Vermont Legislative Update 03-02-2018 - An analysis from DRM's Government & Public Affairs Team

Downs Rachlin Martin PLLC

Downs Rachlin Martin PLLC

Full Senate to Consider Strict Liability Bill

When it returns on March 13, the Vermont Senate is expected to consider S.197, a bill that creates strict liability for damage to property and human health for the release of many harmful substance into the environment, and provides few of the legal defenses available under other environmental law statutes. The bill was approved by the Senate Judiciary Committee, 4-1, on Wednesday.

The bill also creates a new private right of action for exposed persons to recover the costs of medical monitoring. It sets a low threshold for the degree of exposure to the individual as well as the probability of developing a disease. It was vigorously opposed by business and industry and by the Scott Administration.

“Simply put, (this) bill would blatantly circumvent legal concepts that have been carefully developed and applied over decades and even centuries,” states a letter to the committee from the American Insurance Association. “While we certainly understand and sympathize with those impacted as a result of the possible PFOA contamination in North Bennington, we do not believe that the extreme approach embodied in S.197 is warranted.”

The bill is prospective only and would not apply to litigants in the Bennington matter.


Self-Managed Energy Efficiency Program Would Expand Under Proposed Bill

The House Energy and Technology Committee has approved H.739, a bill that will allow a second major company to manage its own energy efficiency program and ten or more smaller companies to engage in a pilot that will allow them to design and manage their own projects. The changes would be made to a law that assesses up to an eight percent surcharge on electric rates to fund Efficiency Vermont, an energy-saving company modeled after a utility.

Ever-rising efficiency costs and a perceived lack of value for their fee investments has been a vocal complaint of the business community for several years. This year’s budget for Efficiency Vermont is more than $54 million.

Under the bill, the OMYA company of Pittsford will join GlobalFoundries of Essex Junction as managers of their own energy efficiency programs and expand the types of investments that qualify to include productivity enhancements – making more widgets per unit of energy. The pilot program created by the bill would allow a number of smaller companies paying up to $2 million in fees to invest in energy savings accounts and provide more self-direction and flexibility in how the money is spent. The pilot program would expire in three years.


Senate Committee Concerned About School Bus Safety

Local television station WCAX-TV rode along on a school bus route recently to document the high rate of vehicles passing school buses displaying flashing red lights and warning signs. As a result, a legislative committee has vowed to do something about drivers passing stopped school buses before a disaster occurs.

State law requires drivers traveling in both directions to stop for a school bus displaying flashing red warning lights, but many do not. In testimony over the past two weeks, the Senate Transportation Committee learned that the problem is chronic in Vermont and across the country. In a one-day snapshot conducted by a national school bus organization, 103,000 bus drivers reported 85,000 school bus passings in a single day. In Vermont, 17 drivers reported 20 passings, or an average of 1.2 per bus per day. On an average day in Vermont 3,000 buses transport 44,000 students to and from school.

The law sets a stiff penalty for the offense of five points on a driver’s license and a $249 fine, but bus drivers must identify the driver and the vehicle to be able to enforce it while monitoring student movements simultaneously. Solutions pondered by the committee include installing external-facing cameras on the buses and deploying targeted enforcement in high occurrence areas. Glen Button of the Governor’s Highway Safety Program told the committee this week that the organization would conduct an awareness campaign between now and the end of the current school year and prepare recommendations for the next legislature.


Bill Seeks Compliance of On-line Bed and Breakfast Businesses

The Senate Economic Development, Housing and General Affairs Committee has advanced a bill that would regulate the business of renting rooms in private homes to traveling strangers through an on-line registry. The measure, S.204, is considered a “level playing field” initiative by the travel and tourism industry.

One such business network, AirBnB, agreed in 2016 to collect the state rooms and meals tax for homeowners renting rooms through its well-known on-line directory, but the legislature’s Joint Fiscal Office estimates that only half of the properties renting rooms are captured and only ten percent remit the tax.

Under the bill, home-based bed and breakfast vendors would need to register and agree to certain practices in order to rent rooms to the public on or after Jan. 1, 2019. The business would be required to self-certify that it meets health and safety standards and that it knows it must collect and remit state and local rooms and meals taxes. Fire safety inspections by authorities having jurisdiction would be expected, and local communities could impose more restrictive local ordinances. The measure now goes to the full Senate.


Committee Kills Ambulatory Surgery Bill

The Senate Health and Welfare Committee brought a sudden and decisive end this week to S.278, a bill that would have imposed significant new regulations on ambulatory surgical centers. After hearing two hours of testimony on Thursday from the owners of two facilities that would have been subject to the new regulations, the committee voted unanimously to reject the bill – something that virtually never happens.

Julie Larson, owner of the Vermont Eye Surgery Center, testified at length about the negative impact she said the bill would have on the eye business she opened ten years ago, arguing that it would endanger the goals of quality and cost and would threaten the viability of her business. Larson said the legislature was proposing to develop a bureaucracy for only two pending surgical centers.

Amy Cooper, an investor of the Green Mountain Surgery Center, which was the target of the proposal, also spoke strongly against it. Cooper proposed alternative language, but argued that the bill was unnecessary and could make her business economically unviable.

Committee members were clearly persuaded by the testimony. Led by Sen. Ann Cummings, D-Washington, and after some discussion about whether to study the issue further, committee members decided instead to pull the plug entirely. The vote was 5-0.


Committee Considers Regulation of Debt Collectors

Vermont Legal Aid made a strong push this week for the legislature to approve amendments to a bill, H.482, that would impose substantial new limits on the ability of persons to collect on debts.

The bill would:

  • Allow a court to suspend the accrual of interest on a judgment against a debtor;
    Create a new minimum recovery for violations of the unfair trade practices act of $500 per violation, up to $5,000;
  • Require a notice to debtors between 60 and 120 days prior to bringing a civil action to collect on a card debt;
  • Limit the ability of a creditor to contact a debtor after the statute of limitations has expired;
  • Shorten the statute of limitations on credit card debt from six to five years; and
  • Make numerous changes in the trustee process against post-judgment debtor bank accounts.

Both the House Commerce and House Judiciary Committees will consider the bill after the Town Meeting Day break. The bill will likely be exempted from the Crossover deadline.


Transportation Committee Approves Electric Vehicle Incentives

At the request of the Scott Administration, the House Transportation Committee gave its approval this week to amendments that would provide for limited regulation of electric vehicle charging stations. The provisions are included in a miscellaneous transportation bill, H.917, and they provide as follows:

  • A person may own or operate an electric vehicle charging station notwithstanding a utility’s franchise territory;
  • The Public Utility Commission may not set retail EV charging station rates, but will have jurisdiction over quality of service, consumer protection, metering, notice of rates and charges and pricing practices;
  • The PUC may waive any requirement for a certificate of public good for an EV charging station; and
  • The PUC will retain jurisdiction over EV charging stations owned or operated by a utility.

The bill also directs the PUC to conduct an investigation and issue an order by July 1, 2019 concerning EV charging stations, including:

  • Removal of barriers to EV charging created by utility rate designs;
  • Strategies for managing EV charging;
  • Notice of EV charging rates that serve the public;
  • Accuracy of electric metering and submetering technology for charging EVs;
    Electric utility planning for EV charging;
    Billing and complaint procedures for EV charging;
  • Recommended scope of DPS and PUC jurisdictions over EV charging station owners and operators;
  • Recommended strategies to address declining revenues to the Transportation Fund from EV’s; and
  • The appropriate role of electric utilities regarding the deployment and operation of EV charging stations.


Bond Threshold Raised for Transportation Projects

The Transportation Committee modified a proposal from the Agency of Transportation to reduce the bonding requirement for state transportation projects. In a bill passed by the committee this week, H.917, the committee voted to require private contractors to post a surety bond for any project of $500,000 or more. Current law requires a bond for any project above $100,000, and the Agency of Transportation had proposed to increase the bond threshold requirement to $1,000,000.


House Panel Passes Economic Development Bills

The House Committee on Commerce and Economic Development passed on Friday morning a proposal that may allow for the designation of additional tax increment financing districts under certain conditions. H. 548 would allow the Vermont Economic Progress Council to submit qualified municipal applications for TIF status to the General Assembly for approval by statute, even if the six TIF district statewide quota under existing law has already been met. The committee also approved an amendment that requires the development of measures to determine TIF district regional and statewide financial impacts and a study of the potential for small-town TIF districts or other appropriate economic development tools.

The bill received the support of VEPC, but the Agency of Commerce and Community Development remained lukewarm on the proposal, saying that there hasn’t been an overwhelming demand for the TIF districts, and it may be unnecessary to create a pathway for the approval of more than six additional districts. The proposal will next be reviewed in the House Committee on Ways and Means.

As Crossover week ended, the committee also passed:

  • H.785: Amends the Vermont Wastewater and Potable Water Revolving Loan Fund, to be used to provide loans for the design and construction of repairs or replacement of wastewater systems and potable water supplies when the systems or supplies have failed or has a demonstrated high likelihood of failing.
  • H.767: Establishes the ThinkVermont Innovation Initiative to “respond to the growth needs of Vermont small businesses with 20 or fewer employees by funding innovative strategies that accelerate small business growth.” The program is funded with a one-time appropriation of $400,000.
  • H.766: Provides for homeowner rehabilitation tax credits, affordable housing tax credits, and downtown and village center tax credits. The bill would allocate $625,000 to encourage homeowners to upgrade older housing stock in some areas through saleable tax credits of up to $25,000 each.
  • H.919: Authorizes a public engagement process and succeeding steps to modernize the state’s workforce development system across all agencies. The bill is designed to implement the recommendations of the Workforce Development Tax Force recently chaired by Greater Burlington Industrial Corporation President Frank Cioffi, who also chairs the Workforce Development Council.
  • H.916: This bill increases the state’s Moral Obligation Support to the Vermont Economic Development Authority by $20 million to $175 million to support its ability to borrow from other lenders at favorable rates. VEDA invests in a number of targeted economic development opportunities across the state aimed at agriculture and small business.


Brattleboro Retreat Supports Forensic Unit

Brattleboro Retreat President Louis Josephson told members of the House Corrections and Institutions Committee this week that the state of Vermont is in immediate need of a forensic psychiatric facility. “We are in an emergency situation – human beings are impacted (patients and staff) and people need treatment. Concentrating forensic expertise and resources in one unit makes sense instead of requiring expertise across the state,” said Josephson.

Josephson said the Retreat’s biggest challenge is referrals from prison – people already convicted of a crime, but whose behaviors cannot be managed. In 2017, the Retreat served 34 forensic patients. Many of these patients have broken the law and are deemed unfit to stand trial or not criminally responsible due to mental illness. The average length of stay for these patients is 48 days. They occupy beds that could be used for other acute psychiatric patients. In addition, beds are taken off-line when the behavior of forensic patients makes it unsafe to house other patients next to them.

Josephson also said there is a federal rule that bars paying for treatment in mental health facilities of more than 16 beds. Vermont has operated under a waiver of federal law for 20 years that has allowed the state hospital and the Brattleboro Retreat to bill Medicaid for services. The federal government has recently tightened the rules regarding Institutes for Mental Disease, which are required to have no more than 16 beds, and the state is required to submit a phase-down plan in December for loss of funding beginning in 2021 and concluding by end of 2025. The Retreat is working with the Agency of Human Services on possible fixes that would permit the Retreat to continue to operate at its current capacity. Without a fix the Retreat will have to close half of its beds, Josephson said.


Senate Approves Drug Importation

The Senate this week unanimously approved S.175, a bill that would allow the state to import prescription drugs from Canada, create a state bulk purchasing program, and require health insurance companies to provide information to the Green Mountain Care Board about the impact of prescription drug spending on premium rates.

The bill directs the Agency of Human Services to design a wholesale prescription drug importation program. AHS would either designate a state agency to become a licensed drug wholesaler or contract with a licensed drug wholesaler to import the drugs. It requires the agency to seek appropriate federal approvals or waivers that enable all covered entities enrolled or eligible for 340B drug pricing to participate in the importation program to the fullest extent possible without jeopardizing their eligibility. The 340B Drug Program requires drug manufacturers to provide outpatient drugs to eligible health care entities at significantly reduced prices.

The bill also requires that contracts between a pharmacy benefit manager (a third-party administrator of prescription drug programs) and a pharmacy not prohibit or penalize a pharmacist for disclosing information regarding the cost of a drug, the availability of any therapeutically equivalent alternative medication, or any alternative method of purchasing a drug (including paying cash) that would be less expensive to the individual.

The bill now moves to the House where additional provisions will likely be added.


House Panel Passes Changes to Bill-Back

The House Health Care Committee on Tuesday advanced H.905, a bill that changes the Green Mountain Care Board’s authority to bill back the costs of certain regulatory activities to the entities it regulates. Committee Chair Rep. Bill Lippert, D-Hinesburg, asked the board last session to work with stakeholders and review the statutory bill-back percentage allocations between hospitals, insurance companies and others to determine if a more equitable allocation is necessary. Accountable care organizations, which are now regulated by the GMCB, will also participate in the assessment.

The new allocations are as follows:

  • 40 percent by the state;
  • 30 percent by hospitals;
  • 24 percent by insurers; and
  • Six percent by ACOs.


Senate Advances Mental Health Bill

The full Senate this week passed S.203, a bill that would create a study committee to look at current law governing orders of non-hospitalization. These are court orders that contain conditions that a person named in the order must abide by or face the possibility of hospitalization or re-hospitalization. The bill calls for a limited-time study committee that will look at the strengths and weaknesses of ONHs and the potential of a pilot project that seeks to redress any weaknesses and build upon any existing strengths.


Senate Panel Approves Adoption of Interstate Medical Licensure Compact

The Senate Health and Welfare Committee on Friday advanced S.253 , a bill that would allow the state to join the Interstate Medical Licensure Compact with a start date of January, 2020. The aim of the compact is to make it easier for physicians to obtain licenses in multiple states and to strengthen public protection by enhancing the ability of states to share investigative and disciplinary information. It will expand access to care, streamline the licensing process for physicians, and facilitate multi-state practice and telemedicine for those physicians and states that choose to participate.

The committee amended the bill before passage on Friday to require an applicant to submit a full set of fingerprints to the Board of Medical Practice for the purpose of obtaining state and federal criminal background checks. It also allows the Department of Public Safety to exchange fingerprint data with the Federal Bureau of Investigation.


Panel Advances Medication-Assisted Treatment Bill

The Senate Health and Welfare Committee on Friday advanced S.225, a bill that requires the Department of Vermont Health Access to develop pilot programs to require health insurers to reimburse providers for Medication-Assisted Treatment. MAT is the use of Food and Drug Administration-approved medications, in combination with counseling and behavioral therapy, to provide treatment of substance abuse disorders. Currently, Medicaid funds licensed-alcohol and drug counselors and other medical providers who are not affiliated with an authorized treatment program but who meet federal requirements for medication assisted-treatment.


Panel Passes Universal Primary Care

The Senate Health and Welfare on Friday passed S.53, a bill that would create and implement a universal primary care program.

The bill requires the Green Mountain Care Board to facilitate a working group that will develop a draft operational model by Jan. 1, 2019. The model would address who would be eligible for the program, which providers would deliver the care and how funds for primary care services would move through the health care system. The bill is intended to ensure quality of care without increasing administrative burdens on primary providers. It requires the Agency of Human Services to submit a final implementation plan to the General Assembly by Jan. 1, 2020, with coverage for all Vermonters beginning on Jan. 1, 2022.

The committee agreed on Friday to use up to $300,000 of the governor’s proposed budget of $2.9 million for delivery system payment reform investments to cover actuarial expenses incurred by the state’s accountable care organization, OneCare Vermont, to develop the operational plan. Hospital administrators have been filled with angst for several weeks while the committee debated language that would have required hospitals with revenue in excess GMCB-approved budgets to invest a portion of those funds to support the development and implementation of the program. That language was removed from the bill on Friday.


Providers Say Opioid Prescribing Rule is Working

At the request of Sen. Dick McCormack, D-Windsor, the Senate Health and Welfare Committee took testimony Thursday morning on pain management prescribing in Vermont and whether the state’s limits on opioid prescribing has limited the ability of providers to address pain adequately. Physicians from across the state said the rules do not impede their ability to treat acute pain from injury or illness. Dr. Trey Dobson, an emergency room physician at Southwestern Vermont Medical Center, said a significant decrease in prescribing occurred well before the rules were put in place and the rules provide support for physicians to explain the risks of opioids to patients.

Dr. Nick Antell, an orthopedic surgeon at Mansfield Orthopaedics, said he and his colleagues are able to control pain under the rules. He acknowledged that they were probably overprescribing prior to the rules. He said very few patients call his office for more pain medication. Antell did say the Vermont Prescription Monitoring System – a tool for reducing prescription drug abuse and diversion by collecting, monitoring, and analyzing electronically transmitted prescribing and dispensing data submitted by pharmacies and dispensing practitioners – is time consuming and clumsy. If the legislature does anything, he said, streamlining the VPMS should be the priority.

Blue Cross Blue Shield of Vermont Clinical Pharmacist Rita Baglini said BCBS was involved with the rule making process and independently set in place a prior authorization process for opioid prescriptions. She said the average number of opioid pills dispensed to members fell 25 percent following implementation of the new rules and PA process. Baglini’s presentation can be found here.

The committee does not plan to take further action on the issue.


Senate Passes Provider Enrollment Bill

The Senate this week passed S.282, a bill that requires the Department of Vermont Health Access to complete the screening and enrollment of applicants seeking to be participating providers in the Medicaid program within 60 days after receiving an application. The bill will go into effect July 1, 2019.


Panel Approves ACO Reporting Bill

The House Health Care Committee on Thursday passed H.914, a bill that requires the Department of Vermont Health Access to continue to provide quarterly reports to the committees of jurisdiction on the implementation of the Next Generation Medicaid Accountable Care Organization pilot. The goal of the pilot is to increase provider flexibility and to pay for value instead of volume of service. The reports will address the amount of Medicaid funds provided by the department to the ACO, the amount of funds expended by the ACO on behalf of attributed Medicaid beneficiaries, and the extent to which the accountable care organization has met the quality indicators specified in the pilot project agreement.


Panel Advances Green Mountain Care Board Priority Bill

The House Health Care Committee on Thursday passed H.912, a bill that revises the certificate of need process for hospitals and other health care facilities. It also would reconstitute the supply-focused Health Resource Allocation Plan with a State Health Improvement Plan – a more nimble assessment of unmet need in the state.

The bill:

  • Shifts review of routine replacement of non-medical equipment from the CON process to the hospital budget process;
  • Clarifies projects presumed to be expedited: repair, renovation, or replacement of building infrastructure and routine replacement of medical equipment;
  • Streamlines the process by allowing the health care advocate, competing applicant, or interested party to waive the requirement for a public hearing;
  • Adjusts monetary thresholds for inflation by increasing the diagnostic and therapeutic equipment threshold from $1 million to $1.5 million and increasing new health care service or technology annual operating expenses threshold from $500,000 to $1 million;
  • Amends enforcement penalties by increasing the one-time violation penalty to $75,000 and capping continuing violations at $200,000. A “knowingly” standard was removed as too arbitrary; and
  • Adds a CON requirement that the applicant has incorporated appropriate energy efficiency measures, if applicable. 

Finally, the bill contains more general language related to the HRAP that will help policymakers and regulators with analysis and decision-making in the context of the larger system of unmet need or gaps.


Panel Approves Individual Mandate

On Friday, the House Health Care Committee advanced H.696, a bill that would require all Vermonters to buy health insurance. The mandate is effective Jan. 1, 2019. Gov. Phil Scott supports the measure.

The bill creates a working group that will develop recommendations by November regarding the administration and enforcement of the individual mandate, including financial penalties for failure to maintain minimum health coverage and exemptions from compliance based on religion, affordability, hardship, and short gaps in coverage.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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