Green Mountain Care Board reels in hospital patient revenues at 3 percent

February 25, 2013


Over the next three fiscal years, the Green Mountain Care Board plans to crack down on hospital budgets to mitigate Vermont’s rising health care costs.

The board is reeling in the limit on the amount hospitals can raise in revenues from patients. It is decreasing the patient revenue cap from 3.75 percent in fiscal year 2013 to 3 percent in 2014, 2015 and 2016.

The board is also removing routine exemptions, like those for increases in the provider tax and costs associated with implementing certain state policies.

When exemptions are subtracted from the state’s 14 community hospital budgets this fiscal year, the rise in overall Vermont hospital revenues is 2.66 percent. Include those exemptions and the increase in patient-generated revenue jumps to about 5.8 percent. [2]

Anya Rader Wallack, chair of the Green Mountain Care Board, which regulates Vermont’s health care finances, says her team is going to get tougher on hospital budget growth.

“We are tightening the range of flexibility, and we’re making it clear that we’re headed toward a lower rate of growth, more consistent with the lower rate of growth in the economy,” she said.

The board aims to limit across-the-board patient revenue growth to $63.7 million in fiscal year 2014 and $66.3 million in 2015 and $68.8 million in 2016.

The board will permit exemptions for budget items related to health care reform, like setting up systems to prevent the need for acute care, reforming budget models and implementing the capacity to shift away from fee-for-service care. In fiscal year 2014, the board will allow for an increase of 1 percent, or $21.2 million, in health reform investments, but that limit will decrease to 0.8 percent, or $17.7 million, in fiscal year 2015; and 0.6 percent, or $13.8 million, in fiscal year 2016.

Wallack said the board is developing measures to better account for physician transfers and acquisitions, which were formerly lumped in with the rest of a hospital’s budget.

Hospitals will submit their proposed budgets to the board in July.

Correction: The board will limit revenue growth to $63.7 million and health reform investment increases to 1 percent in fiscal year 2014.