 I see all board members are here and I know the reporter is here and it is 8.30 in the morning so we are prompt here at the Green Mountain Care Board so I want to welcome everybody. Good morning and my name is Jessica Holmes I'm currently serving as the interim chair of the Green Mountain Care Board. Our first item on our agenda today is the executive directors report so I will turn it over to Susan Barrett. Thank you Madam Chair. This morning I want to share with folks in the meeting and in the public about ways you can save money on your health insurance premium. So what you need to know is if you buy your plans as an individual or a family through Vermont Health Connect that you are eligible for expanded and the federal government recently passed the Inflation Reduction Act and they've extended the subsidies which come in a form of a tax credit for those folks who are buying their insurance again individuals and families through Vermont Health Connect. So for example if you're making up to $105,000 a year and you're a single person you are eligible for subsidies this year right now even if you've tried before and you were not eligible for subsidies previously we're encouraging folks to try again because again the federal government has expanded these subsidies. Next year that same single person the income threshold goes up to $118,000 and for a family this year 2022 the income threshold is $297,000 and then next year it goes up to $333,000 for a family. So far this year nearly 23,000 people have taken advantage of the subsidies and for another example a single person making $60,000 a year could save $324 a month or a family making $100,000 a year could save almost $1,400 a month. A very important point if you're buying your insurance through Blue Cross Blue Shield or MVP and again it's the individual and family plans through the exchange you need to buy these plans through Vermont Health Connect and all of this information on how you do this is available on our website the Green Mountain Care Board website backslash tax credits that will link you to the Vermont Health Connect website and please please please check that out and tell your friends if you know anyone who could be eligible to check out how they can save money on on their premiums. The board is obviously focused on the triple aim and we want to make sure that folks have access to high quality care and to make sure that's affordable and this is one of the ways we are spreading the word so I also want to tell folks to check out our calendar our September press release was just posted recently and so you can see future deliberations and other meetings will be holding throughout the month of September so with that I will turn it back to you Madam Chair thank you for the opportunity for spreading some good news. Thank you so much Susan and we'll be continuing to spread that news throughout the entire enrollment period and I know the health care advocate is doing the same so hopefully that word does get out. We don't have any minutes to approve so I'm going to move on to our next agenda item which is our hospital budget deliberations which is a continuation of Wednesday's meeting again this is day two of our annual cycle of hospital budget deliberations as a reminder our task is to review and then approve or modify the fiscal year 23 budgets for our 14 community hospitals this past Wednesday we voted on budgets for Southwestern Northwestern Copley Gifford and Mount escutney so today we're going to hear a staff analysis for Grace Cottage Rutland NVRH and the three UVM health network hospitals that operate in Vermont that would be Porter CVMC and UVM MC so if the board is comfortable today we may vote on any of those six hospitals budgets today. Brattleboro Springfield and North country will be reviewed next Wednesday so board members our first hospital to review will be Grace if the board feels comfortable we might want to vote on Grace right away since that we had some review of Grace Cottage on Wednesday's meeting my suggestion is that after that we let Sarah run through her analysis of Rutland NVRH and the three UVM health network hospitals without attempting to vote and then we take a 10 minute brief recess come back and see if the board is comfortable voting on Rutland NVRH and or Porter then we take a longer recess for digestion of the CVMC and UVM material and also maybe digestion of lunch and we can come back this afternoon and discuss any of the hospitals we didn't vote on this morning and then discuss at greater length the CVMC and UVM budgets does that make sense to board members as a cadence for the day seeing nodding of heads great okay wonderful and again like last meeting if you have board members if you have clarifying questions please just raise your hand during Sarah's presentation so she can address them as she's going I think that clarity will help so at this point I'd like to turn it over to Sarah Limburg our director of health system finance and her team Sarah floor is yours good morning how's the screen sharing look okay we're able to see these were finalized moments ago and are currently being posted on our website by Cara so thank you to all that's someone I woefully neglected to publicly thank yesterday Cara has been a critical part of the team and will be making a transition soon which is bittersweet so so here we are it's definitely September this morning we are on our second day of deliberations we are hoping to wrap things up next week on September 7th but we also have the 12th and 14th to meet our obligations to issue decisions by September 15th or make decisions issued by October 1st in writing so we're going to continue where we left off so just to reorient everyone to what we did this year which is a departure I think from other years is we took the materials from the guidance as written and came up with a way to frame our decision or recommendations for your decisions in a decision tree because we love the word decision but the first prong of that tree was to determine whether or not the hospitals were within the guidance so it was a two-year growth rate of 8.6 percent with no expectations that it would necessarily be split evenly but that was the guidance for the two years and then we also voted on a new approach where due to so much of the uncertainty supporting these 22 budgets that we would apply that test to the 22 projections to 23 budget so that we could have a better sense of where things actually would be growing so assuming that those were true next week tested a set of assumptions related to their workforce investments and expenses the utilization assumptions as well as the other inflationary growth assumptions to make sure they were within recommended benchmarks and we also take a look at the charge request and see if that seems supported in the submission and is supporting what we consider to be an appropriate operating margin so or an operating margin that doesn't require you know we don't how does that relate to the operating margin that was suggested as another reminder we upon the recommendations from the state economists car and cavit we saw that the recommended measures of inflation probably most conceptually related to inflation for a hospital budget process would be personal consumption expenditures and healthcare and the producer price index by industry for general medical and surgical hospitals there was a lot to digest in that report this is by no means the final say but for this very important task before us under a very aggressive timeline this was what we thought was the most reasonable things and we can see that the approved gmcb changes in charge so that's the amount the charge master is allowed to grow which may or may not be associated with the net increase in revenue so that is the payer adjustment so that price overall price charge master increase has been approved by the green mountain care board and this is where that's triggered out related to inflation over the years and so there are times where the gmcb decision was higher than these lines then there's a period where it's very close and sometimes in between these lines and then in fiscal year 21 it again seemed to climb above that line we also saw that growth in the medical healthcare portion of some of these measures also seems lagged maybe due to deferral of care but that's an area of future investigation so any questions about kind of the review on our background before we dig back in okay sounds good so then last thing to review is that each of these decisions with it comes a set of standard budget conditions so we would approve the official growth rate and what the estimated total npr fpp that decision is decide on an overall charge increase we have a chance to look at all the data we need and check in as needed about the results as they're coming in and that we want them to come to us if there's any material changes to their budgets we get to dictate the format manner that we get the information we need and we want those audited financial statements we want to ensure continued participation in sustainability planning and then yeah just basically other boilerplate here but the there is notice and opportunity to be heard amendment provisions make sure we get this electronically and it doesn't constrain future decisions so that is the standard set of goods that come with these conditions so to review grace cottage this was the kind of the final hospital that we had talked about last week so their change in their overall budget their npr and fpp i should say was 15% from their fiscal year 22 budget however that drops to 6.1% when they look at where they're expecting 22 to land versus the 23 budget so seem like a more reasonable growth rate certainly within the 8.6 their compensation growth was within our benchmark of less than or equal to 13.8% there are other inflationary growth was quite low 0.7% so that was there we needed to investigate the utilization as the exhibit we were using for other payers was not available but their overall commercial rate was 4.7% with an effect to a negative 3.7 operating margin which was the lowest among Vermont regulated hospitals so their charge to inflationary growth has looked a bit different than the rest of the statewide trends and here we saw that the utilization assumptions for physician office visits was the main driver of their utilization changes this is a 13% increase which is what we kind of wanted to make sure we looked at and so because of the small numbers there's just a ton of volatility in their physician office visits over time so that it's plus or minus 10% basically percent change over time so that's again mostly a small numbers thing I'm sorry 9.0% is the standard deviation so it's a little hard the other reason I don't want to treat these numbers as gospel is that it looks like there's definitely some deviations in the utilization numbers that we have an adaptive for this versus what we've seen reported for other exhibits so I think that within a hospital over time I'm a little bit comfortable looking at that but in terms of comparing against hospitals I want more information about how those why that's all different I'm you know just don't want to I want to be based in fact here so so that's why we thought the 13% seen within you know historical trends haven't seen major problems and you know their budgeting assumptions over time you know they have been pretty close in that way consistent I should say so yeah so we were moving that this budget were to be approved as submitted with a 15% charge increase and an NPR FPP I'm sorry that's the pardon me approve a 15% increase in their budget NPR with a 5% change to the overall charge so that's the additional material we had to review for Grace Cottage so I was going to take a pause here Sarah thank you for that because this was a repeat from Wednesday to see if board members might be ready to make a motion on this particular budget I think then we'll go through the rest of the presentation without those votes just to allow people to digest board members to digest but since this was something we already went through Wednesday and this was a repeat I thought perhaps there might be some preparedness for a motion throw that out there or have questions additional questions for Sarah at this time Tom tell them if I can figure out how to get my hand down so one thing that's popped up since we went through the Grace material last time is this letter from the AHS secretary talking about additional funds that might be coming or are coming to the table here and one of them is a one-time 23.7 million dollar dish and so I was going through the you know our material just to see which hospitals got dish because the letter said for those that got dish and I got down to the end of the list and there were only 13 hospitals on my list and I went back through and found that Grace does not have any dish payment and I'm not quite sure I understand why but I'm just wondering if anyone has talked to them about this effort on the part of the state or if they had any went at the table when these issues were being discussed I'm just worried that you know on the one hand we have the biggest hospitals accruing a lot of money and the smallest hospital getting none and because they are obviously a medical school and for some reason they're they're not a participant in dish and that I don't understand and I kind of want to make sure that that Grace knows that this is going on so that they they can say hey look it's not a big deal to us we're not a dish hospital or whatever yeah I don't mean to interrupt I just was reading my notes on this and it says that Grace Cottage opted out of the dish in fiscal year 22 so I don't know the details behind that decision but that's the reason they're not getting any additional it's because they opted out of the program or the the mechanism for the year right but but has anyone talked to them in the context of now what's going on now um I I have not because I mean uh yeah I guess I don't know how that would be actionable from where we're sitting and um I know what the the impact their fiscal 22 budget is which is zero so that that was kind of what I needed to digest for now um but yeah I think that as part of all our conversations like thinking about dish and its use is going to be a major component of any kind of 167 work if I may interrupt Sarah I see Mike Del Treco from the Vermont Hospital Association with his hand raised so I wonder if he might offer some clarity here I will allow any clarity that you have on this particular topic sure um board member Pelham thank you for your questions the the the dish rules are pretty complex and and there is um there are certain requirements to be eligible for dish payment and that's the opt-out thing that Sarah was talking about I personally have reached out to Grace Cottage they are aware of this and I have also had discussions with AHS to see if there's any support for the for the hospitals that you mentioned that are not receiving a dish payment to see if there's any way to have um uh some support for fiscal year 22 losses hopefully that adds some um clarity or information to your question thank you Mike it it does I just want to make sure that that that they're aware of all this and from your representation they're well aware of it uh it's just it's unfolding so fast that little little Grace Cottage could kind of get lost in the shuffle down there and I just wanted to make sure that wasn't going to happen thank you Tom thank you I see Tom Walsh's hand also raised so I'm just a little bit more um background with dish it stands for disproportionate share hospital and it's um Medicare calculation it is complicated and I'm no expert but the disproportionate amount means that from Medicare's standpoint the hospital has a dish a disproportionate amount of people receiving Medicaid Medicare and living below the poverty line so it's disproportionate to what's expected for a similar hospital in a similar region so that might help um with the definition I hope it does thank you Tom I'm just not sure if you all can both lower your hand so I know that you're thank you Tom tell him do you still have another question then for Sarah well you're on mute um no I I don't I'm I'm happy that uh you know from what Michael said is that um you know uh that Grace Cottage is engaged in conversation um I just worry that you know they are such a small entity that when you've got UVM and all the big wigs kind of talking about you know all these opportunities uh with money that somehow they've recently found um that uh that Grace Cottage uh didn't get lost in the shuffle and um I'm under the impression that that that has not happened thank you for that um so Tom if you could lower your hand that will help me know when you have another question are there any other board members that have questions for Sarah on Grace Cottage and I'm assuming that Tom's still trying to lower his hand is there any board member that would want to make a motion about Grace Cottage's budget I will move we approve Grace Cottage's budget as submitted with a 15% increase from fiscal year 22 to 23 for budgeted NPR FPP a 5% increase to overall charges and subject to the standard conditions as presented to the board do I have a second on that second second by Tom Walsh okay is there any further discussion on the motion on the floor and I do see Tom Pelham your hand is raised it's not raised but I think I think I can actually um lower it Tom let me try there we go excellent thank you Robin is there any discussion on this motion the board no okay I will open it up for public comment at this time the motion would be to approve Grace Cottage hospital's budget as submitted is there any public comment at this time okay I'm not seeing any hands raised by anybody in the public so at this point all those in favor of approving Grace Cottage's budget as submitted please say aye aye any opposed hearing no opposition so let the record show that it was unanimous in favor of approving Grace Cottage's budget as submitted okay thank you for that I'm going to turn it back over to you Sarah to go through and as I suggested I think we go through let Sarah run through all slides and then we can take a brief recess and see if we come back and are ready to vote on any of the first few hospitals that uh Sarah run through at this point go ahead Sarah sure uh so uh North Eastern Vermont Regional Hospital uh requested a budget to budget increase um of 13 percent in their NPR slash FPP which if you look at the projection to the budget it's 7.6 with a charge increase of 10.7 percent however the estimated commercial effective rate was a little bit below that at 10.5 percent which they are using to support a 0.2 operating margin that's quite low relatively speaking uh and their NPR growth met that threshold their compensation growth was a little bit above median and their inflationary growth was also quite low so that tells us there's probably some stuff with travelers maybe that we're not disentangling um so the utilization assumption actually changed uh there was a I didn't pick up an error in the spreadsheet so the utilization increases actually seven percent instead of 14.7 percent so right there that's a major shift that's important to note uh we will look at their um charge approval versus the inflationary growth so somewhat similar pattern uh to what was seen statewide except that that last uh segment of the line dips down where statewide it actually dips up quite a bit so um oh I'm sorry I mean that's the 22 uh yeah this looks like the access might be a little bit uh that should be going down for the um 23 so I'll apologize for that we'll get that fixed um so again we corrected the error and the appendix uh they attribute their growth to um increased acuity of the inpatient stays so uh people are still having larger or longer average lengths of stay and I found that they also attributed increases in fusion drugs and imaging was a major increase for that growth they also have an issue that's a little bit for us to cleanly adjust for in that they did have a provider transfer for a podiatrist and so because it was due to retirement it's hard to kind of level that out um there was a someone they didn't work group for which is why they had the provider come in so that's adding 490 to their um NPR in fiscal year 23 but it's not clean to add to fiscal year 22 so that's a little bit funky there so based on these attributes um we didn't see um evidence to recommend a change based on these findings that seemed like it was justified um they also do a pretty good job of um their forecasting historically for utilization so um so we were going to recommend for discussion later but uh the recommendation would be to approve this one as submitted as well all right any questions comments concerns about that before we move on to the next hospital okay so moving on to Rutland Regional Medical Center uh they were one of the hospitals that uh came in with a mid-year rate request uh that was denied for fiscal year 22 so they were um well aware um of the budgetary changes they were experiencing so their fiscal year 22 budget ended up being quite conservative uh compared to what actually has happened so far in the fiscal year um so again that's really evident when we compare their budget to budget growth of 16.1 percent in NPR to the projected values for 22 to the 23 budget which is 4.8 um about half of the request uh in the guidance uh and they have um a charge request of 17.8 however it turned out that the effective rate or request um was quite was quite a bit lower um 10.8 was what they expected the effective commercial rate to be so it's important to know that charge number is is higher than the likely effect on commercial repayers uh so the growth again once you adjust for the projection is 4.8 percent they're um given the uh quite um the serious investment they've made in their workforce the compensation growth growth was within um the recommended guidelines at 1.2 percent and their other inflationary growth at 0.3 so that is um showing some some uh you know real discipline in trying to um keep those numbers within benchmarks utilization was 8.2 percent that is budget to budget so a lot of that is just um being conservative in the 22 budgeting which will walk through in a moment um and so the 10.8 rate supports a 2.6 operating margin um not sure how to interpret that um for the board so just putting it as something to investigate here so when we look at their relationship of what the GMCB has decided compared to um what inflation has been we can see that uh there they have a very low dip in fiscal year 17 um that charge was approved as submitted at negative uh 5.1 percent uh I didn't get a chance to go back and check the record often when we see something like that it's uh related to an enforcement action so I didn't get a chance to check um that but uh that said um dipping that low um is likely to have an impact for years to come so um you know it's hard to say what the longer term effects of that is without some deeper analysis which I have uh uh haven't had a chance to dig into as much as I'd like um but uh I do feel very confident that in terms of utilization hey Sarah can I just interrupt you for a minute um Rutland actually had come in with themselves with a rate cut because their utilization had been high so they self-adjusted so I thought I'd just chime in with that historical explanation great so yeah so that's that's thank you so whoo saved myself a lot of legal research which I'm not great at um and uh so that's important that these percent changes um we don't have reflected here of what so you know um if it's already too high maybe a little percent or too high is not the rate of from that you know if it's relatively higher or relatively lower those you know those percentages can mean different things so just percent change is always tricky that way so thank you um and so uh yeah so again the estimates in the fiscal year 22 budget were quite conservative um so the the gross patient revenue so here we're talking about gross revenue because that's a better way to get at utilization changes um because it evens out the payer differential so that's why we're talking about the change in gross so that was nine percent higher than they budgeted so far in fiscal year 22 which is a big delta from what they historically would be um tracking um so when you look at that where we're starting from the utilization uh currently to what the 23 budget is it's actually a decrease of 0.8 percent so expecting some of that kind of pent up stuff to slow down so um actually seems quite reasonable when you kind of put it in that context uh and you know again we see long-term trends in in their accuracy you know they've been within two percent of their budget for you know past 10 years so it's just not easy to do um so we did not think that utilization assumptions warranted a recommended change uh to the budget as submitted we also heard in their testimony as well as their narrative um that they are having some significant financial losses uh they were projecting a loss of 25 million dollars in the current fiscal year and when they presented to you uh which is includes a 12 million dollar operating loss uh they also outlined how some of these actually breach their debt covenants which might bring greater costs in the system if those are breached and not able to be rectified with their lenders um and then they also have taken very seriously trying to measure productivity improvements and they're using you know the pre-pandemic 2019 as their baseline and have estimated that they've already you know gained 17 percent based on those measures uh they also have a notable the plummet in their days cash on hand um between their fiscal year 21 actuals and the projection for fiscal year 22 um the rise that they're budgeting or trying to hit for 23 feels um you know achievable and and and responsible um compared to what we're seeing across the system um and then we see that those margins so the total margin is projected to be negative eight percent um and the operating margin at negative 3.8 percent so they're trying to get those back to um about two and a half percent in their budget a little bit north of that for each but in line so that says there's you know not a lot expected that's not related to operations uh they they also said in their testimony that they're they expected the impact of the final IPS rule to um increase Medicare revenue by about 600 000 dollars if you were to apply that um based on one percent of the commercial rate it would go down by half a percentage point uh we also were um able to see the estimated dish payments for fiscal year 23 and notice that there was a tenth of a percent delta there so um what they are getting is uh less than what that was in their budget by that so that's why um if you take those two factors into account for what we know that the net uh rate effect would be 0.4 percentage points so those are kind of the things we could find that tied to the submission that we might consider so uh we would recommend that the budget be approved as a I'm sorry the NPR FPP to be approved as submitted and then we wanted to provide a few options these this is not meant to be um an exhaustive list just a few kind of concepts to think about so if you could approve the the NPR FPP request as submitted and you could also approve the charge request as submitted again it was 17.8 percent charge increase which is effective commercial increase estimated to be 10.7 percent you could also modify within that range either just add a tenth of a percent for the shortage of dish and fiscal year 23 budget or just deduct the ips which would take it down to 17.3 percent which would be a range of 10.2 to 10.8 in that effective commercial rate so pretty pretty minor but you know that's the what was clear in the the record as we saw it any questions or clarifying uh comments uh for Rutland before oh yes Robin um so in thinking about the options if we were to adjust the charge do you have and it's totally fine for you to say no a thought on um keeping the NPR as submitted even if the charge charges decrease given the low that the utilization assumption which is an actual decrease yeah so we're saying we think that their their patient revenue makes sense but if you want to adjust in their commercial charge or related to the commercial charge how much of that would be coming from that payer now it does have impacts on other payers so it's not necessarily a one-to-one adjustment here um so you know yeah but that's the idea is that it's just trying to shift where that uh revenue would come from thank you yes board member Pelham i'm gonna learn to put my hand down sometime today but uh at least i know how to get it up which is uh problematic for you probably but um so how how does this new dish endeavor that we were told about um the other day factor into um your numbers here i i think the dish number you're talking about is what was already in in play um and not the additional dish money because uh you know Rutland's Rutland you know Rutland's dish is 3.4 million dollars out of the current um 22 million so my guess is if they're going to do a one time at 23.7 Rutland's amount uh would be another 3.4 million that isn't in play in this discussion um and so i'm wondering what your thoughts are about that yeah um so i didn't see any portion of their 23 ask specifically tied to their 22 losses so i think that that is helping to mitigate the significant loss that they're going to take but i don't think it would be necessarily appropriate to adjust their 23 rate since it's not a factor in the request so is that going to be your position as we go through all these hospitals so not that's that's not true for every hospital some include a term for those fiscal year 22 losses so i think that's a different conversation okay um and one other question i had is just you know as as one of the things that we in past endeavors budget hospital budget endeavors we talked a lot about payer mix and as we go through this um that seems to have been dismissed diminished as a factor and so i'm i'm looking at Rutland and in terms of uh the 22 commercial um system-wide that was in the documents they submitted submitted to us that are not adaptive Rutland was in at 7.8 percent of um the uh commercial amount and now um with their request for 2023 they will move up to 9.1 percent and i i those those ships are small but they're powerful um and and especially because there's real money uh in in commercial i'm just wondering if you have any any uh uh kind of insight as to the consequences of ships like that because it's happening with some other big big hospitals and i'm just wondering where where it takes us down the road yeah i think those are all really fair questions and one of the things on the top of my list is thinking about how we can get our decisions to be more um related to revenue decisions per you know so this change in charge as we showed last uh last time is is very poorly correlated with the actual change in revenue and so like and so we're kind of like trying to change the weather by moving the weather vane you know like and it's just i think we have to really think about what what the goals of what we think we need to do about those pair differentials and how we can think about them in a budgetary context because i do think the other complexity is that um you know revenue doesn't necessarily follow a patient on a one-to-one basis there's some kind of cash flow and you know estimation so we need to think about the most appropriate way to measure these things and i don't know if it's yeah i think the causation piece is a different thing that might affect that but uh it's an important thing to note i don't know that the the budget process as we've have it currently set up is going to be able to address some of those really important concerns yeah and it and yeah like i uh i think that uh we'll see some some graphs later that look at the ratio of net um revenue to the gross revenue and you'll see how kind of that tool has drifted over time um it's uh yeah and i think that uh at the end of the day you're talking about the impact to the rate payer which is another prong of the gmcb mission and the more we can kind of think about aligning goals across those processes that are appropriate to the lever um the better off will be as a regulator last question is my hand down all right all right i put it down for you tom i'll just put it down for i did i thought i did i hit something that said lower okay um any other ruttland uh questions comments concerns so uh we're gonna do a little shift here so we're gonna a very kind of liminal hospital here because uh porter medical center is part of the uvm health network uh filing so they use kind of a common methodology across the three hospitals however the decision tree sugared out a little bit different for porter than the other two um hospitals in that network which is cvmc and the university of vermont medical center and so uh we want to take porter first because they are the last hospital whose projection in 22 to their 23 budget change in npr was within the guidance at 4.4 percent it if you look at budget to budget it was 10.9 percent so if we look at their summary of test results we'll see again their growth from projection to budget was within the guidance their compensation growth was a little bit above median at 8.9 percent but their other inflationary growth was quite low at 0.6 percent uh there was also a mathematical need to get those tables easier to use but uh but it was including a row it shouldn't have so their actual utilization assumption was 6.8 percent um and we wanted to be clear similar to gifford that this hospital has a relationship with its nursing home helen porter and so it helps to support that organization so if you take into account helen porter the hospital's margin drops to 3.2 percent so that 5.7 is also supporting helen porter so we'll take a look at some of those factors so for all of the uvm health network hospitals another difference is that they both provide the change in charge which again is on that charge master and may or may not be very well associated with the actual change in commercial revenue so they also present what they call the commercial effective rate so what they're actually expecting to do in their commercial negotiations or budgeting to do I should say so the top one is the same as we've seen for every hospital that's the change in charge the bottom one is the change in that commercial effective rate for the years in which it was filed so it wasn't always filed they started filing it that way for fiscal year 17 so you can see that the trends for those charges and commercial effective rates can look quite different and that it looked like it was above the estimated inflation in fiscal year 17 but has been pretty close to inflation since for the commercial effective rate so when we look at the net patient revenue instead of the gross change in revenue utilization is a 3.6 percent change from budget to budget so they report the components of their utilization change in gross patient revenue this is in the reconciliation table where we look at the net patient revenue so what are they actually collecting so if you look at the 22 budget and compare it to the 23 budget it's a 3.6 percent change but again here we see that there's likely some conservatism in the 22 budgets at work because if we look at the increase from their 22 projections to their 23 budget it's a 0.7 percent increase which seems reasonable in line with other estimates most of the increases are associated with operating room procedures which they are budgeting to return to 2021 levels you can see that they took a dip in fiscal year 22 so seems like a relatively you don't make sense for the budgeting purposes so we didn't see any evidence that their utilization assumptions were not supported in their submission so we didn't recommend a change based on utilization assumptions so for each UVM health network hospital they provided this table we'll spend just a little time to talk about it so the fiscal year 22 cost inflation is you know not the way we've been talking about inflation you know I would you know the way I would say this is expense increases or expense changes so these are the so some of these costs are related to more care some of these costs are related to inflation on things costing more you know so that there's other factors in here than just you know inflation as we've been talking about it through the economist lens so they include a term for what they are essentially losing in fiscal year 22 which for Porter is 6.8 million dollars however you will notice that their 23 budget does not include any adjustment for that they do not put that into their rate at all for the 23 request so when they look at the the cost inflation they're expecting in their budget on they're looking for 3.9 million or 4.0 million dollars with rounding which they put into a nine month commercial rate year for an 11.45 percent increase now you'll see that the total cost inflation is 5.6 million so they've deducted some things that they are taking out and some of these still involve some risk so for instance you'll notice there's an aco rate increase so they have built in their budget a certain expectation of their performance in the aco model that's not something that's certain so the things that they've deducted out are also you know some of them are at risk so these are not for sure things so I just want to be clear that it's not like they've been able to book all of this reduction so these are you might consider cost savings or you know that's the way some other hospitals might talk about those kind of adjustments so there's risk there they don't have for sure that you know 1.6 billion um yeah and so then so for Porter the the total and the rate matches just fiscal year 23 so fiscal year 22 is is a separate deal so for all these reasons we recommend that this one would also be approved as submitted we think there's sufficient evidence in the record to support their increase but that is and again to note that this would be the last hospital we're discussing whose NPR request came within guidance you know really any Porter Medical Center questions before we move on to our next phase great all right so here we go to again those who's 22 projections to 23 budgets NPR FPP growth was in excess of 8.6 percent so there were one two three four five hospitals three of which are actually under the current budget so that's kind of makes the change greater uh we're going to try to tackle the other two network hospitals today in central Vermont in the University of Vermont and look at the last three hospitals when we next meet so again so their budget to projection is three percent under so they're three percent under their fiscal 22 budget they are asking for a budget to budget increase of 7.3 percent and in overall charge a projection to budget change of 10.7 percent their long-term growth is pretty in line with the all-pair model goals as we discussed last week that is really measuring a quite a different thing than hospital budgets so staff is recommending more investigation into their relationship before we put more attention on that specific factor and then here again the change in charge is 10 percent but the effective commercial rate request is 14.52 percent that's close that's above the median you know close to the closer to the max they are budgeting a one percent operating margin however with that rate their utilization assumptions included a decrease of one percent seemed reasonable and supported in the submission their other inflationary growth was also projected to fall and their compensation growth was below the median so when we look at their decision so again as a network hospital we have that charge request which is not so well associated with commercial revenue and then the effective charge that was approved by the Green Mountain Care Board so here we'll see that again that 18 effective commercial rate was approved as submitted it was submitted as 0.2 tenth of a percent and we see that this trend in the commercial effective rate from 19 to 21 has been above the estimated inflation rate part of that may be residual from the very low ask in fiscal year 18 so we'll just spend a minute here to talk about gross patient revenue versus net patient revenue just to be clear when i'm using npr on this slide it's not the same npr slash fpp that you're making a decision on the only adjustment i've made is for deductions based on contracts so there's you know the the the build amount and then what the actual revenue is so that's what i mean here when i'm saying npr and so the gross patient revenue is going to be those build amounts so they're the same for everyone for the same service whether they have they're paying out of pocket they've got medicare they've got medicaid that gross amount is going to be the same if every patient got the exact same service in the exact same amount we would see that be even across payers for gross values but they they aren't and that's because they're doing different intensity stuff or they're doing different amounts of stuff so that's why when we talk about adjusting values for a population that's the type of thing you're trying to get apples to apples and then npr is when the payment variation comes in so we've taken off the contractual deductions to see what proportion of that gross patient revenue is actually hitting their net patient revenue and so you will see since we have data back to 2002 fairly reliably we see that those used to be a lot more tightly associated and they've drifted more and more over time in the case of central vermont medical center the gross patient revenue has increased more than the net patient revenue in according to their budgetary assumptions they're expecting you know 38 percent of their gross patient revenue to actually be collected uh another important note is that when we move to fpp money comes off this chart that's a different payment mechanism so you know there is um 56 million dollars in their 23 budget that's just been taken off this chart and it's being paid for in a different way so that's another kind of trade-off we have when we think about moving to these fixed payments is we get our trends start to deviate and so then this is where we get into how things look different by the type of payer so again if these patients got the same amount of stuff and got the same stuff done all those bars would theoretically be equal so for the um the top of the bar we're comparing those differences so what's different in how many people came to that hospital what's different in how much was done to them how sick they were stuff like that and then how much of that bar is filled up is the proportion that they're collecting and so for the fiscal year 23 budgets um 15 percent of the gross patient revenue is expected to be collected for Medicaid 63 percent for commercial and 21 percent for Medicare so that's um the pressure that we talk about when we talk about this differences in payment now why that is I think is a separate conversation but this is what it is so I think that this takes a little time to digest so I'm going to stop talking for a minute if I could jump in with a quick question or comment um just two two um and I obviously this is not to answer today to your just last point it seems like something happened with their Medicare reimbursement between 17 and 18 so I think perhaps after we're finished with this process we could have a chat with CVMC to see if we can understand that so that's going to be fixed perspective payment coming off this chart got it okay yeah that makes sense thank you yeah no glad I could answer it hey back seas you got me earlier so Sarah how does um the fixed perspective payment for Medicaid fit into this also off the chart yep so if they off the chart yeah so but there's not as much deviation there as as there was with Medicare Medicare drop from what 44 percent to the medic yeah to 29 and I don't see a a cliff on the Medicaid side yeah I'm looking at the numbers here well I think part of it is um we have to remember that really only about half a Medicaid spending is in the terms of the all-payer model fixed perspective payments and not all of those payments and it's also just you know fewer dollars in general um but yeah yeah I worry sometimes that uh we're getting so uh disaggregated uh and how we look at stuff that it's you know it's becoming a force that's impenetrable um just just a comment this is uh uh this is a lot of moving parts here and I think even for the Jeff cars and Tom Kivets of the world you know it's hard to follow and uh I'm sitting here thinking about it's hard to follow and I'm just wondering how an average citizen you know who uh so I just a word of caution that at some point this gets so complex maybe it's accurate but it's so complex that people can't understand it it's a tough balancing act because I yeah I definitely um I'm doing my best to make it as accessible as I know how but it's an area it's an opportunity for improvement I'll be on my next performance review I do think I think this is really helpful I think that we need to figure out how to incorporate fixed perspective payment and you know when it really took off so we can have an apples to apples comparison over time it's just you know even just noting um the proportion of revenue that came from fixed perspective payment over time or something like that so that uh it's clear but this is really helpful I appreciate it thank you okay um this is Tom Walsh before you before you go thanks um I also think you mentioned this ahead of time and you're exactly right that the discussion about causation does a change in one of these bars make the other change there's common misconceptions about that and there are easy wrong assumptions about it that we should discuss further in the future all right um like I said I know it's a lot to digest and you probably have had very little time with it so um yeah and then that tension between keeping it kind of understandable and actionable is one I'll continue working on um so these are the same metrics we had looked at for Rutland so um similarly we see um depleting cash on hand um this this has kind of been declining more steadily for since fiscal year 20 in the case of CVMC but staying constant between the 22 projection in their budget at um you know between 80 81 and 82 days which is not not a number that feels comfortable I think for most people uh and then if you look at their total and operating margin that big bounce in 9.7 is going to be related to um you know some of the COVID stuff um but the operating margin um has been negative uh for the past three fiscal years projected to be negative again including inclusive and so um the ask is to try to get their operating margin up to one percent um and so just want to take into account their mid-year request in in terms of thinking this through so we've kind of got two sets of all ways to look at that so each row on that is a kind of budget cycle or a revenue portion snapshot so there's their approved budget originally in for fiscal year 22 the mid-year approved budget for fiscal year 22 where their current projection was in their 23 budget and what the 23 budget actually is so for their gross patient revenue the original budget um so it's an 11 growth from their original budget um 8.9 growth from their mid-year approved budget and a 12.2 percent growth from projection to budget but if you look at the NPR that drops to a 10.7 percent increase as we discussed um which uh you know they've actually been pretty close uh relatively speaking to their original budget on the NPR uh we do expect utilization uh of 2.1 percent from the projection to the budget and so I don't think we talked about that portion of it earlier so that's going to explain some of the the increase um and then uh here so here this is uh that same chart that we saw includes the budget risk but the difference here is that um 4 4.1 I guess that was in Europe when I wrote that 4.1 million dollars of fiscal year 22 losses are included in the 23 rate um so that uh if you add the 8.3 estimated um expense increase for fiscal year 23 to that 4.1 the overall component in their budget is 12.4 percent which is a commercial effective ask of 14.15 percent so because they did include these fiscal year 22 losses in their budget it felt responsible and appropriate of us to include the additional dish payment that they got for fiscal year 22 which has a rate effect of 1.59 percent reducing the fiscal year 22 cost inflation to 2.4 million or a 2.35 percent request um so that would basically change the overall request from 14.52 down to 12.93 which is a proportionately 11 percent reduction uh here though we pause for just a note that you know to the staff's knowledge this would be the first time like a previous year's fiscal year loss would be included in a future year rate so I think that's just an important thing to consider in this deliberation uh just uh you know it unprecedented is kind of the buzz word and I know this is one of those uh unprecedented things that we've seen as a result so again not an exhaustive list but some potential options um approve the budget as submitted um approve the budget with an adjustment to the cost inflation for dish um uh I'm sorry I those bullets are a little inaccurate I'll fix those that's slide 44 so if you just adjust it for the 22 dish that reduce it um by 1.5 percent bringing the effective rate down to 12.93 percent oops um if you do not account for the cost inflation at all that would reduce uh the ask by 4.1 million and would reduce it by 3.94 percent so I'll get those corrected for the record so uh after accounting for that dish if you do not include that term they would still have 1 percent of their budgeted fixed perspective payment slash npr that would not have a funding source that we know of so that would add um they would need to find that funding somewhere else so we don't really know have a you know those are just the options to kick around for central Vermont Medical Center um but that is uh the recommendation or I'm sorry lack of recommendation the suggested motion language once you make a really hard decision all right any questions or things you want to go back to for central Vermont so this is I'm just going to go ahead Tom I was just going to say I suspect we're going to have a lot of discussion and questions as we're digesting this so I just go ahead Tom Walsh yeah go ahead I just uh uh wondered when would be best to to talk about a little bit of that particularly the carry forward um should we wait till uh what's your preference chair would you like to hold discussion on that or have that now you know what I think why don't we let Sarah go through that just one more hospital and then I think we'll take um at that point I think we'll just uvm that's left I think we'll take a 10 10 15 minute recess and then I think we can come back um well actually it's up to if you've clarified questions or questions about how that carry forward works I think it's fine to do it now and then we're going to have much more lengthy discussion I think this afternoon about all of these um components and all of the options within these hospitals but certainly why don't you ask your questions now that have to do with the carry forward that'll help us digest the material okay just a couple things to consider with it um Sarah what I've heard you what I've heard and what I think I was reading in the in the submissions was that um losses from the prior year are put into the budget for the next in an attempt to make up for those losses right so that would mean somebody needing care in 2023 would be paying more than they would have in order to cover care delivered to somebody in 2022 which is not the way that's not a gold standard that's not a industry standard um it would so that's not equitable it would also make it I need to think about this with you all more but on first blush that would make it impossible to slow the growth because the loss would always be added forward right so so it's fundamentally against what we're charged to do thank you Tom I'm just gonna I I see Al Labay from VVM health network has his hand raised and so if there's any clarification here about the assumptions about the carry forward uh Mr. Labay you can speak to that right thank you chair Holmes and I will assume that I'm still under oath um from the last meeting yes so I think there's a critical distinction here to be made between carrying losses forward and what we're actually doing here and what was in our presentation we're actually carrying cost inflation growth forward and so if you if you look at the presentation that we made we're very specific about how much that is and so when when prices go up in the in the FY 22 year and we're unable to cover them and and those same prices go up again in our estimate for FY 23 that total cost inflation amount has to be covered basically by volume times rate so this is not losses carried forward and and the last point I want to make is that when we did come for the mid-year we felt the board was very clear to us that they didn't want to reconcile the entire cost inflation from FY 22 that we were experiencing we had articulated that our average inflation um estimate in the FY 22 budget during the August hearing was 2.4 percent but inflation had grown um at above 8 percent nationally at that time of the mid-year and that those costs we could not um we just could not cover and so I agree with with member Walsh that we would not want to bring losses forward and I understand his good reasoning but this is literally the the cost inflation to deliver services that is in FY 22 and will remain in FY 23 with the inflation that we'll see in that year I hope I hope I've made sense uh Chair Holmes if not I'm happy to answer any questions thank you for that um appreciate it so are there any other questions from the board about the CVMC analysis by the staff okay I'm not seeing any again we'll come back to this and I know this is a lot to digest which is why I want to give us time to do that probably over lunch I think is gonna you know at least at the very least to really start to digest this so go ahead Sarah if you want to go with UVM I think you're on mute though I could talk like that all day um thank you for the correction uh so here we are at UVM uh so they have a variance between their projection and their budget of negative five percent um some of that is going to be they're closer for to their original budget um but uh the didn't have as much time to get to the mid-year number so if we look at the budget to budget request uh it is 10.0 uh the 23 request is uh I'm sorry the projection to 23 budget is 15.7 uh percent I just realized that unlike the other hospitals that this access is not starting at zero so that is making that growth look uh disproportionate that's not fair they're actually very close to the um the all-pair model growth rate I'll also correct that in the recess and get updated slides uh so here again the charge request is not probably the most useful thing for us to spend time on it's that effective commercial rate request which is 19.9 percent to support a two percent operating margin um their compensation growth uh was among the highest they also you know have the highest need for staff they're the largest and they also are doing the most technical work so it was below our benchmark and their other inflationary growth was pretty close to the median a little bit higher than that um and again we would only look at the utilization from budget to budget which is not a great way to think about it uh today uh it is 7.7 percent so when we look at the approved uh GMCB decisions uh versus both the charge request and the commercial effective rate uh we see that trend uh again that uh fiscal year 18 ask that's quite low uh was approved as submitted um I don't know that that's the rate that would have been submitted uh it had it not been for some other factors going on with some overages in previous years so I think that's probably still being felt by UVMMC but we can see that since then uh there hasn't been a ton of head room for this hospital between inflation um and what was decided for the commercial effective rate um so here we see that again that gross patient revenue um and the net patient revenue so in the case here um their growth has been uh closer uh they've grown about a pretty similar rate and we also have a lot more money that's come off this chart due to the value-based care fixed purpose fixed perspective payments which is budgeted to be over 200 million dollars in fiscal year 23 which is a lot of things from the dollar store um we can see that uh you know overall that there's a greater amount of the net to the gross and so as we'll see that's largely a mix of a result of kind of the payer mix but we also see that there's a bigger dip in fiscal year 20 uh the covid years uh is got hit hard uh for gross patient revenue here um so when we again look at it by payer uh we see that um the commercial and medicare gross patient revenue are closer to one another than they were for CVMMC um and we also see a lot more uh care and types of care or intensity amounts uh you know charges uh for proportionally to the Medicaid population here um so uh I'm sorry just taller bars more money there but we see similar trends in that the proportion that is collected for Medicaid is 10% of those gross charges 17% for Medicare and 67% for commercial so that's kind of that uh payment difference that we discussed a bit before financial trends again uh we see that uh very similar to Rutland a substantial decrease between the projection for the current year from the 199 and fiscal year 21 and still at a level that is concerning for fiscal year 23 at 128.9 uh the total margin again is not probably as close to the operating expenses as what's uh being felt in terms of the NPR and so we see uh negative uh 2.5% operating loss projected for the current fiscal year with a hope to return to 2% in fiscal year 23. All right and when we compare again those stages of the 22 fiscal year so the original budget um was 1.5 million which was adjusted up a little bit in the mid year um where and their projection is coming in at 1.4 million so uh that's 15.7% growth to get to the 20 billion sorry yeah sorry billion I'm sorry yeah I'm the worst at that billion remember Carl Sagan when I think of EVM um okay uh whereas the growth from their budget um is 10.5% so uh they were you know relatively close to that original value again time was not on the side to get up to that mid-year ask um and see the gross patient revenue numbers there just for reference um so if we look at how utilization is expected to change between the projection for fiscal year 22 and the 23 budget utilization is expected to account for 3% of that um so that is uh an ambitious goal but I felt like there was ample evidence and testimony and narrative about the very substantial measures that they're taking to address the needs of the community and try and move things along uh and so here I'll try to be a little bit more precise in my language but the cost inflation that EVM uh says will persist from fiscal year 22 is estimated to be 48.6 million dollars uh and then additional cost inflation uh that they're in and their fiscal three 23 budget of 77.2 million for a total of 125.9 million uh which translates to a 19.9 percent right so again uh that cost inflation for 22 is 48.6 million so if we think that the additional dish uh is appropriate to put towards that inflation um some of which is hard to know how much of it will subsist nobody knows the economist that we talked to yesterday or earlier didn't know uh but that's going to be a effective impact the rate of 1.555 percent which means that there'd still be 37 million dollars so that cost inflation uh not covered uh so if you're going to make that adjustment uh that portion of the fiscal year 23 commercial ask net effective commercial rate ask would decrease from 6.38 to 4.83 if you just keep fiscal 23 alone that means uh the overall change would usually be organized from min to max 18.35 percent to 19.9 percent uh which represents an eight percent reduction in that rate so again this this is a new method uh we heard some of the reasons why it looks different this year um partially due to the decision uh made at mid-year um so then there's a lot of known unknowns uh for the 23 numbers uh so again 77.3 million in cost inflation estimates the IPS final rule may add 2 to 3 million um that's a hard number to project uh precisely but that might have uh effective 0.35 to 0.52 on the commercial rate increase um the outpatient final rule is not final uh it won't be uh before we're our decisions are due but that could add as much as 8 to 0.8 to 9 million which would have an effective 1.4 to 1.57 percent on that commercial rate um and then as uh Tom uh midport board member Pelham mentioned earlier uh we did get uh letter from uh the our colleagues at uh diva which is posted online that said um that you know they had every intent of requesting an additional 21 million in uh GME money however that does need to be authorized um it does not have a state match requirement so we're very optimistic that that would get passed but um that's part of the reason that UVM is trying to figure things out by November 15th um but the hit uh the effect to the commercial rate increase would be 3.67 percent so um trying to factor in the potential range of these uh would reduce the estimated cost inflation to 44.3 to 46.3 million or a 7.76 to 8.10 commercial rate increase for the fiscal year 23 portion again a lot to digest so again just some options uh and I will also fix these slides um to be a clearer uh but uh approve the budget as submitted um you could approve the adjustment with an uh the dish adjustment to the fiscal year 22 cost inflation which would result in a 10 percent NPR FPP increase and an 18.35 percent commercial rate approve the budget um without any of the fiscal year 22 cost inflation um and then approve an effective commercial rate in the 7.76 to 8.1 range which would expose um uh still 37 million dollars uh for them to find which uh is over 2 percent of their NPR um a note about the self-restricted funds um both our colleagues at the Department of Mental Health and UVMMC or I should say HN have been in very close contact are really working hard to address the critical mental health needs of our community um if we were going to try to apply that 18 million today you know it would be about a three percent effect on the commercial rate um however in staff's judgment we think that it might be too soon to tell about the progress of that and that we would not recommend making an adjustment based on that today or when you vote I should say so uh that's just some some context uh it's a lot of context and I know there's probably just more questions than answers for a lot of these things however um I'm happy to address any other uh questions or clarifications before recess here great I'd like to open it up then to the board first for questions that the board might have Tom Pelham you have your hand raised excellent job but you have to unmute yourself too couple of questions um I you when you were talking about the 18 million dollars uh you trailed off I what was what was your recommendation Sarah my recommendation is that uh that we should give more time to assess progress uh it's a critical time with uh quite a few irons in the fire but we see quite close collaboration with mental health so uh we would we would recommend not making any adjustment based would would you consider putting a clock on that I mean it's already been since 2018 that this you know and three million of it was spent for something that's never going to happen and I'm just wondering yeah I think that um as we heard for the past few weeks that um providers have been dealing with so much um that uh and it has also I think made some adjustments to our mental health needs so that I think um you know I don't know what the right clock would be but it feels hasty to to that today no and my second question has to do with contractual amount obligations um you know in some of our discussions uh we talk about kind of the purchasing power that a hospital might have in in a market and um you know this gets into kind of a either or but or both cost shift versus the versus the uh the the kind of market power of a hospital and so when you were looking at the contractual obligations by each hospital did you see any trend or tendency that would indicate that one hospital has more market power than another I did not do a comparative analysis from that's so it's something we can certainly explore um I do think that um yeah I have to think about uh I worry because again those gross patient numbers are already different um that that means that they're doing different stuff and uh would want to appropriately a case adjust for the intensity of the commercial care being delivered um so I just need to think through um how much actionable information I can provide material to your decision here are you set Tom Pelham uh yes I'm set great thank you are there other board questions for Sarah um Sarah may I ask you one um I noticed that you have for the UVM medical center adjustments for the estimated impact of inpatient final rule and the possible impact of the outpatient final rule but we don't have that for central Vermont medical center yeah they seemed uh I didn't get the exact numbers they seem much smaller um we can certainly uh ask for estimates for my hospital if that would help okay that was my question just trying to match up the two analyses all right so are there any more board questions at this time no okay I think what I'm going to do is I'm going to open it up for public comment at this time and um and then we will break for a recess to be determined after we go through public comment to give the staff a chance to look over the slides have the make any adjustments they need to make and then also give the board some time to digest and again I think we will uh not be voting on any of the hospitals that have greater than 8.6 percent this morning anyway so we will have that discussion larger discussion this afternoon Mr. Gobe I see your hand is raised yes madam chair thank you for the time just one point um Sarah amazing job on on this work here the the only thing I would say is the GME number is the gross number there is the investment that we put up for that and so if you're calculating or considering that number it's about half that would actually come to the UVM health network and we can be precise about that if that's needed and thank you actually I will request that precision if you would Mr. Gobe then we can understand that that would be really well we'll get that to you pretty quick here thank you so much absolutely ham davis I see your hand is raised as well I just like to thank you madam chair I just like to ask Sarah what I understood that correctly would once all the discussion is over is the number two option for UVM amount to a 37 million dollar cut in their budget is that did I hear that correctly uh we there would be no adjustment to the budget the fpp npr uh would not be adjusted it would just be the proportion uh associated with the commercial rate so we would say that money's coming from somewhere else where else I'm okay I'm just not I'm just not clear on that if they if they if they can't put it in the budget if they they put in if the money is in the budget has to has to come from the commercial ask then where else could it possibly come yeah so that was where we were talking about um deltas from the budget so Medicare reimbursement is estimated to be a bit more favorable um but bait you know contingent on some important federal rules uh there is a an additional GME payment that would also be able to take so which is half of about half of 21 point million which I'll tell you more precisely soon that would be able to take that off the commercial rate and so that just goes with the theory that um UVM's policy is they they know the based on what they're expecting to happen the amount of uh revenue they'll need for that and they turn to the commercial uh payers as a last resort for building that budget ham if I can also clarify I think the idea is the npr would stay the same npr fixed perspective payment would stay the same but where that revenue is coming from is changing due to new information about GME payments about dish payments about potential increases in Medicare uh reimbursements that were not anticipated at the time the budget was submitted so it's where the money is coming from is has changing but not the total revenue need does that make sense ham yes thank you sir that's all my question is there any other public comment at this time Mike Fisher I see your hand is raised I think I can even lower it um thank you uh chair Holmes and um thank you uh board and thank you UVM health network uh um I want to just take a moment to recognize uh the exchange of information um uh UVM's answers to questions raised during the hearing um was that last week um and so uh uh a couple details I just think it's worth saying out loud here one of them is uh just to recognize your answer about bad debt and free care between the hospitals gave us some information that we didn't have before so that was useful and um also recognition of some further work to do on that so I want to recognize that I also want to recognize um your answer about our our clinical race equity question um it's great to hear that uh UVM is not doing a race correction uh in spiram spirometry I don't know if I'm saying that right spirometry um uh as well as uh your exploration of doing um uh in a pilot program of doing sickle cell trait um testing um a question for another day but I'll say it here when we asked the question about spirometry to a non-UVM health network hospital their answer was wow we really looked to UVM for answers about how to uh maneuver through things like this and uh we hope there's a process for sharing this kind of information to hospitals throughout Vermont uh and then lastly I uh we wanted to say out loud that um we read UVM health network's response to our question about the RAND data uh spent some time considering that the complicated factors um that were raised and we talked to RAND about these moving pieces and how they impact the comparison of UVM to other academic teaching hospitals um and and just to make the statement that we at the HCA continue to be very concerned about the about how expensive UVM is in comparison to other hospitals thank you Chair Holmes thank you Mr Fisher um so I think at this point first of all I just want to thank Sarah and team for the analysis so far and uh it's very thorough and you know it gives us a really uh unique way and I think an important way to think about what's a very difficult decision ahead of us uh I also want to recognize take this time to recognize the incredible work that AHS did this summer to find funds to increase DISH to short term stabilize the hospitals find a way to increase potential GME payments to the medical center increasing some Medicaid rates all with the goal of stabilizing the system and so doing reducing the pressure on commercial payers so Secretary Seymour center team I think deserve great appreciation for those efforts and we're seeing them and the impact of them in this discussion right now so wanted to do a shout out to AHS and her team and their team over there at DIVA and I think at this point what I want to do is I want to take a recess until 1030 and that will give us some time just to process some of what we've heard all of what we've heard I think it's going to take also lunchtime to process some of the more challenging hospitals that uh where there's more analysis there I would say that's CVMC and University of Vermont Medical Center but let's take a recess until 1030 we'll come back in 1030 and we will start back at the beginning which was uh what was that what was after grace is that northeast we will start with nvrh yes and then we will we will definitely take a recess for lunch as well okay so I'll say everybody back here at 1030 thank you okay well it's 1230 we are back welcome back hopefully the recess allowed everybody to not only digest their lunch but also to digest these uh these two budgets and the budget analysis by the staff admittedly there's a lot there it's pretty complicated there's more nuance and the staff analysis in these two budgets than in the other ones so what I thought we would do is start in the next hour or two uh and just begin a conversation about these two budgets um you know we can talk about the overall npr fpp requested rate and any proposed modifications to either the npr fpp or the effective commercial rates I just want to add that we don't need to vote today if there is additional clarity or information that would help board members make a decision we are not in a rush we are back here on Wednesday so it's more important that we get this right than that we do it quickly so with that why don't I turn it over uh Sarah you've pulled up CVMC's uh options why don't we begin there and see if there's any questions comments from the board opportunities here to consider some of these budget adjustments or not any board members have some thoughts here on CVMC they've digested over lunch Robin I see you're unmuting yourself yeah I mean I'm happy to let somebody else go first um but could you go to slide 40 I think it's 43 Sarah it looked like it went to slide 43 oh oh sorry it did I'm just I tend to be a little bit delayed sorry about that that was on that was my internet not you um so could we just talk a little bit again about the medicare rate changes I know you said you didn't think it would have a significant impact but um I'm wondering I'm wondering if it's possible to get that information um just so that we can consistently consider it absolutely obviously that pushes us to next week um for a decision but does anybody else have any questions or need for clarity on where we stand here I have a general question uh just um a couple of meetings ago um I raised the issue with Russ about um when we can talk about the rate review QHP rate review decision in this process and I was told that the date was September 4th so I'm just wondering will we have something from him I think the 4th is what a Sunday so next week um that allows us to uh engage in the relationship between those between this process and the rate review process that's a good question that I will ask if Russ is on do you have an answer to um I I am on I um you know the you're breaking up Russ I can't hear you sorry can you hear me all right yes okay um the rate review orders are uh of course public so I don't know exactly um what the discussion you contemplate is um if it's you know citing to something in those rate review orders I I think that's fine um I can you know defer to other legal colleagues too if we'd like a little bit more clarity at um but I don't know what uh if there's something else you'd like um no so what I hear you saying is if it's something that was in the order and it is on our website um uh then we we could discuss it I yeah I I mean if it's you want if you want to state something in this proceeding that's stated in the order I don't think that's an issue I believe the request was not to you get into discussions about the rate review process and deliberation um for a few more days so I don't know if that guidance is kind of helpful I realize it's sort of general um yeah kind of leaves me in the middle of the road I feel like I'm going to get run over if there's a fact that you want to bring up from the rate review publicly available well it's just it's just as as you know just there was and I don't know if it is relevant so someone could say that was that process and this is this process but you know we did have a process in rate review where where hospitals came in or the uh the uh carriers were assuming that we were going to give hospitals a hundred percent of what they asked um and um we engaged in that discussion and and decided well that's not necessarily right that we have a history here of approving budgets and our um actuaries did a statistical analysis of that and that came up with a certain percentage off the number um uh that totaled the all hospital request and I'm just wondering does that is that just in limbo now or of no consequence or is that percentage reduction something that um uh Saras folks considered um I just don't know where it stands but at the time it was it was a big conversation and very specific so we can move on I'll go get I'll go get the uh the actual wording from the order and then uh put that on the table and uh and you folks can tell me whether or not you think it's worth discussing or not but I just don't want to leave it behind unattended okay thank you Tom anybody else have a comment or a question something to raise about CVMC budget they need clarity on or an approach I'd like to um I guess gain some clarity about the decision point listed on this slide about the cost inflation from previous fiscal years um that's not been included in previous hospital budget decisions um do you mean Sarah that that's not been included in previous hospitals in this cycle or ever yeah I would say that uh again to our knowledge there's not been like a term in a I know rate that breaks out inflationary increases uh for the current versus upcoming fiscal year it's not to say that it's not been in those rates it's just never been presented to us this way um and I think it's it's just uh especially tricky given that no one predicted the expenses for fiscal year 22 and as we heard no one is sure uh how those are gonna play out in the short or long term I think we also have to acknowledge that um the health network hospitals came to us for a mid-year adjustment and you know we said to them we will deal with this in the budget process and so these expenses that were unbudgeted for which they requested a mid-year of adjustment was kicked over into this process so I think that may be why we're seeing it broken out this way for this year for this these hospitals one because of that process but also two because I think the magnitude of these unbudgeted expenses probably is larger than it has ever been seen before so trying to break it out that's what I'm guessing um Tom do you have some Tom lost did you have something else that you wanted to ask about no not to ask about um we're to comment on yeah that's that's fine my as I've said uh previously my concern is that uh Vermonters have been facing uh steeper inflationary increases over a longer period of time than our healthcare delivery systems have in the last year and a half and and I think the the approach to the the socially responsible approach to dealing with inflation is probably not to inflate prices further so I'm struggling with how to how to deal with that um I don't have a specific question about it um I'm hoping to listen more to my colleagues um but I'm I'm struggling with that well I think to be fair I think we're all struggling with this um I think that's why we're you know we've parked this discussion to the afternoon and while we may not come to an agreement today about what to do about this um it's these are these are very significant increases in in effective rate and unprecedented we use that word a lot but that's the year that we're in uh I have some thoughts I'll share them um if it helps maybe move the conversation forward a little bit um when I let's just talk about you know CVMC's NPR and FPP growth for a second uh it's most of it is driven by rate um in fact on a budget to budget basis utilization is expected to decline on a projected to budget basis utilization is expected to rise uh two percent I think if my numbers are right here so for me on the utilization front given the wait times given the access issues at the network right now in the hopes for greater network integration um in fiscal year 23 with perhaps some care that's maybe being backlocked up at UVM shifting back down to CVMC my I'm comfortable with the CVMC utilization aspect of the NPR FPP request if we turn to the rate which is driving a lot of the increase um you know obviously that's where there's a far more complicated decision to be made in my mind anyway so I'm going to throw out a possibility for us to consider uh which would I think apply to both CVMC and UVMMC in terms of the methodology that I'm going to propose and this is that we approve an allowable range for the effective commercial rate we don't set one number we set an allowable range a range that provides both a not to exceed ceiling and a minimum floor this would allow for some healthy negotiation between hospitals and the payers something that the payers have told us is limited because the degree mat and care board sets rates and then those are believed to be set in stone so that range would allow some of that market negotiation to occur it also would allow some time for clarity on the Medicare you know OPPS rule so in thinking about what that range might be and how I might approach it again this is another something to consider but for both hospitals you could take you could set the maximum allowable commercial rate in the following way this is the maximum right so this is just the top end you might take the effective commercial rate that was submitted okay reduce it by the fiscal year 22 dish amount right so which that would reduce the you know CVMC's effective commercial rate by I think 1.59 and it would reduce UVMS by 1.55 right that would be just taking off the fiscal year 22 dish amount that's now materialized next you could remove the lower end of the Medicare IPPS estimated rate effect we don't have that yet for CVMC we do have it for UVM it's minus 0.35 and then for UVM you could additionally reduce the amount by the new GME that's likely to be approved by the legislature if it's not approved I would just say I think UVM would have every right to return to the board for adjustment so you know that would be how you might take for both hospitals and I'm saying both hospitals now so you could understand my methodology or my thought process here that taken together that gets you to a maximum rate then to get to the minimum rate right the floor you again could start with the effective commercial rate that was submitted in this case you could remove if if so inclined unbudgeted expense carryover Tom I know that's a concern for you and remove both the expected IPPS and OPS perhaps even at the higher range of the estimates and also make the adjustment for GME that gets you to the lower bound right so now you have an upper bound and a lower bound and then effectively we let market forces and heated negotiations between the payers and the hospital come to bear right I think there is some justification or carryover of some of the unbudgeted expenses from fiscal year 22 largely because they came in for mid-year rate increase and we told them to wait and some of these expenses are going to carry over into fiscal year 23 so they are going to be there I believe there was some testimony and we can check this that at least some of that carryover may be related to traveler expenses so you know there that may be something we can revisit or we can ask for further clarification on I would also say I think the reason to have the upper bound and the lower bound is there may be some relief in sight for some of the hot for these two hospitals to the degree that the state is infusing dollars into the system to reduce workforce pressures that may have some impact one of the expense drivers was system flow and backlog of mental health patients and patients who needed post-acute care you know starting July 1st only recently Medicaid started began you know offering per diem reimbursements to you know for Medicaid patients in the ED that are awaiting mental health placement that is going to hopefully help going forward there's also some efforts underway to mitigate some of the bottlenecks and long-term care and residential care facilities that may come through workforce incentives that may come through potentially higher Medicaid reimbursements there's some uncertainty there but if the capacity is increased in these post-acute settings it may mitigate some of the cost pressures in these two hospitals so there's hope there there's also in my mind and these are some of my questions that there may be some relief in sight on the capacity constraint with Dartmouth Hitchcock coming on board potentially that may reduce some of the pressures don't know these are all unknowns and there's also some potential upside potential with 340 b right if to the degree that some of that revenue is recaptured by the Supreme Court decision again these are all areas that are up in the air so to in my mind I think if we were able to and I you know I threw out some possible ways to come up with them in a max but if we came up with them in a max for these hospitals and again I'll say for me CVMC's NPR is reasonable based on the utilization and I would say the same thing about UVM I think that their increase in utilization I hope they get it because it means some of the wait times and the access issues will be mitigated so to the degree that that utilization goes up I think that means patients will get the care that they need in our in these hospitals it's just a question of where the dollars come from right and whether they're coming from Medicare increases in rates whether they're coming from GME whether they're coming from Dish so to me setting up potentially setting up a range allowing some market negotiation within that range but coming up with the min and a max that we think is reasonable might be a way to go forward so I'll throw that out there as an idea we can talk about it with respect to CVMC first or the principle in general I appreciate the principle quite a bit and I'm also relieved to hear of the potential statewide support to address the log jam issue and altering altered budgets in any one facility won't fix the log jam right and so that requires a real systematic look at things so I'm really pleased to hear about that the the min and the max and the negotiation possibilities I'm also very in favor of competition and negotiation that way I do wonder how much leverage a payer has negotiating with a hospital in Vermont there's just not a lot of competition among the hospitals so I don't know how much leverage there is there so I think the range that you're describing I think I followed how you're setting the min and the max it'd be nice to see it written out but that's an idea that I tend to favor with some with the concerns that I just mentioned any other yeah Robin yeah like I like the concept I think it is I think it's helpful to try and think about how to address so many unknowns on the fiscal year 22 cost inflation I think the tough part for me with that is that it's you know really I think of it a little bit differently in the sense of I think of what happened in fiscal year 22 is expenses were higher than budgeted understandably due to the unexpected inflationary pressures and workforce issues and covid issues most of or many of those expenses didn't go away between now and are not expected to go away into 23 that means it's built into the but the way I think about that would be it's built into the base and so really like the breaking it out is just a way to show what hit when more than you know thinking of it as like I don't really thinking think of it so much as carrying forward 22 expenses but that it's expenses that started in 22 like wage increases don't magically go away in 23 but I also you know I think the hospital both hospitals did have some efforts that they included in their budget in terms of cost savings because of course there there's three different components in any budget there's the utilization there's the rate and then there's expense reduction and so I think having you know I think keeping the NPR where it is in both cases makes sense to me because that leaves all three options available should throughput get better than expected or should there be additional cost savings that come to light or should you know the expert the assumptions around inflation be different than what we're built in so all that's kind of a long-winded way of saying I agree I think I would leave the NPR we're at the request for both hospitals and I am on board with the idea of creating a range any other comments or thoughts at this time or anything information if there is appetite for a range any information that you need that you don't have to set with those range men's and max should be the two things sorry Tom Pelham I think you might have been about to jump in but the two things I was interested in are the Medicare impacts for CVMC and I know Saris said she would check in with UVM about the GME because that is I mean my recollection Medicaid being involved with Medicaid budget was a long time at this point for me but we do fund the state share to draw down the federal match with in kind from UVM so that does mean that there is a match rate assumed and it looks like Saris already adjusted it yeah yeah I would get that right so it did and thanks to UVM for their very quick response but it's 11.9 net after we account for the expense I also had a I had some few mismatch denominators here so these are the updated factors for everyone for UVM MC Tom Pelham did you or sorry Robin did you were you gonna say something else no I was just gonna say thanks Tom Pelham did you have a comment um yeah I like the idea of a range I mean there's so much not volatility but so much uncertainty both in the times in the context of society and and um the pandemic and things of that sort that arrange makes sense um the actually I was thinking that the language in the board order having to do with rate review kind of dealt with that issue um and Russ can pull that language up I've been emailing back and forth here he could pull that language up so you can see what I'm talking about um um yeah I can share it just give me one minute but I also you know agree with Robin I think I agree with Robin in that people when hospitals are putting together their budgets they're putting together what they think they need in 2003 um and you know didn't kind of carve out didn't kind of carve out the um uh 2022 inflation um I assume whatever of that was going to carry forward from 2022 to 2023 they built that in their budget to cover it um so so here's that language um it's the third paragraph down here and I'll just read it because I don't know if it makes sense to be part of this discussion or part of a range or but it says because we're at the board we're trying to get to what to use um in our deliberations there relative to a um uh to hospitals um because we were told that the hospitals were basically um or that the carriers were basically using what the hospitals asked for dollar for dollar um and uh so there was a discussion and we went to our actuary to say what do you think basically and they said a reasonable approach this year is to assume the board will reduce hospitals proposed rates by the average percentage rate reduction that the board has imposed over the past five years which is we calculate as approximately 17 percent we think this is a reasonable approach because reductions in recent years have tended to be larger for larger budget requests and this year's requests are historically high furthermore this year's historically high requests reflect budgeted revenue growth for many hospitals that exceeds the two-year revenue guidance set by the set by the board so you know do we have a mismatch here um do do we have carriers that um you know where we approved rates for carriers based on a 17 percent 12 percent 15 percent two percent whatever reduction um in uh from what the hospitals ask i don't know i i don't know how this fits in um but that's and so i'm not asking this with a point i just don't know how it fits because it's a real number that we used um in another process and that number got embedded in that in the results of that process yeah i think the point that i would make there tom is that that process was our best guess at the time based on her historical experience with reductions in hospital budgets now we have the full information of the hospital budgets before us we have that information i would not want to be wed to the decision we made without full information so i think it's important to check and see and and use that as a guiding post going forward but we have full information now about each of these hospitals we've had hearings we have to make our decisions about these hospital budgets based on the information that we have in front of us now that's that's my answer to that i i i fully agree with that jess it's we are where we are now we are farther down the road we know more but um those hospital budgets that were first submitted to us were available at you know prior to to to this decision being made so it wasn't that the actuary was guessing they could actually go to the adaptive you know same documents that we go to to uh to to see what hospitals were asking for yeah understand that's what what so i i i i raise this i support your range approach i think that makes sense um and i think it it deals directly with the conversations we had about who negotiates with who and how much um and that's kind of what this was trying to get at too is it's it's it's not it's not the green mountain care board that's in the final analysis setting the rate there is a negotiation process between the payer and so there you go thank you now michael's going to blow his whistle i think there's one piece of information that it would be helpful for me to have i know i robin already mentioned the medicare uh inpatient and outpatient estimated bump for cvmc understanding that would be helpful i think that perhaps um from the health network it would be helpful to get some clarification on uh or confirmation maybe it's just confirmation that the fiscal year 22 unbudgeted expense growth that we're seeing in the rates is truly uh a carry forward and and believe to be permanent if these are wage increases that are now contracted going forward tell us that so maybe a little bit of a breakdown on the fiscal year 22 my term unbudgeted expense growth their term cost inflation um and i think that might help us as well i i do agree that if if it's these are you know if this is the way they're breaking it out and this is expense growth that is permanent um then we should understand that so does that make sense sara to to request yes i will add that to the punch list here um and i just i just the way i interpret the the wording in that that order i think it's an observation about past board behavior um so it's a measurement of what has happened um just so that's why it's like a finding i wouldn't say it was like the assumption or recommendation uh that was in the rate so i just want to be clear for the record thank you sara that's helpful is there anything else that i'm trying to set get a sense from the board if there's any other information that we need or there's any other approaches that we might consider that we have yet not yet talked about with either one of these budgets well maybe i mean so i i have a uh long standing concern um with the uvm budget um and i you know i i i don't have a you know and i've said in my dissenting opinions in the past on the uvm budget i i don't blame you know i'm not trying to cast blame or accuse uvm they're just taking advantage of the opportunities that are given them and so the the the thing that disturbed me in the 20 and 21 budget process not 22 because of covid and all the federal money was around but in the 20 and 21 process was the case mix issue which isn't front and center this year in this process but in the past you know the the case mix um at the hospital levels what were there and i i kind of view it as kind of the equalization issues that vermont went through in terms of property tax and access to equal educational opportunity you know um at the town level so some you had the stow versus the standards and we have evolved ourselves uh today to a um a point where there is much more equal access to educational opportunity and so you know here you know where and i don't know what the case mix mixes are now i haven't seen the data but last year you'd have like a 10 case mix for medicaid in um in uvm's area and a 17 to 18 percent down in springfield and so so um is there a case mix there so the top of those gross revenue bars are what is coming in through net patient revenue just based on charge so uh it doesn't have that fixed perspective payment which um is taking more off of this chart for medicaid than other payers uh proportionally but also a bunch of medicare is also kind of off the chart so i mean so even here that doesn't have fpp in it you can see you know for commercial um um uvm medical that's 67 percent medicare 17 percent and medicaid 10 percent those to me aren't unfamiliar numbers and um you know so i just think the playing field is not level and um so it's a concern of mine i've tried to deal with it twice before and um have been unsuccessful um for this year i'll just give you some quick numbers um the total amount that hospitals are asking for for 2023 above their 2022 budget is 302 million dollars and uvm medical center um owns 150 of that so they're at 49.6 percent so as you kind of walk forward um and you know this is using the information that hospital submitted to you know for the budget you can see that of that 302.6 million 236.6 million of it or 78 percent is commercial um and then you can and and that is a 14.6 percent increase over the year before which clearly is uh the concern in part that that rate payers are raising then of that 236.6 million increase uvm um has asked for 152.9 million of it or 64.6 percent um and that that is to me a problem of the case mix you know uvm can ask for it because they can get it um and again it's not blaming them or assigning fault it's just the way it is um so i i think that we live in um you know that that that we're dealing with a process where the playing field is not level um and i don't know what to do about it i don't want i i've told both sarah and jess i don't want to go in cutting budgets this year i mean people people are just you know hospitals are trying to dig themselves out of a hole and i think uh the analogy i used is we've got to send the fire trucks to the fire i mean and that's what our our our job is this year but at the same time going forward at some point this crisis is going to be over and that case mix issue is still going to be there uh um hindering uh some schools so that's my two cents thank you tone any other board comments questions need for clarity maybe at this point then that i will open it up for public comment mr gobae i see your hand raised you're on mute though care homes thank you thank you to the members of the board i just wanted to run down uh through a list of some of the things that i heard mentioned and uh clarify or comment on some of the conversation so so first of all medicare assumptions for cvmc we can get those to you um that's not that's not a problem um the second on the qualified health plan rate review process um i just want to say that i i i grow very concerned when anyone handicaps a board's um sort of like cutting because that would mean that we take that into account or into effect when we produce our budgets so if we always knew you were going to cut by 17 percent you know we would learn quickly to always increase our budgets by 17 percent say and we'd get what we needed and i i just want to say that dr brumsted has been very clear and that rick and i have been been clear while under oath with you that our budgets are exactly what we need we don't take any of that into account or into effect in the calculations of what we need so i just want to call that i understand what member pelham was saying and that's a different conversation than what i'm bringing up but i just want to point out how we view it as those submitting budgets third the cost inflation that we talk about in f y 22 is 100 percent in f y 23 that that is that is a linear move now we have talked as a team here all of us what's going to happen with inflation and if it does go down or you know turns really down as the federal reserve and all of us are hoping our budget next year will reflect that those changes but right now we've gone through a period of hyper inflation you know the highest inflation folks have seen in 40 years and that is what is projected on our f y 23 budget and for the record i want to give an example of what we're talking about we all know that labor is our largest expense we also know that labor is driving that our costs and it is something that is a national marketplace and a national workforce crisis that we cannot adjust on our own so in f y 22 i look at dr lefler and i remember the conversations we had as we negotiated with the union and we gave an increase in f y 22 of 10 percent so if you were making 38 dollars an hour as a nurse you got 10 percent in f y 22 that was not in our in our rates and went right to a negative impact on our bottom line and it did not go away that 10 percent increase that brought them to 41 dollars an hour roughly just doing some quick math here we then have an increase of five percent projected for october 1st as part of our collective bargaining agreement they will then go up in f y 23 it is as member lunge artfully described it is baked into the base and so when we talked about our cost inflation we said this amount is baked into the base we're moving it into 23 but i also want to say that we took 50 million dollars off and put that on ourselves to reduce our costs and we did deduct that from the conversation that we had in the mid-year so every single hospital budget that you've looked at did the same thing we did they just didn't separate it i can tell you that claudio fort gave a 10 increase in f y 22 and his union negotiation with his nurses it impacted us he went first it is most certainly in his f y 23 rates and and and so that so so that calls into question the point of and it's something that i would respectfully ask the board please treat the hospitals equally and the same in this process we called it out because you asked us to in the f y 22 mid-year to to bring it forward which we did we've never called it out before because it's always a part of the calculation of a of a budget next the range we'd like time to think about what we heard today we don't have a comment on that yet let us let us think about it and i also would agree with member walsh it'd be good to see it written down i was trying to keep up uh chair homes but i'm not so sure i i did a good job of being a student here today but um we'll come back to that but i would call out to the board that in the opening of this power point there's the components of what have to go into a hospital budget order and there's one particularly labeled e that calls out that we're supposed to come back and tell you of material changes to our budget and so as that happens you know that is that is a process that that should be ongoing but these changes have never been this size before that's why we came to you calling out hey we want to wait till november 15th and reconcile these things so that we don't raise commercial rates any higher than we need to because we feel the same way as you do they shouldn't go any higher than they absolutely need to but i but i would worry that um that we construct any system that is just really hard for us to operationalize but i want to keep i want to keep that set aside the next point the member pelham's good point about what we call payer mix payer mix is very important in what we do it does impact the hospitals if you have a a strong government payer mix things can be hard financially but there are all sorts of um programs with the federal government they're critical access hospital medicare medicare dependent hospital soul community provider that provide ways to to sort of offset some of that that you have to take into account when you look at payer mix but that's not my real point under payer mix my real point is it's primarily driven by demographics and so it's not it can't be moved around like the money in an educational system the patients live in a place and typically get their care there especially for things like primary care that the next point i want to make about payer mix is for dialysis in the state of vermont the payer mix is irrelevant because the only one that provides it is the university medical center so so 100 of that program is done by the academic medical center so if it's done in rutherland it's done by dr lefler's team if it's done at north country it's dr lefler's team if it's done at cvmc our own family that's dr lefler's team that's the way it works in the state so we do things that no one else does in the state the dq would be another good example and so um the last thing i want to talk about is um the the overall process you know just calling this out we came forward with a more in-depth um reach out in partnership with you to say let's not raise commercial rates more than we need to but that we needed our budget approved as submitted we stand firm with that and we would ask that you do not treat us differently than other hospitals in the way that you regulate because regulation cannot be done that way we can't be we can't be different than what we are today because we wish inflation or costs were lower we can't we just can't make that happen and thank you for your time chair homes i appreciate the opportunity to speak you're welcome thank you for your comment any other public comment at this time mr fischer i don't see my camera so do you see my camera yes okay um um i think i want to make this as a process comment more than a comment about the individual hospitals being considered here um i'm not going to express an opposition to the concept of a range um because i think i understand that you need a way to approach this um but i do want to make a express a concern or maybe a prediction that the uh that the outcome at the end of the day will be at or very close to the top of the range that's my concern as a as a as a guy who's got to come here with a uh um speaking particularly to the concern about consumer affordability um so maybe i'm wrong but that's my prediction and uh and given that uh i guess i want to make the the humble request that as board members consider if the board does pursue a range and as board members consider the factors of that range that you feel comfortable with the top of the range thank you chair homes thank you for that comment any other public comment at this time i'm not seeing any now any more public comment i would like to turn it back to the board and just see if if there's any additional thoughts you have on anything you've just heard any more information that you might need or any anything that you would like to ask sarah linberg and her team to do before next wednesday no i think just to make sure that i haven't neglected anything uh i will follow up about kind of how the inflation for fiscal year 22 it flows through in the fiscal year 23 additional inflation just we have a sense of kind of those moving parts um a little more detail and then getting estimates for those um now final ips um and potential productive projections for the ops medicare reimbursement changes by hospital specifically for cvmc and uvm mc were there any other uh follow-ups i missed i don't i don't think so okay did anybody else have anything else for follow-up not so not so much um new work or anything that would require more investigation but just um a good display of the calculation to get to the lower and upper bounds yeah and i think i would say sarah for me the lower bound um you know one of my concerns was just what of the uh cost inflation expense growth from 22 is being carried over that's not permanent if it's all permanent as mr gobae just said i would for me personally i would not use that full cut then to get to the minimum right so so i just want to make clear that um you know part of me was not fully understanding that it was a hundred percent permanent baked into the base for fiscal year 23 if in fact is at my minimum would not include a full reduction um for what they've counted in fiscal year 22 cost inflation if that makes sense to you sarah picking it up thanks picking me up picking it up so i think that's important to to really get sounds like we've got that from mr gobae's testimony here today but just as you're following up on that that would be helpful anything else from anybody so one quick one um and maybe i missed it is what is going how is uvm going to apply this new gme and this new uh dish money relative to this process is is it going to go into substitute is revenue um for their their proposed budget and so therefore they're therefore there there's a rate reduction associated with that that's okay thank you yeah that's the math we'll do a better job of kind of showing in in the kind of overall but the revenue the npr request and the fpp request would stay the same correct yeah yeah it's just where that revenue is from a different bucket yep yeah if i could just um follow up with a question i i think for for for you just if i'm understanding what you were saying a moment ago if the if we're able to tease out what part of the what i would call the carryover for lack of a more appropriate term just yet but if um let's say that that was 10 10 dollars and eight of those dollars were somehow we're able to deem that they're permanent that they they will be baked into the base going forward then the reduction that we would be considering would be the remaining two dollars yes although i think what we just heard from mr gobae was that the ten dollars is fully being carried over into fiscal year 23 so there is no two dollars but i understand i understand and i i i i um i'm not sure how we'll get it get it at that number that's where i'm looking for sarah for some help because um no one is expecting the same traveler expenses for example in 23 and and that's just an example that there are inflate there have been inflationary pressures they're expected to ease the economists that reported to us said that there is sometimes a lag that the healthcare sector may not have experienced it's worse inflation yet so i'm trying to keep all that in mind but the the inflationary pressure that was felt in 2022 is not expected to remain the same going forward it may increase but there are some indicators that it should decline so i worry about baking it into the base particularly with um negotiations coming forward down the run i just i want to see how we tease that out and and how that how our staff can help us tease that out and then adjust the bottom of the range accordingly yeah i think that sarah what sarah will have to do is work with uvm i think that what i'm hearing but again i think this is what we need confirmation of is that these are contracted negotiations largely for labor that were made in 2022 the example that mr gobae gave of the 38 dollar you know nurses salary that increased from 30 i can't remember all the numbers that that al gave but basically right there was a 10 bump and then there's going to be a 5 bump on top that 10 bump right is in there indefinitely because that was a contract that was negotiated above and beyond what they anticipated when they made that budget and then on top of that there's additional expected increases in salaries as part of those negotiations that are going to materialize in basically year 23 so i think as long as the the health network can quantify that and show us so to speak the sarah lindberg word of receipts for how that you know those are indeed permanent and they're baked into contracts that are going to be ongoing i think we're that's the data that we need and then i i suspect there's going to be if the board is open to ranges there's probably you know ranges around the estimates in the budget that we might be able to accommodate in this exercise to help get at some of that uncertainty because plenty of that to go around okay well with that i think that we've exhausted probably all that we can do for the day unless there's anybody else from the board has any other additional comments or questions no okay well is there a motion to adjourn so moved okay i'll take robin as the motion to adjourn and tom pelham as the second all those in favor please say aye aye any opposed no so the motion passes unanimously we have an afternoon to to think about all of us and come back next wednesday so we will resume next wednesday at noon we'll resume with our conversation around uvm and cvmc and then we'll hopefully tackle as well brattle borough springfield and north country and i guess i would ask sarah and team you know if these are also as complicated and difficult if there's you know the lessons that we're thinking about for uvm and cvmc if this methodology applies to those budgets that also exceeded the 8.6 if they could be applied as a as a possible option for us to consider that would be great haven't thought that far ahead myself but you know yeah it's like it's applicable as applicable yeah exactly sounds good all right thank you sarah