 Okay. Uh, well, good morning. Um, I'll call to order the green mountain care board's hearing of July 17th, 2023. Today we have a hearing on the rates for individual and small groups requested by MVP. Um, I'm going to appoint our general counsel, Mike Barber as the hearing officer for today. And I'll turn it over to him in a minute. Um, but just a reminder, we do have Miss Holland here who is going to be preparing a transcript. And so everyone should speak, you know, at a Vermont cadence, not New York City cadence, and, uh, try not to speak over each other so that it's easy for her to make sure she has everything accurately recorded. And, um, Miss Holland, or if anyone else needs a break, uh, please speak up. I think you have my email and you can just email me or Mr. Barber. And, um, we'll make sure we do that. And with that, I will turn it over to hearing officer Barber. Okay. Thank you, Mr. Chair. Good morning, everyone. Um, my name is Michael Barber. As you heard, I'll be the hearing officer for today's hearing. The purpose of this hearing is to take evidence and argument on MVP health plans 2024 individual and small group rate filings. The docket number for MVP's individual rate filing is GMCB-004-23RR and the docket number for MVP's small group rate filing is GMCB-005-23RR. The hearing is being held pursuant to Title 8, Section 4062 of the Vermont Statutes Annotated, as well as Section 2.307 of the Green Mountain Care Board's Rate Review Rule. Representing MVP today are Gary Carnady and Ryan Long of the law firm Primer Piper, Eggleston and Kramer PC. Representing the interests of health insurance consumers are Eric Schulteis and Charles Becker from the Office of the Health Care Advocate. I also want to recognize, um, the board's attorney, Laura Vellavo, who will be leading the direct testimony of the board's contract actuaries at Lewis and Ellis and who may also have questions or other witnesses. Um, I don't think Chair Foster mentioned it, but we only do have four board members today. Board member Walsh is not able to join us today. And he will obviously have access to the video recording and the transcript and will review uh, review those prior to deliberations. Um, because we are holding this hearing remotely before I go any further, um, I just want to make sure that the board members, the attorneys, Ms. Holland, can hear and be heard. So I'm just going to do a little roll call. If I call your name, could you please just take yourself off of mute and confirm that you can hear okay. So, um, we got Chair Foster, board member Holmes. Sorry, yes. I'm getting my mute button. Board member Lunge. Hello. Hello. Board member Merman. I can hear you fine, thanks. You're coming through a little soft, David. Give me a minute. I can't really hear you. Yes. Ms. Bellovo and Mr. Carnegie. Yes, I'm here. Thank you. Mr. Lung. Sorry, I didn't catch that. I can't hear you either. We'll come back in just a second, Ryan. Let's try and figure that out. Mr. Schulteis. Good morning. Oh, we got you. Good morning. Mr. Becker. I'm here. Thank you. Thank you. And Ms. Holland. Good morning. Thank you for allowing me to participate in today's proceedings. Good morning. Good to have you here. Okay. Now that we get that sorted, we are obviously recording today's hearings. Like Chair Foster said, we have Ms. Holland here to transcribe the proceedings. We will provide the parties with a copy of the transcript as soon as we receive it, which I think we're estimating into the week. For any members of the public who are present, we will be taking public comment at the close of the proceedings today. However, I can't say when that will be. And if you don't want to sit through a long day of witness testimony, we are having a meeting on Monday, July 24th from 4.30 to 5.30 in the afternoon that will be dedicated exclusively to hearing from the public on the individual and small group rate filings from MVP and Blue Cross. Information about that meeting can be found by going to the Green Mountain Care Board's website and clicking on the link for 2023 board meeting information. Before we begin, I want to remind the board and the parties to exercise caution regarding information in the exhibit binders that's been marked confidential as those matters can't be discussed in public. If it becomes necessary to discuss confidential materials, we will need to go into an executive session. We have a separate phone line for that purpose. And I expect we'll need to use that. Now let's move on to exhibit binders. We received exhibit binders on July 13th that contained a stipulated exhibit list and 26 stipulated exhibits, 24 from MVP, two from the health care advocate. The exhibit list indicated that exhibit 17, the pre-filed testimony of Christopher Pontiff, had been stipulated to subject to a ruling on the health care advocate's motion to strike, which we'll get to in a minute. The exhibit list also indicated that there were 17 health care advocate exhibits that were not included in the binders. These would be exhibits 27 through 44. On July 14th, five additional stipulated exhibits were filed, four MVP exhibits and one health care advocate exhibit, along with a supplemental stipulated exhibit list. So in total, the binders should have 32 stipulated exhibits, one through 26 and 45 through 50. And health care advocate exhibits 27 through 44 are not in the binders but have been stipulated to by the parties. Did I misstate any of that? Mr. Schulteiser, Mr. Carnegie? No, that was well done. Okay. Does anyone have any questions about what they should have in their binders? And does anyone have any questions? Does anyone have not have all the exhibits that they're supposed to have? Okay. I do have a question for the health care advocate about the exhibits that are not in the binders. And I apologize for not bringing this up at the pre-hearing meeting. But is there a way that the board can access the stipulated exhibits? So Primarin, in particular, Ryan posted all of those exhibits on their secure or on their web posting thing and provided a link. So I think that's probably the easiest way. And thank you for doing that. Okay. Thanks for that. I did not get a chance to look at the E-binders. So they're in the E-binders but they're not in the physical binders. Is that? That's correct. And then I'll I guess I can email Ryan. There are two items in there that came out post our pre-hearing conference and I don't think they're just too little monthly CPIU files. And I'll need to I'll make a note to email those to Ryan. And perhaps it would be so kind as to just put them in the binder. They're already stipulated too. Okay. Anything to add to that from MVP? No. Thank you. Okay. Then I assume neither party objects to me admitting exhibits one through 16 and 18 through 50. So all exhibits other than exhibit 17 into evidence at this time. Any objection from MVP? No, we stipulated. Thank you. And from the HCA? None from us. Okay. Then please consider that done. And we can move on to exhibit 17, the pre-filed testimony of Christopher Pontiff. So on July 7th, the Office of the Healthcare Advocate moved to strike portions of Christopher Pontiff's pre-filed testimony on the grounds that the testimony is hearsay and outside the scope of Mr. Pontiff's employment. The specific portions of the pre-filed testimony at issue are answers A21 through A24 and A27. On the afternoon of July 13th, MVP filed an opposition to the Healthcare Advocate's motion. And given the timing, I was not able to issue a ruling prior to today's hearing. And so we need to take that up now. I was, I guess, does either party object to me ruling now? Is there argument that the parties would like to make or should I just go ahead? The HCA is fine with your ruling. Okay. That's fine. Thank you. So the answers state that they were prepared with the help of individuals on MVP's clinical and marketing teams. MVP argues that the answers are not hearsay because they're Mr. Pontiff's own statements, statements that convey his understanding of certain facts after consultation with others at MVP. Based on the record, as it currently stands, I can't conclude that the statements are hearsay. However, there is clearly an issue of personal knowledge here. And while the HCA's motion cited the rule against hearsay, in this situation, I think the personal knowledge requirements from SITSO 2 is squarely raised, since the concern is the same concern with admitting the substance of out-of-court statements. It's apparent that the answers are based at least in part on inquiries Mr. Pontiff made of his co-workers and the responses these individuals provided under rule 602. The testimony of a witness may be excluded or stricken unless evidence is introduced sufficient to support a finding that he has personal knowledge of the matter. So I don't think there is sufficient evidence in the record to support a finding that Mr. Pontiff has personal knowledge of the matters testified to in the answer. I also don't think that rule 703 renders the answers admissible. It's true that Mr. Pontiff was identified as an expert, but the information provided in the answers does not appear to have been relied on by him in forming an expert opinion. And moreover, while experts can rely on inadmissible information that doesn't be information admissible. But that said, I do agree with MVP that the answers should be admitted under the board's discretion to admit evidence, which may illuminate the issues in the case. MVP makes some good points in its opposition, I think, about the prevalence of this kind of secondhand information in these abbreviated administrative proceedings. And I think there is a sufficient basis upon which to conclude that the information is reliable enough to be admitted. The health care advocate will have an opportunity to cross examine Mr. Pontiff regarding the extent of his personal knowledge and the board can consider this in evaluating what weight to give his testimony, if any. I don't see the answers as being particularly controversial. And I don't believe the HCA would be unfairly prejudiced by its admission. MVP noted that the HCA hasn't identified any potential inaccuracies in the answers and very similar evidence has been admitted in prior proceedings without objection or, to my knowledge, really any questioning. So so that said, the health care advocate's motion to strike is denied and exhibit 17 is admitted in its entirety. And I think we're ready to move on to opening statements, but does either party have anything we need to discuss before we do that? No, thank you. Nothing here. Okay, Mr. Carnegie, would you like to make an opening statement? Yes, General Counsel. Thank you very much. Good morning. My name is Gary Carnegie and I represent MVP again in the 2024 rate filings for individual and small group along with my partner Ryan Long. We appreciate the opportunity to present MVP's rate filing and discuss the critical issues that base the board. We welcome new board members in the chair for these proceedings. The evidence will show that based on input provided by L&E and the most recent hospital budget information provided so far, MVP is now seeking a 13.81% average increase for individuals and a 14.29% average increase for small groups subject to change. These percentages are dependent on what happens with the hospital budgets. We will explain that more in the testimony and hearing today, but for now, have an asterisk next to those numbers. The evidence will show that this year is not a year where there are any substantial substantive differences between MVP and L&E actuaries. You may hear testimony differing actuarial opinions around the edges, but all of those are reasonable and appropriate. As you know, MVP is one of two carriers on the exchange. Our monitors currently receive excellent health care and we believe excellent health insurance. Free Mountain Care Board deserves significant credit for its efforts to sustain these offerings. The board each year walks the high wire trying to maintain balance of sometimes conflicting statutory criteria. It's a daunting task of health care fiscal policy. The evidence will show that MVP has suffered significant losses over the last three years. This makes the board high wire balancing all the more challenging for the greater danger of a fall. We asked the board to address this fiscal danger now with this 2024 rate finally and not let it get worse. The evidence will show it is not sustainable to have long-term negative profits. Let me repeat that. It is not sustainable to have long-term negative profits. Health plans take tremendous risk when guaranteeing rates or an insured population as they must pay for all covered benefits regardless of the cost. Continuing losses in Vermont products are not sustainable for MVP. Regional not-for-profit plans must remain profitable in order to serve the communities we work and live in. Each of the markets that MVP serves must be self-sustaining over the long run. Markets that do not have that expectation due to circumstances outside of MVP's control we reevaluated. Hospital budgets. The evidence will show that if approved the proposed hospital budgets that recently came out caused MVP's proposed rates to increase. MVP like L&E would like the estimated impact of the hospital budgets to be as close to the actual approved budgets as possible. MVP wants to ensure that Vermonters have the insurance necessary to pay for these hospital budget increases. CTR. The evidence will show that the board should be steadfast in adopting MVP's proposed CTR of 1.5% without modification. Concerns raised by L&E and its actuarial memorandum about losses are well-founded. If significant losses continue into 2024 and beyond, board cuts to CTR are simply not sustainable. Thank you very much. Thank you Mr. Schulteis for Mr. Becker. Thank you. So hello for those of you attending that don't know me. My name is Eric Schulteis. I'm an attorney from the office of the health care advocate often abbreviated as the HCA. My role here today as defined by statute is to represent the interests of Vermonters. I expect that you will hear a lot from actuaries about why the proposed insurance rate is actuarially reasonable, i.e. that it is not excessive, inadequate, or unfairly discriminatory. However, this case is about whether health insurance meets the Vermon rate reviews standard, not just whether it meets some actuarial standard of reasonableness and appropriateness. Regarding the non-actuarial factors, it is worth noting that it is MVP's burden to prove that the filed rates meet Vermon's standard for premium price increases. We will offer evidence, some of it already in the record, that it does not. I expect Mr. Fischer will also speak about how the proposed rate increases do not meet the standard. As you hear the evidence today, though, remember that it is not the HCA's burden to reflect the actuarial findings of reasonableness with evidence on other factors. Rather, the law is clear. Is MVP's burden to prove that it's filing meets the multifaceted rate review criteria? Whether a rate is actuarially reasonable is only part of the question at hand. Speaking of actuarial reasonableness and appropriateness, I expect Mr. Fischer to pose a very simple question. If all the assumptions in MVP's filings are reasonable and appropriate, how can the result be so unreasonable? It's a cycle of increasing costs that, as data in the record, shows far outpaces growth state product and wage growth. Through cross-examination, I will also show that what is actuarially reasonable is a range. Just because MVP picks a number in the reasonable range and the L&E recommends the same number, that does not mean that this is the only actuarially reasonable number. Lastly, I expect you will hear from Mr. Fischer about the challenges Vermonters have purchasing and using health insurance, with a particular focus on how premium cost increases are hobbling Vermont's small businesses. Thank you. Thank you, Mr. Schulteis. So, Mr. Carnady, you're welcome to call your first witness. Thank you very much, General Counsel. We'll call Chris Pontiff, please. Good morning, Mr. Pontiff. Good morning. Okay, I'm going to swear you in now. Could you please raise your right hand? Do you solemnly swear that the evidence you shall give relative to the cause now under consideration shall be the truth and whole truth and nothing but the truth? So, help you God. I do. Good morning, Chris. Good morning, Gary. Just state your full name, please, for the board. Sure, Chris Pontiff. And where do you work, Chris? I work at MVP Health Care. And what is MVP Health Plan, Inc.? It is a non-profit subsidiary of MVP Health Care. And at MVP Health Plan, Inc., is that the filer for the filings this year? That's correct. And what's your position at MVP, please? My position is the Senior Director of Commercial Pricing as well as Network and Trend Analytics. And are you a member of any professional associations? Yes, I am a fellow of the Society of Actuaries and a member of the American Academy of Actuaries. Thank you. And how long have you worked in the health care insurance industry? About six years. And how long have you worked at MVP? Those same six years. And have you been involved in the rate filings in Vermont over those six years? Yes, since my started MVP, I've been involved in every filing in some capacity that MVPs had with the state of Vermont over that time period. So that would include the small and individual as well as the large group filings each year? That's correct. And what are your job duties at MVP? In addition to premium setting for all commercial products, I also oversee the corporate reserving, corporate forecasting, network contract support, as well as emerging trend analysis. Would your job include setting IV&R? It would. And reviewing cost drivers? Yes. And as part of your job, do you interact with other departments at MVP? Yes. And what's the purpose in doing that? The purpose is to create a collaborative workspace where we're all learning what each other do and help to help everyone better understand the roles of others within the company and how that plays into the end goal, which of course is providing good, high quality healthcare to the members we serve. In a little more particularity as to this rate filing in this process, how do you interact with different departments and maybe identify some at MVP? Yes. So my role, not just in the commercial pricing facet, but in the network and trend analytics, it leads me to work with the clinical team quite a bit to understand clinical initiatives, how that translates to what's happening in our claims. Also communicate very frequently with the network team as part of my role is to help quantification and analytics around network contracting and the support for that. And lastly, I do work quite a bit with the sales marketing team to understand what we're doing in Vermont from a marketing standpoint and a sales standpoint to try to understand how all of that plays into the end goal. The end goal being the filing that we do here each year, correct? That's correct. And your testimony this year as it relates to what the board would like to hear about the rate filing, correct? Correct. And how often are you interacting just roughly with the clinical group? I would say several times a week. And the marketing group? A little less often, but I'd say a couple times a month. And you said the network group. Is that like finance? The finance group? It's a little bit. There's two different facets of it. The network team, the MVP team members who are going out and working with facilities to negotiate and physician offices that team, that is also on a weekly basis. Thank you very much. What I'd like to do is go through the exhibit binder to acclimate the board on what we have this year in terms of exhibits. So if you go to that exhibit list, please, we'll start with the binder exhibit list. I mean, I don't know when you have that. I'm good. So you'll see all of these exhibits are in evidence, but exhibits one through five and exhibits seven through 16. Those include MVPs, individual small group rate filings, responses to objections. And you've reviewed those and are familiar with them? That's correct. And you would adopt them as your testimony in the case? Yes. And that would include the confidential versions of those exhibits? Correct. And then if you look at the list, exhibit six, is your expert witness disclosure of May 31st? Do you see that? I do. And is your CV attached to that? It is. And did you prepare your CV? I did. And then next, that gets us to exhibit 17. You just heard some discussion on that. That's your prefiled testimony of July the 5th, correct? Correct. And you reviewed that and are familiar with it and adopted as your testimony here? Correct. And then exhibits 18 and 19, those are the DFR solvency analysis letters for individual and small group. Have you reviewed those and you're familiar with them? That's correct. And then exhibits 2021 and 22, are July 5th filings by Lewis and Ellis. There are two actuarial memorandums for the two filings and also a response to questions from the Green Mountain Care Board, correct? That's correct. And you've reviewed those and are familiar with them? I have. And then exhibit 23, is MVPs supplemental prefiled testimony This is the notice of disagreement that the board has as file each year. Did you prepare that? Yes. And you're familiar with it? Correct. And then finally is exhibit 24, the prefiled testimony of Jacqueline Lee. You've reviewed that and are familiar with it, correct? Correct. And then at the end of last week, as the general counsel indicated, we filed a stipulated supplemental exhibit list. I wonder if you could get that in front of you. And that has exhibits 45 through 50. Do you see that? I do. And exhibit 45 is a July 7th, 2023 MVP calculation of L and E's actuarial memorandum rate impact. You prepared that and are familiar with it, correct? Correct. And then exhibit 46 is a Vermont historical rate cut summary. You prepared that and are familiar with it? Correct. And then 47 and 48, those are MVP responses to objection 8 regarding the hospital budgets for individuals in small group, correct? That's correct. And then 49, it's a July 14th. So this past Friday, July 14th MVP updated rate increase summary table, correct? Correct. You prepared that and are familiar with it, correct? That's correct. And then next, if you go to exhibit one, please, just by way of example, exhibit one. And you look in the bottom right-hand corner, we've numbered pages as we've done in prior years. It's a 001 on the first page in red. At least mine has red. Do you see that? I do. So when you and I are talking today, I'll try to make reference to those exhibit pages unless it's obvious what page we're on, all right? And I'd ask you to do the same. Sounds good. So let's then turn and start at a high level on the numbers and points of agreement. So if you please go to exhibit one, I guess you're there already. And go to page two. And this is the individual rate filing from back in May, correct? That's correct. Okay. And on page two, in the upper left, there's an overall rate impact. Do you see that? What's that amount? 12.76%. And that's the overall average premium rate increase, correct? For individual? That's correct. Yes. And going to exhibit two, this is the small group filing from back in May, correct? Correct. And if you go to page two, go to that same location on the page upper left, what's the overall average premium rate increase as of May we were asking for? 12.5%. Thank you very much. Next, I'd ask you to go to exhibit 31, please. Let me know when you're there. What exhibit did you say, Gary? Sorry. 21, please. This is the individual rate filing actuarial memorandum of L&E dated July 5th, 2023, correct? That's correct. And would you go to page 19 of that document, please? Okay. I'm just going to wait a minute and make sure people have caught up. Just randomly, board member, are you with us? Are you at that exhibit? Thank you very much. Okay. So on page 19, we've seen this form before from L&E, correct? This is the recommendations as to MVP's rate filing, correct? That's correct. And would you read the last sentence on the page, please? Sure. After the modifications, the anticipated rate change for the individual market is roughly 11.2% plus any impact from updated hospital budget information. Thank you. So we just looked at MVP's original filing on individual and that was 12.76% and L&E is suggesting it should be reduced to 11.2% as of the time of this actual memorandum, correct? That's correct. So that would be straight subtraction. That's a delta of about 1.47%, correct? Did it get my math wrong? You're hesitating. Yeah. Yeah. 12.76 to 11.2, right? Yeah, I did my math wrong, didn't I? It would be 1.67 at 1.5. It's the difference between 12.76 and 11.2, correct? Yes, that's correct. So we're about eight minutes in and I've made my first confusing math error. There'll be others, I'm sure. Okay. So going to exhibit 22, please. Okay. This is the small group L&E actuarial memorandum dated July 5, 2023, correct? Correct. Would you go to page 16, please? Okay. And go to that last sentence, please, under recommendations and read it, please. After the modifications, the anticipated rate change for the small group market is roughly 11.8% plus any impact from updated hospital budget information. Okay. So we just looked at exhibit two, which was our original small group filing and we were at 12.5% and L&E before hospital budgets has recommended a reduction to 11.8, correct? Correct. And that, let's see if I can get this right, that straight math is, subtraction is 0.7%. Delta. Correct. Thank you. Okay. Let's go back to 21 again, please. Let's look at those four bullets on page 19. Let me know when you're there. All right. So the first questions before we drill down, the first questions I want to ask you is just whether we simply have an agreement, an adjustment needs to be made. We'll discuss the percentages later. Do you understand my frame? I do. So the first item, could you answer that question as it relates to considering updated hospital budget information? Yes. We agree that an update to the proposed rates is necessary for the updated hospital budget information. Okay. And then the second item, reflected updated risk adjustment transfers. Same question. Yep. We agree that due to final risk adjustment coming in after the rates were proposed, we believe that an adjustment is required as well. Okay. The third item, again at a high level, the reflect recommended CSR loads. Yeah. MVP's position on this is that we don't believe an adjustment to the rates is needed for this. And the adjustment that Eleni is suggesting, would that be an increase in rate or decrease in rate? It would be an increase to rates. And then the fourth item, reflect corrected and or updated paid to allowed ratios. Do you see that? I do. Same question. We agree that an adjustment is necessary for these items as well. So as to the individual filing, Eleni is making four recommendations this year. And we agree with three and respectfully disagree on one of them, CSR loads, correct? Correct. And that one reflects Eleni's opinion or increase in rates, correct? Correct. You go to exhibit 22, the small group. Eleni, actual memorandum, page 16, please. Now this page, these recommendations, you see three bullets, not four. Can you explain what's different? The three bullets that are on this page are the same adjustments as the individual market minus the CSR recommendation. CSR is not available. It is not a piece of the individual market. So there is nothing to be discussed there on the small group filing. So as to the small group, these three bullets, we have agreement that adjustment needs to be made. That's correct. Would you explain the second bullet? Do you see where it says the last sentence, this will decrease rates by approximately 0.4 percent? Yes. And on, you don't have to go back to it. I'll read it to you on exhibit 21 for the same item for individual. It says this decrease rates by approximately 1.3 percent. So would you agree with me that the numbers are different as to that item on small group and individual? Yes. Different numbers, same logic, but two independent markets with different numbers. Very good. Thank you. So if you would next go to the Supplemental Stipulated Exhibit List and it's exhibit 45. So if you go to 45, please, let me know when you're there. I'm there. What is this exhibit, please? This exhibit is MVP's calculation of Ellene's Actuarial Memorandum. So Ellene provides its recommendations with calculations on those recommendations each year. Then MVP puts those recommendations through the rate filing and calculates a exact number of which a lot of the time Ellene's estimated numbers are the same and sometimes there are slight differences. So this is just assuming we're not debating or agreeing. We're just assuming Ellene's recommendations. You run it through MVP's rate filing software and basically check their math. Is that correct? That's correct. Would you walk us through the four numbered paragraphs, please? Sure. The first paragraph is the bullet regarding updated risk adjustment. So in the small group market or the small group filing, we do agree that Ellene's recommendation or quantification of the recommendation of 0.4% decrease is correct. For the individual market, Ellene had stated a 1.3% decrease. However, MVP calculated a 1.2% decrease. So a very slight difference. The second bullet is regarding the CSR loads. So MVP or Ellene did not specify the impact on the rates of this proposal. So they communicated that it was left open for MVP to propose and justify our interpretation of this. And so MVP's interpretation of this results in an increase of 0.3% in the individual rate filing. Largely, well, yes, a 0.3% increase and we'll discuss that I think in more detail later. Thank you. The third paragraph is the trend inputs in the high deductible plan designs. And MVP agrees with the quantification on both filings from Ellene of 0.2% decrease. And the fourth one is kind of a summary of the above. In the small group filing, Ellene calculated a new increase of 11.8, which MVP agrees with based on Ellene's recommendations. And in the individual filing, Ellene calculated an increase of 11.2, of which MVP calculated as 11.6. Now that 0.4% delta is largely made up of the CSR load recommendation, which Ellene did not provide a number for, which is why that number, that difference is so large. I know in past years and traditionally that those numbers are very close off by a tenth or two. But this one being off by more is due to Ellene intentionally not giving a percentage for that piece. So there was always going to be a difference there. So that's the that's so the 0.4, 0.3 of it is the CSR load and then 0.1 is referenced on the updated risk adjustment. That's correct. And both of those are just for the individual filing, right? Yes. Would you please go to exhibit 23? In particular, there's a question five, which is on the third page. Question five. This exhibit is the notice of disagreement, correct, that the board has a file each year? Correct. And the purpose of that is to identify the Ellene's recommendations, which one we subsequently agree with as to amounts and which ones we disagree with, correct? That's correct. So would you read the first sentence please of A5? MVP's requested average rate increase for the individual filing of 12.8% is reduced by 1.4%. For a modified total average rate increase request of 11.2% by MVP. So that's individual and that's before considering the hospital budgets, correct? Before the additional information we receive from the hospital budgets for consideration? That is correct and it also does not reflect the impact of the increase due to CSR because MVP disagrees with that. These numbers are reflective of the recommendations MVP accepts of Ellene's and what that translates to on the rate. And then read the second sentence please. MVP's requested average rate increase for the small group filing of 12.5% is reduced by 0.6% for a modified total average rate increase request of 11.8% by MVP. And this was as of July 10th, correct? Before the hospital budget information was considered or factored in? That is correct. This does not reflect any hospital budget information. Thank you. Next if you would go again it's the supplemental stipulated exhibit list exhibit 46 please. Please go to that and let me know when you're there. Just see if the board's caught up. Board member Holmes do you have that? Okay thank you. So first just identify the document please. Sure this is a table showing MVP's historical rate cut summary in Vermont. And what I'd like you to do is just walk through each column. There's 10 columns. You just describe what the column is showing. We'll get into substantive stuff after that. Okay just describe the column and what it is. Sure. The first column from the left is the year in the market. So for 22 and 23 the individual and small group markets are separated prior to that Vermont was a merged market so it's just one line per year. The second column is MVP's proposed CTR and the rates that were filed. The third column is the reductions to the rates proposed by L and E for which MVP did not agree with. So this does not reflect things such as risk adjustment or benefits changing due to IRS limits after the proposal or things like that. So this is a these are numbers that MVP disagreed with that L and E proposed. The fourth column is additional overall cuts to the rate increase passed through or ordered by the board in addition to what L and E proposed. The fifth column is the premium. So this is the in the case of 2023. It is the projected premium for the year. In the case of prior years it is the premium received by MVP. That's the actual premium ordered by the board, correct? Yes it is the premium it is a with the exception of 2023 which you don't have all the numbers in yet. That fair? Correct for the years prior to 2023 it is a summation of the premium rates that we charged members which is a function of the the board's the board's order. Yes. The sixth column? Yep this is MVP's income in each of those years. So a negative represents a loss, a positive represents a gain. And there's a couple of footnotes there. What are those? Yes so for the two rows in 2023 it is the projection of our 2023 performance in our corporate forecasting as of January. So that is obviously seven months seven or six seven months old. 2023 is emerging more than expected so those numbers would likely be higher if we reforecast it 2023 today. Thank you. And column seven? This is just a translation of column three in two dollars on the same basis as the column five the total premium. Thank you. And it represents the the L&E cuts as as noted in column three and the the header column seven. Column eight is the same thing just on column four so the the board cuts translated in two dollars. Column nine is the sum of those two so the total dollar impact of of rate cuts on MVP's proposed rates. And then the final column is the sixth column minus the ninth column so showing what MVP's performance would have been in the absence of any of basically if MVP's rates were proposed or approved as filed adjusting for things like risk adjustment that MVP agrees with what the performance would have been. Thank you. Would you please go to exhibit nine? Let me know when you're there. Okay I'm there. So this is a response to objection number four it has some confidential information in it but we aren't going to be talking about that in my questioning. If you would go please first this was some questions that were answered by MVP questions from the Green Mountain Care Board correct? That is correct. And if you would go to it's question number five which starts on page three but I want to focus on the response on page four please. Are you there? I am. Great. Okay so you'll see there's a series of paragraphs I want to kind of go through paragraph by paragraph and ask you what they mean have some particular questions okay so let's start with the first full paragraph that says health plans take why don't you read those two sentences and then I'll ask you a question. Okay health plans take tremendous risk when guaranteeing premium rates for an insured population as they must pay for all covered benefits regardless of cost. A risk margin is standard actuarial practice and part of premium rate development to account for adverse deviation and projected costs as well as a means to adhere to minimum regulatory reserve requirements. You agree with that? I do. The next paragraph can you read that please? Sure when regulators reduce actuarially sound premium rates to remove risk margins and to make premiums more affordable it compromises the health plan's ability to serve members and remain a viable option in the marketplace. And you agree with that? I do. In the third paragraph just read the second sentence please. MVP has collectively lost 31 million dollars in the past five years and is anticipating a significant loss in 2023. Thank you and you talked a moment ago about we were looking at that table about the losses for this year and the table shows losses of 11.6 million for small group and 2.7 million for individual for the individual market that was projected in January 2023. And is it your expectation as an actuary and based on your knowledge that those numbers are will likely be worse this year? Yes all signs at this point point towards 2023 being worse than we had projected in January at least the first six full months of it are. And so as I stated earlier if we were to re-forecast the rest of 2023 today combined with the first half of the year's actuals it would paint a worse picture than what we have here. That is correct. Thank you. I don't know if it matters but I've got a signal on my screen that says transcription has stopped you're not only recording this meeting. I don't know general counsel whether that's an issue or not. Ms. Holland is that an issue? That will be something to do with not me probably Microsoft Teams. Yeah but you're still transcribing okay. Thank you thank you. We're relying on the human factor at all times that's good. Okay sorry to sorry to raise that I wasn't sure. The fourth paragraph please Mr. Pontiff would you read the first two sentences of the fourth paragraph? Sure MVP is a diversified not-for-profit insured doing its best to serve New York and Vermont customers across multiple lines of business. Each of the markets we serve must be self-sustaining over the long run and be expected to contribute to a healthy not excessive overall reserve level. So explain that to me that the the business of MVP in the two states and how you look at that. Yeah essentially each of the markets each of the what I would call a rate sell so any any place that you separately set premium rates or should be self-sustaining should be a market that can stand on its own and can provide MVP what it needs to be a successful you know thriving business and if yes I guess I will leave it there. Okay thank you and then going to the last paragraph on the page you'll see three four sentences down it starts a one percent reduction in yes you see that so could you read that to the end of the paragraph please. Okay a one percent reduction in Vermont premiums is worth approximately 2.75 million in lost reserves a five percent reduction would yield a very significant loss of 13.75 million continuing losses in Vermont small group and individual products are not sustainable for MVP. Our for-profit competitors are much larger and better capitalized than MVP regional not-for-profit plans must remain profitable in order to serve the communities we work and live in. So would you provide a little color to that please explain it. Sure so in you know being a regional not-for-profit plan it part of part of that is we are not sitting on you know billions and billions of dollars you know as maybe the you know national carriers might be the for-profit competitors and this isn't a direct comparison in the Vermont marketplace this is more a statement about MVP's footprint entirely but the better capitalized you are the more appetite in the better you can sustain maybe short-term losses to achieve an outcome you're you're looking for so whether that is underpricing to gain membership or doing something strategically the more capital you have the easier that is so as a regional not-for-profit plan we are not we are not out for making our income as high as possible or having as much money in the bank as possible ultimately we are here to serve our members and we want to do that in the most efficient way possible but again if you know just consistent sustained losses are not sustainable and without that large capital reserve that say a for-profit competitor or a a much much larger company might have it is not something that is as palatable or tolerable for a extended period of time thank you would you please go back to our table exhibit 46 which is the historical rate cut summary okay and column six the losses I'd ask you to sort of start at the bottom and walk through the years and explain it to the board please sure so starting with 2019 MVP sustained a loss of $1.8 million which is roughly one percent of premium and I would consider generally in the range of adverse deviation reasonable variations over the year-to-year fluctuation of healthcare 2020 there was a $17 million gain almost entirely due to COVID-19 pandemic and the fact that for essentially half of March all of April and half of May doctors offices were totally shut almost rendering a you know complete halt to to care which inevitably did reduce health expenditure healthcare expenditures and therefore did lead to a profit in that year in 2021 there was a significant bounce back and uptick in utilization coming out of the I don't want to say coming out of the pandemic because 2021 there were still significant COVID-19 spend and COVID-19 cases but coming out of the lockdown and the reopening of doctors offices and allowing patients back in but also using the multiple modalities of service that that still continue today was a significant uptick in utilization that was not projected in at the at the time of those rates resulting in a pretty sizable loss in 2022 you can see that the the combined loss is very similar to 2021 it's it's over $22 million this again is a continued uptick in utilization and continued um just you know use use of health care of course we will we will talk in a minute about the impact of the rate cuts on these losses but overall the and then the projection for 2023 of over 14 14 million dollars you know the pattern there being it's been it's been double digit million dollars in the past two years with with a full expectation of double digit million again in 2023 which is is a large portion when you look at premium we're talking 10 plus 10 we'll call it 9 to 11 percent of premium right close to double digit percent losses that is very significant in something that has revenues in the hundreds of millions thank you would you compare column six to column nine uh with that context in lines yes so and i think that that is best done through looking at column 10 as well so looking at the bottom in 2019 if mvp's rates were proposed as or approved as proposed there would have been a slight gain about a one percent slightly under one percent three quarters of a percent gain which is very which is still under the proposed ctr in 2022 the gain would have been larger or in 2020 the gain would have been larger that that is true and but then in 21 through 23 it would have mitigated um it would have mitigated some of the losses so if we just look at the total rows at the bottom 2019 through 2022 total or 2019 through 2023 total we can see that the total losses are 30.2 million from 19 through 22 and including the projection 23 44.5 but those go down by roughly 20 million in the 19 through 22 span and about 30 million in the 19 through 23 span so that is um quite a large difference and um very meaningful 10 vp and then uh the column seven and eight break out the cuts uh by ellen e and then the additional board cuts impacts correct that is correct okay great so now i want to ask you questions about ctr what is our proposed ctr this year 1.5 percent and what is the purpose of contributions to reserves yeah so as i kind of stated earlier it's the the purpose is it's to account for adverse deviation and to help support minimum reserve requirements so adverse deviation in the in the health insurance space we are projecting you know in general it is a high revenue low margin game in which the there are lots of projections happening to arrive at those revenue numbers and just slight misses can translate to two large dollar figures and the the ctr is there to protect against some adverse deviation and allow um more stability over time and on the same kind of the same note for the the reserve requirements having that extra or having those reserves are there for negative that you know advert basically the the tail adverse deviation to ensure that mvp can continue to pay its claims and serve the serve the communities that we're in and serve our members without any fear that you know a company cannot pay it pay out the the hospital stay or whatever for a for a given member and as claims continue to trend up and up over time at a a fast pace significantly you know outpacing what we're asking for in the ctr to keep a you know mvp is regulated by the state of new york on a percent of premium basis and to keep the same percent of premium you will need to increase your dollars every year because premiums go up so there is that component as well that helps maintain that statutory reserve requirement thank you chris i realized i didn't ask you at the beginning but we really have two rate filings this year an individual on a small group uh rate filing correct that's correct so your testimony uh to this point uh would apply to both rate filings unless like the csr load it's something that you were speaking specifically to individual correct that's correct so going forward same thing please raise your hand and let us know if you're just talking about one of the filings otherwise i'll presume it applies to both filings fair enough that's fair thank you would you please go to exhibit 21 which is ellenese actuarial memorandum for individual and go to page 17 let me know when you're there okay so you see there's a section 12 it's ellenese discussion of changes in contribution to reserves do you see that i do and it goes on to page 18 would you read the last paragraph on page 18 just above the number 13 paragraph sure ellenese believes the ctr assumptions are reasonable and appropriate as filed additionally ellenese recommends that any solvency analysis performed by the department of financial regulation be considered you agree with that i do okay and then on that same page if you go to the top of it do you see a paragraph the first paragraph that starts as a reasonableness check do you see that yes and this is similar to what ellenese done in prior years correct yes would you read the paragraph please sure as a reasonableness check of the proposed ctr provision ellenese again reviewed the 2023 nationwide data in 2023 there are 359 carriers who submitted on exchange individual or small group base aifying filings nationally filed ctr varied from negative 24 percent to plus nine percent but most often fell between zero and five percent the mode is between zero and three percent or two and three percent sorry and the premium weighted average ctr for all carriers was filed as 2.8 percent and the piece filed base ctr of 1.5 percent would place it at around the 23rd percentile all for all qhp carriers and using the 0.3 margin for bad debt in the individual market increases this to the 26th percentile thank you and so for folks i've already proven that i have math issues can you explain that 23rd percentile was that me yeah that means that effectively 77 percent of filings nationally are asking for more for more ctr than mvp thank you now i want to clarify something on terms of art that are used in the ellenese filing would you go to page 17 again in the same section and read the first sentence after the heading for number 12 the contribution to reserves is composed of a provision for bad debt of 0.3 percent and a risk margin of 1.5 percent so would you please comment on how those terms are used here and compare it to mvp's use of ctr so the board gets apples to apples please sure so as far as the numbers go mvp did build in a 0.3 for bad debt and we did build in a 1.5 percent for what we are calling contribution to reserves not calling it explicitly risk margin so we just want to address the the i guess potential confusion between the two where ellen e combines the bad debt and what we are calling ctr to call their full ctr of 1.8 percent i don't have any explicit disagreements with ellen e's method there but it's just a difference in the naming convention per se that i we wanted to address and make sure that it's known that mvp when we say ctr and our rate filing our memorandum all of our documents are reflecting 1.5 percent with an additional 0.3 percent for bad debt whereas in here ellen e is suggesting the ctr is 1.8 and that's just the addition of those two numbers one of which we are calling ctr thank you would you go to on 17 that second table on the on the same page you see it's historical risk margin you see that yep i do what does this table show and you could you explain the amounts for the years and the compares for actual versus expected sure so this shows what the actual is mvp's performance so this translates these are percentage income operating income translations from kind of exhibit 46 but created independently with the same numbers this was provided to ellen e through an objection or an interrogatory but um they show what mvp's total margin was for those years for the vermont you know the the relevant filing to this memorandum so it would be the individual filing and the expected is what mvp built into its rates and therefore got approved so this does not when when this is expected risk margin and i guess we would have to confirm with ellen e but in my um understanding it reflects the proposed risk margin minus any direct cuts to risk margin it wouldn't reflect a direct cut to the proposed rates for something else that mvp didn't agree with that we would then call a reduction to our expected margin it would only reflect something that was explicitly called out as a reduction to the margin but i would i would caution that that is my interpretation of it and um ellen e could give a more direct answer on that would you uh call the actual numbers the actual numbers significantly negative as compared to what was expected in the uh rate filings for 21 and 22 i would yes now let's talk about rbc if you go to the next page page 18 please okay and you'll see there's a table in the middle but what what is rbc show what is rbc rbc is is a i'll call it a summarized metric to intend to quantify solvency of a company okay and you'll see uh the third paragraph it's under that table uh would you please read the second second and third sentences it starts vermont business accounts read those two sentences and then comment on those please whether you agree or disagree okay vermont business accounts for approximately nine percent of mvp's overall business therefore ellen e believes it is not a significant factor in determining the company's rbc ratio so i agree with the first sentence it is approximately nine percent um i do disagree with the second that in concept it should not be a large part of mvp's rbc ratio but um when it's losing double digit percent that can can result in a big loss and as we've seen you know 20 20 million dollars a year over the past couple years plus um and that does have a significant impact on rbc it does reduce um you know the capital and the surplus that mvp has which it it's not it's not a function of whether mvp takes in a billion dollars from vermont or one dollar from vermont it is a quantification of our capital as it relates to our business um our operating business and significant losses will have an impact on rbc regardless i'll put it 20 plus million dollars losses will have a significant impact on rbc regardless of where um they come from thank you and would you read the next sentence that says ellen e notes can you read that sentence please yes ellen e notes that is not sustainable to have long-term negative profits in there or a higher ctr could have could be justified do you agree with that general proposition i do so why didn't uh mvp you'll see down below there's a range that ellen e says of 0.5 to 3.0 do you see that i do so why didn't mvp in their rape filing ask for a 3.0 ctr that's a good question so mvp is not trying to as i stated earlier we're not trying to gouge customers we are not trying to make excessive profits or do anything unreasonable we are simply trying to put our best foot forward in terms of our rate increase and ask for what we truly think we need to be able to support our vermont business and um you know provide the best coverage and the best care for the vermonters as possible will not just uh making any assumptions about what may happen in the rate review and and you know some assuming cuts in building in more profit for that or anything like that we are not trying to overcharge we are simply each year trying to provide the rate that we we believe is appropriate and fair in terms or in relation to mvp's business let me ask it more more directly um is the one is the 1.5 actually sound if the board doesn't do additional cuts for say affordability yes so is there a concern if the board does additional non-actuarial cuts that the 1.5 might not be actually sound based on the based on ellen e's definition of actually sound it is possible what i will say is that it could be insufficient thank you i'd like to go to dfr solvency letters please that's exhibits 18 and 19 let me know when you're there okay and you review these and are familiar with them right that's correct and uh the letters uh just to kind of cut to the chase the letters are identical in substance with the exception of 18 references individual and 19 references small group correct that's correct okay so let's go to exhibit 18 please and can you read the sentence under summary of opinion on the first page yes the proposed refiling by mvphp would not negatively impacted solvency and the company otherwise meets vermont financial licensing requirements for a foreign insurer and is an actuary do you agree with that i do and so second if you go to the next page page two and you'll see a heading mvphp solvency opinion and you'll see three bullets there see that i do would you please read the third bullet and tell me if you agree with that as an actuary finally in 2022 all of mvp holding companies operations in vermont accounted for approximately 7.5 of its total premiums written dfr has determined that mvphp's vermont operations pose less risk to its solvency compared to the company's new york business nonetheless adequacy of rates and contribution to surplus are necessary for all health insurers to maintain strength of capital that keeps pace with claim trends yes uh sorry i've got your second question um yes i agree with that vermont does pose less risk than new york that is that cannot be argued um but i believe the last sentence is also appropriate that adequacy rates and contributions to surplus are necessary as well so vermont the board should be reviewing vermont in your opinion based on that separate business it needs to stand on its own all force correct yes we believe that every market and every rate filing needs to be able to stand on its own okay i guess you don't stand on all fours just stand on two feet i guess is the better saying okay let's go to impact of the filing on solvency do you see that heading on the bottom i do would you read the second sentence under there please sure based on the entity wide assessment above and contingent upon gmcb actuaries finding that the proposed rate is not inadequate dfr's opinion is that the proposed rate will not have a negative impact on mvphp solvency thank you so in your opinion will the mvp proposed rates at this hearing as amended by the hospital budgets adversely impact the solvency of mvp health care ink no thank you well uh let's go to exhibit 47 then i want to talk about the hospital budgets with you so that's in the supplemental exhibit pile there's an exhibit 47 and 48 which are the responses to objection nine regarding hospital budgets do you see that yes okay so let's start with 47 and this relates to the individual filing do you have that in front of you i do so let's let's walk through this for the board uh item one it says using the fiscal year 2023 budget submissions narrative posted on the green mountain uh board website so it did look at those those submitted the submitted information that was put on the website yes i think you're lagging a little bit gary but saw that yeah did you hear the question can you restate it please sure i'm looking at item number one as i understand it that's that's um that's the question that was posed and you reproduce it here in the response correct that's correct and so did you uh look at the budget submissions narratives posted on the green mountain uh care boards website yes i'm so sorry we lost the end of that question mr carnady okay again uh did you look at what was posted on the green mountain care board website the narratives that were submitted regarding the fiscal year 2023 budgets yes and those were narratives correct it is a we there are several things posted there are some exhibits some narratives okay so in the next paragraph you make reference in the response paragraph to a table uh with the hospitals produced percent increases you see that reference yep what was that issue about please so in the past there have been some appendices in the hospital budget submissions that made it very clear what the charge master increases by inpatient outpatient physician that the the hospitals were were requesting those have since been well i shouldn't say that what i will say is they are not on the website and so it made it more difficult for us to determine what the hospitals are truly asking for in in their narratives it almost all of the hospitals provide a commercial rate increase number um but then there are other exhibits exhibit nine ten eleven i believe where uh elny had suggested we derive the rate increase from there and so that is what we use in our quantification here but i will caution that none of those tie back to the the numbers in the narrative so it leaves mvp in a position where we're really unsure what the the charge master in the the based on historically the way that we've um quantified these and ultimately implemented the the approved hospital budgets by the board what those requested numbers are today so um the numbers that we put in our rate filing is our best attempt at that but would like to caveat it with we are really not that comfortable with the numbers and um we we don't feel that using the npsr or the gpr is necessarily a one-to-one there are other factors that go into those as i understand it um and the fact that they don't tie to any of the the numbers they provide in the narrative does give a little more um concern to to us and ultimately at the end of the day mvp is not trying to win we're not trying to lose on this this um exercise we are simply trying to best align the trends in the rate filing with the trends that the hospitals have proposed so we can give the board an accurate quantification of what that does what that will cost the system what that you know in general what that is worth and then ultimately what the board decides to do with with the hospitals you know we we do hope that our rates align very closely with that and again i think it creates uncertainty for everybody when the first piece of that equation is is a little bit uncomfortable so ideally to get the table like last year that had each hospital's rates would have been helpful this year correct that's correct okay and you ellen he was terrific you you contacted them and spoke to them about this and they gave you some guidance and said do the best you can is that correct that's correct all right and do you stand ready to if we get more hospital budget uh data more precise data uh to update uh the estimates yes we would be happy to make any adjustments needed to um alter this to be better reflective of the true proposals uh assuming we get that information thank you so going to paragraph a would you please read the the two sentences and just briefly explain yes so the average rate increase is 16.63 under the proposed hospital budgets on the gmcb website this is a 3.4 percent increase over the 12.76 average increase that mvp previously proposed so this essentially said is saying that the what we initially proposed in our rate filing was that the 24 trends would equal the 22 trends ignoring that the 23 trends from the hospitals as we determine them unusually large and thought that 22 would be a better estimation of course knowing that this true up process what would happen and it turns out that the the proposed budgets by the hospitals are a little higher than 2022 so that is resulting in an additional 3.4 percent increase to the proposed rates to align thank you and then would you read uh the first two sentences of 1b and explain sure the average rate increase is 15.43 under the proposed hospital budgets reduced by 17 percent on the gmcb website this is a 2.4 percent increase over the 12.76 average rate increase that mvp previously proposed so the math here is identical um to a it's essentially just reducing each of the hospitals proposed budgets by a factor of 0.83 and that is consistent with what the board ordered mvp to do last year and so it of course was asked as part of the objection but gives that relative uh relative value of it takes about 1 percent out of the rates to reduce the hospital budgets by 17 percent so uh last year's board order did that reduction 17 percent is that right correct thank you and then if you would go please to exhibit 48 and this is for small group correct that's correct and this letter is identical to the other letter with the exception of sections a and b which gives specific numbers for small group correct correct so can you read the first two sentences of a and explain sure the average rate increase is 16.13 under the proposed hospital budgets on the gmcb website this is a 3.2 percent increase over the 12.5 average rate increase that mvp previously proposed so again this is using the same hospital budgets as the prior uh exhibit we talked about there's no difference between individual and small group the reason that the number varies slightly is a difference in um utilization patterns by facility between the two markets that based on the increases that each particular facility asked for will result in a slightly different outcome um and b please and b the average rate increase is 15.01 percent under the proposed hospital budgets reduced by 17 on the gmcb website this is a 2.2 percent increase over the 12.5 percent average rate increase that mvp had previously proposed so again this is same math just reducing those hospital budgets by 17 percent and uh passing it through and seeing what that what impact that has on the rates very good thank you now I want to talk about administrative costs would you please go to exhibit 21 again which is the l&e actuarial memorandum for the individual rate and go to page 14 okay you'll see down at the very bottom there's a paragraph number 10 change in administrative cost do you see that I do would you read those those first two sentences there please sure mvp is projecting 2024 general administrative cost to be 5.9 percent of premium which is a decrease relative to the 2023 assumption of 6.4 percent of premium the overall rate impact is a decrease of 0.6 percent and you agree with that I do and then the next two pages is it fair that l&e discusses mvp's expenses and then goes into some national uh comparative data correct that's correct and would you go please page 16 at the very bottom and I want to ask you about the last sentence first and then we'll talk about the paragraph above would you read the last sentence yes l&e considers the assumed 2024 administrative cost to be reasonable and appropriate so this year l&e agrees with the sun our administrative cost estimates for 2024 correct that's correct and then above can you read those two sentences in that paragraph and then tell me your reaction to that sure among individual and small group carriers nationwide these figures are in the 10th percentile on a pmpm basis and the second percentile as a percentage of premium that is mvp has a typically low administrative cost despite not being a very large health plan therefore appears mvp manages manages and limits administrative cost better than the typical health plan nationally so I mean it the statement the statement speaks for itself mvp is is doing a great job at managing its administrative costs on both a pmpm basis and a percentage of premium basis and yes I agree with that thank you would you go to page eight please I want to ask you about covid page eight of the exhibit all right there's a section on covid testing and then there's a section on covid vaccinations do you see that I do and would you tell the board about the testing issues this year and what l&e found and whether you agree with them sure so with the public health emergency ending earlier in 2023 covid 19 services will no longer be required to be covered will no longer be covered with no cost sharing so mvp as a result mvp assumed a 10 reduction in covid 19 testing utilization due to the cost sharing no longer being waived so we feel that testing is a highly variable service with many different ways to obtain a test and several of which even over the past year to have been free through the federal government I'm not sure to be honest with the where that stands today but you can go down to your wall greens your right aid etc and get a over-the-counter test so all of these things exist so when we're talking about reduction in testing utilization we're talking about testing at labs in pcp offices things like that they're going to cost significantly more than the over-the-counter at home style tests so we felt that members would slowly realize that and move more towards the lower cost alternative um so eleni finds uh you know agreed that that was reasonable and um we obviously agree with that the i do want to speak to and i think uh eleni does have it in here that we do believe testing is more variable than treatment or visits so when we say covid treatment we're talking about somebody who has covid and is being treated for it actively and a visit would be more of a i think i have covid let me go to the doctor i'm active i'm sick right so i'm not exploring it and we don't think that those are variable as as variable and we'll receive the same sort of reduction as a result of cost share being waived um you know if you're sick and if you're being treated for covid you'll be treated regardless so we don't feel that there was any adjustment necessary there and and eleni agreed with that assumption as well and mvp's assumptions on covid 19 vaccinations please yes so in addition to the ending of the phe the phyton administration announced it no longer had funding um so mvp is assuming that we will take on the ingredient cost of the vaccine in 2024 as well currently or as of you know 2022 into 2023 uh commercial insurers were on the hook for the administrative cost of 40 dollars of vaccine we are assuming in 2024 that mvp pays 130 per vaccine um which eleni found to be reasonable and appropriate as well and does result in a in an increase to the rates due to the additional cost of the vaccine and that increase was a plus 0.3 correct correct thank you would you please go to page 19 again in this exhibit okay and i just want to refresh um the third bullet we're going to talk now about csr loads but to see that that was the third recommendation of eleni as to the individual the csr loads correct that's correct so would you please go to exhibit 23 let me know when you're there and there's a q and a on page two the q and q4 a4 you know when you see that i see it so first let's let's start with the number go to line 21 and tell the board what the increase was for the csr load based on eleni's assumptions eleni's recommendation results in a 0.3 increase for the individual filing and i will i will caveat that as i did earlier with eleni's recommendation did not um suggest a a number it is mvp's interpretation of eleni's recommendation thank you very much and then in the two paragraphs above that you talk about the respectful disagreement um why don't you just tell the board briefly what it what it is and you can refer to that as needed sure so in general mvp disagrees that there's any data to support with you know any significance behind it um that there will be membership shifts in a way that are material in one direction or another mvp has provided you know provided data to eleni throughout the rate review process and with that data mvp that is the data mvp used to come up with its assumptions that we don't believe there is we don't have confidence in membership shifting one way or another that would impact these the calculation of these csr loads in the way that eleni suggested but um eleni felt differently frankly so it is you know we understand their point and and believe it is a reasonable interpretation of it um we are not fighting uh or not disagreeing with them on the the grounds that what they're doing is incorrect i think it is simply a difference of opinion and the difference of actual assumptions and interpretation of data that um you know is is complex so many different things talking you know leading to that conclusion and we we felt and we continue to feel that our assumption is the best reflection of the future um and eleni felt different and and we we understand that i will note that the the change they recommended is an increase to the silver loads which the way mvp interpreted that is we are increasing the on exchange silver plans by the change in the load but we are also decreasing the non-silver plans by a big fraction of that so when we say i just want to make it clear to to everybody that when we say a 0.3 percent increase it is actually a a roughly 0.4 percent increase to all on exchange silver plans and then i 0.1 percent decrease to the rest of the plans um and that 0.4 percent increase to the silver plans on exchange would be um in assuming rational consumer behavior and in the large part would not be felt by any consumers because the only people buying on exchange silver plans in theory should be uh should be aptc eligible members in which case the additional money would fall to the federal government through the subsidy so in a net premium outlay for vermonters perspective that 0.3 percent increase would actually be a decrease okay thank you would you please go to exhibit 49 that was in the supplemental stipulated the exhibit list exhibit 49 please okay and this was prepared on july 14th this past friday correct that's correct so this this includes we're going to walk through it but this includes the consideration of hospital budgets uh to date correct correct would you please uh uh walk the the board through this table sure so i'll start at the top with the initial proposal that's the numbers we spoke about at the beginning here today um our initial proposals back in may the second row is adjusted for the agreed changes um from the aline memo so the only thing this does not include is that 0.3 percent for the CSR that we've been discussing MVP respectfully disagrees with that um recommendation so here we are attempting to quantify what MVP believes the new rate increase should be given the factors that have come to light through the review process so the the second line is is that figure adjusted for the aline memo or adjusted for the agreed changes the third line is or the third row is the second row with the updated hospital budgets the full impact of the hospital budget so the budgets as they are proposed as we understand they are proposed that's cumulative correct that is cumulative yes and the last row is is essentially the same thing but just the budgets reduced by 17 percent which is why you can see those numbers go down by roughly a percentage point or so um and ultimately where we're landing is if the board ordered what it ordered last year in terms of a 17 percent reduction to hospital budgets we would be asking today for a 13.81 percent increase in individual and a 14.29 percent increase in small group thank you but if the hospital budgets as proposed aren't changed they're aren't reduced by the 17 percent then we'd be seeking the 14.98 percent and the 15.39 percent at least at this point correct that's correct and what's the asterisk about at the bottom footnote yeah i i think that this goes to what you had presented earlier gary that we are we are generally uncomfortable with the quantification of the hospital budgets right now and to be to be frank with everybody we are not sure if our quantification is over or under stating what the numbers are it's it's truly a um truly an unknown so that's you know part of the the confusion or the uncomfortability um but the asterisk is is really just noting that if if it becomes more clear or if there is a table provided we would like the opportunity to uh restate these numbers with no other changes but just adjusting the hospital budget figures and just to just to make the exhibit clear the point three for the CSR load that would only apply to individual and you would add the point three to those last two rows if the board chose to do that correct that's correct thank you so would you please go i want to talk about non-actuarial issues now would you go to your pre-file testimony exhibit 17 let me know when you're there all right i am there then go to page six and there's a q and a 19 okay and you'll see there's a uh a list of items in response to the question what steps has mvp taken to lower costs and establish its proposed rates promote affordability access to care and quality of care for vermoners do you see that question and the list of items responding to that question i do and um do you also see that the individual items some of them have a reference to seeing a later question and answer do you see that yes what's the purpose of that please the purpose is to go into deeper detail on what we are doing for each of those items and so with these items listed in your pre-filed in the greater detail as well as your testimony today and all the other filings evidence some of the steps mvp is taken to low lower costs promote quality of care and access and evidence that the rates proposed are affordable to vermoners correct in your opinion will short-term underpricing make insurance affordable in the long run no why not it doesn't solve any of the fundamental issues that are that are driving it essentially underpricing will just result in a unless there is unexpected favorable experience will just result in a higher rate required in the following year higher rate increase i should say not a higher rate thank you and then uh keeping in mind that the summary table we just looked at which was exhibit 49 do mvp's proposed rates is modified by your testimony and other uh evidence provided before and during the hearing uh support and evidence individual of an individual rate of 13.81 percent and small groups of 14.9 percent 14.29 percent which includes the hospital budget estimates uh you've discussed today with a 17 percent reduction because all of that actually sound and reasonable is my belief that it is yes and so if you add the additional layer of the 0.3 c s r load for individual uh is the same true that that would be actually sound and reasonable yes and would the same be true if the hospital budgets were not reduced by the 17 percent so you had a 14.98 individual in a 15.39 small group would that be actually sound and reasonable yes and then if you add the additional layer to those two numbers excuse me to the individual 14.98 of a 0.3 percent for the c s r load on individual uh would that be actually sound and reasonable Yes uh do the rate filing other evidence in your testimony today support a conclusion by the board that the MVP rates meet the standard of affordability? Yes, there's the rate filing other evidence in your testimony today support a conclusion by the board that the rates promote quality of care and access to health care yes does the rate filing other evidence and your testimony today support a conclusion by the board that MVP rates are not unjust, unfair, inequitable, misleading, or contrary to all. Yes. Is there sufficient evidence that the rates reasonably are based on data that we have? Yes. Is there sufficient evidence that the rates are actually sound and fairly charged premium for services coverage? Yes. Is there sufficient evidence presented by MVP that the rates are not excessive, inadequate, or unfairly discriminatory? Yes. Are the rates reasonable relative to the benefits that are offered? Yes. Do they provide for payment of claims, administrative expenses, taxes, and regulatory fees and have reasonable contingency or profit margins? Yes. So they are adequate to cover the benefits offered? Yes. Do the rates exceed the rate needed to provide for payment of claims, administrative expenses, taxes, regulatory fees, and reasonable contingency and profit margins? No. So they are not excessive? Correct. Do the rates result in premium differences among insurers within similar risk categories which are not permissible under applicable law and do not reasonably correspond to differences in expected costs? No. You were worried about a double negative there, weren't you? I was. Would you agree with me that the statutory criteria we just went through are interrelated, not cycle? Yes. Any adjustments to a rate increase for whatever reason all feed into the final number? Yes. And it's important that that final number is actually sound and reasonable? Yes. In this case, 13.81 for individual and 14.29 for small group? Yes. Or if there's a 17% reduction based on the hospital budgets, it would be 14.98 and 15.39, correct? Correct. Or if you add another .3% for the CSR load on individual or either of those circumstances, all that would be actually sound and reasonable, correct? That's correct. And in your opinion, do the proposed rates and the evidence provided are sufficient for the board to conclude that MVP has met all the statutory criteria? Yes. If the board cuts the final number on non-actuarial grounds, is there a risk that the rate would no longer be adequate? Yes. And as to MVP's losses over the past three years, are continued losses in the Vermont small group and individual products sustainable? No. Regional not-for-profit plans need to remain profitable in order to serve the communities they live in? Yes. Thank you very much. I may have redirect, but that's all the questions I have at this time. Okay. I think we should take a break. Maybe a little bit longer break. My dogs need to go out. So why don't we come back here at 10 after 10? On the record council? We just completed the direct testimony of Christopher Pontiff and Mr. Schulteis or Mr. Becker. Do you have questions for Mr. Pontiff? I do. Here in Officer Barber. Hello, Mr. Pontiff. Hi, how are you? Good. Good. Good. Monday morning, right? I have a few topics I want to discuss with you. But before we start that discussion, I just want to cover a few preliminary things. So kind of like Mr. Carnegie, I'm going to try to guide you to the relevant document. But please let me know if it takes you a little longer to find the page. I imagine that I'll probably be the one who it takes longer. I have very large hands, and they don't play well with that paper. So I'm also going to be referencing, as Mr. Carnegie did, the right page's numbers on the bottom. So I also want to say we've seen each other during the QHP filings for a few years now. Would it be okay if I called you, Chris, and you called me Eric? Yep, sounds good. Okay. And then so lastly, they're so kind of similar to the issues doing math, but likely even more problematic. So for some unknown reason, I've stopped being able to say the word actuarially on Sunday afternoon. So it is not a professional slide. It is my problem. So bear with me. So we're going to jump in. Would you turn to MVP's individual market memo? So which is exhibit one at page 17? And let me know when you're there. Page 17, you said? Yeah, the very second to last page. Okay. Yep. So at the bottom there, second full paragraph to the end, you provide an actuarial certification where you state that to your best of your knowledge and belief that the filing complies with Vermont laws and regulations, correct? Correct. Yep. And that certification was made in the individual market. Small group is exactly the same, correct? Yes, I believe so. So what is Vermont law regarding commercial rates like these? When my answer to that would be in relation to the statute that we're here to talk about today, that we believe it's in accordance with that. And I mean, that is the extent, I'll say, of my Vermont law knowledge is basically the points that Gary had called out in terms of what the statute and what this rate review process calls for. And so thinking about the affordability standard or assessing affordability and speaking of affordability not in terms of whether a rate is excessive or inadequate, do you have professional or academic training in assessing affordability? No, I would say that I would not be somebody who would be called upon to provide an opinion or a standard on what the definition of affordability is. We can make our own assumptions and make our own decisions on what we feel affordability is and guide it to that. But in terms of a technical understanding of affordability, I think that wouldn't be my area of expertise. Okay, thank you. And so do you have academic or professional training in assessing how cost impacts access or not network adequacy but cost impacts access? I would argue professionally, yes. Academically, no. And so let's turn to your expert witness disclosure, which is exhibit six, page two, and let me know when you get there. So I am looking at that and there's a bunch of actuarial positions listed. Would you point me to where on the resume you have professional experience that speaks to how cost impacts access? Yeah, I would make the argument that that is within the scope of a pricing actuary and somebody working in the the pricing trend analytics space within a healthcare company. So looking at claims data and then so the empirical claims data and then projecting out how consumers will behave, is that correct? That's a component of it, but there are other things at play working again in conjunction with other departments in a collaborative manner where we do surveys on biggest drawbacks of the care continuum or the biggest unmet needs to a member, things of those nature that we get that data and we try to tie that together with what we're seeing in the claims data to make those assertions as to how that does impact access. Okay, so would you turn to your pre-file testimony, which is exhibit 23, at page two? Let me know when you're there. So we're going to talk a little bit about silver alignment or CSR load depending on what terminology you want to use. I'm going to use silver alignment and you should just hear that as being synonymous with CSR load. Would you read the last sentence of the last full paragraph? The sentence starts with membership shifts should not be standardized? Yep, membership shifts should not be standardized across the review process as each assumption should be evaluated independently. So when you say each assumption should be evaluated independently, could you explain what you mean? Yeah, and this may be a forwarding choice. I think what is meant here is each carrier's assumption or each filing's assumption in the sense that we do not believe that in a blanket statement we think, I'm going to make up a number, we think a thousand members are going to buy from silver to gold or there's going to be a thousand members move from Medicaid to silver. We don't think that that should be standardized because there are different things that play with the different carriers that might shift behavior differently and also take that out of the equation. Each carrier is presumably, I'll speak for us, but presumably each carrier is using their own data to make their projections and make their assumptions of which may be very different. I don't have access to our competitors data, of course. So last question on this topic and it's a bit of a mouthful, so bear with me. So if the amount of premium tax credit or advanced premium tax credit, so premium subsidies in the individual market depends on the price of all silver plans sold on the marketplace, so like every carrier who participates in the market, how can premium tax credits be maximized if we only look at one carrier's assumptions in isolation? I mean that is a valid question. I guess I would argue that it is not, you know, each rate filing and each rate hearing is an independent process of which the evidence should be gathered independently and decided on independently. And if the outcome of that is what you're stating, then that is good. And I believe the guidance that was provided by the board on the silver CSR plans was intended to do such a thing, but I don't feel it would be appropriate to use information in another, I don't know, I'll try to use the legal term in another proceeding that might impact something we're doing here. I think the guidance in our opinion at MVP, the guidance was the attempt to do some form of standardization and then there is that freedom within to interpret how you interpret and do make strategic decisions as a company in a way that you choose to. And if you take the result of what both carriers do and you make a decision on that, then I would say that wouldn't be treating each carriers filing independently. So I want to ask you, I want to try to summarize that a bit. So I think I heard you say that there was a fair amount of ambiguity in the board, in the guidance about how to implement this. Is that fair? I don't know that ambiguity is the word. I would say the guidance was pretty clear on what to do, but the result of that can lead to other things, which are some assumptions, right? So what the guidance says to do I believe is clear. Then what results of that guidance I believe is where the questions come in. Okay, so we're going to switch topics and talk a bit about the restart of Medicaid redeterminations. So would you turn to exhibit 16 at, sorry, sorry, sorry, sorry, exhibit one at page 16? Hearing officer, would it be okay if I just called back in with my backup recorder really quickly? We'll just take one moment. Yes, why don't we take a pause, Mr. Schulte? I'm so sorry, thank you. Thank you so much for that, Grace, everyone. Thank you, hearing officer. No problem. Go ahead, Mr. Schulte. Sure. So Chris, I just want to direct your attention. It's where it's referenced, the Medicaid redeterminations is the last full paragraph that starts with MVP is aware. Do you see that? Yep. Yes. Okay. So MVP assumes no membership shift or morbidity change due to the restart of Medicaid redeterminations. Is that correct? That's correct. Okay, thank you. And Lewis and Ellis says that there will be a membership shift due to Medicaid redeterminations starting up again, right? That is correct. Okay. So switching topics again, let's talk about premium and cost-sharing subsidies. Could you turn to exhibit 17 at page 14? So that's your pre-file testimony. And let me know when you're there. Okay, I'm there. Okay. So would you read the first paragraph of 828? So that's lines 10 through 14. Sure. MVP works with its members to help members take advantage of federal and state cost-sharing incentives or subsidies in the individual market to help members maximize their benefit and pick the right cost plan. MVP supports and guides taxpayers who may be eligible for premium assistance through the federal advanced premium tax credits for the individual market, which further increases affordability. So other than third parties like Vermont Health Connect or the HCA or low-income tax preparation surveys, what does MVP do to help members take advantage of federal and state premium subsidies? Yeah. So I'm not sure if it's a reference and an answer to a question somewhere else, but I'll state it that we reach out to members who are on the individual market, who we determine are eligible for tax subsidies or may be eligible for subsidies, right? Because we do not get necessarily income information on members. So it can be difficult to understand who's eligible and who's not by just looking at the population if they're not getting it already. And we see that through the data. So we do reach out and direct members to look at the Vermont Health Connect website and go through the process to understand whether or not they have the ability to get more affordable coverage. And what we've done recently is, and I believe last year we made an effort to, especially with the increased tax subsidies through the ARPA, we reached out or attempted to reach out. I can't say we connected with, but we made an attempt with all of our direct and roll individual members saying these subsidies got expanded and now they are, it is a big, a high percentage of the federal poverty level and most people get some form of assistance. So please check out the Vermont Health Connect website where you can go through, I don't know the exact process, but I assume there's some calculator to determine what kind of coverage you may get and direct them to enroll through the Vermont Health Connect as that is, you know this, but directly enrolling through MVP excludes from any subsidies that they could get, it has to be through that venue. So we do encourage our direct and roll members to do that and we do send out, I think we've made posts, we've sent out mailings saying things such as, you know, promoting those avenues and promoting, hey, you can get federal assistance, things like that. So I'm going to just try to summarize again or you can say whether my understanding is correct or not of what you just said. So MVP has a bunch of communications to members mostly on the direct and roll side that they should contact Vermont Health Connect. Is that correct? Yeah, and I'll be careful in my wording, but yes, essentially they should go through the process, I will say, the communication is intended to educate the members to go through the process that would allow them to understand whether or not there are assistance programs available to them. Okay. So Wood, you read lines 15 and 16, so that's the first sentence of the second paragraph in 828. Yes, MVP reduces out-of-pocket costs for enrollees earning from 100 to 300 percent of the federal poverty level through cost sharing reductions. Good. So if you could just clear something up for me, so does MVP fund cost sharing subsidies in addition to those paid for by the state and federal governments? No. Okay. So MVP reduces, that should be the state and federal government reduces, correct? So I think this is intended to suggest that MVP, and I will concede, it could be worded better, MVP offers plans that reduce out-of-pocket costs, so the federal government's program reduces, you're correct. MVP offers those plans, whether we're required to or not is something, but it's more intended to say that MVP offers plans that reduce your out-of-pocket costs, not that MVP specifically is doing that reduction. And so looking up at the wording of so Q28, it says MVP increases increase affordability by helping. So if we were talking about premium subsidies, aside from the communications you have with members, it's a federal and state government that increases affordability. Is that correct? They're programs, yes. Okay. So would you, in that same exhibit, would you turn to page 16 and we're gonna look at Q30 and Q31? Okay. Okay. So you testified that the large majority of individual policy holders will not bear the burden of premium increases in 2025 due to ARPA subsidies and ARPA-like subsidy extensions, correct? The vast majority will be protected against the full rate increase, yes. They will feel an increase to the extent that the federal poverty level changes or they have income changes that would impact their subsidy level, but assuming a flat federal poverty level and the same income as the prior year, a member in the individual market who is receiving a subsidy would have no rate increase. Thank you. I should have said all else being equal, but I sometimes forget to say that clause. So individual policy holders who purchase direct from MVP, whether by mistake or choice, they're not gonna get premium subsidies, correct? That is correct, and that is, yes, that is correct. And so small group policy holders, excluding the folks who aren't offered MAC, they're not gonna be protected by the increases. Is that correct? Small group, that is correct. I don't, yes, they will feel they're the full rate increase. So you mentioned that policy holders in the individual market, most policy holders in the individual market, will be protected through 2025. So under current law, the premium increases we approve today, if any are approved by the board, will impact the size of the cliff, quote unquote, at 401% of FPL in 2026, correct? Yes. Okay. So we are almost done, just two more topics to cover. Would you turn to MVP's 2021 annual report, which is exhibit 26? No, I messed up again. Exhibit 25. Okay. Okay. So looking at page one, your name is enlisted, correct? On that page? That's correct. And Eric, just for a second, I want to just confirm we're on the right exhibit. I believe I'm on 25 and it's the 22 annual statement. So I don't know if you want to be on 22 or 21. No, I wanted to be the same thing is true for exhibit 26. So I thought I was wrong about thinking I was wrong if that makes sense. That won't happen again. Nope, that makes sense. And yes, I agree. My name is not on either. Okay. And so do you have personal knowledge about MVP health plans, finances, and financial health? To a degree. Okay. And so do you have specific information? Do you have not personal knowledge of this specific information that's in the annual statement? Depending on the question, I may or I may not. There are some items in here that I am unfamiliar with and there are some items that I'm familiar with. I did not produce the document, but I am familiar with it. But that doesn't mean that I am an expert on everything in it or frankly know everything about it. And I'm assuming the same is true for the financial methods that are used to derive the reported numbers? The same is true. Yes. Depending on the line, I may be intimately familiar and others I may have no familiarity whatsoever. Okay. And so just out of curiosity, who at MVP would have a working knowledge of the or full knowledge of the annual statement? Our accounting team. Your accounting team. And they're not here today, correct? That's correct. Okay. So, we will nonetheless try to ask you some specific questions and see if you have personal knowledge. Would you look at page two of exhibit 26? So line item 1101. Do you see that? I do. Okay. So MVP health plan made a $41,597,951 investment in Hudson health plan, correct? I'm going to just object just with a caution. I don't know if we're getting into confidential information that we should go into executive session. So all of this is reported, in my understanding is all of this is publicly reported in the annual statement. That's going to be the content of my cross. So I don't think we need to, but maybe that's what you're saying, just a caution. I didn't know where your line was going. I would just ask the witness, are we getting into confidential information we should go into executive session? Not yet. Okay. I'll try to be polite and not interrupt, but I will if we have. No, fair enough. So going back to that, it's a, you said it's correct that MVP health plan made a $41,597 investment in million investment in Hudson health, correct? So I don't believe I answered the question at all. I'll tell you what I know. MVP acquired Hudson health plan many years ago. And what I know about this is that it is a no asset change to MVP as a result of this transaction. I believe it is the closing down of Hudson health plan entirely and moving the assets to MVP health plan. Now that's the extent of the financial, you know, so I am not an accountant. I will give you that, but it is a Hudson health plan has been acquired or was acquired by MVP many years ago. And this right in on the assets is a net zero total change year over year assets to MVP. And that's the extent of it that I know. So I go ahead. Sorry. I was just wondering if you could explain, when you say a net asset change of zero, is that that it's what that means was that that there's a writing in terms of assets and then there's a corresponding entry in the ledger for a debit. I'm going to just object on relevancy grounds. This relates to the New York business, not the Vermont business. And I don't see how this is relevant to this rate filing. So I would just respond that RBC and Solvency is determined at an entity level that has been discussed and that this is asking questions about $41 million. So that's roughly 37 RBC points that have presumably disappeared from MVP's balance sheet. I honestly don't see how that's not relevant. So I would I would move to strike. That's not evidence what he just said. But the reality is this relates to the New York business. We've been having these hearings for many, many years and this is not relevant to the Vermont proceedings. So I would object to this line for the line of questioning. The witness is already exhausted. What he knows anyway. So so again, the issue for relevance is whether it has any probative value. It's up to the trier of fact. In this case, the board to decide it is not up to the hearing officer or really any judge to strictly interpret relevance. And I think this clearly meets that standard. Hearing Officer Barber, can I ask a clarifying question? You may. Of the witness or of the parties. Of Mr. Carnady. Mr. Carnady, is Mr. Schulteis correct that the RBC is at an entity level? And if this were a $41 million loss, I don't know if it is or isn't, but that that would impact RBC or no. To be fair, chair, I would ask my witness to answer that question because I'm not 100% clear. RBC information in our exhibits and L&E's analysis, I thought was Vermont specific, but I'm not sure of that. So I want to get your question answered. Chris. RBC is at the company level. So it would be MVP health plan. Thank you. It does bear some relevance to MVP's finances, which is reflected in RBC and therefore I think is relevant to Solvency. I don't want to turn these hearings into an audit of the annual statement. That's really a function for the New York Department of Insurance, but to the extent that this is a major loss kind of impacting, I shouldn't quantify it, a $41 million impact here, I think it's sufficiently relevant. So you can proceed. Overruled, sorry, objection on relevancy, overruled. So would you turn to the absolute last page of 26, so that's page 47. Let me know when you're there. I'm there. Okay. So on the far left of that is, so that's a corporate structure of, and so all corporate parents and siblings of MVP health care, correct? That's correct. And over on the left, MVP health plan is listed, correct? Correct. And that's the entity that these rights pertain to, correct? Correct. And under MVP health plan, so as a corporate subsidiary or child, is Hudson Health Planning, correct? Correct. Okay. And so I'm assuming that's the Hudson Health Plan, Inc. is the company that the $41.597 million investment was in, correct? It's the same thing. That's correct. Okay. So let's turn to the 2022 annual statement. Which is exhibit five. Let's turn in particular to the last page of that, so page 49. Let me know when you're there. I'm there. What was the exhibit number, please? Exhibit 25. What's the page number again? Page number 49. Let me know when you're there, Gary. So over and that's again, that's a corporate structure of MVP health care, correct? Correct. And then over on the left again, it's listed MVP health planning, correct? Correct. And looking at that chart, so MVP health planning doesn't have any corporate children or if you want to call them subsidiaries, correct? Correct. Okay. And so Hudson Health Plan isn't on this chart, correct? That's correct. And that's because you mentioned earlier that it was dissolved, correct? It, what I, what I was, I think the witness can answer. I don't think that was the exact testimony, but go ahead. What I would say is I'm not sure, yeah, I'm not sure dissolved is the word that the Hudson Health Plan was, was closed down and its assets were transferred to MVP health plan. That is the extent of my knowledge. Okay. So would you just point me to the page in the 2022 annual statement, so that's exhibit 25, where the return on MVP's investment of $41.597 million in Hudson Health is reflected? I don't have the answer to that. I, that is out of my scope. Would that be the accounting team that has the answer in your opinion, Mr. Von Chris? Yes, the accounting team would have the answer as to this whole situation and the accounting of it. I am a little bit careful to call it an investment and where the return on that investment would be articulated if it was acquiring a company. But again, I am not an accountant and so I'm not intimately familiar with this and or the accounting that went into the numbers on the specific lines. So did you say, Chris, that you weren't sure if it's an investment, would be called an investment, correct? It's, I'm not sure. So the details of the write-in says investment. That is true, but I'm not sure the accounting that's going on here is an investment. It is an investment. I'm trying to say something else as opposed to a transferring of assets or something else like that and not a direct, we paid $41 million for this and what did we get out of it? Again, I'm not intimately familiar with how much Hudson Health plan cost to acquire and any of the details surrounding it. So I really can't give you any information on that. So I just want to be clear. When you say it is called an investment in the 2021 annual statement though, correct? I'm just going to object to this continued line of questioning. The witness has said he's exhausted his understanding and he's asking him to speculate. No, he questioned. I'm going to overrule the objection. He's clarifying a statement that I'm trying to clarify a statement Mr. Ponte have made about whether it's termed an investment on the annual statement. I just objection over. Do you want me to have said it again, Mr. Ponte? Yes, if you could repeat the question. Yeah, please. So in exhibit 26, which is the MVP 2021 annual statement on page two, item 1101, it reads investment in Hudson Health plan, correct? Correct. And then it says if you look across that line, that amounts to $41.597 million when some change. Correct. So switching topics for the last time, this is going to be the last question. And does Mr. Ponte at Chris, does MVP negotiate rates with hospitals regulated by the GMCB? I would say I would argue that. Well, I wouldn't argue. I would just say anything we talk about here. And I don't know where you're going with it. I mean, that question I can answer. That's literally the question. Last, last question. I'm not going to look into the issue, Chris. I think the issue is whether or not this should go into executive session or not hit response. And I think the witness is feeling like it should. So I would ask that we go into executive session unless you want to throw the question. We can wait till the end and I can or we can wait and I'll ask this question in executive session. I don't need to ask it now. So whenever that's convenient hearing officer partner. Yeah, I think I think the question calls for an answer that really should be safe for the executive session because it yeah. So the we will save it for them. So do you have any other questions for fair? No, just just to say thank you, Chris. And that's the end of my questions with the exception of the one that I'm reserving for executive section hearing officer Barbara. Thank you. So we're going to move now to board questions. And we're going to start with board member lunch. Thank you. Good morning, everyone. I just have a couple of questions. So the first question I had was related to the. Hold on. Let me find the exhibit. Sorry about that. It is exhibit 17. The three file testimony page 17. And Chris, let me know when you're there. And please feel free to call me Robin. 17171717171717171717171717171717171717171717171717171717171717171717171717171717171717171717. All right, I'm there. Great. So I wanted to ask you a little bit about your answer to question 34. Related to. MVP's plans for moving forward with fixed perspective payments. Could you elaborate a little bit about what you the direction that you believe the company will be going on going in in relationship to this topic? Yes, I'm wondering if this is confidential as if this should be executive session as well. Sir, I was thinking not. I wasn't specifically asking about specific negotiations that you may be currently engaging in, but I'm happy to save it for executive session if you need to get into negotiated negotiate confidential negotiations to answer it. I'm happy to answer on a broader sense. If can you just restate the question and I can I can answer without going into detail. Sure, that confidential detail, I should say. Yeah, and I can follow up an executive session if I need more information. So I'm interested in learning more about the direction that the company is going in terms of capitation and fixed perspective payments, both for the primary care capitation model referred to in your answer as well as more broadly with other types of providers. Yeah, so so I think and I know Robin, I'm on and I know you are as well the the whole global hospital budget team there and I think MVP and I agree with this is is trying to distance ourselves or trying to think of a better way to do things than your traditional fee for service. So when that comes to, you know, like like global hospital budgets, I mean, you could argue is a is a huge step in in that direction, right? That's a far step, but some things that are less monumental such as you noted a PCP capitation model that we, you know, we do have in some places in in New York where it's very new. It's a very new model, especially in our commercial space, but we are hoping to continue to push that forward and rethink the way that care is paid for to align all the behavior in the right way, right? Like we should be incentivizing high quality care, getting rid of low value care, doing all those things. And I think we all on this call would agree fee for service has has been the standard for a long time and probably doesn't achieve all the things that we think we should achieve. So MVP is definitely committed to fixed perspective payment models and working to understand what those are and how those work now in terms of getting things done. Of course, you know, it takes two to tango and there are there are factors at play there, but we continue to develop and we continue to have discussions both internally and externally as far as what's the appropriate way to get off of this. I go to the doctor and I get paid for model that's existed for as long as I've been doing it. Thank you and I may have some more specific questions. I'll ask you, but I'll save them for executive session because I think they are details related to the specificity of the payment model, which I assume is proprietary. Yep. Okay, so let me direct your attention to exhibit 12, page two. Let me know when you've arrived. Okay. So I want to ask you a couple of questions about the Act 131, Vermont Act 131 and that your work with your pharmacy benefit manager related to that Act. So it's your understanding that any adjustments related to this Act would be included in your pharmacy trend request? Yes. So what I mean by that is if the PBM, so our pharmacy trend modeling is done with, you know, through the PBM and if the PBM, because the PBM has intimate knowledge that MVP otherwise wouldn't, drugs coming down the pipeline, cost changes, all those things that, you know, is part of the value that a PBM can provide to a, especially a regional smaller insurer, if they felt that this Act was going to do something material to utilization or cost or something within the Vermont landscape, they would have made those adjustments in their model that then flow through to our trends. So I think that's what we're trying to articulate now. As far as if they did or not, I don't. Okay. And could you describe for me how the pharmacy rebates are accounted for in your filing? Are they an offset included in your trend or is that a different line item? It's both, I guess. So there's, we have the trend, which is on an allowed basis, regardless, it's gross of rebates, doesn't take into account rebates at all. And then we do have a separate line item, which is takes into account the rebates that we've, the rebates that we received in the experience period to offset the expense and then our projection of that going forward. So we do project rebates into the offset, the projection of the claim expense. So there's kind of two trends you could calculate from our two pharmacy trends you could calculate. You could calculate a net of rebates and a in a gross of rebates trend. But it's not, if our filing says pharmacy trend is 8%, it is not in that number of rebates are calculated separately. Okay. And can you remind me where in the filing that's contained? And if you need to take a minute to look and answer that question later after a break, after lunch or something, that's fine. Yeah, I, if you just give me a minute, it would be in the exhibit one. It's just a matter of where an exhibit one. Yes. And I apologize. The, the attachments to exhibit one are so small, I can't actually really read all of the numbers very easily. So I've been trying to look for it in the electronic version. But if you could direct my attention, that would be Yeah. So exhibit one page 148.