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

Downs Rachlin Martin PLLC

Downs Rachlin Martin PLLC

Transportation Agency Proposes Right-of-Way Penalties

The Agency of Transportation has submitted a proposal to the House Transportation Committee that would allow the agency to seek damages from a utility that fails to move or adjust a utility line that is in a state or local right-of-way within the time period specified in an order issued by AOT or a municipality. A utility could avoid the payment of damages if the failure to act is “for reasons beyond its control.”

The AOT proposal stems from the agency’s belief that some utilities fail to respond promptly to requests to move poles for road repairs and other projects. They argued before the committee that the agency can be liable for penalties owed to private contractors for delays caused by utilities. Utility representatives testified that they communicate regularly with AOT on such projects, many of which are complicated, and that delays are unusual. Relocation orders often require the coordination of numerous companies to relocate electric, cable and telephone lines. AOT testified to only one delay in five years which resulted in the payment of a penalty to a contractor.

The Transportation Committee intends to take more testimony on the proposal.

House Approves Ride-Sharing Insurance Bill

The House gave its final approval on Friday to a bill, H.143, that establishes automobile insurance requirements for ride-sharing companies such as Uber and Lyft. The bill was supported by auto insurers and Uber, which are seeking uniform insurance requirements for all ride-sharing companies across states. The bill imposes different insurance requirements depending on whether a driver’s ride-sharing app is turned on, and whether a passenger is present.

Support for Expanded Telemedicine Services

The Senate Health and Welfare Committee took testimony this week on S.50, a bill that expands Medicaid and private health insurance coverage for telemedicine services delivered in or outside of a health care facility. 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 Vermont Medical Society supports the efforts to increase and clarify insurance coverage for telemedicine services. Jessa Barnard, vice president of policy for the society, said technology has allowed physicians to provide services that keep patients healthy and avoid higher-cost interventions. Barnard said her members are very interested in using telemedicine for mental health treatment. She said while Vermont law and policy address Medicaid reimbursement for telemedicine services in primary care provided when a patient is outside of a health care facility, there is not a parallel policy for psychiatry or other services. A more consistent policy applicable to all areas of medicine would encourage more practices to offer telehealth services and could potentially expand access to services.

Department of Vermont Health Access Chief Clinical Officer Aaron French said DVHA is considering impacts of the proposal. Those include:

  • Determining clinically appropriate services for telemedicine outside a facility;
  • Establishing performance and quality measures;
  • Instituting program integrity activities; 
  • Defining billing requirements and making necessary changes to the claims processing system;
  • Promulgating an administrative rule on telemedicine services and reimbursement; and
  • Anticipating increased service utilization and Medicaid expenditures.

The committee plans to take more testimony next week.

Committee Considers Pole Attachment Rules

The House Energy and Technology Committee took up a bill this week, H.186, that would direct the Public Service Board to initiate rulemaking for the purpose of expediting the pole attachment process for broadband service providers.

The bill was offered by Rep. Jim Masland, D-Thetford, on behalf of E.C. Fiber, a telecommunications company on whose board he serves. The PSB is currently revising its pole attachment rules, and it is unclear how the legislation would affect that process. Additional testimony on Masland’s bill is expected.

DVHA Budget Foresees Reduced Medicaid and Pharmacy Costs

The House Appropriations Committee this week began its close look at Gov. Phil Scott’s proposed $482 million Department of Vermont Health Access Budget. The budget reflects savings from a reduction in Medicaid caseload due to eligibility changes, but the state payment share is increased by growth in “Per Member Per Month” costs due to an increase in utilized services.

Pharmacy costs are also down due to rebates that are exceeding expectations, but DVHA Commissioner Cory Gustafson is not confident that the trend will continue and wants to retain a sizeable caseload and utilization reserve if the trend should level. The committee questioned the need for the reserve when there are significant budget pressures. Rep. David Yacovone, D-Morrisville, suggested that some of the reserve should be spent on high-need members of the Vermont Chronic Care Initiative to reduce the increased PMPM.

The budget also reflects a ten percent Disproportionate Share Reduction across the board. These payments are made to hospitals that carry heavy Medicaid or uninsured caseloads. The committee indicated that it may explore an even larger reduction, or a proportional reduction tied to each hospital’s burden.

Governor Announces $93 Million Medicaid Pilot Program

Gov. Phil Scott announced this week that Vermont has entered into a one-year All-Payer Model pilot project with OneCare to assign 30,000 Medicaid patients to the provider network. OneCare, one of Vermont’s accountable care organizations, has 1800 member providers who will assume responsibility for the health of the selected Medicaid population, who are already patients of the providers.

The pilot transfers Medicaid cost risk from the state to the providers who are responsible for their care. Providers retain savings of up to three percent below the set annual patient payment and are responsible for costs up to three percent over the patient payment. DVHA retains or pays funds outside of that three percent corridor. This departure from fee-for-service care is intended to reward low-cost and high-quality care rather than volume. The pilot program also eliminates prior authorization requirements for treatment or referrals, allowing care decisions to be made by providers and patients. Providers will receive payments for patient care directly from the $93 million pool paid by the state to OneCare and won’t have to make claim submissions to DVHA.

Bill Would Require Notice of New Telephone Poles

Rep. Bill Botzow, D-Pownal, introduced a bill, H.51, that would require telecommunications companies to provide notice to a municipality and adjoining property owners before installing a new facility, including a pole. The company would be required to allow the municipality or property owner to ask questions and propose changes to the proposal. The bill was introduced at the request of a constituent who was unhappy that a new pole obstructed a scenic view.

The Energy and Technology Committee held hearings on the legislation this week, and members seemed cognizant of the costs that the bill could impose, at a time the committee is seeking to encourage greater broadband construction. Additional hearings on the bill are likely.

DVHA Discusses Vermont Health Connect Next Steps

The Department of Vermont Health Access began its Vermont Health Connect updates to the House Health Care Committee this week. DVHA Commissioner Cory Gustafson confirmed that the department will not abandon the web-based system and said it will instead fully examine VHC’s past and current issues in order to improve the system and the customer experience. He also stressed the department’s desire to be transparent with the committee.

VHC Director of Operations Cassandra Madison rolled out new performance indicator dashboards as a demonstration of the increased transparency. The indicators incorporate “stretch goals” for VHC such as promptly answering members’ calls and transmitting data files in a timely and accurate manner. Madison told the committee that they would use the indicators to determine where to focus operational energy. She also noted that the new indicators draw from only two months of data and cannot yet indicate trends.   

As revealed in the governor’s proposed budget, VHC will seek to simplify programs and save money by encouraging unsubsidized individuals to enroll directly with insurance carriers. VHC is also considering whether to end premium processing for Qualified Health Plans and return processing and billing to carriers.

Chair Bill Lippert, D-Hinesburg, reminded the committee that they were no longer responsible for the technology of VHC, but needed to focus solely on the policy issues that the technology implements. Rep. Ben Jickling, I-East Randolph, has been named the designated liaison to work with the Energy and Technology Committee to ensure coordination of VHC oversight.

Consultant’s Report for Treasurer Rejects Fossil Fuel Divestment

A new report prepared by a consultant to the Vermont Pension Investment Committee recommends against divestment of state employee pension funds from coal, oil, natural gas and ExxonMobil stocks in favor of constructive engagement by the State Treasurer. The report also recommends that states work together to find affordable, passive investment vehicles for low-carbon strategies.

The study released on Wednesday by Sarah Bernstein of Pension Consulting Alliance, LLC, a California firm, was the result of nearly a year of work by the panel that oversees pension investments of state employees. Last session, Treasurer Beth Pearce fought back against an aggressive push by then-governor Peter Shumlin in favor of divestment. Pearce prevailed in that fight and promised a study instead.

The report released on Wednesday was authored by a firm that was recommended by divestment activists and approved by VPIC. The process included input from many sides of the issue and investment counsel. The report concludes, in part, “We believe that VPIC’s significant proxy voting and engagement efforts on climate risk issues at fossil fuel companies, including ExxonMobil, and investment strategies other than divestment, are better suited than divestment for VPIC to manage risks and opportunities posed by climate change within its role as fiduciary of a U.S. public pension fund.”

Hospitals Release White Paper on Mental Health

Vermont’s hospitals released a White Paper on Friday that is designed to prompt discussions about the challenges and gaps facing mental health providers and patients. The white paper shares the hospitals’ perspective around long emergency wait times for those in mental health crisis as well as potential solutions.

Vermont Association of Hospitals and Health Systems lobbyist Laura Pelosi said in addition to each hospital’s efforts, VAHHS has organized an internal mental health task force comprised of psychiatric and emergency department clinicians across hospitals to develop solutions and draft clinical standards that will allow hospitals to provide better care for their mental health patients. Pelosi said in the near term Vermont hospitals have responded by employing mental health technicians in emergency departments, utilizing tele-psychiatry to perform assessments on patients, creating private therapeutic spaces within emergency departments, and working closely with community providers to help address this crisis.

In order to reduce emergency department wait times and appropriate treatment, hospitals identified some notable challenges: the need for comparable and comprehensive data across providers; the need for crisis beds, mobile crisis and other community-based alternatives; an increase in capacity of residential options in the community for people with persistent mental illness; a comprehensive partnership between hospitals and designated agencies throughout the state; and better coordination between hospitals and state agencies.

The hospitals also proposed the following steps to help improve the current system:

  • Develop geriatric psychiatry capacity in Vermont;
  • Create more step-down capacity to serve children and adolescents with mental health needs within their own communities;
  • Provide a secure facility to treat forensic patients;
  • Build more secure step-down capacity to free up Level One beds (for patients who require the highest level of care and services within the inpatient system); and
  • Analyze workforce needs and adopt a plan to address them as expeditiously as possible.

Economic Development Begins Listing Priorities

The House Commerce and Economic Development Committee has begun to list common themes in business and workforce development after more than five weeks of briefings and overviews from both the public and private sector. The priorities will be posted on a white board in the committee’s hearing room starting next week.

This week, the committee heard from several directors of the 12 Regional Development Corporations on economic development "outside of Chittenden County." Although Adam Grinold of Brattleboro, Bob Flint of Springfield, Dave Snedeker of the Northeastern Vermont Development Association and John Mandeville of the Lamoille County RDC all described unique programs and situations, they also sounded some common themes. All called for continued support of the Vermont Economic Growth Incentive and the Vermont Training Program and all talked about better coordination of career and technical education. They supported bringing workforce training programs currently run by the Department of Labor into the Agency of Commerce and Community Development, and talked about filling the gap between high construction costs and low market value of new industrial spaces through creative financing.

The RDCs have also voted as a group to endorse the idea of allowing more Tax Increment Financing districts for communities across the state. A number of towns have formed a coalition calling for new TIF districts managed by well-known Burlington developer David White of White and Burke, Inc. Removing the cap on TIFs also has the support of the Scott Administration and municipal officials from across the state.

Post-Affordable Care Act Options Discussed

With President Donald Trump’s vow to repeal the Affordable Care Act looming, Legislative Council Attorney Jennifer Carbee appeared before the House Health Care Committee on Tuesday to review an informational memorandum that looks at the Vermont health insurance landscape if the ACA is repealed. Under the ACA, Vermont’s individual and small group markets were merged into a single risk pool with the same health plan offerings. It is unclear what options states may have if the ACA is repealed and whether Vermont will have the option to maintain its exchange or its exchange plan configurations.

Carbee said the following provisions would continue to apply to health insurance plans in Vermont even if the ACA is repealed:

  • Guaranteed issue;
  • Community rating;
  • Contraceptive coverage with no cost-sharing (in most instances);
  • Coverage for mammograms and colonoscopies with no cost-sharing; and
  • Mental health parity requirements.

The following provisions would not continue to apply to health insurance plans or to employers’ self-funded plans in Vermont if the ACA is repealed:

  • Annual out-of-pocket maximum;
  • Ban on preexisting condition exclusions;
  • Bans on annual and lifetime limits for essential health benefits;
  • Ban on cost-sharing for preventive services; and
  • Coverage for young adult children up to 26 years of age on their parents’ plan.

Carbee also addressed the impact on self-insured plans under the Employee Retirement Income Security Act of 1974, which prohibits states from regulating the benefits that private sector employers offer in self-funded plans. The ACA applies several of the insurance market reforms applicable to fully insured plans to self-funded plans as well, including the requirement for coverage of preventive health services without cost-sharing, the ban on exclusion of preexisting condition, the annual out-of-pocket spending limits, the bans on annual and lifetime limits for essential health benefits, and the requirement to continue coverage for young adult children up to 26 years of age. If these provisions of the ACA are repealed, Vermont cannot require private sector self-funded plans to continue offering these benefits to their employees.

Pharmacy Benefit Managers Under the Spotlight

The Senate Finance Committee spent time on Thursday on S.57, a bill that attempts to increase consumer awareness of prescription drug prices. Sen. Michael Sirotkin, D-Chittenden, said his goal was for consumers to find out where they can get their prescription drugs at the lowest cost.

Legislative Counsel Attorney Jennifer Carbee told the committee the bill has two main provisions:

  • It requires a PBM to mail an explanation of benefits form to the beneficiary for each prescription drug covered by the PBM. The EOB would include the cost of the prescription drug being charged to the health plan; the copayment amount paid by the beneficiary; any fees and other charges deducted from the cost of the drug; the amount retained by the PBM; and the final payment to the pharmacy, and;
  • It requires health insurers to provide a range of actual coinsurance amounts based on the lowest and highest prices available at pharmacies on a weekly basis.

The committee heard from Blue Cross Blue Shield of Vermont Director of Vendor Management Brian Murphy on the impact to the organization. BCBSVT has approximately 1.3 million pharmacy claims a year, and the bill would increase costs to their PBM by $1.4 million. It would also increase BCBSVT’s administrative costs by about $1.8 million annually. Murphy’s presentation can be found here.

Funding Recommendations for Clean Water on the Table

A $5 surcharge on hotel room rentals and an increase in the gasoline and diesel tax are among the funding options on the table for the state's Clean Water Fund. The options are contained in a draft bill released Friday morning in the House Natural Resources, Fish and Wildlife Committee, which is charged with raising up to $50 million per year for surface water pollution projects. A link to the draft was later removed from the committee’s web site.

Development of a long-term strategy for the Clean Water Fund is a state priority after Vermont agreed with the U.S. EPA on a plan to mitigate pollution in Lake Champlain. State Treasurer Beth Pearce conducted an outreach effort over the summer which led to report of the options and pros and cons of each. A new long-term funding source of at least $25 million per year will be needed when a temporary 0.2 percent surtax on property transfers expires in 2019.

The proposals, if all are included, would raise $45 million, and the committee is looking at four options related to real estate holdings that total about $36 million. Besides the taxes listed above, the current proposal includes a one percent increase in the rooms and meals and alcohol tax, a tax on fertilizers and extending the sales tax to parking fees, marina moorings and limousine service.

On Friday, the committee decided to take the Vermont Mayor’s Coalition up on its offer to get involved in a task force that will decide how to assess a per-parcel fee on all land holdings. The study committee would have a year to recommend an appropriate mechanism, either through the state tax department or municipal taxes.

Results of Prior Authorizations Pilot Released

The Senate Health and Welfare Committee took testimony on Wednesday on a pilot project spearheaded by former Green Mountain Care Board member Dr. Alan Ramsay that would reduce the burden of prior authorizations in primary care. As a board member, Ramsay continuously advocated for easing administrative burdens for primary care physicians.

Blue Cross Blue Shield of Vermont Director of Vendor Management Brian Murphy described the Green Mountain Care Board Prior Authorization Pilot Project to the committee. The project eliminated prior authorizations for two classes of drugs, proton pump inhibitors and statins, which are high-volume and low-cost drugs. It also eliminated prior authorizations for non-contrast MRI’s of the spine. The radiology pilot was conducted in two hospital service areas – Rutland Regional Medical Center and Porter Medical Center. In these two service areas the radiology group approved or denied the request by the ordering clinician based on American College of Radiology criteria.

Murphy said the results of the pilot showed an increase in cost to the Medicaid program for removal of prior authorization of PPIs because of the way the program purchases this class of drugs. There was no increase in costs to BCBS, MVP, or Medicaid for removing prior authorization of statins.

The radiology pilot project included a large hospital radiology group and a small critical access hospital radiology group. The group developed a process for approving the prior authorization for an advanced imaging procedure and thereby reduce this burden on their primary care colleagues. 

Murray said options were presented to BCBS, MVP, and Medicaid for ways to expand the pilot to other drug classes and to other radiology groups. Their unanimous decision was to end the advanced imaging pilot on May 1, 2016 based on feedback from the radiology group on the amount of work required to expand it, and to end the drug pilot on July 1, 2016 due to the increased drug costs to the Medicaid program.

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