As Passed the House

As Passed Senate

Sec. 1.  Health Care Reform Principles

Adopts guidelines modeled after the Coalition 21 principles


Sec. 2.  Legislative Purpose and Intent

  • Legislative intent that all Vermonters receive affordable and appropriate health care at the appropriate time and that health care costs be contained over time.
    • First steps:
      • Prevention and management of chronic disease
      • Coverage of uninsured through catamount health
    • Legislative intent to ensure that any reduction in the cost shift is returned to consumers by slowing the rate of growth in insurance premiums. Raising Medicaid payment rates and reducing the number of uninsured will reduce the cost shift
  • (a) Conforms first steps to Senate proposal
    • Removes reference to Catamount Health as      self-insured
    • Adds provision of minimum preventive services starting with immunizations
  • (b) Clarification that the costs shifted are to private insurance

Sec. 3.  Health Care System Reform - Coordination

  • Establishes the secretary of administration with general assembly as responsible for the coordination of health care system reform
  • Defines reform initiatives as:
    • Blueprint for Health (chronic care infrastructure, disease prevention, and management)
    • Information technology initiatives
      • Vermont health information technology project (VITL)
      • Multi-payer data collection project
      • Common claims administration project
      • Consumer price and quality information system
    • Public health initiatives
    • Medicaid, VHAP, Dr. Dynasaur, VPharm, and Vermont Rx
    • Catamount health
  • Requires a report, including five-year strategic plan, by secretary to commission on health care reform, health access oversight, house health care, senate health and welfare, and governor by December 1, 2006
      • Provides for annual report starting January 15, 2007
  • Revisions to conform to S.310 provision and adds uniform hospital uncompensated care policies

Chronic Care Infrastructure and Prevention

Sec. 4.  Blueprint for Health

  • Endorses and builds on Blueprint for Health, chronic care and disease prevention initiative
  • Requests revised strategic plan by October 1, 2006
  • Requires fully designed model for patient registry by January 1, 2007

Sec. 4.  Blueprint for Health

  • Adds recommendation on organizational structure and time line; preliminary report June 15, 2006 to commission

Sec. 5.  Chronic Care Infrastructure and Prevention

  • 701.  Definitions
    • chronic care
    • chronic care management
    • health risk assessment
  • 702.  Blueprint for Health; Strategic Plan
    • requires the department of health to create a five-year strategic plan
    • establishes an executive committee to advise the commissioner
    • provides criteria to be included in the strategic plan:
      • description of the Blueprint, including standard elements to used statewide
      • description of prevention programs
      • plan to develop and implement reimbursement systems aligned with chronic disease management
      • involvement of public and private parties
      • alignment of information technology needs
      • use and development of outcome measures and reporting requirements
      • target timelines
      • strategy for ensuring statewide participation no later than January 1, 2009
    • reviews the plan biennially and report of amendments to general assembly
    • reports by the department quarterly
    • recommendations in January 2009 if statewide participation is not achieved
  • 703.  Request for Proposals
    • requires secretary of administration to issue an RFP no later than January 1, 2007 for:
      • individuals with chronic disease in Medicaid, VHAP, and Dr. Dynasaur
      • individuals enrolled in catamount health
    • allows secretary to target chronic care management to certain groups to ensure successful implementation and quality of services and to maximize cost savings
      • includes all individuals in catamount health upon enrollment
      • allows time period of phased-in implementation for current individuals in Medicaid, VHAP, and Dr. Dynasaur
      • directs secretary to apply for Medicare waiver to include dual eligibles
    • provides for broad range of chronic conditions to be included
    • requires proposals to include:
      • methods for identifying patients
      • processes for coordinating care
      • methods of increasing communication among health care professionals and patients
      • protocols and tools for educational, wellness, and clinical management
      • process and outcome measures
      • payment methodologies creating financial incentives to improve disease management
      • payment to the care management organization which guarantees savings or risks its fee
    • requires the commission on health care to review RFP before it is issued

Sec. 5.  Chronic Care Infrastructure and Prevention

  • 701. Definitions
    • Blueprint – adds broader description
    • Chronic care and chronic care management – clarifies that  “chronic disabilities” are included
    • Patient registry – adds description
  • 702. Blueprint Strategic Plan
    • Adds descriptive “prevention” language as requested by Dept. of Health throughout and changes chronic care language from “disease” to “condition”
    • (b) Specifies executive committee members; adds consumer, CAM professional and primary care professional to committee
    • (c) Adds:
      • (1)(E) community and consumer group involvement
      • (1)(I) resource needs and plan
      • (1)(J) statewide participants
    • (d)(1) Requires annual report (not quarterly) and rewrites language about surveys to reflect annual report
    • (d)(2) Rewritten to specify evaluation and recommendation on any changes necessary







  • 703.  Chronic Care Management Program
    • Request for proposal language removed to Sec. 7a.
    • Rewritten to reflect parameters for chronic care management
    • (c)(6) Clarifying language added to specific purpose of payment methodology changes
    • (c)(8) Added re: data on enrollees shared with other health care reform initiatives (e.g., VITL)
    • (c)(9) Added re: method for care management organization to participate in the Blueprint
    • (c)(10) Comply with pharmacy best practices and cost-control program in existing law
    • (d) moved to Sec. 7a

Sec. 6.  Chronic Disease Prevention and Care Management; Agency of Human Services

  • Establishes an implementation plan for compliance with Blueprint and RFP by January 1, 2007
  • Allows agency to provide additional care coordination services (Medicaid top 1% initiative) Ensures payment methods are aligned with Blueprint and RFP
  • Establishes only annual recertifications in existing health care programs

Sec. 6.  Prevention and Care Management; Agency of Human Services; Implementation Plan

  • (b) Adds “Where permitted under federal law,” re: annual recertification

Sec. 7.  Chronic Disease Prevention and Care Management; State Employees

  • Requires human resources to seek information on chronic care management and Blueprint participation in RFP for state employees’ health benefit plan
  • Provides that human resources and VSEA work with the secretary of administration on how to be included in the Blueprint

See House 18 VSA 703.

Sec. 7a.  Request for Proposals; Medicaid; Catamount Health

  • (a)(1) Same as House 18 VSA 703(a) except:
    • Clarifies single private entity
    • Covers all health services for some groups in Medicaid, VHAP, and Dr. Dynasaur
    • Excludes more specifically certain groups of individuals enrolled in  Medicaid and Dr. Dynasaur who are not appropriate for chronic care management
    • Removes requirement of seeking a Medicare waiver
  • (a)(2) Allows entity to accept some or all of risk, or just administration of the program
  • (b) Same as House 18 VSA 703(d)
  • (c) Adds review of proposals by independent actuary or other consultant
  • (d) Conditions implementation on approval by the general assembly or combined membership of joint fiscal committee and commission on health care reform


Medicaid Initiatives

Sec. 8.  Medicaid Reimbursement

  • Increases Medicaid reimbursement for primary care services to Medicare levels in FY 2007
  • Provides intent to link future increase in reimbursements to Blueprint standards

Sec. 8.  Medicaid Reimbursement

·        Health care professionals ─ Provides annualized $5M; $2.5M first year; Anticipates increases through 2010

o       Establishes priorities: primary care, case management fees for participation in the Blueprint, incentives for participation in care coordination, increase lowest rates, increase dental reimbursement

o       Report to HAOC by 10/31/06 with actual amounts

·        Hospitals – allows use of increase for any hospital services (may need technical amendment)

Sec. 9.  Hospital Service Area Pilot Projects

  • Provides for an RFP by OVHA and DOH in two hospital service areas
  • Establishes goal of pilots to integrate and improve collaboration among health care professionals and community partners
  • Provides incentive grants of $100,000


Sec. 10.  VHAP Premiums

Reduces current VHAP premiums by 35% to increase enrollment


Sec. 11.  Dr. Dynasaur Premiums

Reduces current Dr. Dynasaur premiums to increase enrollment



Sec. 11.  Premium Assistance Program; Employer-Sponsored Insurance

  • October 1, 2007 start date; applies to those enrolled in VHAP and Catamount Health; participation of children optional
  • VHAP premium assistance
    • Sliding-scale subsidies of premiums or other cost-sharing amounts – out-of-pocket costs must be substantially equivalent to VHAP premiums and cost-sharing (emergency room co-pay)
    • Mandatory participation
    • OVHA may wrap benefits
  • Catamount Health subsidy
    • Subsidy substantially equivalent to premiums and cost-sharing under Catamount
    • Mandatory
    • No wrap
  • Employer-sponsored health insurance plans must include covered benefits and chronic care management substantially equivalent to Catamount to qualify
  • Agency may cap or restrict enrollment
  • Needs Global Commitment waiver amendment
  • Additional information and analysis needed prior to implementation – approval by JFC and HAOC at joint meeting.

Sec. 19. Enrollment Initiative

Provides for engagement of interested groups and parties in assisting with outreach

Sec. 12. Enrollment Initiative

Same as House Sec. 19.

Private Insurance Cost Shift Reviews

Sec. 12.  Cost Shift Review

Requires BISHCA to ensure for appropriate reductions in cost shift due to increased Medicaid rates and reduction in bad debt or charity care



Sec. 13.  Hospital Reporting

Expands cost-shift reporting required of hospitals beyond Medicaid to include Medicare and reductions in uncompensated care due to increase in insured individuals.


Sec. 13.  Cost Shift Task Force

Convenes a task force to determine how to ensure the cost shift is reflected in health insurance premium rates

Sec. 14.  Cost Shift Task Force

Reorganized and adds references to hospitals as well as private insurance, immunizations, and the nongroup market reinsurance

Catamount Health

Sec. 14.  Catamount Health


  • 2021.  Policy and Purpose
  • 2022.  Definitions
    • Chronic care – same as Blueprint
    • Chronic care management – same as Blueprint
    • Preventive care
    • Primary care
    • Uninsured – same as VHAP 12‑month rule


  • 2023.  Eligibility
    • uninsured Vermont resident
    • rules to establish criteria for and proof of residency, income, and insurance status







  • 2024.  Benefits
    • actuarially equivalent to the Cigna Selectcare POS plan for state employees in 2006, except cost sharing as provided for in this chapter
    • details developed by rule
    • ensures nondiscrimination by provider type, while allowing appropriate cost-sharing to encourage use of efficacious or cost-effective services
    • establishes criteria for benefit details







  • 2025.  Administration
    • contracts out with a third party administrator
    • allows purchase of reinsurance if cost-effective and financially prudent
    • pays for services at Medicare +10%
    • provides for a single, simplified form to apply for Catamount health, Medicaid, VHAP, and Dr. Dynasaur
    • requires data collection
    • provides for annual recertification
    • requires smooth transition between current programs and Catamount health
  • 2026.  Cost Sharing
    • establishes sliding scale premiums for individuals with incomes up to 350% of FPL and for full cost buy-in by those with incomes over 350%
    • provides that co-payments, deductibles, or other cost-sharing to be proposed to general assembly, but none for chronic care management or preventive care
    • includes a late enrollment premium increase
    • allows for healthy lifestyles discounts
  • 2027.  Catamount Fund
    • establishes the Catamount fund as a special fund for revenue from strategic payments under the Master Tobacco Settlement Agreement, increase in the cigarette tax, and other appropriations if any.

Sec. 15.  Catamount Health

  • Chronic care issues – changes “disease” to “condition”
  • 2021.  Policy and Purpose revised to add immunizations
  • 2022.  Definitions
    • Administrator defined to include entity bearing risk
    • Chronic care and chronic care management ─ clarifies that  “chronic disabilities” are included
    • Immunization – as recommended by the practice guidelines of CDC
  • 2023.  Eligibility
    • Any Vermont resident may receive minimum preventive care
    • Excludes adults who are claimed as a dependent on an out-of-state resident’s tax return
    • Adds enrollment limitation or cap provision
      • Agency recommends plan to HAOC
      • Deemed approved if no action after 21 days
      • Process may also reopen if money is sufficient
  • 2024.  Benefits
    • Actuarially equivalent to Blue Cross Blue Shield Vermont Freedom Plan with $200 deductible
    • (b)(2) same as House § 2026






  • 2025.  Minimum Preventive Services
    • Any Vermont resident may receive minimum preventive services – immunizations; expanded as funding permits
    • Medicaid, VHAP, Dr. Dynasaur, Medicare and other federal programs pay first
  • 2026.  Administration
    • Contract with private entity – for admin only or admin + risk
    • Must include chronic care management
    • Requires reinsurance if self-insured
      • stop-loss for aggregate amount
      • allows other types of reinsurance as well
      • allows utilization review procedures
    • Payment provisions moved to § 2027
    • Adds compliance with pharmacy best practices and cost-control program in current law


  • Cost sharing moved to § 2024, premium increase removed


  • § 2027.  Payment; Health Care Professionals; Hospitals
    • (a) Same as House § 2025(b) first sentence; increases indexed to Medicare economic index
    • (b) Sets hospital payments as Medicare, modified to ensure 110% of cost; indexed to Medicare payment rules; sets floor of 102% of cost over time
    • (c) Same as House § 2025(b) last 2 sentences
  • 2028.  Catamount Fund
    • Modified to reflect Senate revenue proposal: employer health care premium contribution

Sec. 15.  Catamount Health Premiums

Establishes sliding scale premium amounts for Catamount health from $60 to $170, with full premium set at $310

Sec. 16Catamount Health Premiums

Same premiums; indexed in future years to overall growth in spending per enrollee


Sec. 16a.  Immunizations; administration

Study to determine appropriate administration of immunizations provided by Catamount Health

Sec. 16.  Rules Process and Oversight

  • Provides for review of rules by the commission and health access oversight committee
  • Establishes oversight by health access oversight committee


Sec. 17.  Global Commitment Financing

  • Finances Catamount health through Global Commitment
    • Requires agency to seek a waiver amendment to include program in the premium
    • Allows financing as an MCO investment


Sec. 17a. Fund Transfers

Provides for up to $10 million of any balance in the Catamount fund to be transferred for Medicaid.


Nongroup Health Insurance Market


Sec. 19.  Nongroup Market Security Trust

  • BISHCA to establish
  • Provides reinsurance for insurers in nongroup market to cover 5% of the claims cost; end of year “true up”
  • Insurers eligible if over $100,000 annual earned premium (includes only carriers currently offering in the market now)

Hospital Uncompensated Care


Sec. 21.  Findings


Sec. 22. Hospital Uncompensated Care; Standards; Reporting

  • BISHCA and interested parties
  • Review policies
  • Recommend uniform statewide policy
    • May recommend deviations or set of policies
  • Recommend reporting changes to ensure fair and thorough method of reporting uncompensated care
    • Method of calculating
    • Information about patients using policy

Health Care Coverage Planning

Sec. 28. Reports

  • Looks toward establishing mandate in 2011.

Sec. 23.  Schedule for Attaining Universal Health Care

  • Commission on health care reform report by 2/15/07
  • Schedule, benchmarks and additional analysis for incremental expansions over time – universal coverage in 2011
  • Priority to:
    • Extending minimum preventive services
    • Providing increased coverage to individuals who pay >10% of the income in health care expenses
    • Providing increased coverage to individuals in individual or other high cost markets
    • Determining information needed for individual mandate in 2011



Sec. 24.  Required coverage; health care

Individual mandate in 2011 if 98% of Vermonters are not insured


Sec. 25.  Community Planning; Health Care Coverage

Provides $100,000 planning grant for community that is looking at a regional health care coverage system or initiative



Sec. 25a.  Employers’ Health Care Premium Contribution

  • 2001.  Purpose
  • 2002.  Definitions
    • Employer defined by withholding
    • Full-time equivalent
    • Uncovered employee
      • Employee of an employer who does not offer to pay part of health care costs
      • Employee who is not eligible for health care offered by employer
      • Uninsured employee who has access to employer coverage
  • 2003.  Premium Contribution
    • Assessed quarterly by department of labor on FTE uncovered employees
    • Exemption for 3 FTEs
    • FY 2007 $91.25 per FTE per quarter; adjusted by increases in Catamount Health premiums
    • Payable 30 days after close of each quarter; same late penalties as unemployment
    • Deposited in the Catamount fund


Sec. 25b.  Employer Assessment; Effective Date

January 1, 2007, payable April 30, 2007

Sec. 17b. and 17c. Cigarette Tax Increase & Floor Stock Tax

  • Increases the cigarette tax by .60 cents
  • Provides for one-time floor stock tax to account for existing inventory; tax is calculated on July 1, 2006 & paid by August 25, 2006

Sec.  25c.-25g Cigarette and Tobacco Taxes

Sec. 25c.  Definitions

  • Includes roll-your-own tobacco in definition of cigarette
  • Adds definition of little cigar; reflects federal definition

Sec. 25d.  Rate

  • Increases cigarette tax by 60 cents in 2006
  • Taxes little cigars as cigarettes

Sec. 25e.  Floor Stock Tax

  • Provides for one-time floor stock tax to account for existing inventory; tax is calculated on July 1, 2006 and paid by August 25, 2006
  • Applies to moist snuff, cigarettes, little cigars and roll your own tobacco

Sec. 25f.  Moist Snuff

  • Changes method of taxing moist snuff from 41% of the wholesale price to per ounce

Sec. 25g.  Effective Dates; Increase

  • July 1, 2008 – cigarette tax increase by 20 cents, moist snuff by 17 cents and corresponding one-time floor stock taxes.

Sec. 17d. – 17h. Technical Amendments to Funds

  • 17d. amends tobacco settlement statute to account for deposit of strategic payments into the Catamount fund
  • 17e. amends the state health care resources fund to reflect split in cigarette tax between this fund and Catamount fund
  • 17f. deletes obsolete reference to cigarette tax in general fund statute
  • 17g. clarifies that the one-time floor stock tax is to be deposited into the Catamount fund
  • 17h. revises revenue estimates to the emergency board to include Catamount fund and new names of Medicaid funds

Sec. 25h – 25k; 27 Technical Amendments to Funds

  • 25h. amends the state health care resources fund to reflect split in cigarette tax between this fund and Catamount fund (House 17d has a different percentage)
  • 25i. distribution of cigarette tax to be revised to reflect 2008 increase
  • 25j.  same as House 17f.
  • 25k. same as House 17g.
  • 26 same as House 17h.

Sec. 18.  Reports

  • (a) Provides that the secretary of administration will make recommendations for changes to the program if the insured rate is not at 98% by January 15, 2009 and that the BISHCA survey of insurance status will be completed in time for this report
  • (b) Requires report no later than January 15, 2009 on:
    • The percentage of uninsured Vermonters and the number of insured Vermonters by coverage type
    • An analysis of the trends of catamount health costs and trends in the revenue sources for catamount health
    • Feasibility of allowing additional coverage in Catamount health
    • Number of enrollees with employer sponsored insurance
    • Number of individuals in chronic care management programs
    • Removing or capping the late enrollment premium increases

Sec. 27.  Report; Health Care Reform

  • See Sec. 23 also





  • Same as House Sec. 18(b), except removes ESI provision and enrollment premium increase data.


Sec. 19.  Enrollment Initiatives

Provides for engagement of interested groups and parties in assisting with outreach

Sec. 12. Enrollment Initiatives


Sec. 20.  Commission on Health Care Reform

Sec. 28.  Commission on Health Care Reform; Finance

Provides any reports to the commission

Adds Senate Finance


Sec.  21. Appropriations

Sec.  29. Appropriations


Medicaid Reimbursement – $2.9 M



Hospital Service Area Incentive Grants – $200,000

Moves actual appropriation to the budget

Medicaid Reimbursement

  • Health care professionals ─ $2.5M
  • Hospitals ─ $1M

Community planning grant ─ $100,000

ESI $1M (conditioned on approval over $250,000)

Sec. 22. Effective Dates

Sec. 30. Effective Dates

Upon passage, except:

  • June 30, 2006 for catamount fund & state health care resources fund
  • July 1, 2006 for Medicaid reimbursement, cost shift review, catamount fund transfers, and tobacco litigation fund; cigarette tax applies after this date.
  • July 1, 2007 for VHAP & Dr. Dynasaur premium changes

Upon passage, except:

  • June 30, 2006 for Catamount fund (needs technical amendment to add state health care resources fund)
  • July 1, 2006 for Medicaid reimbursement changes, hospital report changes, community planning grant
  • July 1, 2007 for VHAP and Dr. Dynasaur premium decreases and nongroup reinsurance
  • October 1, 2007 Catamount Health implementation
  • January 1, 2011 health care coverage requirement
  • Employers’ premium contribution effective dates in Sec. 25b
  • Cigarette and tobacco tax effectives dates in Sec. 25g.


Sec. 31. Technical Provisions


Addresses simultaneous passage of S.310 and this act which have a common provision in Title 3.