 Okay it's one o'clock I'll call to order the Green Mountain Care Board's hearing of August 30th. Today we have a brief agenda. We have a staff presentation by Director Lindberg and Staff Attorney McCracken relating to the deliberative process we'll be using for the hospital budgets this year and we'll have an overview of some standard conditions and so with that I'll turn it directly over to Director Lindberg and Mr McCracken. The slide's coming through for folks. Yes. Okay thank you all for the record I'm Sarah Lindberg the Director of Health Systems Finance for the Green Mountain Care Board and I'm joined today by Russ McCracken our stellar staff attorney. The overview of what we hope to accomplish today is just review the deliberative process for the fiscal year 2024 hospital budgets. Review standard order conditions for those budgets. Review the public comment that we've received to date and start to do some deliberations for the hospitals that were able to submit budgets under the benchmark for Gifford Medical Center and Rutland Regional Medical Center. So each year the Green Mountain Care Board establishes budgets for the 14 community hospitals. In that review the board considers many factors including labor expenses utilization pharmaceutical expenses cost inflation commercial price changes financial indicators known pricing changes for Medicare and Medicaid uncompensated care and other factors as well as testimony from hospitals and comments from members of the public. The guidance also outlines that the GMCB will execute its statutory duties consistent with its purpose to promote the general good of Vermont as set forth in 18 VSA 93-72 to review and establish hospital budgets consistent with the principles for healthcare reform as required by statute and we shall review and establish budgets in adherence to the requirements of 18 VSA 94-56. So sorry to read a slide to you but all important detail there. As I'm very well aware all these decisions must be made by September 15th with the written orders being issued to the hospitals by October 1st. If folks are interested in more detail about that process we do have some more information on our website that people can check out. We're in the process of enhancing this process that's a lot of processes but as we look to improve and further adapt this process we want to look to expand it in future years to include things like quality more measures of productivity getting some solid indicators for patient access incorporating equity consumer affordability and considering the possibility of per capita budgeting. This is a step toward that end so this is not the end all be all and probably will be work in progress for the next year. However the main enhancements that have come to pass this year are using publicly available data sources to understand how Vermont's expense growth compares with peers nationally and regionally. The fiscal year 24 guidance inherited a benchmark that was established in the fiscal year 23 guidance. That guidance used a two-year growth rate that was designed to be responsive to the desire of hospitals to look at budgeting over several years and also to account for some of the historic inflationary pressures and workforce challenges that cropped up in the wake of the global pandemic presented by COVID-19. That growth benchmark was 8.6% in net patient revenue and fixed perspective payment which I often will refer to as NPR of 8.6% from fiscal year 22 actuals to fiscal year 24 budgets. That number comes from the goals established in Vermont's all-payer model which is tied to the growth in the gross state product. When that model was negotiated depending on whether you looked back five or ten years the range of the growth was between 3.5 and 4.3 percent. So the idea there being that hospital growth should be in line with the rest of the economy. We know that it has not been standard economic conditions over the past few years but that was the litmus test that the state has dedicated itself to through payment reform activities. So the way we'll approach this deliberative process is to start with a very simple but difficult question. Is that NPR at or below benchmark difficult in that it was an extremely ambitious target which I think was acknowledged throughout this process. So for those hospitals what we want to see is if the assumptions used were reasonable and if so we would recommend that those are approved as submitted. If any of those don't seem reasonable or are not supported by the submission then we would recommend considering modification. However for those hospitals that exceed the benchmark so their NPR growth was in excess of that 8.6% from fiscal year 22 actuals to fiscal year 24 budgets. We want to see how each expense factor identified in the guidance compares with the reference ranges and if it's in line with that that gives us more confidence in the number that was used to establish that budget and if not that's when we might consider modification. So we used new data sources as I mentioned earlier that were identified in the guidance that was established this year back in March of 2023 and what we have for labor expense growth was a median of 5.2% with a range of 0.8 to 9.7% that comes from the economic cost index. Utilization is based on historical trends in Vermont and has a median of a decline of negative 0.4% and a range of minus 5.5% to 4.2%. Pharmaceutical expense growth is one that I think folks are grappling with across the spectrum in our delivery system and as you can see there the median growth is 12% here according to the national data with a range of 2.3 to 21.6%. So no doubt that that is a cost pressure facing a lot of hospitals and not just in Vermont but across the nation. Cost inflation more broadly is at 5.8% again nationally and over time with a range of 1.1 to 10.5% so see that over time that we can have a lot of variability in these estimates but at least we can know what it's looked like over time. For commercial price changes we will look at comparisons with inflationary measures and their relative prices of hospitals. The financial indicators will vary by that indicator so those are things like operating margins and days cash on hand. Known pricing changes for Medicare and Medicaid we want to know that those were factored into the budgets and that there was diligence done to make sure that they were accounted for and similarly for uncompensated care we're most acutely aware of the market disruption caused by the end of the federal public health emergency which has led to Medicaid redeterminations starting back up after a few years off so we expect to see some market shifts and we want to know that hospitals and thought about that and did some homework about how to account for that in their budgets. And there's always a catchall category so for some hospitals there might be some individual factors or circumstances that we want to consider in the deliberative process. And now I'll turn it over to Russ. Great thank you Sarah. I'm going to walk through some proposed what we're calling standard budget conditions. Before I do that I'll explain that these would be effectively a default set of conditions that the board would include with each budget approval or modification but it's and our discussion today is not specific to any hospital and these conditions are not specific to any hospital. So as the board goes through each hospital through the deliberations process and approves or modifies a budget the board can attach these default conditions or if appropriate for a particular hospital situation can modify these conditions or add to them as needed. So that's why we're calling we're referring to them here as the standard budget conditions. So I'll walk through. Most will look familiar from prior years we've made some drafting changes and I'll highlight that. The first is simply approval of the NPR growth rate as a percentage over the FY22 actual NPR to be consistent with the guidance and so the board will approve a total NPR if not more than a certain amount for FY24 for the hospital. The next condition is an approval of the overall commercial rate increase as a percentage over the current level for the hospital so over its FY23 levels. We've made some additional clarifications here to make explicit what I think has always been the board's intention with this with this condition with this approval. So the first one is to say that the commercial rate increase overall will be capped at a certain percentage and that that cap applies equally to each different payer. So if it were say a 5% increase the board intended that 5% increase to apply overall and for each commercial contract. Part C is a continuation of making more explicit what has been the board's intent in this commercial rate cap and it's to say that the commercial rate cap really is a cap. It's a maximum. It's subject to negotiation between the hospital and its commercial insurers. It's not a rate approved by the GMCB that constitutes some kind of amount that's said or guaranteed by the board in the hospital's negotiation with insurers. It's really intended as a cap subject to negotiation between the parties. So I'm going to move into the next couple of conditions which I kind of group all together. We can say on the slide for minutes here which I grouped together as I know sorry go back one slide as reporting conditions for the hospitals. So D which is new from prior years says that the hospital's expected commercial NPR which we can estimate based on the budget as approved by the board is a certain amount. And the condition is requiring the hospital to report its actual expected commercial NPR by February 15th and explain what accounts for any variations between what we've estimated based on the budget submission and what is actual. There are a couple of reasons there might be variations in this. There could be a change in payer mix. There could be some other factors. So we're asking the hospitals to report back and explain that difference. Sarah is there anything else you wanted to add on this particular condition? I would say that this is a step as we try to continue to move towards measuring what we want to measure and measuring it in such a way that we can check our work and make sure that things are sugaring out the way we intended. Thanks. The next condition sorry one more on the prior slide before I go. This is a change from prior years. We would be requiring hospitals to report actual year to date performance only kind of once between budget cycles on April 30th for the period from October 1 to March 31. Previously we've had some we had reporting done quarterly which we then modified to kind of twice during the budget cycle. So with this we would have this one interim report on April 30th. We would receive projections for FY 24 when hospitals submit their FY 25 budgets in July of next year and then obviously we would still collect year end actuals for FY 24 in early 2025. All right next slide sir. Here we have some broad here we have I think what are familiar conditions around reporting. The hospital will have to submit its FY 23 actuals on or before January 31 2024. Hospital has to file its FY 23 audited financials the earlier of 15 days after the hospital receives its audited financial statements or January 31. The hospital to the extent determined by the board chair there would be helpful the hospital participate in phone calls check-ins about the hospital's operating performance. The hospital should advise the board of any material changes to its FY 24 budget or expenses should include assumptions determining used in determining the budget so changes in their reimbursements additions or reductions in programs or services any other event that can materially change the NPR that the board approves for FY 24. Next slide sir. Again a continuation of conditions or a condition that looks familiar from prior years the hospital shall participate in the board's strategic sustainability planning process pursuant to Act 167. The hospital shall timely file all forms and information required for the practice acquisitions or transfers as determined by board staff. We have a there's a board policy on reporting provider acquisitions or transfers so this is a condition that relates back to that. Hospital shall file all requested data or other information in a timely manner and then by some boilerplate things here after notice and an opportunity to be heard the board can amend the provisions consistent with its authority in statute and rule. All materials can be provided electronically and findings and orders in these orders do not bind the board's future decision-making. So I believe on the next slide I did offer some motion language around approving these budgets sorry approving these conditions. I know from some individual discussions with board members there may be we may not be in a position to do that today so I would open it up for discussion and we can always approve the board can always take up approval of these conditions at the meeting next week and then I think I turn it back to you or do I turn it forward discussion. Yeah why don't we turn to the board discussion before we move on if that suits the board. I think that makes sense. Let's hear any thoughts or suggestions board members had on the standard conditions that were presented. I'm happy to hop in here I have I like the standard conditions I like the amendments to them so thank you Russ and team. I wanted to throw in another one for possible consideration by the board and it relates to wait times monitoring. Again this year most but not all hospitals actually complied with our guidance to submit both referral lag and visit lag on their practices and top radiology procedures. So I think in order to ensure compliance next year I would like to add a standard condition or a condition or requirement that hospitals incorporate a system to be able to track and monitor both referral lag and visit lag so that we have 100 compliance by next year. One quick question member Holmes that sounds like a good suggestion to me given the access and delay problems we hear about. Would we need to be more prescriptive to ensure that everyone has a uniform measure for measuring these? I think the guidance that we put together last March is pretty clear on what's expected but we might be able to revisit what that language said and make sure that that's standard and apples to apples across different hospitals and everybody understands what is being measured. But I thought we did a pretty good job of making clear what we needed. I think there were some hospitals it sounded like from some of our budget hearings that just didn't have the systems in place to be able to record that. So I think by giving this much lead time the hope is that they can put the systems in place to be able to monitor and track it. But you know I'm happy to hear about ways to standardize it better and if the staff or others have ideas that'd be great. I just think it's really as you said it's really important we you know are monitoring wait times we have serious access issues across the state and if we're not measuring referral lag and visit lag we don't know where the problems are. Okay thank you. Any other board response? We certainly will do some homework on that and can circle back with some suggested language but didn't know if there's anything else we shall should consider as we do that. All right sounds like we've got a takeaway. Any other discussion on this? Okay so it sounds like we're not ready for a vote today but we will take that up at the next meeting and move along. So shifting gears to review the public comment. The comments were more robust I'd say this year than in previous years for my understanding. So we had a total I think now actually recently of 151 comments. Of those the vast majority were related to a situation of how reimbursement for staff at a certain health network should be meted out and then we also look at we got the second most comments of comments was related to exercising the GMCB's full authority to limit increases. We had a few comments that a specific health network shouldn't have any limitations on the revenue that they seek and finally just a single comment that we should approve budget the GMCB should approve budgets that support each hospital's need. I do want to highlight that we did get a very substantive comment letter from the health care advocate that included analysis of the UVM health network's audited financials and they also offered their recommendations about what action they would recommend on the budgets for the hospitals for the board to review. So again uncommon to get those that this many comments but that is how it worked out this year. So I think this would might be a good opportunity to see if there's any other public comment before we really dig into the hospital specific deliberative deliberation process. Good afternoon Mr. Chair. Mike Fisher here. Mike Carrio please go ahead. Thank you. I wanted to just say a few words as you enter into this next stage not about any specific hospital but about the process. As you know as it was just stated we provided a written comment and we of course stand by that comment and there's no need to repeat anything here. But we did want to offer that if you have any questions or clarifications about the details we provided in that comment we are happy to engage and work to get you the best answers we can. I just want to recognize it's not easy to be the regulator in the situation in front of you yet regulator you are. You have this very challenging task of finding the best path between the expressions of financial need from the hospitals and the comments from the likes of the HCA and others about the consequences of a health care spending that's growing faster than real wage growth on Vermonters. We appreciate the clear evidence driven process that was rolled out this year. It was a significant improvement from past years. We also want to recognize that that there are a handful of hospitals that did hard work and effectively reduced their budgets without cutting medical without cutting services. We think the hard work of evaluating the budgets of those hospitals who significantly exceeded the guidance in evaluating those hospitals who significantly exceeded the guidance. It's important and respectful to remember those hospitals who lived within or close to within the guidance. A few years ago we challenged ourselves at the HCA to always bring up health equity in every proceeding to ask the question what's the health equity angle. I want to recognize that we didn't do that in this year's hospital budget hearings and tell you a little bit why. We reached out to sort of in follow up to last year's hospital budget process where we raised a number of questions about clinical race equity questions. You know I think the example of which was spirometry that the the race adjustment for spirometry that is common. In follow up to that we did have a meeting with the hospital associations CMO council and started the work of trying to raise issues of race equity clinical equity questions there to attempt to have a system-wide approach to those questions. I think this is good. I don't think it's great. It doesn't it's good that we have a forum and a process to go forward to raise those questions but it it it's not systemic enough in my opinion to really bring experts to the table to ask those questions and to understand where we're doing well and where we're failing in different hospitals. We've been raising the question the relationship between bad debt and free care for a lot of years before you and I want to express a little frustration. After all these years I still don't have confidence that hospitals are reporting to you the value of those items free care and bad debt in a consistent and reasonable way. This makes it hard for me to push you to push hospitals to do a better job of engaging with patients who are having troubles paying their bills and make sure they're evaluated for eligibility for free care. We heard from a number of hospitals this year who say that people just won't respond. No one ever said this was easy yet some hospitals appear to do a better job of engaging their patients about their financial assistance policies than others. Many of you know I'm a social worker by training in the best of the human service model when we fail. We don't say there's something wrong with the client. We ask what's wrong with our approach. We know that we believe I believe there are ways to infect effectively engaged patients and to make sure that they know about the financial assistance that's available to them and look forward to a day when we can hold hospitals when we can measure hospitals efforts on this level. Again thank you in advance for your work. We're hopeful and know that you will find a way to keep the affordability of Vermonters in mind as you make the tough decisions in front of you. Thank you Mr. Chair. Thank you very much Mr. Fisher. Any other public comment? Chair Foster this is Tom Walsh. I wanted to ask the health care advocate if he has a preferred methodology for measuring the bad debt to free care ratio and if so if he could share that with us how would how would you prefer it be calculated? Is there a gold standard or what are the strengths and weaknesses of your approach? I'd like to learn more about that. Member Walsh, I'd be happy to engage here or happy to engage later about how to do that. I think written would be helpful for us. We can consider incorporating that into our guidance. Yes, thank you. Kelly Lang, you have your hand raised. Thank you Chair Foster. The comment is in regards to the special conditions proposed and we just wanted to highlight and make note that the rates that are put in our budget are the commercial rates that are necessary and budgeted models on all payers providing that rate. So it is not seen as a maximum or variable between payers. If we could provide services at a lower commercial rate that's how they would be provided to address the access that Professor Holmes noted and the quality. In regards to that when you have the payer regulatory procedure in the payer orders it's not where and how payers negotiate contracts. So this is a different standard and we're trying to all address quality and access here on both sides and we'd like to make that comment for the record. Great, thank you. And I believe Ms. Lang just for the record you work at UVM Health Network, is that right? That is correct. Great, thank you. The next hand if folks are from entities that are regulated it would be good to identify that just for the record. The next hand is Mark Stanislaus. Hi Chair Foster, this is Mark Stanislaus from the University of Vermont Health Network and I think this is more of a question on item D. I don't know if you can go to that one, Sarah. And Kelly might also have some comment on this too. I'm just to clarify what you're looking for. If it's from a dollar perspective those rates go into effect on January. Many of those claims aren't even adjudicated for the first month by the 15th. So we would have every intention to try to comply with this as much as possible, but we just don't have the data to certify from a dollar perspective from an actual GL perspective, Sarah, to I think answer this. I think we could be in a perspective to share the percentage that, you know, where we landed potentially, but I just wanted to point that out. I don't know if item D is possible to do that by that date and you know with any assurance that the number is correct because those new rates go into place in January. I mean our books aren't even closed for January until the end of February. And many times depending on the timing of the negotiation, the fee schedule might not even be updated until February 1st versus January 1st. So I just wanted to point that out to you as it relates to item D for consideration. Thank you for this opportunity to share that. Thank you. Director Lindbergh has condition B, sorry D, been included in prior year's budgets? Or is this a new one? This is a new one, yeah. Yeah, so we can certainly take that back and workshop it a bit to make sure it's respond, you know, it's something that can be responded to. Any other public comment? Seeing none, Director Lindbergh, if you want to keep on moving, that's fine with me. Wonderful. So we will commence the deliberative process starting with Gifford Medical Center to review the request that Gifford made. The two-year growth rate requested would result in a 7.7 percent, I'm sorry 7.2 percent overall growth in net patient revenue and fixed perspective payments from the fiscal year 22 actuals to the fiscal year 24 submission. A note that this number includes an adjustment related to a provider transfer. There were some practices or components of the Gifford Health system that made more sense to transfer to the hospital versus the FQHC under which owns the hospital. So with so that that just explains the delta between the NPR that we will, you know, ultimately approve and the growth rate that we're approving. So we want to be complicit, you know, we want to make sure that we're measuring growth in NPR appropriately and fairly. And as far as the charge increases that Gifford is expecting to use to get there, there was a 3.5 percent charge approved in fiscal year 22, a 3.65 percent rate, a charge increase approved in fiscal year 23, which when you look at the submission for fiscal year 24 is another 3.6 percent. So taking the two years fiscal year 22 to the budget as submitted, we get to 7.25. Those are among some of the lowest rates that we see in this time period. So definitely demonstrating a low reliance on a commercial or I'm sorry a rate increase to be clear a charge increase would affect all payers evenly and is not specific to a commercial. So if we apply our decision tree, NPR is at as below the benchmark. So we next ask if the assumptions used to get there are reasonable. And when we look through the budget submission, we see that for labor expense Gifford's been very active in that space. They recently implemented a wage analysis and they continue to review and adjust compensation based on market conditions. And they also in the relatively recent past have implemented a position control mechanism so that they can optimize the appropriate staffing levels. They're clear that their objectives are to pay a fair rate in order to retain and attract providers to the area. As far as utilization goes, they were above the historical benchmark there and their higher than typical increase was related to the two provider transfers that we just mentioned. So they're adding OBGYN and neurology services and they also had recently added a podiatrist and they have a cardiologist who's ramping up. So there was certainly justification from prior assumptions from provided these areas that justified that utilization rate that was above typical for them. The cost inflation information they use, they provided plenty of detail. It aggregated out at 5% for pharmaceutical expenses, which was derived from information from their group of purchasing organization. Their data was a little noisy in that they had some very high cost pharmaceuticals in 22 that for a patient that they are no longer caring for. So it looks a little funky in their financials, but as far as the pure cost inflation that is within the benchmark. For non-pharmaceutical cost inflation that was budgeted from a range between 1.5 and 4% all within the benchmark and again based on information from there that should read from their group purchasing organization. The requested rate increase for fiscal year 23 to 24 is the second lowest among all the submissions this year. They also demonstrated a CMI adjusted average cost per discharge below the median of their peer group in fiscal year 22 and their cost and cost coverage were among the lowest of Vermont critical access hospitals. This is driven in part to the fact that they have been unable to implement charge increases for the past couple years as they've looked to restructure their charge master and implement their new electronic medical record system. So even if you net in those retrospective rate increases that they hope to realize the rate growth is still within benchmark of what we would expect during this time period. For financial indicators so when you think about Gifford it's really important to remember that they look a lot different on what we call the consolidated basis than at the hospital level. So we see that Gifford health care as an entity is struggling they acknowledge that in their narrative. They talk about the measures that they're doing to try to improve their margin but even if you just look at the hospital most of the financial results are below median for indicators but for the days cash on hand and debt to capitalization ratio. So you know not seeing any drastic growth in margin or you know too much too fast when we talk about financial recovery from their submission. Gifford accounted for all known pricing changes in the submitted fiscal year 24 budget. So as a critical access hospital most of their reimbursement for Medicare is going to be based on cost reports and it's going to be based on the services that they did in fact provide. And finally the assumptions that they use for the unwinding and Medicaid redeterminations was based on prevailing trends and they in their hearing talked about how they approached that exercise. So according to the way the staff here see it all those assumptions seemed reasonable and we would suggest that this budget would be approved as submitted. So that is a potential motion language for you to consider in the deliberation today. Thank you. I'll open up to any board member questions or comments. I have a question related to the charge increase. It looks like what you're suggesting is that in the order we basically stick with the increase for 23 to 24 and that the order is silent on you know whatever happens on those prior increases. Is that right? That's correct. Our thinking there and Russ can help keep me honest is that these orders have been framed such that their increases above previously approved rates and given that these were due to some operational challenges in the past few years it did not give staff pause. Okay. I just wanted to make sure I understood how that worked together with that. Thank you. Yeah and I would just say that I appreciated that they were so forthright and highlighting that they wouldn't have had to do that frankly. So I thought that was that that I would appreciate that as a regulator. Agreed. So I'm comfortable with the staff recommendation for this hospital without any changes and I'm happy to make a motion if people are ready for that but also happy to wait until there's more discussion. The only I'm also okay with the approving this as submitted and for the staff's recommendation here. A little concerned about the prior increases just the precedent of potentially they didn't do that here you know of banking them and then using them the future is a different circumstance but you can see if that were to happen in a different type of context it could be a lot of money added to commercial unexpectedly pretty quickly and that that would be suboptimal but I don't have a problem with this request and I think this should be approved. Any other board member questions or comments? Member Lunge you want to make the motion? Sorry I'm talking on mute. I would move to approve Gifford Medical Center's budget as submitted with a 7.2% increase from fiscal year 22 actuals to fiscal year 24 budgeted net patient revenue and fixed perspective payment a 3.6% charge increase from fiscal year 23 to fiscal year 24 and subject to the standard budget conditions. With the caveat that those standard budget conditions will have not yet been approved so our future standard budget conditions second that. I'll second the motion. I'll give Dave the second. All those in favor please say aye. Aye. Aye. Aye. Mr. McCracken. I'm sorry to interrupt. I wanted to see if you wanted to open up to any public comment before we did a vote and then also just say Sarah said this at the outset but the 7.2% increase is giving adjustment effect to the provider transfers and that'll be clear as it's written up I just wanted to make sure I noted that here. So can you say again my computer froze up so I went off video for a second because I couldn't hear it could you say that again? Sure no I had the first was I wanted to see if the board would like to open this up to any public comment before voting. And then the second point was just to note again what Sarah said at that beginning that the 7.2% increases giving an adjustment for the provider transfers that's sort of noted on the prior slide and that would be clear in the budget order I just wanted to make sure it was clear for the motion as well. Okay. If it would be better I can we can withdraw it and redo it if that would be better at rest because we did use we used to have a separate vote on provider transfers in the past. I think that was my mistake in not making a note here in the suggested motion language. I think it's okay if it's in the budget order and we all have that understanding I think I made a mistake in not calling for public comment before the vote and I apologize for that so why don't I take public comment we have the motion we have the second and then we'll vote so if anyone has public comment on the motion please raise your hand. Okay seeing none all those in favor of approving the motion say aye. Aye. And the motion carries unanimously. I see a hand now. Mr. Bennett. Yes chair Foster thank you I didn't want to raise my hand before you voted so I wanted to thank you. Your board director Lindbergh and her staff and the HCA for your consideration and and in process so appreciate the work that you've done here and look forward to moving forward thanks. Great thank you and thank you for your team for doing your best efforts in submitting this budget it obviously went pretty smoothly and I think that reflects on the work that you all put in so thank you. Director Lindbergh I'll turn back to you. All right morning the hopper 13 to go. All right so the only other hospital who was able to submit a budget that was within the guidance was Rutland Regional Medical Center so to remind you of their submission uh the numbers here have not been updated I apologize on the top uh note there let me pull that up quickly for you. Uh if it suits the chair if you if we could maybe take a 10 minute recess I could update this and make sure that we're looking at the right numbers for the record. Makes sense so we'll adjourn for 10 minutes we'll come back at um 2 p.m. Okay I really appreciate it thank you. Of course thank you. Okay well we'll reconvene our meeting um director Lindbergh. Thank you um a wise person once told me never to do math in public so I appreciate the break uh so uh reviewing uh the request from Rutland Regional Medical Center we see that the approved growth from 22 to 23 was 2.4 percent and they're projecting a growth of 6.2 percent over that 22 actual but if you look at the growth from 23 to 24 it's 1.5 percent from that 1.4 percent from the projection in 23 and with a two-year growth rate of 7.7 percent. The charge increase in fiscal year 22 was 3.6 percent I have a little footnote there I wanted to remind the board that Rutland did submit a mid-year budget amendment request of 9 percent in that year that was not approved by the Greed Mountain Care Board. Had that been approved the growth from 22 to 24 would not have been quite as large as it is so just want to acknowledge that um as we the growth in 23 was approved at 17.4 percent so a lot of that mid-year clearly was rolled forward into the 23 request which was uh acknowledged in the revised order for fiscal year 22. Um when for fiscal year 23 to 24 the growth rate was uh or the requested charge increase for fiscal year 24 is 5.62 percent um rolling that across the two years the growth is 23.02 percent. Just to add a little more color to that 22 rate at 3.6 percent that was the fifth lowest approved charge increase that year from a range of 2.2 to 8.3 percent so that was a pretty low approval in 22 so you know I just want to give that context in looking at these numbers um so clearly the NPR came in uh below the benchmark so the next task is to see if the assumptions used were reasonable so uh as Rutland details in their narrative and was further articulated in their hearings and follow-up and interrogatories uh they were made the difficult decision to reduce some positions uh and they are implementing compensation benchmarks to the median of similar hospitals they also are in the process of a market analysis to review their compensation and have recently implemented some processes to evaluate criteria to review their CEO and establish the CEO's salary uh the utilization assumptions were flat from fiscal year 23 to 24 but for a couple attempts for them to address some access issues they were trying to expand some infusion services that are needed in the community and saw that the wait times were longer than they should be for some imaging procedures and so we're working to increase access for those services which would increase the utilization but was within the expected range uh the cost inflation for pharmaceutical expenses is tailored to the group purchasing vendor that they use and the advantage of that information is it is tailored to their specific formulary and utilization patterns and using that information they came up with a inflation target of four percent which is a little bit above the producer price index that was used for that but seemed to be reasonable and probably more accurate than that benchmark in this case uh the cost inflation assumptions were in line with the other hospital producer price index identified in the guidance and in the follow-up inflationary assumptions we see that they're all within the range uh commercial price changes uh the charge increase that they identified is or requested in their fiscal year 24 budget for the charge increase is 5.6 percent this is near the middle of all the Vermont hospitals and uh unless they had to reduce their expenses they were looking at an ask of us highest 9.1 percent so um they took some cost reductions in order to reduce that amount they were hoping to reduce it even more than that unfortunately some reductions in 340b revenue made it difficult for them to get that as low as they were hoping financial indicators so during fiscal uh Rutland's had some recent breaches and debt covenants which has impacted some of their lending agreements so they now must keep more days cash on hand and have some adjustments to their debt service coverage ratio and debt to debt the capitalization ratio ratio in order to make the borrowing feel safer to the lender so you know their budget accounts for that and make sure that they're not at risk of violating any more debt covenants the process to do those agreements is actually quite costly and so it is to the advantage to avoid those breaches whenever possible Rutland did account for all known pricing changes in their submission for fiscal year 24 and from their narrative it says they looked at both national and state estimates and tried to do their best to estimate the potential impact of the Medicaid unwinding that's currently underway so uh again uh all these assumptions seem reasonable uh nothing that uh staff think uh was not justified in the submission and so uh consider would could recommend that this budget also be approved as submitted okay i'll open up to any board member comments or questions my only comment I think is that I support the suggested motion language I really appreciate Rutland's uh you know meeting the board's guidance with respect to npr growth I know that was very very challenging this year and I appreciate the efforts that they made to to meet that guidance and the hard decisions that had to be made so I support approving Rutland's budget as submitted I might just ask if others agree that the budget order reflect the hope that Rutland continue the hard work necessary to get their CMI adjusted uh cost per discharge down closer to the median I know that's going to be continued hard work but I think it should be noted that they were they were high and I think the cost production planning efforts that were underway this year will make you know get closer to that level but just to note of that but I I I definitely think that this budget should be approved as submitted given the hard work that's been done I support the motion as well and echo member Holmes's comments I'm comfortable as well sorry Dave shall I make a motion can I just ask uh member Holmes for a quick clarification do you think that comment needs to be reflected in a budget order or that concern about the CMI adjusted cost per discharge or do you think that is something that is more just a general discussion point well I mean I think I just I think it's worth noting in the budget order it doesn't have to you know I think it's just a finding of fact that we will include in there and perhaps there can be some language around continuing on the path that they've been on I think is worth putting in the budget order I'd be comfortable with that I'll just ask Russ if procedurally there's anything we would need to adjust in order to reflect this or if you're set no I think that encouragement can be added we don't have to include it in the motion language wonder bar thanks well I'll go ahead and move that we approve retland regional medical centers budget is submitted with a 7.7 percent increase from fiscal year 22 actual to fiscal year 24 budgeted net patient revenue fixed perspective payment a 5.62 charge increase from fiscal year 23 to 24 and subject to the standard budget conditions once those are finalized a second I'll open it up to any public comment via the raise the hand function Miss Fox the CEO of Rutland please go ahead yes so first off thank you for supporting Rutland and our community in approving our budget it really was a difficult task for us so I do appreciate that I also would offer as you consider thoughts around tracking both referrals and lag time there are some true challenges that are outside of hospitals to be able to support we'd love to engage in a conversation with you around what that looks like I think we'd be open to that thank you for the suggestion and there's probably many things that could be outside the hospital's control measuring it and understanding it will be the first step I think to really address it so we we definitely want that feedback and thank you for offering and congratulations on a good budget you guys did a nice job so I think if I may just add chair foster I just want to I think I mentioned this in the hearing but I think Rutland did a fantastic job with really clear you know thorough wait time statistics and I you know one of the better hospitals submitting that referral and visit lag time information so I very very much appreciated that recognizing that some of that is out of you know the hospital's control but the data that you submitted was really helpful in understanding what the wait times are like in your community so thank you sure any other public comment all right I think we can go ahead and vote all those in favor of approving the motion you say hi hi hi hi motion carries unanimously and the Rutland budget will be approved pursuant to an order that will be forthcoming thank you very much so we'll be looking at hospitals a little bit differently who are above the benchmark when we reconvene next week kind of the other side of the decision tree appreciate your efficient use of time we're going to have an ambitious agenda next Wednesday so it was a little bit difficult to predict the timing with the standard conditions so always nice to get a little time back but thanks for your patience with a few of the bumps along the way should be a smoother show next week so appreciate it thank you very much thank you so is there any old or new business to come before the board and is there a motion to adjourn so moved second what was in favor please say hi hi hi hi motion carries and we are adjourned and thank you very much