 So it's eight o'clock, so I'm going to call the meeting of the Green Mountain Care Board to order. Good morning, everyone. I see that all the board members are present. I see that Alan Rick are here from UVM. So, Kim, I'm anticipating at some point, we may be asking Alan Rick some questions. So if you could swear them in now, we'll get that over with. Okay. Would you please raise your right hands? Do you swear the testimony you are about to give shall be the truth, the whole truth, excuse me, and nothing but the truth to help you God. I do. I do. Thank you. Okay. So good morning, everyone. We're here in a continuation of a hearing on a mid-year request for a budget adjustment from UVM Medical Center and from San Framont Medical Center. At this point, I'm going to turn the meeting over to Patrick Rooney. Patrick. Thank you, Mr. Chair. Good morning, everyone. Kim, can you hear me? I can. Thank you. Very good. All right. Good morning, board members, members of the public and stakeholders. As the Chair discussed, we're here to pick up our conversation for the mid-year rate request for the University of Vermont Medical Center and Central Vermont Medical Center here on Friday, April 8th. I'm going to move through some of the slides rather quickly because we covered this grounds just a couple short days ago. For the most part, there haven't been any changes for the bulk of the slide deck. If there's a particular slide that a board member would like me to cover in a little more detail, please speak up. I'm happy to do so. Recapping here, public comments received as of 4.05.20.22. 58 in total, 57 here that the staff is categorized based on common themes throughout those public comments that were received. If members of the public want to read public comments, they can go to the public comment section of the Green Mountain Care Board for this mid-year rate request. Not all of these will be published should the authors have not given us permission to do so, but all of them were shared with the board. The comment missing from that categorization there is the response from the Agency of Human Services. Executive Director Barrett shared these points at the beginning of the meeting on Wednesday. I will not reiterate this letter is also posted on the Green Mountain Care Board website under public comment. Some of the quick considerations and following factors for the board in this process, this is something we've outlined in each one of the three mid-year rate requests that we've received thus far. We provided a brief overview of UVM's rate submitted and approved and differential and the NPR value of that over the last six years, and the performance based around NPR submitted, approved, and actual budgets for the Academic Medical Center. The request was received for both hospitals on March 18th. The reason for the request, as we all know, unanticipated demand for services, adverse effect, payer mix, and workforce challenges in recruiting and maintaining staff are causing budgets to be busted. These anticipated challenges are having adverse effect of operating expenses for the FY22 budget, which are nearly 93.3 million for the Medical Center in Burlington and 7 million for Central Vermont respectively. The result of this is some significant margin erosion due to these factors. The update based on that, there is a revenue budget miss that's occurring at the Medical Center by about 74 million dollars. Operating revenues are over budget due to receipt of the insurance from the cyber attack and also some unanticipated federal relief coming into the organization. The operating expenses are driven by workforce pressures and rising costs and are projected to exceed budget by 93 million dollars. The result of that is an operating margin of loss of 39 million dollars, which is a 90 million dollar variance from budget. Central Vermont experiencing similar financial issues here. Their reason is decreasing volumes of higher margin services, increasing average length of stay, cost inflation, and growing traveler FTEs and cost per FTE have contributed to the net patient face projected payments falling by 7.7 million. Operating revenues as with the Medical Center in Burlington are over budget due to unbudgeted federal relief, which is aiding and offsetting a portion of the rising cost and further constraining margin erosion. Operating expenses, however, driven by workforce pressures and rising costs are projected at 2.60 budget. And the result is an operating margin that's currently projected to be nearly a $5 million loss, which is a $7.6 million variance from budget. We can see here a quick recap of where the hospitals stand for approved budgets. The budget projection without the requests considered here today and the projection with the full 10% for each organization, noting of course that that is still budget misses from a revenue perspective for both hospitals. The financial impact here, MPR increase of $28 million over the current projection, mostly recaptured now patient services, net patient revenues are still projected to be under budget by 46 million. And if approved, the projected margin will fall to a $12 million loss instead of the $39 million loss that is currently projected. Central Vermont net patient revenue increased to 4.5 million over the current projection, mostly recaptured in the inpatient side. If approved, these revenues are still projected to be under budget by 3.2 million. And the margins will be significantly improved from the near a $5 million loss to just under 700,000 with the 10% increase. So I'm not gonna go through these, most of what we just covered is built into these next several Excel tables that were provided by UVM and Central Vermont respectively. A quick history of NPR, both as a projection here in 2022 and then projection with the rate adjustment. Again, we've covered that on Wednesday and briefly here just a short time ago. And the same for Central Vermont, that same perspective on NPR with and without the rate increase for the projection, the current projection for 2022. History of Days cash on hand for both organizations and average age of plant. Again, noting that we did not ask for a 2022 projection for age of plant for either of these organizations. So that's why we have that drop off there in 2022. Quick margin history here. UVM having several years of very solid operating margin performance going back into the mid 2010s. But we've seen that decrease over time here initially bottoming out with the pandemic year of 2020 in which significant pressures were put on the medical center up in Burlington. And then kind of a rebound here on margin for 2021. But as we discussed about a month ago, that's largely driven by the sheer volume of federal relief that the hospital received for the 2021 pandemic year. And then we have the projections and the projection with rate increase here at the very end looking left to right for the organization. Central Vermont, a very different story becoming a long history of operating losses. The projection for 2022, as you can see is not out of the context here as it relates to this history of loss, but the rate increase would produce a significant mitigate factor to the operating loss that's being projected at this time coming in just under 690,000 dollars. Five year history, UVM and CBMC for their change in charge are right with each other throughout 3.5% for a five year average and 3% for a median. And looking here at that history in more detail and what the approved 10% increase would provide for fiscal year 2022 as a base increase over 2021. A quick peer group comparison based on first quarter results comparing UVM and CBMC to their Vermont PPS counterparts here and then relative revenue and geographic footprint in the Fitch's rating solutions, bond rating information that we collect and some of the reasoning behind this request here and some additional questions from staff to follow up. Looking at the health networks, debt service coverage capacity and where the current projection would be and then additional losses that would have to be incurred to bring them into the consultant call and default level for their capacity of service debt. And at the bottom here, we have each hospital within the network's capacity to contribute to that debt service coverage ratio. And as you saw last Wednesday, we went through a brief overview here of where this net patient revenue impact is going to land for each hospital. I will not go back through all of this unless a board member wants us to, but you can see that for UVM and CBMC, it's happening in the commercial space and largely the outpatient space and looking at the gross to net versions across those various service buckets and central Vermont again, commercial space and largely in the outpatient space for net patient revenue impact of this rate request at 10% and then the gross to net for each one of those. So moving into the updated information here on slide 32, we wanna thank UVM for parsing out some of the information which we said we could not do on the Wednesday meeting. So we took a different approach at that time to our recommendation, but they provided us with a more detailed breakout of the information that we wanted to see. So we're gonna walk you through what was provided and our logic in reaching a revised recommendation based on the detail that we received yesterday. So this is the initial inflation table that the medical center provided for these major categories in their fiscal year 2022 budget. Relatively nominal impact here as originally intentioned and you can see the contract staffing line which has been kind of the cornerstone of this discussion had no inflation component built in for the medical center. The revised table yesterday provides a very different perspective in addition to the fact that upon breaking out the wages and compensation for their non-medical staff, UVM also broke out non-medical staff positions that are being filled by travelers. So these are vacancies at permanent positions that are being filled by the travelers. So if we recall, they originally budgeted for 80 traveling FTEs and their projection for fiscal year 22 is now 405 which is a 325 FTE variance. So they're using that variance there primarily to fill empty positions at their organization and we can see the inflation impact that comes with those 325 extra persons. It's a very significant figure here but they also broke out the contracted staffing as budgeted and the inflation factor that's coming with that. In addition to that, they updated their fringe drugs and supplies as well in addition. So what we did was we took a look at that and the changes and I'm gonna focus on the red fields first here because we have the built in wages and compensation. So the 4.8% increase you see is the variance between the projection and the budget. And that of course changes the weighted average for inflation on the right, the 1.5. The fringe drugs and supplies were adjusted similarly for what was originally budgeted versus what they're projecting. And that of course is gonna have an impact on the weighted average as well. So those four areas and then including the contract staffing travelers in the orange originally not budgeted, but however, the 1.2% is as submitted. So we're looking at those four or sorry, five categories respectively. And I'll explain why we're not looking at the large non-medical staff travelers filled positions as I walk you through our reconciliation here. So the sum of the adjusted red fields on the previous slide is equal to an inflation factor of 2.5%. The sum of the adjusted red fields plus the orange field is 3.7%. The addition of the orange field would recognize the inflation component of the originally budgeted 80 traveling FTEs. So that's the logic behind where we're going with our recommendation for the UVM Medical Center in that the unanticipated originally budgeted 80 FTEs have a significant inflation factor that was not able to be considered at that time with what the administration at UVM Medical Center knew or the health network. The other component is related to the unanticipated FTEs and the inflation factor tied to that. And that is a component that is going to ebb and flow as this year continues and as their needs go on and as they fill permanent positions over time as we know they've said that's their plan to do to lower their reliance on that. We wanna see that continue. And so that piece we're not willing to consider for our recommendation. But as I said, we are willing to consider the inflation factor of the original budgeted 80 traveling staff and then the changes that have occurred for wages and compensation for the non-medical staff, drugs, fringe and supplies. We apply the similar logic. Oh, sorry, I'll continue here. So now here we have a breakdown of those red fields, reconciliation showing the subtotal and then the contributing factor of the inflation for the 80 FTEs that were originally budgeted and we get to a 3.7% increase. UVMMC supplied us with the 1% value of this rate request over nine months and over six months. The six months would be if this is retroactively put in place for the rest of their fiscal year taking the April 1st to September 30th. And the nine months is if this is retroactively applied to April 1st through the end of the calendar year or the contract year that these rates would be in effect before they are renegotiated them in similar format and also considered the contract status component. So the sum of the red fields on slide 38 is equal to 2.7. The sum of the adjusted red fields plus the orange field is 3%. And the addition of the orange field again would recognize the inflation component of the originally budgeted nearly 16 traveling FTEs. Our reconciliation again, they've had lower than anticipated inflation on drugs. So that's a factor here mitigating factor to a higher rate but it brings that range between 2.7 and 3% if you consider the contract staffing component and then the breakdown and value of NPR for the same periods looking at these different rate options. So our staff recommendation for the medical center is between 2.5 and 3.7. I will say that the unanticipated contract staffing related to those 80 FTEs is very important. And so getting to a place from my perspective it would be on the higher end of this to pay respect to the fact that that has occurred in this healthcare environment. And I would say the same thing about the central Vermont medical center going at the higher end of the 2.7 to 3%. So that would also pay respect to the fact that there has been an unanticipated increase in that original budgeted amount of persons that they needed to provide care. So that brings us to the conclusion here. Here's the appendix for the NPR as we did the other day but that's our logic based on the materials provided yesterday by the UVim Health Network again. We thank them for providing that detail that allows us to provide a more quantifiable recommendation for the board this morning. So with that, Mr. Chair, I'll turn it back over to you. Thank you, Patrick. At this point, I'm going to open it up to the board for any questions or comments. And I'll go in alphabetical order starting with board member Holmes. Jessica. If you're talking, you're going to be on the board's mode and the hospital budget adjustment. And whoever is bleeding through, if you could mute your mic. OK, can you hear me now, Kevin? I can. Mark, it was you that was bleeding through. So hopefully you're muted now. Perfect. OK, go ahead, Jess. I don't have any questions for Patrick. I appreciate this analysis quite a bit. So I don't have any additional comments or questions. OK. Next I'm going to turn to board member Lange-Robin. Yes. So I wanted to start by talking about the retroactivity, which just in thinking about that piece of it, I had some thoughts about it that I wanted that I would welcome Mike or Russ chiming in on if they think I'm off base. I haven't really had a chance to deeply speak with them about this. So I just want to be clear that I don't think a retroactive approval is something that I'm comfortable with either legally or practically. We haven't basically, I think the request was in part from UVM, at least the justification, was that in order for the 10% increase to get to the result that they were arguing for, it would need to start April 1st. However, I personally am not comfortable with a 10% increase. So I think that argument then isn't as persuasive to me if the rate is less than 10%. So that's sort of the persuasive part. But I am uncomfortable with retroactive for a number of reasons. First of all, I don't recall us ever doing a retroactive approval. And while there's certainly, I certainly have not done a legal deep dive, there can be legal issues with retroactive, particularly when there are contracts in place. And we don't, we've not heard any evidence about the contractual terms, whether that's permissible, whether that'd be a violation of the contractual terms. In the utility context, it's my understanding that rates, there are some legal issues with setting rates retroactively. So I just wanted to put that out there that I don't feel comfortable with it. It would be a very big precedent. And I don't have enough of a legal analysis or justification for doing that to set that precedent. So if Russ or Mike think I'm off base on the legal side, I'd welcome their comments. But I certainly don't want to put them on the spot. The other practical letter is- Well, I don't mind putting them on the spot, Robin. I mean, that's what they're here for. So let's see if Russ has an opinion. Russ? Sure, thank you, Mr. Chair. I agree with Board Member Lunge's comment that I have some, I definitely have some concerns from a legal aspect that applying a rate increase to transactions that have already occurred could be considered some impermissible retroactive rate making. That is, there are some cases in the utility context that courts have found that sort of action not allowed by commissions with the authority to set rates. So it is not something that a court has weighed in on as far as I know in this specific context, but I agree with Board Member Lunge's summary that there are some definite legal concerns with that approach. And to that end, that's why the staff's recommendation is prospective and not retroactive. Thank you. So that was my first comment. I also have an approach for decision making that I'd like to propose to my fellow Board Members, which is that, and you're getting stuck now with my legal mind. For me, there's a threshold question of is a mid-year adjustment warranted in the circumstances of each of these hospitals, which I think needs to be taken separately. One decision for each hospital. And if there is a majority that says yes to that question, then I think it would make sense to get to a rate amount and a justification for that. So I know I wanna give other people obviously the opportunity to make any other comments, but I just wanted to mention that that is how I was gonna approach the motions, although of course other people are welcome to make motions differently if they would prefer. Thank you, Robin. Next, I'm gonna go to Board Member Pelham. Tom. Well, good morning, everyone. And thank you, Patrick and team, for this work over the last couple of days and thank the UVM and Central Vermont team for their cooperation. For me, as I said the other day, there are kind of two major forces at work here. One is this request happening outside the context of the needs of all 14 hospitals. And we've embarked on that process. Guidelines are available and issued. We'll be deep into it in a couple of months. And I just feel given the large impact of the UVM Medical Network, it's just important to kind of, to have the analysis and work done in the context that all hospitals have kind of an equal standing for access to additional resources. So that's number one. And number two is the context of healthcare reform that this request is happening outside the context of healthcare reform. There are a lot of major moving parts that we'll know during the regular hospital budget process, such as maybe the APM all-paramodal renewal document, the renewal of the Global Commitment 1115 waiver, the starting of the hospital sustainability plan. The legislature will have gone home. And so my thought is that, and this request is all fee for service. So it's trying to end something or it's supporting something that we're actually trying to diminish. So given that, that's what my feeling is. And but I do want to thank you for the effort. Thank you, Tom. Next we'll turn to Board Member Walsh, Tom. Thank you, Chair. Thank you, Patrick and team for the analysis, the depth that you've gone in a short period of time has been extremely helpful. I want to share Member Pellum's feelings about the direction of this. We're in an era of trying to transform more toward fixed prospective payments and staying within a budget. This is not aligned with those efforts. The claim that this is an unprecedented position for an organization doesn't bear out when looking at previous data. The organizations have faced losses larger than they're set to face right now and have a proven record of reversing those losses without any mid-rate change. So the situation isn't unprecedented. The situation they face isn't unprecedented, but the request is and the effect that it would have on Vermont businesses and Vermonters, that's unprecedented. I was willing to reconsider my position based on the new data with the inflationary tables, but I just didn't find that compelling enough to make any large changes. They were very diminished in the percentage coming from 10 down to 2.5 to three, retroactive or not. We're slicing and dicing, trying to find some way to do something, but I'm still not convinced that anything is needed other than things that have been done before to address larger losses. I'm also concerned with the precedent we had denied Rutland Regional. We're now looking at a different situation, different organizations that aren't in as strong a financial position that's evident from the data presented. I still don't feel compelled to move toward any increase. I agree with Member Lunge's approach. I hadn't thought of it quite that way myself explicitly, but I think that's what I've been doing internally. Is it appropriate to grant any increase? And then if that were moved seconded and a majority ruled, then thinking of what amount? So those are my thoughts this morning and I'll pass it back to you, Chair. Thank you, Tom. I guess I'm going to start by saying the troubling thing here is that the impacts of our decisions could have an effect on Vermonters and one of the troubling things for me has been not an explicit threat, but almost an implied threat that the inpatient psych beds would have to be rethought. And so, Al, I'm going to put you on the spot and I know you guys were refusing to come in and talk to us about that project on the normal course of reporting, but I'm going to put you on the spot. Does even that inflationary increase that the staff recommended change any of the thinking that you are going through with your team at UVM as you move towards the future? Chair Mullin, thank you for the opportunity to comment on that and good morning to everyone. What I would say is that the losses that you see on what I think of his slide 19 from Patrick's work should concern every board member and every Vermont citizen, and in fact, everyone in our catchment area. They are not one year, they are a pattern, they are not something that's easily recovered from and we will have to do things in order to make our services aligned with our budget. That's all we're willing to talk about at this time, but this is a very serious moment. That's why we came for a mid-year request and we really appreciate the time to talk about where we're at and thank you. And unfortunately, that doesn't help me get to where I had hoped to be able to get to because I have a feeling that even if a request is granted to you based on what I'm hearing from my fellow board members, it won't be enough to stop some of the scaling back of what I think are essential services. I think that mental health has to be placed on an equal platform with physical health and I'm truly worried about where we're headed here and I do believe that central Vermont is a troubled institution that should be given the help because quite frankly, UVM should be commended for having build out two Vermont hospitals. And so I'm at the point where I'm still struggling here. I do not believe that the increases are transitory in any fashion whatsoever. Once you give someone an increase in pay that doesn't go away and in addition to that, we already know that it's a three-year contract. It's not a one-year contract. So yes, it's went up 10% this year but it's going up 5% the next year and 5% the following year. And that's contrary to what the historical pattern has been towards a more of a 3% increase. And I think that anybody that doesn't recognize the effect that the wage pressure has had on hospitals isn't seeing the bigger picture. With that being said, I'm totally opposed to a mid-year increase but there's a reason why there's the ability to come in in the mid-year and that's for an emergency situation. The question is, do we believe today that anything that we're going to do is going to change the direction that these institutions go in? And that's what I'm struggling with. So with that, I'll throw it over to any board members for follow-up comments or questions. So hearing none, I'll open it up for public comment. Does any member of the public wish to offer comment at this time on the UVM budget or the Central Vermont Medical Center budget? I almost said Central Vermont Public Service. Boy, does any member of the public wish to comment on these budget requests? Well, that is unusual. So Robin, I believe that you had an idea on how you wished to proceed. Not sure how helpful it'll be because I believe these are two separate requests but I'm willing to follow your lead and listen to what you have to say. Okay, so yes. And I think that we will deal with them as two separate requests for sure, we have to. So I'll just start by saying, for me the mid-year aspect of this makes it particularly challenging. And I know that in UVM's initial statement when they first came in, they indicated they were looking at this as a directional cue. I would just for myself say this is not a directional cue that I am giving in any of my votes today. It is the result of the fact that mid-year adjustments are just tough because we're asking folks who also have a budget for their health and care costs to absorb an impact that was unexpected. So the mid-year aspect of this is I think we've all said is very troubling and makes it challenging. The other challenging aspect, quite frankly, is the turnaround time is much faster than during the regular budget season, which makes feeling like you have full, accurate information more challenging. So with those comments, what I would do is move to approve, and I'm gonna do this two parts. First, whether we would approve any adjustment or not and then get to a number. So the first motion would be to approve a mid-year adjustment for Central Vermont Medical Center in an amount to be determined in a second motion. I'll second that. It's been moved and seconded to on the motion by member launch to really it's almost a polling of the board on whether to move forward with a mid-year adjustment for Central Vermont Medical Center. Is there discussion? I'll just say for myself, obviously I voted to deny a request for Rutland as a threshold matter for me. The financial situation at CVMC is what swayed me to move towards approving an adjustment. And Rutland was in much stronger financial position to weather the unexpected inflationary pressures. I do think that even so, this is a tough choice, but given Central Vermont's financial position, I do feel supportive of a mid-year adjustment. I too agree with Robin. I'm supportive of a mid-year adjustment to the rate ceiling. I'm concerned about their shrinking reserves. I'm concerned about their negative margins. I think the revised inflation tables validate permanent changes in their underlying cost structure, particularly compelling are the increases in wages that are not one-time bonuses, but the result of permanent increases in the base wage necessary to retain their critical staff. So I am supportive of a conversation about a mid-year adjustment for CVMC. For me, my vote isn't an indication of whether or not I feel that the need is there. I obviously do think that there's a need for resolution in terms of both the UVM Medical Center and at Central Vermont. I just think that isolating this is the wrong way to go and that we should deal with these issues in the regular budget process, where I may be supportive of some of this, but we should deal with it in the regular budget process and we should deal with it in the context of our efforts on healthcare reform, which are picking up momentum, speed and increases now seem to be quite contrary to the goals that we have for ourselves in healthcare reform. And I'll just respond to that, Tom, because I know that both the Toms have mentioned that. The states that do, of which there are only two other states that are working towards doing fixed perspective payments in a regulatory fashion, they do do mid-year adjustments on occasion in extraordinary circumstances. So I think it's a point well taken that the purpose behind the fixed payments is to live within a budget, but it's also not, for example, Maryland makes adjustments much more frequently with that to keep the budget sort of aligned. And in this case, the NPR is below budget. So if this, if we were Maryland, we would be increasing rate to offset the decrease in volume and we'd be doing that on a regular basis to keep the budget out of budget. So, but I recognize that for you, the mid-year aspect is troubling and is the deciding factor. And I totally understand that because that is a big challenge for me too. Yeah, well, I appreciate that Robin. And I'm familiar with Maryland and their approach and an aspect to this that we haven't discussed so far. I think there's been some talk around it, but moving toward a Maryland or Pennsylvania type approach to get at the first year calculation for that requires looking back over several years at what the base has been. The changes that we're talking about now combined with the last approval, some approval now and approval in the spring creates a large step baked into that base. And so I've just, I've wanted to come away from a denial. I haven't been compelled to come away from a denial. So I'm a no. Any further discussion? All those in favor of the motion signify by, oh, wait. Russ McCracken, could you please call the roll? Yeah, Mr. Chair. Board member Holmes. Yes. Board member Lunge. Yes. Board member Pellin. No. Board member Walsh. No. Chair Mullen. Yes. Robin, would you like to make another motion? I would. So for me in thinking about what rate increase ceiling would be appropriate, I very much appreciate, am I muted? No, but I'm just going to say, hopefully you are already doing this, but if you could just confine your motion to Central Vermont Medical Center. Absolutely. Yep. Absolutely. That's my plan. So, and I'm sorry, I'm looking back at the staff presentation on another screen. So my apologies if I'm looking a little funny. So I appreciate the staff and UVM working together to fill out the inflation tables as intended. To me, I, given the financial situation and the permanent, I think, nature of to your point, heaven, the wages and compensation for the non-medical staff, where I'm falling on Central Vermont is at the 2.7% rate increase. Again, because I am very concerned about the impact on Vermonters and employers and the unanticipated impacts to them. And quite frankly, I just don't have enough information about the contractual arrangements to know, which makes me want to be on the lower side. Also, in the motion, I just want to explain that the way that I will make the motion, recognizing UVMs and CVMC's responses about the need to then go to the payers and negotiate that I would make the motion that this would be the ceiling and that leave room for negotiation between the parties. So the motion that I will make is to approve a 2.7%, to approve no more than a 2.7% rate increase for Central Vermont Medical Center, which is tied to adjusted inflation to mitigate projected margin erosion and provide hospital leadership financial flexibility to meet the unforeseen circumstances related to workforce and other cost pressures. And that is for the approved fiscal year 22 budget. And Robin, just as a clarification, since I did listen carefully to your comments earlier, did you want to set either a proposed effective date or any language that prohibited it from being retroactive? So I think typically in order for it to be retroactive, there would have to be language directing that. So I think I would follow our normal practice, which is we don't typically include an effective date. Unless Russ or I would ask Russ McCracken without us putting in a date, when would it be effective? Could it be mid month or are we talking May 1st or what is happening here? When we do the budgets in the normal course of business, the true effective date is really the beginning of the calendar year, even though the hospital budgets are on a September 30th ending year. So Russ, if you could just tell the board what it means. Well, I think when the board does the normal yearly budget process, the rate increase is effective calendar year because of the contracts between the hospitals and the insurers, not specifically because of the board's approval of the rate increase. So I remember lunch is correct that a rate increase isn't retroactive and action isn't retroactive unless it's specifically stated to be retroactive. It's assumed to be effective the date that it's taken. So if the board were to approve a rate increase today, I would see that as effective, could be effective as of today. So it wouldn't be effective when the official order was sent to them. It would be effective as of the time of the vote. Just wanna make sure everybody's on the same page here. So there's no questions later, Ron. Yeah, the only other thing, sorry, Russ, I don't mean to jump in, but part of why I didn't pick a date is I don't know what the contracts say. The contracts may require notice from the hospital to the carriers, and we just don't know that. So I think understanding that there will have to be negotiations, I think the true effective date will be governed in part by whatever the contractual terms are, between the hospital and the carriers and couldn't be before today, but that actual date would be negotiated at some point after today. That's my thought, but Russ, feel free to contradict me if I'm wrong. I'm not hearing a contradiction. No, I was just pondering. I don't, I'm not contradicting you. I'm thinking if the approval is effective today or the date, the written order is issued, I'm candidly not sure off hand. It definitely, similarly, I don't know how that works for the hospitals under their contract with the carriers. That's a separate issue. I would, frankly, I would take it if the board approved this today, I think that is approval for the hospitals and negotiate the rate increase with their carriers. A written order would follow sometime relatively soon. Okay, is there a second to member Lunge's motion? I will second it. Okay, further discussion? Yeah, I would just like to add here. I would be very sympathetic toward working with Central Vermont doing the normal budget process. I do look here, I went back and I looked at the total operating margin across all hospitals for the five years from 2017 till now. And the total operating margin across all hospitals was $208.2 million over the five year period. Of that, the UVM Medical Center accrued 178.6 million and the network accrued 180.1 million, which is 86.5% of all the operating margin. But Central Vermont stands out. They were negative all five years. So again, I just like to emphasize that I'm more than open to trying to resolve these issues during the regular budget process. But this ad hoc situation just doesn't work for me. So that said, I'll be a no-vote. Thank you, Tom. I see that Rick Vinson has his hand up, Rick. Thank you, Chair Mollard. I just wanted to make sure, I've been just kind of sitting here thinking about saying silent on this issue, but I do want to make sure that I share this with the board before you finalize this discussion on the actual rate. Just obviously we haven't had a chance to review the staff recommendation, but I was hoping just to highlight one piece that I want to just make sure is that the board is aware. From my perspective, if we can pull up the slide deck again on slide 41, I just want to point out one. Okay. In terms of how the rate is being used here, where we're using the 2.7 and the 3% number, the inflation number to essentially come up with what the range or the rate increase might be. In reality, what should be used in those two columns is the actual amount of the inflation, so the dollar value of that inflation. That divided into what a 1% commercial rate increase equals is what should generate that percentage. So I just wanted to highlight that, not trying to influence in any way, I just want to make sure the record is clear in terms of something that I see in here in terms of the calculation that's been done for the recommendation. Patrick, any response? Was a late night. No, I don't. I was using the logic that we've used throughout the budget process in the past to gather the 1% value times the rate request to arrive at an MPR impact. So perhaps that would have to be a discussion that I have with Rick after any vote were to occur. Okay, is there any further discussion from the board? If not, Russ, I'm gonna ask you to take the roll. Member Holmes. Couldn't hear you, Jess. Yes. Member Lunge. Yes. The member Appellum. No. Member Walsh. No. And Chair Mullen. Yes. But the record shows a three to two vote for Center Vermont Medical Center. We'll now move on to the budget for UVM Medical Center. And the request for a mid-year adjustment. Does any board member wish to make a motion at this time? Go ahead and make a motion. So I am similarly troubled about the financial position at UVM because the days cash on hand are not in for me a spot where I feel comfortable where they should be for an academic medical center. It is our only academic medical center in state and there have been significant headwinds in their direction between the pandemic and the cyber attack and Fannie Allen and now the broken pipe. So I do think those circumstances have been hard to manage too. And I also want to recognize that the wage increases for staff retention again are permanent and so will have an ongoing impact. So with that I would move to approve a mid-year adjustment for UVM Medical Center with the rate to be determined in a second motion. I'll second. Is there any further discussion. Any further discussion. If not Russ if you could call the roll. Yes. Member Holmes. Yes. Member Lunge. Yes. Member Pelham. No. Member Walsh. No. And Chair Mullen. Yes. Let the record show the motion carried by a 3-2 vote and Robin are you prepared to make a second motion. I am and I my logic is is basically the same as for CVMC so I'm not going to repeat it. I'll just go straight to the motion which is to approve a 2.5 percent mid-year adjustment sorry an up to 2.5 percent rate increase to UVM's fiscal year 22 budget as a mid-year adjustment to mitigate projected financial erosion and provide hospital leadership financial flexibility to meet unforeseen circumstances related to workforce and other cost pressures. I will second. Can you repeat the number that you used Robin. 2.5 it's the lower end of the staff recommended range. Okay. It's been moved and seconded is their discussion from the board. I just want to say that I don't think that this solves the problem but it recognizes that the shoes that the people at UVM are in now given the nature of the pressures that have been put on each and every one of our hospitals around the state. They're not alone. And I think these pressures are being seen through by hospitals throughout the country and not just by hospitals by nursing homes and everyone else that's delivering health care and I'm troubled a little bit by the fact that I really am not assured that in order that was done three years ago by the board and was put on hold because of covid which is the site beds. I worry about where that's headed. I don't appreciate not getting answers to that before having to vote on this mid-year adjustment. So I just want to state publicly before voting on this that as the regulator I will be looking to hold the feet to the fire of making sure that new inpatients like beds get built and that the order from over three years ago is actually followed through. So with that is there other discussion. Is there other discussion. If not Russ if you could call the roll. Board member Holmes. Yes. Board member Lunge. Yes. Board member Pelham. No. Board member Walsh. No. And Chair Mullen. Yes. Now we will expect you to be in next week to do that quarterly report on the inpatient site beds. So I realize that you're still in a tough spot but all Vermonters are and we have to move forward and hopefully we can do this together. I don't believe there's any other business to come before the board today. Is there a motion to adjourn. Guess nobody wants to leave. So moved. Second. It's been moved and seconded to adjourn. All those in favor please signify by saying aye. Aye. Any opposed please signify by saying nay. Thank you everyone have a great day.