll point out just because there was a lot of discussion about expense control in our presentation this year as we've done in the past if you look at slide 47 and 48 the UVM Medical Center compared the other academic medical centers is been the last five years near the near the 25th percentile in terms of cost and this is cost from the provider perspective not from the patient and payer perspective so absolutely there's always work to be done to control costs and that's a focus that we have with everything that we do but again to highlight the place that we're starting at is a very low cost starting point in addition we highlighted that the shared services that we provide as a network is starting to have an impact as a percentage of net patient revenue we have gone down in this year's budget compared to last year and as before we have all the systems that will enable us to accelerate that cost reduction so I just thought important to point out those those factors as they're as they're connected to the to the discussion that you're currently having thank you thank you Rick I see him Davis's hand raised thank you Kevin I've just got a quick technical question for Patrick the change of 7.05 reduced to 6.05 and that's the overall charge is that the same number that would affect what people call the commercial ask Patrick be in other words the amount that they could the could increase the charges to just insurance companies yeah I didn't did I not he not hear me no I heard you I'm contemplating your question oh I'm sorry so are you set I'm not sure I follow what you're what you're stating or asking okay so we'll just just the thing is you can if you the change in charge you could imply that that's a that's simply a number that applies to the charge master that would then apply to all the charges across the whole book of business of UVM um if the the critical number uh because it doesn't because because Medicare and Medicaid don't pay the bill anyway uh then the real question is how much in in in uh in Robin's motion how much will UVM be able to increase the charge or care that they purchase that is purchased by Blue Cross well it's my understanding that they don't increase charges by pay or they increase them by service so I'm not sure I have the number for you ham well to ham's point this is Robin I think UVM typically actually requests not a change in charge but an effective commercial rate so I should probably change my motion to effect to use that language of effective commercial rate because I think that was what the 7.05 percent was if I'm not mistaken yeah I think also if you turn to page 122 because in the past many hospitals don't increase their gross charges the same across each area but UVM was projecting to do that in their submission so the 6.05 should go across inpatient, outpatient and professional um and then you can see when you look at the payer type ham if you were getting to you know that won't change Medicaid and Medicare so it really will just have the impact on commercial and maybe self-pay thank you all for that I uh I'm not sure I understand it but uh that that's probably that's that's my bad I have a comment which is simply this that there's a huge sort of disconnect with reality that it's not everybody but it just sort of a sense that goes across this discussion that makes no difference none whatsoever what you set for NPR but you can't run the face of it they can't get people through there fast enough the more they put through the more the NPR will go up and if it sets do you expect something different than you're living in a cave so that really doesn't that really doesn't matter if the UVM in fact goes over way over what they went huge level which they did in 2017 um the NPR and and and in your judgment um too much money then dropped to their bottom line okay then you can get it back and it was exactly what you did in 2017 and it was a fact that helped you get uh and some alleviation of the the mental health bed problem so the question really is the real the question really is whether you is is really what you can charge Blue Cross you can't get any more money out of Medicaid you can't get any more money out of Medicare okay and so so the question is is is the one that Jessica Holmes raises is is UVM going to get enough and one of the things I've never heard this board talk about even once maybe I missed some okay the fact of the matter and Robin says today I don't know if I think if we can afford UVM UVM is the UVM network is cheaper than the state average by 20 percent and is cheaper per capita across across its service area from the high places like Rutland okay Bennington Gifford those places are 30 percent higher per capita and those those numbers are age adjusted they're all in the Dartmouth Health Atlas which was born by the way in Vermont and so so the question is so the question do you want to make UVM if UVM if people can afford the bill the insurance bill then what about Rutland what about Bennington what about Gifford okay you know what about what about the other 1.2 billion in the system the I just can't I don't I I I don't get it if this board this the UVM is the only really serious heavy duty medical structure here it's all tertiary care it's all we have Dartmouth too Dartmouth is every bit as important to us as UVM even though we never talk about them so all I'm saying is it is it just sounds ridiculous to me you the you want to you're afraid of this cost it's too much chip away here and nickel there chip away and nickel there it's the cheapest you've got okay you say nothing about the people that did a did a way over over spending anyway that that's that wasn't a comment Kevin that was kind of a rant thank you ham other public comment Kevin could I just point one thing out you know addressing some of what ham was saying if we look at slide 121 so on on 121 you know you addressed npr and we didn't put any cap on npr but look at the history you know 2017 yet they were over budget but it was 4.7 percent above the prior year 18 3.5 2.5 minus 6.7 8 and 15.8 and if they don't achieve the 15.8 they certainly have the expenses lined up to go against that and there could be a massive decline so you know we're putting that responsibility on on UVM and not capping the npr as you said but it'll be interesting to see next year whether that really came in or not because there's there's certainly risks there but the board chose not to cap the npr let it come in as stated and you know knowing that UVM should be able to manage that to a degree but it's pretty big growth year over year but Maureen it doesn't matter what you do about npr they're going to get npr public comment I agree with you I agree with public comment is not a period of debate I'm going to recognize like Fisher next Good morning Mr. Chair members of the board a couple of comments I want to make in the context of the UVM budget though I think it should be noted that that much of what I have to say is applies to many many Vermont hospitals and the board's consideration of many hospitals first I just want to remind us a little bit of not so ancient history not too long ago there was a discussion of a one-time COVID bump that would not go into the base I remember the details of why that came out and and that decision last year became part of a recognized as an increase not as a separate increase for COVID and and there was discussion at that time about about the importance of being able to back that out I have missed if there's been any discussion this year about a decision not to back that out there may have been and I missed it but I bring it up now because it's my hope that and it might be a reasonable decision I'm not debating whether it's a reasonable decision or not to to back the the one-time COVID the discussion of one-time COVID increase last year out this year but I think that it should be discussed in future years I want to remind us of that and then I also want to make a more global comment about sort of the meaning of the bad debt line it you know to a hospital administrator it is something that is written off and and and goes away it's a an accounting tool we asked for stories this year about the impacts of medical debt on Vermonters lives most particularly the impacts of medical debt on Vermonters decisions about getting care and you know it won't surprise you you hear these stories like we hear these stories but but it was relentless it was a difficult comments to read and a difficult number of comments to read and I'd be remiss if I didn't say it out loud in this context that that medical debt and the impacts of medical debt on Vermont families pushes in exactly the wrong direction of where we're all trying to go with right care at the right time it's it's so important that we make progress in how we in how payers and providers organize themselves around promoting care but if we don't touch the the significant pressure on Vermonters it will be even harder to make real progress on delivery reform thank you Mr. Chair thank you board for your hard work thank you Mike other public comment hearing none is there any further board discussion on the motion in front of us hearing none all those in favor of the motion please signify by saying aye aye any opposed signify by saying nay but the record show is a unanimous decision Patrick I'm going to turn it back over to you for the next hospital thank you Mr. Chair and for clarification of the process can we assume that will be the template for the next two there will be a motion made on the budget with pursuant to the work that legal is going to do around the commercial fixed perspective payment topic I think it makes sense okay all right we will proceed then next up is Porter Medical Center and I'm going to wait hold on a minute Patrick sorry so I'm I should have actually I'm sorry to do this but I think I should have amended my motion before we voted on it that to clarify that the 6.05 was the effective commercial rate not the change in charge we as in years past we didn't receive a specific request for commercial effective rate we would only receive the request for the increase to gross charges and quite frankly the board made it clear that we weren't going to have two different standards one for one hospital one for another so to go back to what what it was done in the past we're just stomping on ourselves I'm fine with that it's it's just not how I read this submission which says aggregate commercial insurance rate increases of not change in charge but I'm comfortable with everybody else's I just want to make sure that I'd done it correctly so hearing nothing Patrick might as well presume okay as I was stating next up is Porter Medical Center and I'm going to turn it over to Kate Hoffman to walk through the hospital's budget profile Kate thanks Patrick good morning yes sorry still morning everybody so to go through Porter for FY 21 we're looking they're coming in about four percent below their 21 budget um their FY 22 request of about 94.1 or two million dollars is about 4.9 percent over their 21 budget which is over the 3.5 growth rate guidance and they are their request is about 9.2 percent over their 21 budget to the right for their charges they're requesting a 5.86 overall charge master increase which is mostly allocated to commercial but some is also going to Medicare and with a small deduction to self-pay and other when we look at their performance versus the 3.5 trending they are almost exactly where they would be at the pre-pandemic 2019 actuals being projected 3.5 percent year over year it's like thirty thousand dollars short I believe some of the justifications the hospital discussed which are consistent with other hospitals are the staffing challenges and the desire for capital investments to improve their patient access they discuss also the LNA training program they want to be sustainable and affordable and their rate request sorry is for incremental inflation only so if we look at their waterfall graph their increase from FY 21 is about 4.3 million dollars 3.7 of this is utilization 3.7 million sorry 2.6 million is attributed to rate with offsets to the FY 21 rate difference bad debt free care and their reimbursement slash payer mix the operating expense drivers for Porter they're increasing about 2.9 million mainly due to inflation increases of 2.2 million dollars equipment and software of 1.7 million dollars and new positions of 1.2 million dollars their offsets include compensation to non-medical staff of about 1.1 million purchase services of about 1 million and fridge fringe of about 560 thousand dollars so when we look at Porter's quarterly performance they ramped up up to Q3 and are projected to drop in quarter four however they are projecting a positive operating gain for fiscal year 21 for Porter's historical performance this hospital is operated slightly above budgeted NPR FPP from 2017 to 2019 with their missing oh sorry got a little feedback Tom let you coming back through if you could mute yourself it would be great sorry with their missing NPR and FY 20 and projected in 21 as we discussed earlier operating margins continue to be positive with a budgeted margin of 5.1 percent in FY 22 this is the second highest budgeted operating margin for all hospitals in FY 22 also to note in the 2019 and 2020 actuals Porter has had the highest operating margin across the hospital systems as well however what's not reflected in here is the money that is used to support Helen Porter which likely also deteriorates their day's cash on hand of it I believe if I remember correctly they were thinking about two million dollars last year was going to support Helen Porter so slide 131 breaks down their charge request the 5.86 percent that they're hoping for the NPR due to change in charge was about 2.6 million dollars which we saw in the waterfall graph the percent broken out by commercial Medicare and Medicaid is shown here as well they like the UBM Medical Center are increasing this all-service areas by 5.86 percent again you can see the breakout of the request to the individual payers and finally with their charge increases if we remember the slide that showed everybody's averages um Porter's was zero but if we consider their commercial rate asks they were in the five-year average they were about the middle of the road when compared to all hospitals so our next slide shows their their net revenue collection rates for all payers we can see it dropping overall a bit in the 22 budget from 51 to 50 percent from the projection however their commercial collection is slightly higher at 61 percent um they also have charge increases um oh excuse me um their pair mix shown here you can see a bit of a shift to commercial um when compared to the projection on the graph on the right and then finally um our recommendation so I'm actually going to start with the charge recommendation so the staff supports a four percent um charge increase um and we also are supporting as with the medical center um and approve as submitted for NPR FPP we believe they could make up for the cut in the change in charge in volume also if Porter did not um make up for this in their charge request in volume this would reduce their operating margin to about four point five six million dollars which is about a six hundred thousand dollar reduction um they have estimated approximately two point one million dollars of loss to be covered by Porter at Helen Porter which is based with our based on previous correspondence with um with the health network this would ultimately leave Porter with a two point four six million dollar operating margin um and yeah we support the growth is submitted if we drop it by the charge reduction the NPR growth would be approximately four point three percent however as I said we believe Porter should be able to make up through the for this reduction through volume so I'll kick it off and uh just say that uh I hate to ever hear the words make it up through volume and it's one thing to say that it's we're making it up through uh reducing the pent up demand but we have to realize that cost is really a function of price and utilization and we should not be encouraging utilization unless it's the right utilization and the right care at the right time in the right place so um that's just a pet peeve that I have but I do support the staff recommendations completely um I think that the fact is that it's next to impossible to accurately at the time budgets were submitted budget for revenues given everything that has been occurring in the world around us um with that I do think that the two point four six million operating margin after taking into consideration other expenses is still a healthy operating margin and so I support the reduction to the four percent other board members sure I'll go um I also support this recommendation you know as submitted um and um I do want to point out and and I'll refer to Mike Fisher I've I've pointed this out every ever to every hospital that did get a COVID adjustment the year before so maybe you missed me bringing it up but I have pointed it out every time um and this hospital did receive uh one percent in what we would have assumed as a temporary adjustment last year in their four percent rate request um so considering this reduction to four percent I would for me that is a factor in in bringing forward the reduction from 5.86 to 4.0 I'd also point out that they have a similar forecasting um in bad debt and free care where the actual in 2020 was 5.2 million the projected in 2021 is 5 million and the projected in 22 is 7 million um on a 2 million dollar increase on a 10 million dollar increase to NPR so that's that's pretty significant shift in how much we would think is going to occur in bad debt and free care so I would if things shake out anywhere close to where they are the past two years then they'll make up that difference in rate change which is 600,000 um by their projected budgeted increase of 2 million dollars over the prior year again from 5 to 7 on bad debt and free care um so I'm fully supportive of this recommendation other board members um so I'm comfortable with approving the the NPR as submitted I think that you know those projections are roughly in line with other hospitals and on par with what NPR would have been if we had annualized that three and a half percent growth rate since 2019 so I'm comfortable with it I also think to the degree that the medical center may have to push down uh care to a more appropriate setting in its other affiliated hospitals um we might be seeing some of that excess demand up at UVM coming back into uh potentially Porter so I'm comfortable with the NPR uh let me just ask I would love to talk a little bit about the change in charge because I do think that this subsidy to Helen Porter nursing home changes the way I look a little bit at their margin so operating margin currently budgeted to 5.1 if you remove the subsidy I think I believe Porter is really generating about a 3% margin and if we reduce the change in charge down to 4% I think we're in you know into the well I think we are under the 2% operating margin um you know in the one plus range so I guess one of the things that I think about there is that because UVM health network thinks holistically uh all of the subsidiary hospitals or all the affiliated hospitals their margins contribute to the the A rating that the health network needs to the degree that we are uh decreasing margins below 2% in the subsidiary hospitals it's putting more upward pressure on what UVM medical center needs to gain in terms of margin to get that A rating so I'm just wondering if the 4% change in charge might be too low given that need to subsidize Helen Porter nursing home and given the need for all of those hospitals to achieve you know roughly 2% margin to uh maintain their A rating so wondered if the budget team had done those calculations to see what you know what exactly would the operating margin look like if we cut the rate to four and they still had to subsidize at about 2.1 million dollars the Helen Porter nursing home am I about right it's in the 1.5% range Kate I think you provided a number when you were walking through that logic did you not I had a number a dollar value um this would leave them if they did not um make up for the NPR so everything as is and they just took the charge out with a 2.1 million dollar um transfer to Helen Porter would leave them with 2.46 million dollars at Porter okay so I guess hands on whether you just take your calculator and divides that by uh the top line then we can get to what that margin is yeah maybe we can ask Lori to take that figure and divide it into the total operating revenues to find a margin for Porter hospital that reflects the logic that we've discussed Jess you make you make a good point about that however in UV I believe in UVM's presentation they were looking at a weighted average on that contribution um in that medical center would supply the majority of that margin so that the weight of that margin would it be 2.7% if everything falls into order and no expenses are changed or the 3% if they can find the the savings throughout the year it would it probably Porter probably wouldn't move the needle that much on based on their logic around the weighted average of the margin that they need to maintain that A rating if I understood their presentation correctly but still we should still talk about what the margin percentage is um with the reduction in rate and the contribution to Helen Porter do you have that number lori at the 2.46 million I'm working on it um basically you're asking me to take 2.1 million from the current operating margin and also the additional drop in change in charge or not touching that yes both okay the first one we're taking the current operating margin of 5.2 will say million dropping it to 3.2 we're bringing their operating margin to 3% so they originally had 5.1% operating margin and dropping it 2 million one for the Helen Porter brings it to 3% and if we include the rate cut on top of that and the rate cut that we're expecting is worth how much is the rate cut please go back up to the uh it's about 600 000 dollars okay thank you okay so brings the operating margin down to almost 2.5 so then the operating margin that's millions and then the operating margin percent is 2.5 okay and just for me one of the things I'm you know I'm trying to think about is you know looking at um budget and actual and I think you know to me the actual Trump's Trump's budgeted numbers and so for 2021 the budget was 6.5 million for free good free care and bad debt and the actual is coming in at 5 million and now for 2022 the budget is 7 million which is in line with how they were budgeting you know in in 21 um but not understanding why um and the history has been 5 billion in in 20 um now 5 million in 22 and a 7 million budget in uh in 22 so that that's that's where um and and also when we had gone through the commercial rate changes and how they were kind of putting free care a free back in there um it seems to be inflating that number um so if that were reduced even to 6 million or 6.4 million which would be a significant increase over the 5 million expected this year and the prior year um you know that that would offset more than offset um this it's going to be what it is I get that but to me the actual history kind of trumps more the the budget and budgeting what we did last year similarly and that didn't occur so okay can I ask you a quick question can you just go to slide 131 I just want to make sure that I understand because one of the I think I just heard Kate say it was a six hundred thousand dollar impact of a one percent change in charge but I'm just looking at the that um the one percent value of one percent change in charge commercial Medicare Medicaid um how does that line up it's 1.86 I believe I think what Kate was saying was the 1.86 percent reduction oh okay two four percent would be a value of around six hundred thousand dollars yeah okay fine that makes sense sorry just trying to make sure all these things are tying out in my head thank you so I can jump in um I'm comfortable with the staff recommendation um uh on both the MPR and the change in charge I do think to just this point that some of the reduction in change in charge could be made up through pent up demand and redirection of care from UVM um and I think part of the benefits of Porter joining the network has been stronger financial footing for Porter as well as hopefully some continued cost savings from being part of a larger group so I'm comfortable with that and and I think that in in general um given that we're still in a pandemic I am comfortable being a little uh giving us you know more flexibility to hospitals as we've discussed in our previous deliberations um but I do remain concerned about affordability across the board for Vermonters other board members yeah I um I always find Helen Porter a pleasant uh almost island of reprieve to look at their budget while that it was some of the complications of the other um they uh if you look at the four-year trend 2019 to um 2022 budget their npr growth trend has been 3.49 percent and their operating margin operating expenses have been 3.2 percent so they've done well there um the only thing that kind of caught my eye was um in terms of looking at their budget to budget payer uh changes you know they were looking at 8 you know from their uh payer mix 8.9 percent increase for Medicare budget to budget a 16.1 percent increase in Medicaid budget to budget but a zero increase in commercial budget to budget which was they get to by having a 12 percent decrease 2021 budget to um 2021 projected and then a 13 percent increase offsetting from uh 2021 budget to 2022 budget so my sense is I mean these are always difficult to you know have any certainty but that they're you know if there is um you know with the commercial being at zero built into their budget zero growth but to budget that there might be some upside potential there and uh um that would be a good thing other board members robin are you prepared to make a motion sure I move to approve porter medical center's budget with an npr fpp increase of 4.9 percent from fiscal year 21 to fiscal year 22 budget a 4 percent increased overall change in charge subject to the standard budget conditions as outlined in on slide 36 and uh just with the note that um we may come back with another condition after discussion with legal as discussed earlier is there a second second it's been moved and seconded is there board discussion if not I'm going to open it up for public comment does any member of the public wish to comment at this time Mike Fisher um let me take that down um uh uh I want to thank member usifer for um I have heard you recognize the COVID um bump from last year from previous years maybe I didn't make myself clear I think what I hadn't heard was a board decision about the one-time nature of that discussion last year and a decision about whether to do that in future years but I but I um but I was remiss it because um I really do appreciate I think it's important to appreciate that member usifer has has called this out um and I have heard them and thank you so Mike just to be clear because the language was changed last year nothing was one time so legally you can't go back to last year's decisions the way you do any adjustments are in the current um charges and in future charges and so there's there's no legal way to rescind what happened last year which was not a bifurcated rate thank you Mr. Chair I'm I'm fully aware of the dynamics that led to that last year it there was still a discussion and I know this isn't I appreciate the opportunity to say that the discussion last year um of the importance of um though it could not be considered a one time that many board members um recognize the importance of of coming back to it in future years and exactly the right time to do that I think is open for debate I just uh in making the statement that I think it should be done thank you Mike other public comment hearing none the motion before us is to approve Porter Medical Center's budget with uh NPR FPP increase of 4.9 percent from 21 to 22 and a 4 percent um increase to overall change in charge and subject to the standard budget conditions is outlined on slide 36 and um with the recognition that there may be a further um motion later today or on Wednesday um is there any further board discussion hearing none all those in favor of the motion please signify by saying aye aye those opposed please signify by saying nay let the record show that it was unanimous vote Patrick back to you for Central Vermont Medical Center thank you Mr. Chair we will move on to CVMC and Laurie Perry is going to uh walk the board through the hospital profile and staff recommendation Laurie over to you thank you uh Central Vermont's budget to projection variance was a negative 3.8 percent their FY 21 budget was approved at 236 million point one and their projection was 227 million point one and their FY 22 request is 251.5 their um NPR the NPR is 6.5 more than their 21 budget and 10.7 percent more than their 21 projection they are above the uh 3.5 growth rate guidance at 6.5 percent we will be discussing their provider transfer first which um changes this slightly but we'll go to oh it changes it to 4.54 percent and we will um show that in a couple slides their changing charges are commercial at just shy of 5.9 million their Medicaid is uh reduction of shy of 200 000 Medicare is a 1.2 million and self-paying other is a negative 90 000 and they are asking for 7.41 percent for the overall changing charges uh CVMC's um performance versus the 3.5 percent trend shows the budget is 20.9 million more than the trend or 9 percent more the hospital's justifications for their budget are an increase in staffing and capital investments to improve patient access they are seeing an increase in complex care for their excuse me acute admissions and high ed and express care volumes and they are seeing borders residing in the ed they want to have an improvement in their margin and then also they have a lot of inflation pressures the same as all the other hospitals we've been hearing next slide please as i mentioned the and we've approved these is the provider transfers they took effect last year in september and they are worth a negative 2 percent to their npr and these were approved in may on may 19th uh CVMC's drivers of the npr this is their waterfall chart they had a budget growth of 15.5 four million dollars and it is made up of their rate effect of 6.8 million utilization of 6.4 million those provider transfers we mentioned are worth 4.5 million reimbursement pair mix is 2.6 million and their f y 21 rate difference reduces the npr by 5.1 million they also have small drivers such as dish increase of 43 000 and bad debt free care of an increase of 134 000 their expenses they have an increase of 14 million dollars that they're budgeting for of which inflation is worth 6.1 million the provider transfers are worth 5.6 million they have new positions and vacancies combined and those are 1.9 million purchase services are 1.3 million fringe benefits are an increase of 1.2 million provider tax equipment software are both around six a 0.6 million their wages for non-medical and medical staff are half a million the traveling nurses are 233 000 supplies contribute a decrease of 228 000 and drugs are a decrease of 1.6 million and then they are counting for all other expenses have a decrease of 2.2 million cvmc's operating performance this last year for npr they had that they were for the first three quarters have steadily increased from 54.3 million to 56.3 million to 59.4 million as shown in this chart but they are projecting a decline of a negative 3.7 percent or 57.2 million for their fourth quarter their operating margins for the first quarter was a negative 2.4 percent then they reported nearly dealt that with a negative 4.7 percent in the second quarter and then a positive operating margin for the last two quarters of 1 percent and 0.7 percent respectively their historical performance on slide 139 shows that their npr exceeded the budget in fiscal year 16 and 17 but they did not meet their budgets for fiscal years 18, 19, 20 and you also see in the projection 21 for their operating margin performance for 16 they made a two million dollar margin but they reported operating losses for 17, 18, 19 and 20 and they were projecting a loss for 21 at 3.2 million dollars but for 22 they're budgeting a 2.7 million dollar operating margin center Vermont's change in charge is the 7.41 percent and they are having the npr is changed by the change in charge of about 6.8 million dollars the value of 1 percent for commercial is just the eye of 800 thousand dollars or 791 thousand the 1 percent change in charge for Medicare is 700 thousand the change in charge for Medicaid is about 171 thousand they are going to be increasing their service categories for inpatient outpatient and professional services by the 7.41 percent their pair mix for this change in charge as we mentioned on the previous shop excuse me slide is commercial is 5.8 million Medicaid is a negative 178 thousand Medicare is a 1.2 million and then self-paying other is a negative 90 thousand the change in npr is worth 15.4 million and the change in charge as we have been mentioning is worth 6.8 million this hospital's five-year average has been the overall average for their change in charge has been at 2.3 percent approved but the commercial effective weight was 3.7 percent for five-year average the collection rate for central Vermont is was 50 percent for fiscal year 18 and 19 and 49 percent for 20 and projected for 21 but they are budgeting 47 percent this year the budget for commercial is 61 percent Medicaid is 37 percent and Medicare is 38 percent the hospital npr pair mix has shifted a bit the current commercial pairs were about 49 percent in 20 and 21 and Medicaid was about 14 percent and 13 percent for those same years but in 21 and 22 commercial pairs changed to 51 percent Medicaid went to 12 percent Medicare shifted between 36 38 37 percent and back to 36 percent for the 20 through 22 respectively um Patrick if we could go to slide 147 please we thought we would give you a perspective of central Vermont as a pps hospital and the growth that we've seen with that hospital compared to Rutland and southwestern and we see the npr growth for central Vermont for the 2019 through 22 period is great much greater than the other two hospitals and their budget was um higher for all the other years um we've seen the budget growth for them with their kager is at 6.5 percent but the other two hospitals were 1.8 and 2.7 percent for their operating revenue again we're seeing central Vermont is basically like an outlier of those three their kager between the years of 2019 and 22 is 6.3 percent where Rutland is at 1.9 and southwestern is 2.5 at the bottom graph to showing the operating expense growth again center Vermont is the outlier and their um kager for 19 through 22 is 5.2 percent for operating expenses growth where Rutland is 2 percent and southwestern is 2.9 percent we wanted to kind of like put this in perspective for pps hospitals of their size um please go back to our recommendation slide Patrick so we are recommending that um we read first we go to the change in charge that we change in charge from 7.41 percent to 5 percent which equals 1,907,238 reduction to npr or a reduced growth rate of 5.72 percent and then with the provided transfers that is 3.74 percent for the npr mainly we are having these type of reductions or recommendations for this hospital because they hadn't been meeting their budgets through the years and we think they should be concentrating on their expense reductions so they can meet their margins and their rate and utilization are their major drivers of the npr and fpp so we figure they haven't been meeting their utilization and Patrick if you have anything else to add to this particular hospital yes I do so this was a hospital that we took a long look at as it relates to the history and the request which falls under everything that we set out in guidance and so I'll page back to the slides that we're looking at to try to put it into context you know southwestern Vermont from a revenue perspective is slightly smaller than central Vermont and Rutland is slightly larger and we were trying to take a holistic look at why this budget was going over the quarter billion dollar mark from a npr perspective and we've had Rutland and CV and CVMC in here discussing it and certainly a lot of the factors that are driving those budgets are also driving this budget there's a large piece here to be considered is that this hospital has been within the UVM health network for many years and they have advantages to that affiliation that Rutland as a standalone does not and that SVMC may share some relative points with for their relationship with Dartmouth Hitchcock in New Hampshire so when we were looking at this at the npr growth figures in relation to their very close peers in the state and in the operating expense piece we were kind of blown away by that and that is where our concern comes in about the revenue level that is being put forth in this budget is this is a hospital that has had uh rates overall rates that are commensurate with those of Rutland you can see here on slide 149 that what CVMC has been approved for for overall rate increases not effective rate overall rate increases is 2.3 percent and their peer in Rutland is 2.2 percent so they are really neck and neck as it relates to that but yet expense growth is much much higher than it is at Rutland which leads us to believe that there's been issues in controlling those costs now we talked about that during the hearing with UVM and they have a focus on central Vermont as they've stated but when we go back to that topic of Rutland disappear Rutland has controlled costs over this period that we're measuring here and they've produced positive operating margins and CVMC has not and CVMC if it weren't for its affiliation with the network would have the staff very very concerned about its financial future but that said they do have the benefit of being with the network we heard from the network leadership that that is a major factor in being affiliated with it so we hope that there will be some concentrated efforts to get some of that expense growth under wraps and if they can meet their top line revenues then they can produce an operating margin but at least since I've been here we've seen positive margins come in every year of budget season and they don't materialize so like I said that's a big concern for us that the revenue projection going into 22 has an operating expense projection that's mirroring it pretty closely and if they don't hit those numbers we'll be looking at another seven figure loss going through the end of 2022 so I just want to support what Laurie is saying with this recommendation that we do have concerns about the operating expense piece we hope that that will be weighted against the need for services there very very closely I think if anyone has the capacity to really monitor the need to add expenses it will be the network with the resources and the leadership that they have but we still have concerns about that given the very recent history of operating performance at central Vermont so just to recap once we if you were to accept the change in charge reduction to five percent which is still a very high rate increase relative to the other decisions we've made this year that would pull about 1.9 million off of the 251 and then when we back out the contribution from the provider transfers their budget to budget growth falls to 3.74 percent which is where we felt that hospital could achieve the revenue growth from that perspective so with all that said Mr. Chair we'll turn it over to you for a board discussion on central Vermont thank thank you so much Patrick and I'm going to open it up to the board for discussion board members uh sure I'll go this is uh this is a tough one um they've had challenging budgets for several years so if we look at slide um slide 139 um so I guess first my underlying concern is is I agree with the staff on will they be able to hit the 251 that they have for NPR and when we look from 2018 19 and 20 the misses at NPR uh 4 million and 18 3 million and 19 and and quite a bit more um obviously in 20 but just looking at 18 and 19 and then going down operating margin they clearly when they miss the top line have not been able to make any adjustments to their expenses and so they've been running at a loss for many years so so that's obviously a concern and will they be able to show that growth um even if even with the staff recommendation I think it brings it to a 9.8 percent growth from year-end projection to 22 budget um so that to me you know is potentially a challenge whether they'll achieve that or not this this if this weren't a network hospital I agree too that uh there would be a lot more concern on on whether they would be um sustainable um that said a couple things when you go to slide 145 um I think you know relative to comparisons to Rutland and SVMC um and you know this is just one in one indicator and it's it's not an exact science but you know SVMC and Rutland are their commercial to Medicaid rates are double and I'm sorry to Medicare rates are double and SVMC is 142 so they're the lowest um ratio their Medicaid ratio is is a little bit higher so so that may may indicate that you know their Medicare is is a little bit um you know what the reflection that would be to Medicare as well but that's concerning to me there so I know you know all those efficiencies that you just looked at for a CVMC to Rutland and SVMC part of it might be related to this may maybe they're actually you know a little bit underpriced relative to the others so that's one factor um to put in there the other one is if you go to the cash flow page which is um day's cash on hand 153 um and I exclude SVMC obviously has the parent so so that's not a relative comparison but when we look at CVMC they are the lowest except for Copley which we know has a whole bunch of money that's going to come in and increase that when they clear their PPS and some of their CARES Act money uh Springfield which we talked about and then SVMC which has an issue um you know because of their parents so so those things are making me then go look at your the commercial rate um recommendation reduction um which I think may be too hot and um really just because of the financial trouble they've been in and they continue to be in they did have last year a 7% and it was 4% uh base and 3% COVID so I know that's a factor too but I would just be a little concerned with um lowering them you know I'm looking at maybe a 6% rate you know because because of their impacts they've had before on being able to manage their bottom line so not to say they should be relying on rate but you know we have been approving 6% for several of the hospitals and so I would be willing to put forward going to a 6%. The other concern I have when you look at their P&L is exactly what you guys were pushing for before which is the expense increases so in 2020 um their operating expenses were $235 million in 2021 excluding the COVID um one time money for vaccinations it's $246 million and they're projecting $266 million in expenses in uh 22 aligning with that revenue of 251 at NPR and then and then with pharmacy and things like that at 268 so you know I have a concern of them a hitting the top line and b being able to manage those expenses um at the 266 so I think that that's really just pointing forward to the hospitals I'm not saying we can reduce that but certainly this is one that there's going to have to be a really close watch on are they hitting the top line because their history has been they don't hit the top line they don't cut the expenses they lose more money um so so this one you know I just kind of put out a lot of things out there's a challenge to me but um you know it's trying to align that again kind of where their ratios sit where their cash sits which I have been focusing on a lot of the hospitals and uh you know I I think um want them to get on track and hopefully in the future they can be managing that expense to revenue but um I'm concerned that the going down to five is is going to be too much of a challenge for this hospital um who I think still needs has a ways to go before they're able to improve their financials other board members other board members is my mic working yes it is it is we're all thinking Maureen just gave us a lot to digest Kevin okay I guess I'll just start so um you know I share a lot of the concerns around the top line that Maureen outlined even with potential for excess demand potentially from UVM to shift down to CVMC I worry that their submitted budget is again aspirational you know and the you know Laurie went through it Maureen went through it but when I look at the you know 2009 NPR growing at three and a half percent you know it's hard to imagine coming anywhere close to the 251 million um and you know one of the things that the narrative talks about the volumes for all three hospitals generally returning to pre-covid fiscal 19 levels right so they're expecting this this huge increase in NPR but they're also predicting their volume for all three hospitals to return to pre-covid 19 levels and with epic implementation at CVMC I would expect there's got to be some downward adjustment below even potentially you know 19 levels just if we think about depending upon you know I don't know where to think it's so much uncertainty here pent up demand shift of care from UVM but you also have epic implementation in there which we know has an impact on productivity so there's so much unknown here but I still find it hard to imagine them hitting their budget so I support I think the reduction that the staff suggested here that feels better to me with a commensurate reduction in expenses so that they can achieve that margin particularly given their ability to hit their projections which we know they've overestimated their revenues year after year in generated operating losses so the hope would be that if we drop that NPR they drop their expenses they'll have a chance at at making a margin um what I'm thinking about now is the rate request of course is on the high side when compared to other hospitals in Vermont you know and you know they've been affiliated with the UVM network for the longest period of time so I would be hoping that we would start to see some of those gains from affiliation right the benefits of economies of scale translating into lower rate requests so I'm um I guess I'm I'm open to more conversation around the five percent or potentially as Maureen just put out there the six percent but um you know when are we going to start to see you know gains from affiliation leading to lower rate requests than other similar hospitals right we had Southwestern had a 4.8 Rutland had a 3.6 you know you're looking at other hospitals that were able to manage lower rate requests so but I recognize also some of the points that Maureen made about their base their commercial to medicare ratio so I guess I'm I'm fine with the NPR the staff's recommendation on NPR and I'm open to conversation around what that change in charge should be so I'll jump in I am comfortable with the six percent change in charge recognizing that what really I think focus it for me is a factor in looking at all the different comparisons that we've just gone through is the commercial to medicare ratio which um is significantly lower for CVMC than for example Rutland and so that is persuasive to me in terms of being comfortable with the higher rate request I also agree that the NPR is high and seems aspirational so I would be supportive of reducing that I don't I haven't myself landed on a specific number but certainly in the range of what the staff recommendation would be seems reasonable to me and I pretty much agree with you know all the other points that Justin Maureen raised so I'll I don't need to repeat them okay Tom didn't realize my camera was off um I think I I land here supporting basically where the staff is looking at the kind of way I structure these things um you know their NPR trend rate uh from 2019 to 22 budget is 6.5 percent their operating expenses are 5.2 percent um I think they're a little rich in the provider tax in that their 2020 payment was a 5.5 percent payment but they are in for 2021 projected over and uh 2020 budget at 7.03 percent and 6.45 percent so I think there might be some cushion there um and their the revenues I think maybe there's some some upside there they're looking at Medicare going from 2021 budget to 2022 budget from 89.7 million to 91.5 Medicaid from 30.7 million to 30.6 million and commercial a heavier lift from 114 to 128 but that would be with the rate increase but I also keep in mind that they are part of the network and the network has a lot of very talented people working for expensive talented people work for and uh and uh this you know Porter is probably you know not a difficult hospital for them in terms of uh worrying about it and and obviously they've got to worry about UVM Medical Center and and this one but uh because they are part of the network um um I'm not as uh generous in my uh um you're wanting to help them out financially I I think there's obviously some operational issues here and uh uh it's it's up to the network I think to kind of solve this so I I can go with the staff recommendation so I too the staff recommendation the only thing that would um really question me on whether or not it should be a higher rate is knowing that um hopefully by the end of this year we will have um some movement on a CON for the inpatient psych beds and so I get nervous that uh I would not want to do anything that would jeopardize um the financial footing for the institution that we're expecting to move forward on on this project um but as I said coming in today I was prepared to support the staff recommendations but whether it's the five or the six um it's not going to prohibit me from voting for this Robin are you at a point where you think you could make a motion or I would just ask um it sounded Maureen and Jess um what they were thinking about in terms of NPR it sounds like um I'm just not particularly clear on that piece of it for me Robin I support the staff's recommendation on NPR yeah I would regardless of what we do with the change in charge so so if we make it six which would obviously create less of a reduction related to the change in charge I would still look for uh the I still support the staff recommendation up top um and I still think that is a stretch um and you know hopefully with all the analytics that the network has they can be looking at that and and justifying that because um this hospital could have a significant loss the next year if it can't cut expenses corresponding to where the top line may be achieved and they definitely have the history of missing their budgets um and having losses every year so thank you okay that's where I thought you were both were but I just wanted to make sure I was clear so I'm going to move to approve central Vermont Medical Center's budget um with an NPR FPP increase of 5.2 percent from fiscal year 21 to 22 which will be a 3.74 percent increase after factoring in so Robin did you mean 5.72 yes thank you sorry which will be a 3.74 percent increase after factoring in fiscal year 21 physician transfers from UVMMC to CVMC with commensurate reductions in operate to operating expense growth in the aggregate in order to protect margins a 5 percent increase to overall change in charge and subject to the standard budget conditions as outlined on slide 36 with a note that uh we will consider potentially an additional condition as discussed earlier is there a second oh second okay there's been a motion in second board board discussion yeah just to be clear I'm not at five I'm at six but um that's okay yes and actually I'm not at five I'm at six I just got Kevin flustered me with when I misspoke with the 5.72 so I'm going to amend my motion to change the overall chart change in charge to six percent I think I need some lunch I'll second I'll take I'll take uh that uh suggestion Robin and uh it is one minute away from that that 1245 so at this point we're going to go into recess for two hours give the legal team a chance to do some work and give us all a chance to make sure that we're thinking clearly on a nourished body so with that this meeting will be in recess until 245 I'm reconvening the meeting and at this point in time we had left at a point where Robin had made a motion but um had asked to change the language of her motion and so I'm going to go back to Robin and start with her Robin thank you actually now that I'm my blood sugar is back up what I'd like to do is actually withdraw the motion and start over that would be good is the second girl okay with that Tom I think it was me and yes okay great okay so I am going to move that we approve central Vermont medical centers budget with an NPR FPP increase of 5.72 percent from fiscal year 21 to fiscal year 22 budget which will be a 3.74 percent increase after factoring in the fiscal year 21 physician transfers from UDMMC to CVMC with commensurate reductions to operating expense growth in the aggregate in order to protect margins a 6 percent increase to overall change in charge and subject to the standard budget conditions is outlined in slide 36 is there a second yeah I'll second that okay I'll open it up to board discussion hearing none I'm going to open it up for public comment you do see a hand raised and Rick Vinson thank you chair mullen just a few few things I'd like to point out so one just to highlight that earlier we were looking at the the net patient revenue growth for CVMC compared to the expense growth taking a look at that change year over year compared to a couple other hospitals and just to point out that that one of the things that has been increasing expenses at CVMC and it has more of an impact for them than when you look at you know a budget that's that's larger like the UVM medical center is that as the outpatient pharmacy business increases that adds pharmaceutical costs that actually doesn't generate additional net patient revenue it generates additional nonpatient revenue so just to to highlight that that that point particularly when you look back going back to 2019 there's been you know fairly significant growth in that in that expense line the second was just to put some context around what board member Yusuf pointed out in terms of the commercial rate increase as a as a percentage of Medicare if you were to just move you know CVMC 10% up that scale and they were to move a little bit further along the and get a little bit closer to Rutland and some of the other hospitals at the upper end of that that scale that's almost six million dollars for CVMC so it doesn't take much of a change there to start to really change the the outlook and the of the margin for for CVMC and then the last point that I just wanted to make is that certainly going into the first quarter of the new fiscal year I just want to probably set some expectations that we already with what we're having to do in terms of salary adjustments tools that we're putting in place to attract and retain staff and providers are already essentially outstripping the inflation assumptions that we have in our budgets where we're currently at in terms of traveler usage as you probably have seen in some of the exhibits are are well above our 2022 budget and it's going to take time for that to to come down so in the first quarter of the fiscal year at least you know expense reductions with those pressures that are already outstripping the FY 22 budgets will be you know obviously something that will be difficult for CVMC and other hospitals to to tackle while there will certainly be a focus on expense savings a lot of those expense savings could end up being consumed by those inflationary pressures and the fact that we still have a lot of travelers in our in our run rate thank you thank you rick is there other public comment so we'll shift back the motion in front of us is to approve CVMC's budget as modified hereby with an NPR FPP increase of 5.72 percent from 21 to 22 budget which will be a 3.7 increase after factoring in 21 physician transfers from UVMMC to CVMC with commensurate reduction to operating expense growth in the aggregate in order to protect margins a five six percent increase in overall change in charge and subject to the standard budget conditions as outlined on slide 36 and just commensurate with a possible further discussion after the budget is there any further discussion from the board I just wanted to say appreciate rick making his comments and points in terms of clarifying areas it doesn't change my vote but I do appreciate that and I'm I just want to say I'm sympathetic to some of the challenges in the current environment okay is there any other board discussion hearing none all those in favor of the motion please signify by saying aye any opposed please signify by saying nay let the record show that the motion passed unanimously and Tom now I'm going to go to you for an explanation can you or do you want me to go to Russ no you can come to me I lost your sound there for a minute though can you hear me I can yes okay so we had a good little chat it's I think that we all agree that something is pretty much out of balance when you know the the kind of gross amount of a carrier payments to hospitals is around one point six billion and only three tenths of one percent of that is engaged in some kind of healthcare reform program it's a meager four point seven million whereas in Medicare the the participation rate in the FPP is around let's think exactly according to our payer mix tables 33.8 percent and for Medicaid it's 42.9 percent so to have this huge player in in the healthcare market not engaged in the programs that are now getting mature for you know population based or fixed per perspective payments just doesn't make sense on the other hand given the magnitude of it it's also very complicated so I think and this was a you know this was a meeting on the run but I feel comfortable that you know there there there is some sorting that has to happen between our established rate review process and hospital budget review process and maybe others like the sustainability project to make sure that we're not you know stepping on each other's toes and that we have the bandwidth in order to do this stuff well so that's an important consideration um and that that over the coming weeks and so we should or we should be map out a a board process that is consistent with existing rules or integrates or a man's existing rules to to find ways to bring this huge resource that's out there now independent of healthcare reform to bring it in line to some degree and so and also I think there's some hope you know but it's it thinks unfold faster than people anticipate you know that we we might have some idea of where we're going or or or how far we're getting there prior to budget guidance for 2023 so it's you know it's aspirational as marina would say this is as an aspirational you know but to me it's I we just got to get the train on the tracks and start moving down our rulemaking process because 1.6 billion dollars is a lot of money it's bigger than Medicare and bigger than Medicaid and and to have a kind of sitting independent of all the efforts that everybody's making in so many levels in terms of healthcare reform just just doesn't make sense and so in order to kind of end this I think robin has me withdrawing my motion from in the morning which which didn't didn't exist at five o'clock in the morning so that that creation at five o'clock in the morning has had a life that it never expected and but at three o'clock in the afternoon I I would draw that emotion if that's the right way to do it robin it makes sense to me but it is of course up to you tom um I think you've outlined you know that there's definitely some work for us as a board to think about how to move forward across all our processes and make sure that we're supporting the effort to move towards these kinds of payments so I like the idea I hope that we can have a fuller board discussion about that at some point sooner than later but I think that makes sense to me to do it and the holistic approach makes sense and to Jess and Maureen's previous comments since it wasn't in guidance I think for me at least it you know it feels like we're not changing the game in stream but giving people notice that um we're interested in pursuing this line agreed so Tom um since you and Robin were the maker and the seconder I'll consider the uh motion having been withdrawn um that that's what we're doing okay um Ross did you have anything to add no I don't I don't think so I don't want to reiterate what uh board member uh Pelham has said just just now um I think that there will be a next step uh as a presentation to the board of some uh different process options um for the board to consider and and provide some direction on not not necessarily exclusive options but um whether the board wanted to pursue a rulemaking option and or development of some benchmarks for the FY 23 hospital budget guidance okay thank you so Russ Patrick are there any further motions that uh you envision needing or has everything been done that needs to be done in order for the the written um orders to begin I believe you answered everything for this budget process yes I agreed and and there's nothing else I'm uh anticipating um that we wouldn't do additional orders that would be needed here thank you so this would probably be the uh appropriate time for me to uh thank a number of people Kevin before I'm sorry to jump in before you do that did we get a request for reconsideration from Brattleboro and when were we going to talk about that if yes we did receive a request from for reconsideration and does any board member wish to reconsider I wasn't necessarily prepared to bring it up today but um because I did see it late on Friday so I just wasn't sure if we were gonna it seems like we would need to even if we didn't want to reconsider that we'd have to then deny the motion one way or the other but Russ should correct me like we either have to grant it or deny it I think so we'd have to look at it at some point is it a formal request for reconsideration you have not seen it Russ and no I'm sorry I have it here yeah I agree with I agree with Robin that the best course would be for the board to for the board the best course would be for the board to consider whether they want to reconsider the Brattleboro decision and if not to have a motion not to reconsider it should we pull it up I mean I do not want to reconsider it they basically want us to not not do the NPR reduction that we took and they were one of the higher NPR gross over over projection over 10 percent and they have a history of not hitting numbers in quite frankly I didn't see any urgency to this reconsideration because NPR is something that if there are solid reasons why they exceed it during this crazy year that we are in now and coming up into 22 I can't understand why we would seek enforcement if there were valid reasons for it so my opinion was not to reconsider but again I'm just one board member Patrick do you have thoughts I believe the staff would keep the decision as is board members I didn't spend I would keep as is okay I heard Maureen say as is Tom go ahead yeah me too I I you know I I did read the letter and I went back and looked at the material and I couldn't see any reason to to to reconsider Jessica Robin yeah I'm in the same camp thinking that we can leave it as is for the points that you mentioned and obviously if they are running hot I hope that they will come back and talk to us about that but I'm comfortable leaving it as is and Robin I'm comfortable with that approach so why don't I move to not reconsider Brattle borough's budget at this time or to deny the motion for reconsideration I think that would be a cleaner motion all right I move I move that we deny the motion for reconsideration is there a second second it's been moved and seconded to deny the request for reconsideration is there any board discussion I just wanted to chime in and say or maybe I I'm sorry maybe I did say this but I do think if to Jess's point in your point Kevin if there if there does seem to be a need I do hope that they would come back in the future other board comments or questions not I'll open it up for public comment and turn to Mike Del Trucco sorry I was on mute I apologize for that I just wanted to ask a process question if if I know the folks from Brattle borough were on the phone this morning and not of it and aren't available right now is there a situation where this would be noticed as a different meeting to take this up or so they could comment or be available that would be my only thought thank you so if this motion passes Mike that's that's the end of the request for reconsideration at this point in time I understood I just wanted to know where it wasn't on the calendar to be taking up today and they're not on on the call if there was any procedural things where it wasn't on the calendar specifically is let me rephrase this another way Mike are you asking that we postpone action on this motion until the next regularly scheduled board meeting chairman I'm not necessarily asking for postponement I'm asking for consideration where they're not on the call and it wasn't scheduled to be taking up if that's procedurally okay with you you and and and your process there's no there's no way I could sort of require or request a postponement so well Mike I'm inclined to grant your request if that's what you're asking I'll just chime in out of order here I think it probably does make sense to take it we have a meeting scheduled for Wednesday I think to Mike's point the agenda said hospital budget deliberations which is somewhat vague so it it's probably difficult for them to know whether or not we would so to me it's just a little bit cleaner since we already have the meeting scheduled if we push it to Wednesday and that way we can make sure Brattleboro knows that we'll discuss it then and that gives them an opportunity to make comment and Robin and Kevin thank you for hearing me and I've been trying to notify all the hospitals sort of when they're coming up to sort of help with some of that clarity and I know that it's a difficult thing and everything's on the fly but where this was a air quote reconsideration that's why I reached out and and provided comment thank you thank you Mike so unless there's objection from board member we'll put off this discussion until Wednesday morning yeah that's one one request I would have is can we do normal start one o'clock start on Wednesday I don't think we have anything else on the agenda you're pushing me now I got to look at the the the calendar where can we can we do a 10 o'clock start I just have an appointment I can schedule um one one o'clock um would work 10 o'clock uh would work it's for me I don't know about other board members either works for me works for me which works better for you marine now let's do 10 that's fine okay so the meeting will start at 10 o'clock on Wednesday for where the purpose of discussing Brattleboro Memorial's request for reconsideration so I think I will go ahead though and you know make some thank you notes to people at this time and get that out of the way so I don't drag it out on Wednesday and to start I want to thank our hospital budget team Patrick Rooney Laurie Perry Kate Hoffman a lot of work and this was one of the better presentations that I can remember in my years here at the board so thank you for everything that you've done in your analysis but I do want to prepare you because next year I'm going to expect even more and the reason why I'm going to expect even more is the person that I want to thank next um back in May of 2017 um when I was notified that um I was being appointed to this position um the person that came in with me at the same time was Maureen Yusuf and Maureen has been an incredible asset to the board and her financial analysis um has been extremely helpful and is going to be missed so um Patrick we're going to be asking you to even um do a little bit more next year um because we won't have Maureen with us but we're all going to miss you Maureen and I wanted to say that at a public meeting that it has been a pleasure to serve with you and how much we value your contributions to the state of Vermont and your public service so thank you Maureen no thank you as well it wasn't it wasn't prepared for that today but um you know my term in September 30th and um I was not prepared to be able to sign on for another six years but you know really everyone that I've encountered during this process I've been impressed by on you know all sides and um you know I guess as I'm partying out here you know if you're to remember me maybe it's was firm and fair so hopefully uh you know that that will represent and I'm sure I'm going to encounter a lot of people um not leaving Vermont and um you know hope to be able to share stories with all of you on all sides so thank you very much thank you Maureen and I also want to thank everyone at the hospitals who have put in countless hours um preparing budgets reviewing them going back to the drawing board um answering questions and everything that they've done and I know that uh no matter what that in these hospital budget hearings we never please everybody and if we did we probably weren't doing our job so um there is a couple of house keeping items that I do need to take care of first uh Abigail informed me that we have not approved the minutes of nine one or nine three would someone wish to make a motion at this time to approve those minutes so moved second it's been moved and seconded to approve the minutes of nine one and nine three 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 so that cleans up um that item is there any old business to come before the board hearing none is there any new business to come before the board hearing none again we will meet at 10 o'clock on Wednesday morning and at this time a motion to adjourn would be appropriate a some move second all those in favor of the motion please signify by saying aye aye aye any opposed thank you everyone enjoy the rest of your day