Introduced by Representative McFaun of Barre Town
Subject: Health; hospitals; access; coverage; premium relief
Statement of purpose: This bill would provide access to and coverage for health services provided in hospitals and offer opportunities for premium relief to all Vermonters. The bill would establish a global hospital budget for the state and an individual hospital budget for each hospital in the state. It would establish a Vermont hospital security trust fund from which a negotiated payment would be made to each hospital for health services provided.
AN ACT RELATING TO THE VERMONT HOSPITAL SECURITY PLAN
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 33 V.S.A. chapter 19, subchapter 6 is added to read:
Subchapter 6. Vermont Hospital Security Plan
§ 2031. PURPOSE
The purpose of this subchapter is to provide all Vermonters access to and coverage for health services provided in hospitals and provide the opportunity to reduce hospital and related administrative costs. The general assembly recognizes that the health care system is in crisis, and that Vermonters do not have the financial ability to pay increasing health insurance premiums or the rising costs of health care. Vermonters need access to hospital care, regardless of ability to pay or insurance coverage. Additionally, the state must seek financial sustainability of the health care system, including reducing health care spending and transaction costs.
§ 2032. DEFINITIONS
As used in this subchapter:
(1) “Commissioner” means the commissioner of the department of banking, insurance, securities, and health care administration.
(2) “Division” means the division of health care administration of the department of banking, insurance, securities, and health care administration.
(3) “Health service” means any medically necessary treatment or procedure to maintain, diagnose, or treat an individual’s physical or mental condition, including services provided pursuant to a physician’s order and services to assist in activities of daily living provided in a hospital.
(4) “Hospital” shall have the same meaning as in section 1902 of Title 18 and may include hospitals located out of state.
(5) “Vermont resident” means an individual domiciled in Vermont as evidenced by an intent to maintain a principal dwelling place in Vermont indefinitely and to return to Vermont if temporarily absent, coupled with an act or acts consistent with that intent. The commissioner shall by rule establish specific criteria for demonstrating residency.
§ 2033. VERMONT HOSPITAL SECURITY PLAN
(a) The division of health care administration shall administer the Vermont hospital security plan to provide Vermont residents with access to and coverage for health services received in a hospital and for payments to hospitals for health services provided.
(b) The Vermont hospital security plan shall:
(1) provide each hospital in the state with a negotiated annual payment based upon the individual budget of the hospital for health services provided by that hospital to all patients, including patients who are not Vermont residents;
(2) provide for the collection of payments for health services provided by hospitals in the state to patients who are not residents of the state, which may be by the division or by a third party administrator under contract with the division for this purpose;
(3) provide for payments for health services to hospitals not located in the state for health services provided by them to Vermont residents.
(c) The division shall establish by rule income-sensitized deductibles, co‑payments, an annual hospital care fee, or other cost-sharing amounts applicable to the Vermont hospital security plan established by this subchapter.
(d) A beneficiary aggrieved by an adverse decision of the division may appeal to the human services board as provided for in section 3090 of Title 3.
(e) A health service that may be covered in whole or in part by Title XVIII of the Social Security Act (Medicare) or by any other public health benefit plan, including Medicaid or the Vermont health access plan, shall be funded from those payment sources. Vermont residents accessing health services at a hospital shall be considered Medicare beneficiaries for purposes of chapter 65 of this title (Medicare balance billing).
§ 2034. GLOBAL HOSPITAL BUDGETS
(a) Annually, the commissioner of banking, insurance, securities, and health care administration shall develop a global hospital budget for the state and individual hospital budgets for each hospital located in Vermont. The commissioner shall consider the portions of the health resource allocation plan under section 9405 of this title, the unified health care budget under section 9406 of this title applicable to hospitals, the hospital budget review under section 9456 of this title, the negotiated global hospital payments under section 2035 of this title, and all other revenue received by hospitals in the development of the global hospital budget. The global hospital budget for the state shall be reported annually to the general assembly on or before January 15 for the following fiscal year and shall not be effective until approved or modified by the general assembly.
(b) The global hospital budget for the state shall serve as a spending cap within which hospital costs may be controlled, resources directed, and quality and access assured. The global hospital budget shall limit the total annual growth of hospital costs to the Consumer Price Index plus three percent. The commissioner of banking, insurance, securities, and health care administration shall ensure that the review of individual hospital budgets under subchapter 7 of chapter 221 of this title or certificate of need requests under subchapter 5 of chapter 221 of this title are consistent with the global hospital budget.
(c) The commissioner of banking, insurance, securities, and health care administration shall adopt by rule standards and procedures necessary to implement this section.
§ 2035. NEGOTIATED GLOBAL HOSPITAL PAYMENTS
The commissioner shall negotiate with hospitals for a global hospital payment for health services provided by the Vermont hospital security plan. The payment amount shall be based upon the global hospital budget developed under section 2304 of this title and other information necessary to the determination of the appropriate payment, including all other revenue received from other sources. The commissioner shall adopt by rule standards and procedures necessary to implement this section.
§ 2036. VERMONT HOSPITAL SECURITY TRUST FUND
(a) The Vermont hospital security trust fund is hereby established as a special fund in the state treasury for the purpose of financing health care services provided by hospitals to beneficiaries of the Vermont hospital security plan.
(b) Into the fund shall be deposited:
(1) transfers from the general fund, authorized by the general assembly;
(2) proceeds from grants, donations, contributions, and taxes and any other sources of revenue as may be provided by statute or by rule;
(3) transfers of all federal receipts for health care purposes provided by hospitals, including all Medicaid receipts and all Medicare receipts upon federal approval; and
(4) revenue from the sources established to fund the Vermont hospital security plan established under this subchapter.
(c) The fund shall be administered by the commissioner of banking, insurance, securities, and health care administration pursuant to subchapter 5 of chapter 7 of Title 32, except that interest earned on the fund and any remaining balance shall be retained in the fund. The commissioner shall maintain records indicating the amount of money in the fund at any time.
(d) All monies received by or generated to the fund shall be used only for the administration and delivery of health care services provided by hospitals covered through state health care assistance programs administered by the division of health care services, including the Vermont hospital security plan.
Sec. 2. 18 V.S.A. § 9437(1) is amended to read:
application is consistent with the health resource allocation plan
Sec. 3. 18 V.S.A. § 9456(c) is amended to read:
(c) Individual hospital budgets established under this section shall:
(1) Be consistent with the health resource allocation plan;
(2) Take into consideration national, regional, or instate peer group norms, according to indicators, ratios, and statistics established by the commissioner;
(3) promote efficient and economic operation of the hospital;
budget performances for prior years;
(5) Include a finding that the analysis provided in subdivision (b)(9) of this section is a reasonable methodology for reflecting a reduction in net revenues for non-Medicaid payers;
(6) Be consistent with the global hospital budget established under section 2034 of Title 33.
Sec. 4. FUNDING MECHANISM
(a) A Vermont hospital security fund special committee is created to determine the appropriate funding mechanisms for the Vermont hospital security plan and shall consider at a minimum the following funding sources: an income tax; a payroll tax; premiums or cost-sharing measures; a value‑added tax; and an annual hospital care fee or another consumption tax.
(b) The Vermont hospital security fund special committee shall consist of the chair and vice chair of the joint fiscal committee, the chair and vice chair of the health access oversight committee, the secretaries of the agency of human services and the agency of administration, and the commissioner of banking, insurance, securities, and health care administration. The committee may meet for no more than six meetings or public hearings and shall have such powers as are needed to carry out the purposes of this section. Committee members who are not members of the general assembly or state employees shall be entitled to per diem compensation and expenses as provided in 32 V.S.A. § 1010. Committee members who are members of the general assembly shall be entitled to compensation and reimbursement for expenses pursuant to 2 V.S.A. § 406.
(c) The Vermont hospital security fund special committee shall issue to the general assembly no later than January 15, 2007 a report with a recommendation on funding the Vermont hospital security plan.
Sec. 5. FEDERAL WAIVERS
(a) The secretary of human services shall apply for a federal Medicare waiver no later than July 1, 2006 to allow the state to include Medicare funds for hospital services in the hospital security trust fund established under subchapter 6 of chapter 19 of Title 33 and to modify the payment standards or amounts in order to include Medicare funds in the global hospital budget established under section 2034 of Title 33.
(b) The secretary of human services shall apply for a federal Medicaid waiver no later than July 1, 2006 to allow the state to modify the payment standards or amounts in order to include Medicaid funds in the global hospital budget established under section 2034 of Title 33.
Sec. 6. EFFECTIVE DATE
This act shall take effect from passage, except that the Vermont hospital security plan shall be implemented no later than January 1, 2008.
The Vermont General Assembly
115 State Street