 so welcome everyone we're going to get started we're going to start with the executive director's report yes thank you mr. chair just wanted to update the board in the public that we have received six additional public comments regarding hospital budgets they've all been shared with the board and the other update is to remind folks that we will be meeting again tomorrow we're going to start at 9 30 in the morning you're in this room we'll go until 11 30 and then we'll come and that will be all hospital budgets and then at one o'clock we will reconvene we're going to have a data presentation from our data team and then we'll go back to hospital budgets if needed and I would just remind the public to sign in if you haven't already that's all I have the next item on the agenda are the minutes of Wednesday September 5th is there a motion it's been moved to approve the minutes of Wednesday September 5th without any additions deletions or corrections during discussion seeing none all those favor signify by saying hi hi any opposed okay so Pat I believe that last week we left off at the finish that's correct I'm going to give you a little intro though if that's okay a little additional information for the record my name is Pat Jones I'm director of health system finances for the Green Mountain care board our agenda for the rest of this week is outlined on this slide the next steps are that as chair mullen just indicated the board provides some preliminary decisions and leanings for ten of our hospitals on September 5th we'll go through the remaining hospitals today and then you know revisit some additional information that we've received on the hospitals that you already discussed formal public comment the public comment period closed yesterday we obviously always are willing and happy to take public comments so comments can continue to be submitted but the formal period closed yesterday final decisions our objective is to still make decisions on September 14th or sooner excuse me or sooner or sooner yes bye bye September 14th with orders by September 28th both of those meet statutory deadlines the way that we'll approach this today in terms of obtaining your input on hospital specific recommendations is that we'll initially review the hospitals that we didn't review last week that's CBMC Porter and the University of Vermont Medical Center and then we'll review the previous hospitals with the goal being to finalize decisions with votes this week a recap of the work that we've done today just a reminder that the Green Mountain care boards fiscal year 19 budget guidance includes a net patient revenue growth target of 2.8% and then you also approved an allowance of up to 0.4% for approved health care reform investments so the total growth target for NPR from 18 to 19 is up to 3.2% there is no target in the guidance for commercial rate increases at the September 5th meeting you all began discussing the individual hospital budgets the discussion focused more on commercial rate increases and on NPR growth but obviously both are related for most hospitals board members we attempted in the PowerPoint that you're going to see today to indicate where there seem to be at least three board members with a particular leaning but as I think you all will remember last year feels like last year last week the board members did have a range of reductions particularly around those requested commercial rate increases what we've done in the interim is to analyze the impact of those reductions in commercial rate increases on NPR so that we could give you a sense of where NPR is going and again what we did was we even though what I'm presenting in the PowerPoint is where it seemed like there might be some consensus we did analyze for the lowest range that a board member recommended a mid range and then the high range and the high range tends to be what the hospital submitted for NPR and and rate requests for some hospitals you'll note I'm going to show you a table in a moment but that that mid range and high range is the same base because the board had sort of a low range and the higher range but nothing in the middle and for all of the hospitals as I mentioned already the high range numbers reflect what they requested in their budgets for commercial rate increase and NPR grant the results high level the fiscal year 19 budgets as submitted by the hospitals and again equivalent to the staff's high range analysis would result in a system-wide NPR increase of 2.8% if you agree with all the staff recommended adjustments and most hospitals included healthcare reform investments at that 0.4% allowance I want to note here that there were three adjustments for the UVM health network hospitals related to ACO accounting changes that are there I the staff believes and I think you probably will as well that there's some validity if we want to do apples to apples comparisons from 18 to 19 those accounting changes should be at least considered we did not include them in the high range analysis if we did include those adjustments that NPR increase would be more like 2.2 to 2.3% so I just want to call that out without the accounting adjustments the mid-range board member proposals would result in a system-wide NPR increase of 2.5% and similarly without the adjustments the low range would result in a system-wide NPR increase of 2% so from a system-wide perspective all of the options higher range mid-range low range would result in an NPR increase it's below that 2.8% plus healthcare reform investment growth target that was in the 19 budget guidance obviously it varies by individual hospital this this is a table that shows a summary of the staff analysis so it shows what the low range rate is for each of the hospitals what that translates into in terms of a low range NPR it shows the mid-range rate and the mid-range NPR and then the high range rate and the high range NPR as well as the NPR as submitted with all adjustments including those that the staff isn't recommending that we make and so the three hospitals in that last column that that vary our quarter the accounting adjustment would take them from a 4.5 percent NPR growth rate down to a 3.2 percent central Vermont it would take them from a 6.3 percent NPR growth rate to a 5 percent and then UVMMC from a 1.7 to a 1.1 percent NPR growth rate so I just want to make sure that those are pointed out and just to speak a little more to the ACO related accounting I've asked Kelly Thoreau my colleague to to she's sort of our hospital budget team expert on all things ACO accounting and so we wanted to let her have a chance to just go into a little more depth on those so we wanted to add a slide to show just to explain a little more about the ACO accounting and why we don't have a firm decision here yet on on where to go accounting for fixed perspective payments ACO accounting participation fees and the ACO related downside risk is new in the accounting world there are not ACO specific FASB guidelines yet and auditors and accountants do not yet have consensus as to how to reserve for risk and account for the ACO related expenses and revenues during the FY 19 I'm sorry what I'm sorry federal accounting standards board so during the 19 budget process GMCB staff requested information from hospitals on how they are currently accounting for these expenses and revenues as well as the risk and of course we got various answers from hospitals I think there are only a couple who accounted for revenues and expenses in a similar way everyone was was doing things differently after the FY 19 budgets have been approved our plan is to convene interested parties to develop standardized guidance for ACO accounting and that information will be included in the 2020 budget guidance so we really do have an apples to apples comparison and we can make those we can make that decision in a thoughtful way getting input from everyone who deals with this every day so due to the current uncertainty and the variation in reporting GMCB staff recommends that the board consider potential adjustments to NPR growth calculations as factors in decision-making for affected hospitals but not make formal adjustments this year because our fear is that if we do if we do have them adjusted formally within the system and we decide something different then we'll be in the same place making adjustment to adjustment to adjustment but it it should be a consideration in your decision today can I just clarify though sure for the UVM network adjustments where we have it in two different places one place in 18 and one place in 19 I think we need to reconcile that it will be one way or the other so that we're consistent apples to apples otherwise our NPR rates and things like that that we're comparing to it will definitely not be accurate so we may choose to say it's not going to be the way UVM has done it right now and put into expenses and we'll just reflect it up you know as a reduction in NPR like all like most all the other hospitals we believe are doing at least that part the risk reserve is a separate issue otherwise we'll be reporting numbers that I think won't make sense and that could also be true for other hospitals as well which is our concern here is if we have UVM Porter and CVMC change where they're reporting and don't specify to other hospitals exactly where that needs to happen now right after decisions then we're still coming from a different point for various hospitals are there eight I don't think any of the other hospitals I think they're consistent year-over-year to each year and how they're doing it here we have a complete disconnect they're doing it a different way in 19 whereas other hospitals are doing it the same way year-over-year I'm just saying it will not reflect the correct NPR change if we take it as entered into our system right now I can check that but there may be one other hospital one or two who did make an adjustment they just didn't highlight it in the same way that that UVM did just a note on that I think and I want to reflect what I think you're saying Maureen but that is that if at least we could get consistency within for those three hospitals for their NPR year to year even if it's not quite the same so the comparison across hospitals we might not quite be there yet but if you were to accept that adjustment in some fashion for the three UVM network hospitals at least there would be consistency for each hospital from 18 to 19 is that am I reflecting that numbers will come out of here and we'll be looking at you know a quarter for instance we'll show we don't make the change over 5% where they're at 3.2 roughly around the 3.2 if we adjust for that and you know I just want to make sure you know it is consistent but you can take that off yeah and I'll just know for everybody that they the record the request from the UVM health network hospitals was to adjust the fiscal year 18 base so that the so that we would have that comparability between 18 and 19 when looking at growth over over time I think our struggle is is that the best way to do this but that was the request from the hospitals was to adjust that 18 base and that may be the way they're going to report it and that they need to for their auditors but not trying to simplify it but it's moving money from expenses to reduce NPR we can do it to 19 as well I mean it can be done either way how they need to report it for auditors can be different for how we report it collectively but if it's consistent it'll make more sense I just think it's gonna haunt us anyway but it's gonna haunt us later if we you know have different numbers and we say well in total it's the whole group is coming out at X but it's really different if you just make this one shift so yep understood and so we will let you all make that decision and we can go back and and do calculations based on that so as chair Mullin indicated we had gotten partway through the central Vermont Medical Center discussion at our last meeting not much is new on this slide except that the staff had a chance to go back and look more carefully at the dermatology provider transfer request and we are now recommending that that 250,525 dollars be approved as an adjustment to the 18 base because that that transfer is a replacement of an independent dermatologist who retired so we are recommending that that that dermatology transfer be approved that brings their NPR growth down to 6.3 percent again we you know whatever you decide to do on the accounting adjustment could bring their NPR growth down far further but otherwise this slide remains pretty much the same so what we before you move on to there does anyone object to the acceptance of the dermatologists that's what we're talking about right dermatologists yep so I think that's a decision point that we can check off as having been made okay so that takes care of what was going to be my first question on this decision point slide the second question is what to do with the accounting adjustment so this is I'll just jump in on that from my perspective quite frankly I don't have the accounting expertise to know the right way to deal with the adjustment so I don't really have a strong feeling about that what I do have a strong feeling about is not having an inflated NPR because of an accounting change I agree with that too I mean I would defer to Maureen on that I think the other way to do it if we're if the staff is not sure exactly how to adjust 18 would be to go with the lower the right if you will NPR and then indicate in the order that we'll make that adjustment sort of after like somewhere mid-year or something like that so that things can get trued up in whatever way the stakeholder group figures out but that we're not necessarily rushing it and doing it and changing it twice I actually like that proposal because I think that this is going to take some time to figure out but at the end of the day everything has to be apples to apples and it may require it may not require but I'm just saying it may require two different treatments for accounting purposes one is for the accounting for the board and one is for the accounting for the purposes of financial statements and I think that's really up to a working group to determine that and so I think we should try to keep a little bit of flexibility and I would just have that whether you change it in 18 you know by changing 18 to take the expenses out and put them into the expense category or 19 the change to NPR is about the same it doesn't you know dramatically change the exact change percentage wise is pretty close the only difference I would say is the majority of all the hospitals accept the new VM network and maybe there are some adjustments elsewhere Kelly that are that I haven't seen are doing you know what they did in 18 what you VM did in 18 they're carrying that forward into 19 that that's why I've been saying to do it to 19 but the actual percentage change is is about the same either way so you know I think we can go back and look at what's best I mean some of the issues may be the history and things like that because the network hasn't changed you know restated 18 to revise all their numbers in 18 the way they're rolling through so you know we also have to figure out how this is going to be represented through history because we look at our charts and if all of a sudden we're going to be going back and every time if we don't restate the history we'll be making those changes too and it's not that so it's net of it is either way it should come up with the same overall and we can try and do those calculations for you for tomorrow if that's helpful okay so health care reform investments you all agreed at the last mean that you were leaning to accept the staff recommendation on those which is to accept the 0.4 percent health care reform investments is everyone good with that let's chop that one off is being finished NPR growth rate again it's 5% with the acquisition and ACO accounting adjustments 6.3% just with the acquisition or transfer adjustments I will note that in the projections the fiscal year 18 projections that CBMC was submitted with their with their 19 budget they they were running a little ahead or a fair amount ahead of their 18 budget that's actually leveled out since then we got updated projections in their presentation at the budget hearings and so that's sort of leveled out so that their 18 projections are now running very close to their 18 budget so I just wanted to note that the options here are to accept the NPR growth rate or reduce it I will note you know since the board has shown quite a bit of interest in commercial rates during this process if the commercial rate was decreased it would lead to a 5.7 percent NPR growth rate with just the transfer acquisition adjustments and a 4.4 percent NPR growth rate with the accounting change and then in terms of the commercial rate same thing options are to accept what is one of the lower you know commercial rates that were submitted I think this is like the third lowest rate that was submitted by any hospital or to reduce that commercial rate increase so I think that we left it last time it's a just at 1.8 I had suggested to Tom and Robin were both unsure and we hadn't heard from Jess so I guess starting at that end of the table Robin if you finalize any of your thoughts on this I don't know if I would say final but I will tell you kind of my pros and cons list so so you know I think the NPR growth is high even with if we accept like all those adjustments we're down to 4.4 so it's closer to our target of 3.2 and our guidance does stress the NPR as the target we obviously I think all of us have taken a good interest in the commercial rate side because part of what we've been trying to do as a board is connect our regulatory process together so that what we're when we're making a decision in rape review we're being consistent in hospital budgets and similarly with the ACO process and so I think this a lot at least for me a lot of the discussion around the rate increase is trying to be consistent with at least the QHP filings that we approved with a statewide rate now of course there's a lot of noise which is what makes it in my mind somewhat complicated because here we're approving an increase to charges there we're improving a net of charges if you will the actual payment rate between the insurer and the hospital so it's not like a one-to-one which for me makes it like I'm not particularly comfortable when I feel like I'm kind of shooting in the dark and I don't know really how those two things tie together so however like reducing the commercial rate is one way to also reduce the NPR so I guess if one other thing I would say is that you know I do think that for the hospitals that are all in on the all-pair model and taking a leadership role that they do need to be able to make investments beyond they need to be able to make operational investments to change the way they're doing business if they're going to be successful under that new model and I don't know where that exactly like influences me in terms of a number per se but it's just an important consideration for me because I think we're only we're talking about year two of the model coming up in 2019 so we're still very early days so I guess where I sort of land with this is I do want to see the NPR growth rate come down and I'm still struggling with whether we just bring that down and be clear in our order that we did direct the carriers to try and negotiate below and then leave it to sort of the private market to determine whether the rate comes down or actually reduce the rate so I know that's wishy-washy but that's where I where I am well I'm kind of following Maureen's lead on this if she's still where she was at the last meeting and I would could support the 1.8% as a rate increase and adjust the NPR according to that I get to that point by kind of looking at their overall total margin and assuming that the rate was reduced to 1.8% that would have an effect on their margin obviously but it would take to replace that margin through efficiencies of 1.5% to replace it totally and would still leave their expense growth growth at 5.1% which is which is high in the qualified health plan rate review process so we did insert a 1% efficiency assumption that was not tactically targeted but was strategically targeted and given that for Central Vermont Hospital given their large budget and the fact that they're they're looking for a 3.3 million dollar increase in commercial revenue and 2.8 million in Medicaid and another 1.4 million in Medicare it just seems that you know we're pushing the envelope slightly to reduce our NPR but do it in a way that this hospital could manage to it one thing on this hospital which I hadn't really taken into consideration is the thing that was driving me here was the 5% increase over year and in all their justification part of that was because they were trending hot for 2018 so they kind of did this whole analysis off of 2018 they hadn't been rebased but now they were trending hot they were going 3.2% above that I wonder if since they're now back to their original budget for 2018 in their presentation I wonder if the 5% still holds if there really are still 5% above and if in fact that may have changed so that may be one consideration on the 3.2 one other thing I just want to personally I just want to get on the record from my perspective my point of view on the insurance rates and what we did with the insurance rates I'm not looking to force this process into that number because and I say that because I look at them independently and they're timed at a different time and I know there can be a disconnect whether it's higher or lower and that will have to be adjusted and the reason I say that is when we what we did say is traditionally the board has not increased rates for a commercial insurance but has brought rates down and so that's why I felt you know there should be an adjustment down to what the insurance companies have done but I think it would be unfair to the hospital process if we said we are now forcing to that before we even saw the hospital so I'm not trying to force to a number at the end of the day it will be what it is in the hospital budgets and it will be something different in the exchange rates and that will catch up and reconcile you know down the road in the next year and I totally appreciate we've got a disconnect in the timing and things like that but I don't think we can you know state that that rate will have to be the same that's my point of view and I know that's where the board can have you know different points of view but I definitely not looking back to say what did we do there I think it'll catch up with us down the road but there are other factors besides just rate in those insurance there's also utilization and things like that that can be different that are driving that so just thinking about even though at one point I think I threw out there the idea that we look at the network together holistically and I know the board sort of suggested that we look at them independently but in my head I'm still actually looking at them some to some degree holistically and the reason I say that is because I am less moved or concerned about the NPR growth rate for CVMC and Porter because I do view the system and I think what UVM Medical Center the network actually rather is trying to do is move care to the communities and what that's you know so right care right place right time and what that's going to do is that is going to grow NPR at those two community hospitals and it's going to decrease it at the medical center and that's what we actually want I think I think we want to have it at the lowest cost local centers versus the tertiary care center where possible and my hope and my belief is that the network is doing that so I say that to say that the NPR growth rate here I have to think about the ACO adjustments some more and I look forward to some of the analysis I'm still in I feel like you do Robin about I don't I'm not an accountant and I don't know where it should land but I do want I don't want them to be inflated because of an accounting adjustment so five percent with the accounting adjustment either way whether we do it in 18 or 19 is rough 5% so it okay so I guess what I'm saying is I'm less concerned about 5% for example if I think that that's because care is moving back into those centers so I think of Porter and Central Vermont similarly and when you look at what UVM network is doing their NPR is depends upon the adjustment right but it's you know one point one person one point one if you make that adjustment right so that's lower than what we came in at so it in some ways it looks to me like what they're doing is what we want them to do so holistically I would say that if I think about it that way then I'm less concerned about the NPR here at these two other hospitals when I look at their days cash on hand 112 that's below the state average I think there's some you know concern there we'd like to see that hire some reserves particularly since that they are in the all-hair model I hear you Robin on that you know there needs to be some adjust some room for investments to ensure success of that model there on all three so when I look at this budget and I look at the 2.8 percent commercial rate increase again as Pat said that's one of the lowest rate increases that we're seeing in hospitals and I appreciate that because I think we need to keep commercial rate increases at a reasonable rate so I guess what I would say is I'm fairly comfortable with this particular budget for those reasons and I think what I've heard is two people say one point eight on commercial one person say they're comfortable that you were as well I think you know it really helps me to have everybody's perspective and be able to actually talk about it which we obviously can't do before we get in this room so I appreciate the ability to do that here and I think I'm with Jess I'm okay with it I would be willing on this one to make a motion to go to 2.3 percent so a half percent reduction which is a little bit above where we are but split you know kind of in between and really driving that that you know for me the half percent increase or decrease is just driving to get the more cost savings throughout the budget and you know also looking at a consideration of where the NPR growth is but if someone else we could have discussion or if someone else wants to revise that fine with that so does anybody wish to second it I'll second it I do have one question here that the 1% estimated value of 1% commercial rate increase is 674,000 so if we're doing half a percent we're looking at a 300,000 plus correct so that's the that's the dollar value here that's correct I would just throw discussion on I wonder whether we want to not vote on these three budgets before we go through them because we went through all the budgets the other day it didn't make a vote and allowed for public comment and I I think my recommendation was that we kind of get get to the point I don't know if you're going to vote but that would be my recommendation that we wait until after we go through these three budgets have gone through all the budgets one pass allow any public comment before we do votes I'll defer to the request I don't like it because I think we're putting a lot of pressure on ourselves for tomorrow but that's okay well I'd like to does anyone else want to comment does anyone do what do you guys what does anyone else think do you want to vote on it now or personally I would wait at least till the end of today assuming we get through these three because I mean we could come back and start with these three if we get through them today because then we have an opportunity for at least people in the room to to comment so I'm with you more so rather than debate any further let's just defer to the actual vote okay I'll let's draw the motion okay the next hospital is Porter Medical Center again not much changed not nothing really in this slide they do have a request for the ACO accounting change and that would change their MPR growth rate to 3.2% if we are to do that which is at the target assuming we approve their health care reform investments 4.5% without that adjustment so the decisions here are the accounting adjustment the health care reform investments of 335,000 which the staff is recommending that the board accept and then the MPR growth rate would be the options are to accept or reduce we again calculated what 1% reduction in the rate would do to MPR growth it would come in at 4% without the accounting change or 2.7% below the MPR target with the accounting change there's a question that's come up and board member Yusuf will be able to speak to this as well but Porter is one of the is a hospital that has actually reserved its risk for participating in the ACO model it estimates that risk at about 2.2 million the effect of that is that the risk does not that does not show up in MPR so the MPR rate is lower than it would be if they treated those reserves for risk differently in an accounting sense and then commercial rate again the options are to accept that same 2.8% again the third lowest of any hospital or to reduce that yeah I'll just add the and I've been been trying to work with with Porter to try to figure out you know what the best way I guess what what's really driving my concern on this one is their net FPP so net of the 2.2 million for the ACO is 17 million dollars so a 2.2 million reserve on the 17 million is a big disconnect for me because I thought the maximum risk is 3% in total up or down you know roughly was a 3% total risk which would be significantly lower than 2.2 million dollars so that was kind of my first concern and I believe that's what they received from the ACO so that may be something we need to go back because if that's the risk they're taking on 17 million that's a significant risk for that piece so that was the first part the second part is if they are assuming that's that that the original number 2.2 million higher if we adjusted that out of NPR instead of being at 3.2 they would be I think it's like five and a half percent so it's I think it's 2.4 percent on their net for last year so I'm as confused about this one I think as you know everybody else is it's just a large number I know the recommendation from staff is to you know just deal with this offline and I guess I'm willing to do that but it it's something we need to to dig into because if in fact that's true it carries through the whole P&L if the risk doesn't happen so I'm just there's just a big disconnect in that number relative to the size I think the whole for UVM I think it's 10 million for their risk on a significantly larger number so so I'll not make that a big deal for this right now because I think it'll confuse it yeah just to clarify this has two things one it has that they put the expenses down that would get them to 3.2 and then the other is we've you know said we didn't want hospitals reserving for risk and they've reserved 2 million 2.2 million dollars for risk which if we said okay we weren't going to do that that brings this to five five point six percent so I would say yeah I think it's about 2.4 percent it's 2.2 million on 80 80 something million so it's so over 2 percent I mean one of the things last year when this came up and then ask for a very large commercial rating crease to cover that we did not prove that because in some ways we shouldn't be putting on the facts and commercial rate payers risk but here the commercial rating crease is only 2.8 percent so it feels different to me but I'm not sure what to do about the accounting. So I don't have time. I was big like Robin. Okay this one I have a little bit different take on on just the rate in 2017 we rebased Porter for 2018 and did not make any any adjustments you know for the future in 2018 versus their budget and I know this isn't final right now and I do think operating profit and income comes into play I know there's been some notification maybe it shouldn't but they had a budget of losing two hundred thousand dollars and they're making five point four million dollars part of that certainly could be synergies through the system and that they're benefiting from from UVM and then things like that's a part of it could be accounting but you know for 2018 they're going to be you know above what their budget was for top line by seven million and for bottom line by five point four million so I don't have a right answer or you know when I'm kind of throwing out there do we jump ahead of that at all their one percent of rate increase is worth about four hundred thousand dollars if I just were looking you know at that I could see being a zero year which would be about you know a million dollar reduction really going from the significant overage in the prior year so I know that's pretty extreme but it's really looking at it more to say you know at what point do we say you know hey you need to to kind of give back to the system because you're increasing your profits significantly and I you know it's tough because that is a good thing to do and then when you go to 19 they're going back down to three point three million so instead of being at the five point four million and operating profit they're going down to three point three million which again kind of tied to me that they were about two million dollars over you know change going down that they had that excess in the current year so I know I throw that as kind of extreme but that's that's you know what I at least want to throw out and why so it's really related to you know coming in much higher not doing anything in 2017 because the alternative is when we wait until the end of 2018 is over and we could make adjustments then but then what you know then it's much harder to get into the system and we can't you know we've heard from the insurance companies we're not changing rates midstream so we don't get the benefit of it so that's right so this is one of budgets were cumulatively to me little things add up to big things over time and I go back to the when we worked on the commercial rates and was able to get a fairly close look at the impact of rates insurance rates on people that don't get any assistance whether it's premium assistance or cost sharing assistance and you know those folks are facing double digit premiums in order in order to or insurance so here I'm I see that Porter has been very disciplined on their expense side with a run rate since 2015 of 27 of 2.7% I note and I don't understand admittedly so but I note that in terms of their total requested increase 5.3 million of it comes from commercial insurers it's a negative 541,000 from Medicaid and a negative 2,000 2 million 142,000 from Medicare I don't understand those swings but they seem pretty volatile but overall I I think that at 2.8% we're looking at about a $900,000 a total there and I I could and knowing that that a porter is in somewhat of a recovery phase and that to make up that difference in terms of efficiencies would only be seven-tenths of 1% I could support a 1.8 percent rate increase and adjust the NPR accordingly so I would let me start with the reserve issue so I my inclination on the reserve issue would be also to add that to the to-do list and figure out a consistent way to do it with the caveat that for me there could be a difference between a critical access hospital and other hospital types because of their reimbursement methodology from Medicare quite frankly I don't understand how the ACO FPP and the critical access designation interact in terms of the cost accounting and settlement process so I think we need to look at that to really understand whether and how those things interplay because that could potentially I can see a world where Medicare would still do the cost the car reconciliation in some way that could claw back some money that was paid in the FPP at which point it would make sense to reserve for that as a small critical access hospital I don't know if that's accurate or not just to be frank but that's something that to me needs to be sorted out in order to make a rational decision about it so for me so I would kind of just punt that quite frankly and not worry about it this year because we we also don't necessarily know or haven't collected all the information consistently with the other hospitals so with that aside I would probably just stick with the 3.2 percent NPR and the 2.8 percent rate increase because it's consistent with our guidance okay and I had it down that I could live with the submission as is but I could also accept a commercial rate between 2 and 2.8 so it looks like we're all over the map so definitely be so at least you have those ranges I guess just one other question for you all do you wish to accept the health care reform investments I do yes okay can I just say one other thing to Maureen's point I appreciate wanting to try in if somebody's running hot in their projection trying to true that up in real time I think that that makes logical sense to me I'm not sure it's necessarily entirely consistent with our enforcement guidance that we put out there like if we wanted to do that in lieu of then an enforcement process later on I think we'd want to be clear about that in our guidance yeah I'd also just add I if if in fact the 2 million is in there for for reserve and is dropping all the way to the bottom line they would be at you know a little over 5 million as well which is about 7% 8% so running hot there and I'd also just a comment on the within guidance you know we only gave guidance for NPR and we gave the 2.8.4 to get to the 3.2 and we didn't we didn't give guidance for rate increases but we talked at war or cost savings which was another thing but I don't go with just if we're at a 3.2 that's okay because we have hospitals that could put in a 10 or 15 percent rate increase to get to a 3.2 you know they could put a significant rate increase get to the 3.2 and they're living within so that's just my point of view on I think they're separate and we can look at them separately but I do appreciate that they are within guidance of the 3.2 X the moving part of the risk of the ACL but with you I don't think like we're constrained but I do think in this particular case for me it's the leadership around the ACO model needing to really tackle operational change and those sorts of factors that also influence my thoughts UVM UVM again I don't think there have been changes to this particular information you'll see that without the adjust they also are asking for the accounting change adjustment without it their NPR would grow at 1.7 percent over their rebased budget with the adjustment that would be 1.1 percent the value of a 1 percent commercial rate increases in the neighborhood of 4.5 million so again the staff suggested that the accounting adjustment be considered as a factor I'm taking from the last two hospitals that you would like to adjust the growth rate according to the accounting adjustment and so like with the other two we will work offline to figure out the best way to do that health care reform investments we are recommending they they put in 8.6 million worth of health care reform investments there's 0.4 percent allowances 5 million and we're recommending that you accept that the NPR growth rate again you can see they're they're well below the target regardless of whether the adjustment is made or not 1.7 percent without the adjustment 1.1 percent with the adjustment your options there to to accept or reduce that NPR growth rate the calculation here is that if the rate is reduced to 3 percent their NPR growth rate without the accounting adjustment would fall to 1.3 percent the commercial rate increase that they have requested is 4 percent again your options are to accept reduce and we said that you could consider reducing to 3 percent or 2 percent or some other number if you opt to go the reducing mode so on on this one I just again want to repeat myself once again after this but I just want to emphasize that this process to me has a lot to do with kind of the real-time living-in-the-moment cost shift we know from past studies at the Green Mountain Care Board has done that the cost shift just the Medicaid cost shift for 2017-2018 is in the $208 million range and so in this exercise if we add up the total requests NPR requests of hospitals it comes to about 80 million dollars and in terms of the suggested sources of to support that revenue 3.9 percent is from Medicaid 76 percent is from commercial payers and 20 percent is from Medicaid payers and so that in balance is one that certainly is not going to be solved overnight but it can be at least mitigated if chipped at bit by bit so that brings me to UVM where UVM's spending trend over the last five years has been at about a 5% clip and their total margin history between 2015 and 2018 has been between 4.4 and 5.6 percent and you know they obviously were running hot on revenues in 2017 and they were re-benchmarked in terms of the source of to support their requested increase 18 million is from commercial there's a small amount 311,000 from a Medicaid and another six million dollars six point two million dollars from Medicare so I'm I'm thinking here that that a rate reduction from 4% to 2% on the commercial rate which equals about nine million dollars seems appropriate because that would reduce with that it would reduce their total margin down to four point six percent which is about sixty three million dollars and an operating margin down to two point two percent or thirty two million dollars so those are big numbers sixty three million or thirty two million and so it's not a cut it's an increase to their bottom line I also note of maybe some relevance is a a budget profile that was used during the approval of the certificate of need process for epic the new electronic medical record system that UVM has been approved for and is putting in and in that presentation which is about this one is dated February 17 so it's not that old UVM was projecting for 2019 excess revenues over expenses of a little over sixty million dollars so I and with today's presentation they're up to quite a bit more than that so I I feel comfortable that this is 2% is still adding a lot to UVM's bottom line that their excess excess revenues over expenses is fine and but to be able to reduce the burden on commercial insurers by nine million dollars is is important as we try to work our way away from a cost shift and toward insurance rates that aren't being commercial insurance rates that aren't being cost shifted upon so I think where I am is I would do a rate increase I think I'd be more inclined to do 3% I mean rate decrease sorry I approve a 3% as opposed to a 2% but I'm interested in listening to the discussion again for me a big factor is leadership in the ACO and moving forward with that following through on the operational change of shifting services to the communities as Jess had mentioned earlier and I guess those are really the two biggest factors I'm sure so when I look at you know the budgets here I've pushed back a couple times already on the top line and I know I have gotten some response from from UVM but I question that they're going to be able to keep a 1.1% increase so I just want to put that out there again there's not been a great history of meeting the budgets the budgets have been exceeded for the past four years budget to budget pretty significantly and you know part of the pushback has been to not jeopardize in the future you know comparing against a budget that might be too low but I'm going to accept that I've tried to push and that push was to me was trying to be helpful to maybe come in with a higher NPR on growth because this will become the budget and and to put in context this budget is increasing 13 million dollars over the current year and in the past four years I think the average has been about 45 to 50 million dollar increase actual to actual not not budget to budget taking that mix out of it we've had a 60 million increase of 40 million to 40 and I think a 50 and this year we're coming in at a 13 million dollar increase and contributing to that 25 million is is rate increases which is much higher than last year we only had a one less than 1% rate increase so the rate increases are contributing 25 million but I'm not going to beat that again I think we'll we'll revisit it when actuals come in I'm not trying to root against them I'm trying to say I really think you're going to come in higher and I understand it's it's pushing to the cost shift and all that but it does factor into my my you know rate discussion which you know I'm coming in around 2 to 2.8% for for a rate and you know I if I were at the high side of 2.8 is kind of saying that's what we've done you know that's we've requested for Porter and for CVMC saying that's medical inflation I also know that everything mixes in together so we're not supposed to be increasing rate for Epic or Miller and we probably could isolate those out and say well that's not what's included is really what the rates for but it it all kind of comes into one place and I could say some of the rate requests is is for those things the expense increases have been significant and higher increases than the top line and I really want you know the 2% when I go there that's the lowest hospital we've had come in as as a rate increase and I really want UVM to be the leader there and to be you know leading with that and there's been a lot of discussion about you know salaries and salary increases and I'm not going to get into the weeds of of saying salary and salary increases but you know when you take a 3% increase and then you have some adjustments elsewhere you know a 3% increase on the salaries I think is you know you're talking about roughly a $600 million base so you know could there be some savings there you know other people aren't getting a 3% increase I'm just I'm not telling you where to do it but you know I think we're not seeing people coming in and saying the rest of us I think Kevin pointed out last week the last two years the state of Vermont which has got to be one of the largest employers has been 1.7 every year so although we like to think 3% is the rate and all the hospitals use that I'm saying I don't know that that is the rate so you know I'm just pushing back to saying you know we've got to look to UVM to be making cost saves making reductions and you know I see pushing down to a 2 or 2.8 and also want to kind of get the elephant out of the room that yes there was a presentation months ago that said a 0% rate increase but that's before we had put the $21 million you know towards the mental health so I just want to get out you know we understand you guys came in and said zero and that zero wasn't going to be you know really up for grabs anymore you know because of the amount that's going to the mental health you know I too I understand what Robin's saying about not not fast-forwarding I think when we rebased the 2018 budgets thing I think the board could have done better is maybe given some direction to say we're taking action on 2017 here's what was over but we're also increasing your 2018 by 40 million well into your budget cycle so you would have expected your expenses would not have trended as high and we would have seen some more profits there that could have been views for future rate reduction and we're only seeing about a $3 million change I'm not saying that's you know from that your budget was 50 million you're now coming in at 53.5 for non-operating income before non-operating revenue yet on an increase to the top line of over 40 million and a and really large increases in other operating expense some of which is the ACO adjustment but going from 396 to 410 salaries on top line going up you know $20 million so I just think and and bad debt and free care going up 10 million I pointed some of these out before I think when you have a year where you're really increasing the top line you also may be able to shore up some reserves so that's really why I'm looking you know between a range of the two to 2.8 HS as I've heard earlier I will note that UVM was just rebased I will note the appreciation I have for their leadership in ACO and Robin's point that the need for some operational flexibility are also backstopping some risk I think something nobody's noted is that we do have you know long waits for some specialties so we do UVM does need to have some flexibility in increasing access to some areas consider that as well I do also hear Maureen's point about the history of budget excesses you know in the range of $40 to $50 million so I share your concern about a $13 million increase and really is that achievable and I so I do worry a little bit to some extent about what are the utilization projections really are they realistic because with a 4 percent you know a commercial rate increase I'm concerned about the underlying utilization projections I do appreciate that I think what UVM is trying to do is push the some of the utilization down to PMC and CVSC but I don't know if this is realistic so where I come in at is I think the 4 percent commercial rate ask is too high I do think that there are some cost savings that could be achieved that would therefore not warrant a 4 percent commercial rate increase I'll just name one right off the top ask them for $2 million in the marketing line when history shows that over the last few years they've spent $500,000 that to me that's $1.5 million right there that they don't need in their expense line but I do think there's probably some other cost savings that could be incurred to reduce that need for that ask so I I land between 2 and 2.8 I think the 2.8 for me was you know again thinking holistically about the whole system the other hospitals have asked for in their network have asked for 2.8 but I could go down to 2 I think going below 2 I think would impede some of the progress that they need to make in in back sobbing risk in the ACO the leadership in the ACO and solving some of the access issues in some of the specialty areas but let me add one more thing I do think that the other thing that influences my decision is they as Tom said they have very healthy margins I mean I think they can afford a rate cut and I think you know days cash on hand at 192 days total margin of 5.1 percent I think that they're they can afford the rate cut more than commercial rate payers can afford the rate increase so so on my end my thinking was similar to Maureen's and the historical NPR growth and that I wasn't going to recommend a cut to NPR but I do think that the commercial rate has to be cut and I was at approximately two and a half percent so I think that gives you quite a bit to chew on there looks like two three two to 2.8 was mentioned twice and two and a half so okay so at this point I'm going to open it up to public comment on the three hospitals that were just discussed since we've already taken public comment on the others after the discussion last week yes Jennifer and please say your name and town my name is Jennifer Bertrand from Middlebury Vermont I'm the Chief Financial Officer for the Medical Center I did want to say that our goal during our budget process was to abide by the NPR board's guidelines to give back to our community and our patients by investing in much needed services and by reducing prices for our patients all while trying to keep our head above water as we make the transition to value-based care and health care reform we were very transparent and straightforward with our budget and I do want to address just a couple of items here for today's discussion one being the reserve discussion and I strongly advocate for critical access hospitals have a reserve and the latitude put up a risk preserve and for all the reasons I outlined in the letter that we submitted during the public comment period and really using the complexities of the critical access reimbursement especially as it pertains to Medicare there's quite a bit of all utility there that we need to take a look at this in the future and we're more than looking to work with the board to now already to actually do that for the future of the all-care model secondly I do want to say that this is the second year that we've submitted the lowest rate increase in over a 10-year period and with that we self-impose that lower rate increase and that's really just to cover inflationary factors thirdly I did want to state that even though we're reflecting an adequate margin that we have a long history strike with quarter and it has been finally that we're reaching a level of sustainability to where we can reinvest in critical capital needs and services that we've been deferring for years so I just ask that the board please consider this as you make your decision to approve our budget thank you thank you Jennifer other public comment you're gonna have to speak up sorry should get at something that I have been thinking about I find these complicated I guess hospital budgets are supposed to be complicated by finding the process complicated it doesn't seem to it's supposed to be standardized yet every hospital is so different in its circumstances it doesn't work that's one feeling I get and might give just a little bit I'm not understanding but most of the things that you're looking at to use some regulations are what I call dependent variables they're the end result of a whole lot of something that determines that and is it that which determines this more about what you're trying to regulate or you might not be trying to regulate that's what I get really confused is if you're trying to get the investments as she mentioned having to do with what you're going to offer as a service you have to be careful and once you're limiting and that's where I get really confused is how can I do that through NPR now for sure I've got a good outcome and sometimes I'm looking at I've got a brief base and things like that well I have a 10-year trend and every single year is going to be very unique so I'm just saying this kid does get confusing to try to and unless I've listened to all of you and you have very different opinions on what's which I like the diversity which is very different I actually think there's more common ground that I would have imagined you know I think that you hit on something really important deal is that each and every hospital is a different story and that's why you can't use a cookie cutter approach and I hope that that's not what we're trying to do and this is a question just to comment and again speak up way behind this is all going together but I cannot fathom how you can have guidelines on commercial ways without being without factoring in the payor mixture to give a hospital the money you're getting sensitive to. Number two I do not I do not understand if you're going to appear which of our cap is the NPR and you get the NPR number I think that you risk regulatory overreach if you start trying to climb inside the budget and then start moving individuals. I think you'll end up. Appreciate it. Anyone else? Yes, Mark. Mark Stanislaus. I'm first going to comment from the University of Vermont Medical Center. University of Vermont Medical Center is the hospital's only tertiary care facility. It is the state's only safety net hospital. There are two significant COM projects that are being engaged in. There's one that is just barely being finished which is the milk building and the next one is epic and everyone knows the challenges that if you read any articles on epic the pressures that that puts on hospitals. So I would just ask that you be sensitive to that as you go through this decision-making process. The other thing that I would like to speak to is on the four percent commercial rate act that has zero cost shift passed along to the commercial. What wasn't talked about today was their budget in margin compared to prior years you know budgets is lower. So some of that cost savings is already built in and and they lower their margin to account for part of that cost shift. So within that four percent pass which I would argue is only a three percent effective increase because of the timing difference. That just covers normal inflation if we look at your guidance of normal inflation of the 2.8 percent. So I think that's very important to get out there and I worry that decisions that are being made like this as we transition through such a critical implementation such as epic which is critical to the values of the all-payer model. Getting everyone under one platform to manage the health from so many different avenues of care is critical to the success of the all-payer model. So I would just say if you're going to make any changes now is not the time. So just think about that please. Now four percent has zero percent cost shift and I cannot resist saying that okay that's four percent the approvals that was just made for MVP and Blue Cross Lucio for 5.8 percent and 6.6 percent. The hospitals are not driving those increases as much as other expenses are and we need to uncover what is driving those expenses if we are truly serious about making healthcare more affordable for the average model. Because if it continues to be put on the burdens of these hospitals there's going to be different conversations about how do you survive in the future. Four percent is not excessive it's just keeping up with inflation and Maureen I understand your points about utilization okay and I can say from a health network perspective we have some of those concerns also about how that can be and we reviewed all of their volume assumptions and their volume assumptions for the 19 budget based upon July year-to-day actual are right in line with each other. I also want to say too that those utilization increases from prior cycles they were used to buy down the commercial rate of 2.45 percent and 0.7 percent. So the first year that those increases are in there to that level the University of Mont Medical Center only asks for normalized inflation and I think to say healthcare inflation at 2.83 percent where you know where you know wherever you follow that's normalized in my mind you could argue over a 0.2 percent here and there but I just want to give those statements out there because that is critical and so my next comments are coming on behalf of the University of Vermont Health Network okay the University of Vermont Health Network is all in for the all-paying model that is the pathway to making healthcare more affordable for Vermonters okay we are all in and it's important that the decisions in this budget process are consistent with those values there because it's a delicate balance between all of that together so I just asked you to be mindful of that and I would ask you to think out loud and speculate if all of the commercial business was all in on the all-payer model and that fixed growth factor was there of 3.5 percent on rates what would those commercial rate increases be coming in that versus what the final approvals were the all-payer model is the pathway that's what the state of Vermont is jump on board with that's what I believe the Vermont Care Board is sign up and the University of Vermont Health Network is all in so and then the last thing is the structure of the budget review process there's been a discipline for many years for which these hospitals have worked under in in my opinion okay and in that process is what I can attest to at least the hospitals under the health network take seriously and submit their budget and it just seems in this cycle there's a little bit of varying from that process there was no games been shipped in this process the medical center came in at 1.1 percent after the accounting change nothing was bumped up I would argue that every one percent of commercial we know we know rate that draws so if you just take it down to one percent three that brings that growth down to zero point seven percent zero point seven percent so I just ask you to be mindful of that and it's important to have discipline to the process and that's all I have to say for today Jess I just want to make a quick comment or first of all I very much appreciate your comments particularly the all-in of the network you mentioned the qhp filing and the rates that were approved I just want to mention to you that the unit cost increases assumed in those filings for UVM medical center was a zero percent so that's the underlying assumption that went into the actuarial analysis that led to the unit cost trend so and that was based on the suggestion back in January or February that there would be a zero percent commercial rate ask in the fiscal year 19 budgets again before the mental health change you know enforcement action but so that's the assumption that's actually made by the carriers so when we go to a if we were to go to four percent it would be to some degree problematic for what we've already approved in the qhp filing so I disagree to some extent to Maureen's keep these two things completely separate because I do think we made some decisions in the qhp filings that we have to now at least take into account to some degree in what we do with these hospital budgets so that's just what I wanted to say because you did bring up the qhp approved rates and this is zero percent underlying that rate yes or I really don't want to get into a public debate but go ahead Mark actually I would say in any actual area analysis there's a range and there's a range in all of those assumptions too but I would say if if if if they assume the zero percent I'm even questioning more why their rates are so high pharmacy trend yeah so well it's more than that it's a lot of different things but we're not going to get into that today is there anyone else who'd like to make a public comment okay seeing none pat if we could begin with grace cottage and move forward and see if we might actually be able to make some decision points sure I've asked lori to present the first few hospitals that you heard so grace cottage this slide we didn't change anything from last week the hospital is coming in at proposed budget of 19 million 292 581 this would be an npr growth of 3.5 percent and they didn't have any health reform investments and they are not participating in the aco for 2018 they are requesting a rate of 3.2 percent based on last week we understood that you accepted their 3.5 percent growth and we based on our recommendations and their 3.2 percent rate increase based on our recommendations hey is there any questions how does someone wish to make a motion I will be happy to make a motion I would make a motion that we accept the staff recommendation of a fiscal year 19 rate request 3.2 percent and an npr growth of 3.5 percent for grace cottage is there a second all second it's been moved in seconded is there any discussion if not all those in favor of the motion signify by saying aye aye any opposed thank you one now and 13 okay that was the hard line right there smiley yet um monoskutney um on this slide there is no changes they um they are participating in the aco for 2019 um we had a request for information about their npr change how much of that might have been for new hampshire and they said that their their npr change is mostly new hampshire patients that are factoring the change in the increase they are their um npr growth is 5.2 percent and their rate request is 2.9 percent does anyone want to make a motion I'll make a motion on miss cutney I move we accept the staff recommendations of an npr growth of 5.2 and a commercial re-increase of 2.9 I'll second throw in the health care requirement investments as well and accepting the allowance of the 0.4 percent for health care reform investments is there a second discussion on monoskutney the only discussion I throw out is the um presentation materials that show didn't support that the increase was coming from out of state in that presentation it it showed you know that it was actually coming down so it's kind of changing that that the 5.2 that the increase over the 3.2 is related to that so I mean I'll accept what they put in but in their presentation here when they showed the change it was actually I think slightly declining the new hampshire resident if I um may just clarify what I think they've said more recently um it's really they were looking at the change in npr and I think part of it is because of payer mix and um and uh reimbursement rates from payers but what they're suggesting is that a greater proportion of that change is from the new hampshire business and that the new hampshire business is growing faster year over year from 18 to 19 so I just wanted to make sure I clarified that I don't know if that helps or not they they showed it but they did show payer mix before received from mount escutney where they showed that the greater proportion of the growth is coming from new hampshire and so to me that is why this is compelling uh you know I'm not typically comfortable with npr growth above our guidelines but to the extent that this is coming from new hampshire is other commercial payers and uh new hampshire medicaid that are funding this to me this is outsourcing health care services so this is an economic growth opportunity for vermont and I can support this any other discussion if not all in favor of the uh motion signified by saying aye aye any opposed giford giford bennett senator uh gifords proposed budget is 55 million eight hundred ninety four six fifty three a negative six point one percent growth uh we are requesting the allowance of point four percent um but it really doesn't matter too much for their budget because they're already negative they they did request five hundred ninety thousand excuse me and they are not participating with the acl for 2018 but they're planning on participating in 2019 for medicaid they are requesting a rate increase of four percent as of last week uh you agreed to the health care reform investments and we are waiting for your what you would like for the npr growth we are had an estimate of um six negative six point eight percent if you go with a reduced rate of three percent and a negative seven point four percent npr growth growth rate if you do a reduced rate up to two percent um they have hired a few uh surgeon and practitioners to increase their um productivity and they have implemented their EMR this year so as i recall tentatively um the majority of the board last week had been looking at a two percent rate is that correct that was prior to the update about the acl i'll jump in here for a second so my concern about the rate requests i think i was going to let this conversation was that giver's rates are already very very high their charges are already very very high relative to all other hospitals in the state their total cost of care tends to be an outlier as well so my concern is allowing you know commercial rate increase of four percent when the hospitals in charge is all already high is troubling to me um so i think i let the going down to two percent um given that their days cash on hand is healthy above average i thought that this is not the hardship that's possible i will say that i was very very pleased to find out that they were going to participate in the acl and the medicare program um my concern about prior to that was there's a very high rate using fee for service and throwing good money after bad and continuing to increase rate to cover the hospital could be high expenses and the underlying business model of the hospital my view has somewhat changed a little bit i could given that they are starting to move into the all-payer model and starting to revisit it i could accept the staff recommendation with a zero percent give them some flexibility to make the operational changes it's going to be needed to shift from fee for service to fixed payments but i will caution and say that i am still concerned about their charges and this is a hospital that we need to keep an eye on what their charges are and i would throw in um i was also at two percent um potentially adjusting it to two point five percent you know to say because they're going with the acl medicare program i wouldn't go all the way up to three percent would be my recommendation because i agree with you they had the high charges to begin with um this is another one where it will be a challenge for them though i think to make their npr growth year over year because it's really a 10 percent growth to where they're trending but i think they need to get their expenses in line with where their revenue is and not be fixing it by the commercial rate increases top of my notes um the thing that caught my eye on gifford was that um they are looking um in terms of an their current npr requests uh on paper it's a negative six point one percent but it equals nine point eight percent over their 2018 forecasted budget or projected budget and um so i that is a reach to me that they would be able to achieve that um so i would be open and so i think that there's npr there that they'll probably never get to just because it's such a big reach so i thought about uh reducing the npr by about 1.1 million to 54.8 million which falls to the margin of our budget review process um that if they if they do happen to achieve um the full uh 9.8 percent increase when we're here next spring um that that's within the margin that we don't that we benchmark but um you know hospitals can live with that that extra revenue so um it's not a substantive proposal necessarily but um i could live with a 1.1 million dollar reduction in in their npr which puts them within that two percent of uh guardrail uh that we have when we consider revenge marketing on the rate increase um i'd be open to lowering it to 2 to 3 percent but um i do want to keep in mind that uh there are 2018 uh that their request for 2019 is lower than their 2018 budget so it's not like they are adding to the commercial uh burden statewide they are asking for less than they asked for last year or were approved for last year robin um i would also reduce the commercial rate as for the same reasons that just had described relating to the total cost of care and the current level of charges um and i am inclined to be more at three but i could probably be talked into two and a half if that's would get us to a decision so i believe that uh we're probably somewhere in that two and a half to three range at the end of the day does anybody want to make a motion where are you sitting um i'm comfortable with that range i'd make a motion to um put the commercial rate at 2.75 percent and um not adjust i wouldn't adjust the npr growth rate i hear what you're saying but i would just let it let it fall um you know because it's below so it's been moved and seconded to a set of that 2.75 and not adjust the npr i think that is smart give them the opportunity to try to blend back the business that they have lost leave it at that is there any discussion if not all those in favor signify by saying aye aye any opposed the north country north country um we didn't have any changes to this slide also but they are one of the hospitals that participating this year in the medicaid aco program the last week the board um accepted their hcr investments health care reform investments to the two and a point three percent two hundred thirty seven two hundred twenty four dollars um they are requesting a three point one percent npr growth and a three point six percent commercial rate if you um want to change the npr growth to two point seven percent the rate would be three point one percent sure go ahead robin so i've been mauling over north country in terms of the particularly the commercial rate because they did come in um below the guidance on npr and my concern around north country is that given their demographics and given their pair mix which is the highest medicare and medicaid percentage in the state that that reducing their commercial rate increase just is really tough for them um we know that they're they're they're just their demographics are just so tough and when you look at the social determinants of health and some of the data around their median income the house that attainment of education all those sort of socioeconomic factors so i think where i am is i would i would accept what they asked for in this case given their specific circumstance uh that they're jumping into the all pair model or they have been in the all pair model uh that they're looking to expand into all three pair programs this year um i feel like they really are trying to do all the things we're asking for and they had a different pair mix i'd probably feel differently but given their pair mix i just worry uh i'm i'm in line with robin here if you look at their spending and revenue over the last five years they've operated at an incredibly low range at 1.8 percent annual growth and expenses and 1.8 percent annual growth in npr their um their requested npr for commercial is 39.3 million for 2019 budget and they were approved at 42 uh 0.7 million for 2018 budget so um it's not that they're they're they're looking to increase their burden on the commercial market relative to their 2018 budget um it will be less so i would i would vote to approve um the npr is requested at 3.1 percent and the rate increase at 3.6 percent anyone else want to share any thoughts i would support uh just to clarify robin are you saying the 3.6 which was the budget or their decision of 3.1 i thought you went back to 3.6 but i'm sorry yeah so and tom are you 3.6 or 3.1 um i'm at the staff recommendation which was 3.6 so it's a little bit higher than i had hoped for but i certainly could live with that given the demographics and in their commitment to the all-payer model somebody should i'll make a motion that we accept the staff recommendation with an npr growth rate or a country hospital 3.1 percent and a commercial rate increase at 3.6 percent and we accept the uh thank you our reform investments a second 307 thousand and i heard a second from tom is there any further discussion if not all those in favor signify by saying aye aye any opposed okay southwestern vermont southwestern um they had a proposed budget of 165 thousand point two million and an npr growth of 3.2 because we talked to you about their c o n last year so they brought it to um five million one twenty two five sixty two for the growth and they have health reform investments of 1.7 and the allowance is 637 990 they are participating in the medicaid aco program for 2018 and the rate request is 3.2 percent we have your um excuse me you're you accepted their health care reform investments last week and the c o n that was approved last year and um they are asking for 3.2 percent npr growth 3.2 percent commercial rate increase if you were to reduce the rate to 3 percent the npr growth would be 3.1 percent okay and again just because those votes last week were all tentative if anybody does make a motion if they could include those into that motion discussion on southwestern do you wish to offer any comments or a motion um sure i do i had the recommendation of a two percent um was my recommendation for the rate increase really driven a couple things one there for the services that they're increasing rates um under the current they're increasing by five percent so they had certain service areas i think it was in uh office visits and some of the medical supplies where they were were zero the rest of the services were going up by five percent so what my recommendation was if we allowed those to be three percent um because it was only on i think 67 percent of their services that would generate a two percent um commercial rate increase you know they they definitely have one of the stronger both operating margins and you know um balance sheets uh they when you can consider their parent um you know they manage it well and i just think that you know having five percent on across a lot of the services was too high so that's why i put in you know a two percent rate so is that in the form of a motion or not discussion discussion so uh again um i think last week yes you were in the two to three percent range tom you were at three wearing your consistent attitude um robin you were at the three percent rate and i hadn't weighed in uh because i wanted to have a conversation with their cfo i've had that conversation and uh i would be at the high end of the the two to three percent range and look for a three percent rate in my opinion does anybody wish to make any type of a motion if not we can put it off till tomorrow plus all right so i can support a uh commercial rate increase of three percent the associated npr group that would follow with that can you also throw in the adjustments and the hcr investment thank you uh with the adjustment for the c o n for the dental clinic and approval of the uh healthcare inform investments with i think robin would be uh the point last week that we wanted to be explicit that we were not approving the iq conversion dollars even though i know that exceeds that the point four percent we wanted to send the message that that is not qualified as is there a second okay discussion yeah i i would just want to add that um my point of view on any of these when we reduce the rates if they are below the um you know if they're three point two percent in this case i wouldn't reduce their npr to three point one you know i totally understand if you just roll they can if they want to i totally understand if we just take the commercial it gets them to the three point one my thinking is on all these um nobody's that good at forecasting budgets are obsolete day one you know when we look at the mrs every year they range from two percent below to two percent above very few hit and so it's really just more giving them the flexibility if we reduce a rate commercial rate that should they desire they can keep within the npr because because i just think nobody you know to knock them three point one um so so i think what i've heard moraine suggest is a friendly amendment point two would you accept that friendly amendment would the seconder accept it okay so is there any further discussion on southwestern if not all those in favor signify by saying aye aye any opposed let it know just let the record noted unanimous reluctantly ruttland regional ruttland regional um this slide really didn't change that didn't change from last week we want to make sure that the board is aware that at their presentation they did come in with a revised npr growth of three point one percent and a rate request of two point six percent is there a second it's been seconded by robin is there any discussion good discussion in my class when a cell phone goes off i get to answer okay is there any any discussion on ruttland um cabin could you repeat that i was shuffling papers over here and i didn't so the motion was to approve ruttland regional with a commercial rate increase of two point six percent with an npr growth of three point one the health care reform investment of one million and twelve thousand four hundred and forty dollars okay any discussion if not all those in favor of the motion signified by saying aye aye any opposed hotly um nothing new in terms of their request here npr growth of five point nine percent rate request an increase of seven point nine percent they at this point are not participating in aco programs for 18 we don't know if they're planning to in 19 yet so um last week when you all discussed coply the focus was again on that rate increase and we heard ranges from four to five percent so we um we had the preliminary decision as right in the middle a rate of four point five percent there was also a discussion of requiring the hospital to come before the board quarterly for budget review because of concerns um about about their budget days cash on hand and so forth um health care reform investments they requested sixty six thousand three hundred fifty one dollars worth which translates into zero point one percent of their eighteen mpr so that would make their mpr growth target if we went by our guidance two point nine percent we do recommend that those be accepted and your preliminary decision last week was to do so if the rate were decreased their rate increase was reduced to four point five percent that would translate if if um you also applied it to their mpr to an estimated mpr growth rate of three point nine percent yeah the questions of staff is your discussion a little on discussion on um on this one a couple things one i think even with the rate reduction i i still think i know if you roll the rate reduction through it brings them to three point nine i just wanted to discuss whether we should make that either the two point nine with their health you know their point one or the three point two because they're missing their budget this year so their year over year increases eight point four i don't see that they're going to hit their number but um you know i'm willing to either let it roll if we just you know here i would say opposite of what i said before here i would say take it down because they're above if we if we reduce their rate i would take it down and the other thing i would just bring up for discussion is i know we talked about you know board quarterly for budget review i understand why i just question whether we should make that formally this way or work with them to come in you know to to redo their budget and things like that and what the process is because i think that's probably a little bit above what we've done before and you know certainly they're going to have to accept what we what we give for rate increase and and the npr so they're going to have to revise their numbers to get there and i think we should you know bring more of the hospitals in more frequently during the year to see see how they're doing but i just throw that out there whether it should be formally as a quarterly budget review just on those thoughts um i i'm i'm fine with having them come in informally if that makes sense to staff and there's not like a need for the the formal like for me the formal piece of it was more related to the fact that their days cash is pretty low and they seem they're just in this whole budget is just a hard but i don't i i don't have a strong feeling about that one where the other and i like your suggestion of reducing the npr so it's more in line with our guidance so i'm not in favor of really formal hearings informally i think we do have to track this hospital very carefully you know the the real question in my mind is what do you do with that npr because the healthcare reform investment is only zero point one so do you bring it to two point nine or do you give them a little bit more than that i don't know is there anybody that wishes to make a motion on this one so just on the two point nine point or the three point two i guess i maybe i'm just the softy here but i guess i would probably give them the three point two even though that is above technically above what they should be getting at two point nine with the four and a half percent rate decrease so i i think i could go there i could go quite frankly with either one i i i do think getting them more in line on the npr is important do you want to make that a motion sure then we'll see what happens so i believe what i've heard is robin's motion was to allow for a commercial rate increase of four point five percent set the npr growth rate at three point two percent and accept the healthcare reform investment of sixty six thousand three hundred and fifty one is there a second i'll second that moved and seconded is there any further discussion on this if not all those in favor signify by saying i any opposed so then so cognizant of the time i see and uh knowing that christina will shoot me if we're not done before for so it's kind of crazy to start at the discussion on another hospital so i think that we're going to um end here today and begin tomorrow at nine thirty starting with northeastern um is there a motion to adjourn so it's been moved and seconded to adjourn all those in favor signify by saying i i any opposed thank you everyone