An act relating to reference-based pricing and the Green Mountain Care Board

Added a requirement that the Board reduce hospital prices incrementally until they equal national median prices by hospital type by calendar year 2030, using nonpartisan data showing hospital prices as a percentage of Medicare.

Added a prohibition preventing health care professionals from charging or collecting from patients or insurers any amount in excess of the reference-based amount established by the Board.

Removed the default percentage of Medicare cap for newly established CPT codes and the default maximum percentage of Medicare cap for individual inpatient or outpatient items and services.

Changed the date by which provider contracts must express rates as a percentage of Medicare from October 1, 2026 to January 1, 2028, and added 'amended, or renewed' to cover contract modifications.

Removed the entire detailed hospital outsourcing regulatory framework, including definitions of outsourcing, requirements to include outsourced revenue in hospital budget limits, billing protections for patients, and financial assistance policy requirements for outsourced services.

Changed the treatment of provider bargaining groups from full repeal of section 9409 to an amendment that preserves the authorization but explicitly excludes reference-based price establishment from the scope of required negotiations or arbitration.

Added Section 9 addressing the federal requirement that Medicare beneficiaries pay 20 percent of the amount charged (rather than 20 percent of what Medicare pays) for outpatient services at critical access hospitals, directing information provision to seniors and a stakeholder working group to develop solutions.

Replaced the specific 250 percent of Medicare reimbursement cap for qualified health benefit plans with a mechanism where the Board determines the percentage of Medicare adjusted base rate it will order hospitals to accept for qualified health benefit plans and school employee plans in fiscal year 2027.

Added Section 4a authorizing the Department of Vermont Health Access to submit a Section 1332 State Innovation Waiver under the ACA to establish a reinsurance program and seek federal pass-through funding of premium tax credit amounts.

Simplified the health system performance tool requirements by removing the specific mandate to display hospital prices relative to Medicare rates as a percentage and in dollars, and changed the update frequency from 'at least quarterly' to 'on a regular basis, to the extent operationally feasible.'

The bill's short title was changed from 'An act relating to the Green Mountain Care Board, reference-based pricing, and studying the creation of a Public Employee Health Benefit Authority' to 'An act relating to reference-based pricing and the Green Mountain Care Board,' removing the public employee health benefit authority study from the stated purpose (though the study provisions remain in the body).

New Section 5 amends 18 V.S.A. 9409 to explicitly exclude reference-based pricing from the scope of health care provider bargaining group negotiations and nonbinding arbitration, meaning the Board can set reference-based prices without negotiating with provider groups on that specific issue.

New Section 1 amends 18 V.S.A. 9376(e) to require the Green Mountain Care Board to establish reference-based prices as maximum hospital payment amounts, reduce hospital prices incrementally to national median by calendar year 2030, begin implementation no later than hospital fiscal year 2027, and review prices annually as part of budget review. The Board must also monitor that hospital price decreases result in premium decreases and post findings annually.

New Section 1(3)(C) requires that for provider contracts entered into, amended, or renewed on or after January 1, 2028, hospitals and insurers must express rates as a percentage of Medicare or another Board-approved benchmark. Hospitals must also include percentage-of-Medicare pricing in machine-readable files under federal transparency rules.

New Section 1(3)(D) requires each hospital to use a unique National Provider Identifier (NPI) on all claims filed after October 1, 2027 for off-campus departments located more than 250 yards from the main campus.

New Sections 7 and 8 require the Board to develop a public health system performance tool displaying quality, access, and affordability information, but only if sufficient federal or other funding is available for the purpose.

New Section 9 requires each critical access hospital to identify outpatient services where charges are five or more times the Medicare allowed amount and to post a prominent disclosure about the federal requirement that Medicare beneficiaries pay 20 percent of the charge (not 20 percent of what Medicare pays) by September 1, 2026.

New Section 2 authorizes the Green Mountain Care Board to order hospitals to reduce commercial reimbursement rates for qualified health benefit plans and school employee health benefit association plans in FY2027 based on a percentage of the Medicare adjusted base rate. Carriers may not reimburse above the Board-specified limit, and hospitals may not balance-bill patients beyond plan cost-sharing.

New Section 4a authorizes the Department of Vermont Health Access to submit a Section 1332 State Innovation Waiver under the Affordable Care Act to establish a reinsurance program and seek federal pass-through funding of premium tax credit amounts.

New Section 4 requires the Green Mountain Care Board to provide findings and recommendations on hospital outsourcing to legislative committees by January 15, 2027, including an assessment of how outsourcing affects provider tax revenue.

New Section 6 amends 18 V.S.A. 9381 to require the Green Mountain Care Board to adopt administrative appeal procedures and allows any aggrieved person to appeal final Board actions to the Vermont Supreme Court after exhausting administrative appeals.

New 33 V.S.A. section 1815 caps hospital reimbursement at 250 percent of the Medicare adjusted base rate for items and services in qualified health benefit plans, with a prohibition on balance billing patients beyond authorized cost-sharing amounts.

New Section 11 requires the Board to convene a working group on mitigating the federal Medicare 20 percent outpatient cost-sharing requirement for critical access hospitals, with recommendations due January 15, 2027, and prohibits the Board from addressing this issue through FY2027 hospital budget orders.

New Section 3 (18 V.S.A. section 9459) establishes a tiered mechanism for commercial rate reductions: first through the 250 percent cap, then by reducing rates exceeding 500 percent of Medicare adjusted base rate, while allowing hospitals to shift spending toward service lines like primary care within their total budget.

The provider contract requirement now applies to contracts 'entered into, amended, or renewed' on or after October 1, 2026, rather than only contracts 'entered into' on that date, broadening its reach to existing agreements that are modified.

Removed the provisions requiring the Board to establish a default percentage of Medicare above which hospitals cannot accept payment for new CPT codes, and a default maximum percentage of Medicare for any individual inpatient or outpatient item or service.

New Section 4 directs the Green Mountain Care Board to analyze claims data for state employees and VEHI enrollees and report by January 15, 2027 on opportunities and projected impacts of implementing reference-based pricing for public employee health plans.

New Section 10 creates a Public Employee Health Benefit Authority Study Committee (11 members from public sector organizations) to evaluate establishing a state authority to administer comprehensive health benefits for all public-sector employees, with a report due February 15, 2027.

The hospital outsourcing section was drastically reduced from a full regulatory framework (definitions, mandatory inclusion of outsourced revenue in net patient revenue limits, consumer protections including billing responsibility and financial assistance policy application) to a simple information-gathering directive for FY2027 budgets and a report-and-recommendation requirement due January 15, 2027.

The introduced version repealed 18 V.S.A. section 9409 (health care provider bargaining groups). The Senate version instead amends it to preserve bargaining groups, adds a nonbinding arbitration process for disputes, and explicitly excludes reference-based price establishment from mandatory negotiation or arbitration.

The deadline for hospitals to use unique NPIs for off-campus departments changed from October 1, 2026 (introduced) to October 1, 2027 (Senate).

The health system performance tool description was changed from displaying hospital prices relative to Medicare rates (as percentage and dollars) sortable by service line and payer with quarterly updates, to displaying information on quality, access, and affordability updated 'on a regular basis, to the extent operationally feasible.'

New definition of 'Medicare adjusted base rate' added in both 33 V.S.A. section 1815 and 18 V.S.A. section 9451, specifying it is the standardized Medicare payment amount before hospital-specific, patient-specific, or policy-based adjustments, including geographic wage adjustments, with a special methodology for critical access hospitals.