News from the Vermont State House - An analysis from DRM's Government & Public Affairs Team - February 2017 #2

Downs Rachlin Martin PLLC

Downs Rachlin Martin PLLC

Governor’s $35 Million Housing Bond Discussed in Ways and Means Committee

Executive Director Gus Selig of the Vermont Housing and Conservation Board revealed some of the details this week behind the $35 million bond fund for affordable housing projects announced by Gov. Phil Scott in his January budget address. The plans were outlined in a presentation for the House Ways and Means Committee on Thursday.

Funding would come from a bond issued against revenue VHCB receives from its share of the 0.7 percent property transfer tax. The first $2.5 million would be dedicated to debt service for the bond. VHCB is comfortable with this, Selig said, as well as with a request from Scott that it shift its annual funding commitments from 55 percent for housing and 45 percent for conservation to 60-40. The proposal was well received, but Committee Chair Rep. Janet Ancel, D-Calais, questioned the proposed structure of retiring the bond with an otherwise non-dedicated tax. The committee will likely approve the proposal in some form.

Senate Assembles Another Big Economic Development Bill

The Senate Economic Development, Housing and General Affairs Committee on Tuesday opened consideration of a wide-ranging economic development bill. Committee Attorney David Hall walked the committee through a bill that includes minor changes in the Vermont Economic Growth Initiative, a ten percent increase in the research and development tax credit, reauthorization of the Enterprise Fund and establishment of  Enterprise Zones targeted at millennials. The bill would also repeal the sales tax on airplane parts, restoring an exemption that was eliminated by a recent legislature. Surrounding states all exempt airplane parts from sales tax in order to attract the high-end aircraft repair business.

The first draft of the bill contained language dealing with Act 250 criterion 9(L), which has been blamed for stopping a number of development projects in the state since it was revised two years ago. But the committee deleted any ideas that require heavy lifting and hopes to get a bill over to the House by the “crossover” date, March 17.  Committee Chair Sen. Kevin Mullin, R-Rutland, hopes to move a bill out of committee by the end of next week.

A Look at Workforce Needs in the Next Decade

Department of Labor Economist Matt Barewicz gave a presentation Thursday on long-term occupational changes and workforce needs in the state through 2024. Barewicz gave his talk before the House Commerce and Economic Development Committee on Thursday. 

The presentation showed both the actual number of new jobs expected to be available due to growth in each sector and those available to replace existing workers who move on. The largest areas of employment in the state are sales and related occupations followed by food preparation and serving.

The study also compared changes in Vermont’s labor market to the United States as a whole. For example, Vermont ranks sixth in the number of jobs available in the healthcare sector, but growth in that sector trails the national trend by a wide margin. The presentation also showed the best professions available for workers who complete each level of education, and the average wage paid to each.

RDCs Talk Economic Development in Senate Agriculture Committee

Senate President Pro Tempore Tim Ashe, D/P-Chittenden, has asked the Senate Agriculture Committee to look at new ways to stimulate economic growth in rural areas of the state, addressing a concept he described as “two Vermonts” in his opening remarks to the Senate in January.

In wide-ranging conversations with RDC Directors Tim Smith of Franklin County, Jamie Steward of Central Vermont, Lyle Jepson of Rutland and Dave Snedeker of the Northeast Kingdom, senators probed issues that are not commonly raised. They included the impact of the energy efficiency charge and demand charges on the cost of electricity for small manufacturers,  the cost of renewing annual storm water permits, the impact of high cost and delay of environmental permits, and the lack of a qualified grant writer to apply for state and federal funds in many rural areas.

The four RDC directors also plugged the familiar themes sounded by most of the twelve regional organizations this session, including the value of the VEGI and Vermont Training Programs, the need to allow more tax increment financing districts and the focus on workforce training and development. Committee Chair Sen. Bobby Starr, D-Essex Orleans, plans to produce a rural economic development bill by the crossover deadline.

State Chamber Exec Lauds Impact of R&D Tax Credit

Vermont Chamber of Commerce President Betsy Bishop made a spirited pitch for restoring the state’s Research and Development Tax Credit from 27 to 30 percent in the House Ways and Means Committee on Thursday, calling it “a key component of Vermont’s economic growth strategy.”

Bishop said no state funds go directly toward recruiting out-of-state companies to Vermont and that the majority of the state’s resources go to retain existing companies and helping them to grow. Particularly in the technology sector, she said, research and development investments lead to high-paying jobs in companies that are globally competitive and highly mobile. Offering a robust R&D tax credit sends a message to these companies that we want them to locate and grow in Vermont.

Senate Committee Works to Improve Mental Health Services Workforce

Yasmine Ziesler of the Vermont State College system told the Senate Health and Welfare Committee on Wednesday that Vermont will need to increase the number of Vermonters with postsecondary credentials from 50 to 70 percent by 2025 in order to address urgent workforce and economic development needs. Legislators are responding by making workforce development a priority. The committee is working on a bill aimed at encouraging mental health service training and job placement and spent time this week surveying current programs.  

Several Department of Mental Health programs link together higher education and the mental health workforce, according to witnesses. The Vermont Cooperative for Practice Improvement and Innovation program connects designated agencies, hospitals and training programs to promote skills development. The program also aims to reduce high staff turnover rates through improved and more efficient job orientation. Additional programs include the Wellness Workforce Coalition, psychiatric nursing partnerships with hospitals, and mental health training fellowships and scholarships.

David Lahr of the Department of Labor testified that DOL uses labor market research to determine workforce areas of need, and then provides appropriate training for those who have difficulty entering the workforce. The department suggested that some of the federal funding used for that training could be designated for job training in the health care fields. However, because people in department programs are often seeking rapid employment, the extensive training and frequent masters-level job requirements can be a barrier.  
The committee will continue to take testimony on the issue in coming weeks.

Panel Passes Telemedicine Expansion

The Senate Health and Welfare Committee on Friday unanimously passed S.50, a bill that expands Medicaid and private health insurance coverage for telemedicine services delivered by an approved provider. The bill would allow the same number of consultations by live interactive audio and video services as if the service were performed in person. Representatives from Vermont’s two major health insurers testified in support of the bill.

The committee amended the bill to clarify coverage for telemedicine services delivered by a provider at a distant site (the location of the health care provider delivering services through telemedicine at the time the services are provided) and the originating site (location of the patient at the time services whether at a provider’s office, hospital, the patient’s home or other non-medical environment).

DVHA Provides Details on Medicaid Pilot

The House Health Care Committee on Wednesday heard from the Department of Vermont Health Access Commissioner Cory Gustafson and Deputy Commissioner Michael Costa on the Vermont Medicaid Next Generation Accountable Care Organization Pilot Project – the Medicaid portion of the ACO all payer model. The all payer ACO model enables the three main payers of health care in Vermont – Medicaid, Medicare, and commercial insurance – to pay a group of providers differently than through a fee-for-service reimbursement system.

Gustafson said that the Medicaid pilot is an agreement with OneCare Vermont – Vermont’s largest accountable care organization – and the Medicaid office. It is the first step in making fundamental changes to the way health care is funded. The pilot project will consist of 30,000 Medicaid beneficiaries. It will provide payment flexibility and support to providers to deliver care for the population they serve. The pilot will include four hospitals, the Federally Qualified Health Centers, independent providers, designated agencies and skilled nursing facilities in four communities.

Costa said it is a one-year agreement with four optional one-year extensions. Providers will receive payments from the $93 million pool paid by the state to OneCare. Oversight of the pilot will be led by DVHA’s payment reform team who will coordinate activities across the department. The department will evaluate progress of the pilot on a month-to-month basis.

Payments to the ACO will be a monthly fixed prospective payment made in advance of services being performed for hospitals. The ACO will be paid for each attributed member and the ACO would be financially responsible for each member, regardless of the services each person uses. Costa said one of the key goals of the model is to give providers and Medicaid certainty and predictability regarding revenue for a pre-identified population of Vermonters. Fee-for-service payments would continue for all other non-hospital providers in the ACO.

There are a number of services for which the ACO is not responsible. This includes pharmacy, nursing facility care, dental, non-emergency transportation, psychiatric treatment in a state psychiatric hospital, Level I involuntary inpatient psychiatric stays in any hospital, and smoking cessation services.

Finance Committee Looks at Prescription Drug Cap Bill

The Senate Finance Committee took testimony on Friday from representatives of health insurers and the Scott Administration on S.19, a bill that would delay for one year a requirement that the Department of Vermont Health Access apply for a federal waiver to ensure the continued availability of bronze-level Vermont Health Connect exchange plans that meet Vermont’s out-of-pocket prescription drug cost limit. The bill also directs an advisory group to look at potential changes to the law to ensure the continued availability of bronze plans.

Legislative Counsel Attorney Jennifer Carbee told the committee that health insurers sought to increase or eliminate the out-of-pocket prescription limit to give individuals a more affordable insurance option. The Green Mountain Care Board recently approved Vermont Health Connect exchange plans and added one bronze without a cap.

Carbee said the bill requires DVHA and an advisory group to make recommendations by February 2018 for the continuation of the out-of-pocket prescription drug limit and options for statutory or regulatory changes to ensure the continued availability of bronze-level plans on the exchange. This includes identifying inflation factors as an alternative to referencing federal health savings accounts or establishing a special fund to reimburse individuals with exceptionally high out-of-pocket prescription costs instead of imposing an annual out-of-pocket prescription drug limit. It also requires the advisory council to look at modifying other cost-sharing limits applicable to health plans in order to preserve the availability of bronze plans.

Agency of Human Services Director of Health Care Reform Mary Kate Mohlman and representatives of the health plans said there is no pressure to apply for a waiver since the plans are in compliance with state law and will be for the foreseeable future. She asked that the date be pushed out to 2019. Sen. Michael Sirotkin said with the uncertainty at the federal level and the expense to seek a waiver, he supports the one-year delay.

The committee will vote on the bill next week.

Insurers Take Wait-and-See Approach to ACA Repeal

Representatives of commercial health plans and the Scott Administration appeared before the House Health Care Committee on Wednesday to brainstorm over the steps that may need to be taken if Congress repeals the Affordable Care Act. Agency of Human Services Secretary Al Gobeille said, “We can all ask the ‘what if’ questions, but until we know what Congress plans to do it doesn’t make sense to spend much time trying to figure what questions we need answers to. At this point in time we have nothing to react to – there is no solid legislation to respond to. No matter what happens in Congress, making changes will take years to implement.”

Blue Cross Blue Shield of Vermont General Counsel Rebecca Heintz said her organization believes that the ACA has been good for consumers, although the law is far from perfect. Heintz said the ACA is made up of multiple policy levers, all intended to work together to make insurance more comprehensive, yet more affordable. Heintz is concerned that if pieces of the ACA are removed and others remain in place, there is significant risk that the market will destabilize. Heintz said prior to the ACA, with some exceptions, virtually all health insurance regulation was at the state level. If mandates go away, BCBSVT would like to see the open enrollment rules maintained. Heintz’s presentation can be found here.

MVP Senior Government Strategist Susan Gretkowski told the committee that MVP’s biggest concern with potential repeal is market stability. She said there is a move in Congress to repeal the individual mandate within the next few weeks. The individual mandate requires all Americans to have health insurance or pay a fine to the Internal Revenue Service. Gretkowski said some individuals pay the fine instead of buying health insurance. If the penalty went away, fewer people would sign up for insurance, creating upward pressure on premium costs.

ACO Implementation and Timeline Reviewed

Green Mountain Care Board Executive Director Susan Barrett appeared before the House Health Care Committee on Tuesday and provided the committee with a presentation that discussed the all payer model accountable care organization implementation and reporting timeline. The APM ACO is an alternative payment model in which payers incentivize health care value and quality for a group of providers.

Barrett told the committee that the Agency of Human Services is responsible for developing, offering, and implementing the Vermont Medicaid Next Generation Accountable Care Organization program. The Green Mountain Care Board is responsible for regulatory implementation of ACOs by certifying the ACOs, reviewing budgets, reviewing and advising on Medicaid rates, setting commercial and Medicare rates, tracking financial benchmarks and quality targets, and implementing changes to other GMCB processes (hospital budgets and health insurance premium rate review) to create an integrated regulatory approach.

Panel Reviews Medicaid Pathways Report

Agency of Human Services Director of Health Care Operations Selina Hickman appeared before the Senate Health and Welfare Committee on Thursday to review the Medicaid Pathway Report required by Act 113 of 2016. The Medicaid Pathway is a process that supports Medicaid payment and delivery system reforms. The state’s high-level goal for payment and delivery system reform includes improving patient experience of care, improving the health of populations, and reducing per-capita cost.

Hickman said the overarching planning principles behind Medicaid Pathway are to ensure access to care for consumers with special health needs, promote person and family centered care, ensure quality and promote positive health outcomes, ensure the appropriate allocation of resources and manage costs, and create a structural framework to support integration.

Hickman said the report provides valuable information on the funding challenges in the current system linked to workforce development and staff turnover, which in turn have a profound impact on access and quality of services delivered. She said value-based payment methodologies may lead to additional provider flexibility. However, the senior staff who have the knowledge and ability to lead internal agency reforms are often also responsible for staff recruitment, training and supervision and may also carry a direct service caseload. High turnover rates not only inhibit quality and continuity of direct care for consumers, but also impact the organizations’ ability to engage in internal innovation and delivery transformation.

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Downs Rachlin Martin PLLC

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