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Hospital Sustainability and Act 167

The financial health and sustainability of Vermont’s hospitals has been top of mind for the GMCB for years. Given the national trends of rural hospital closures and the headwinds facing Vermont’s hospitals, particularly due to the COVID-19 pandemic, the GMCB has been keeping a close eye on hospital sustainability and studying opportunities to ensure hospitals’ financial health.  

Act 167 of 2022

In 2022, the Vermont Legislature passed Act 167 which included funding for the GMCB to deepen its work on these issues in partnership with hospitals, other health care providers, insurers, Vermonters, and other State of Vermont partner agencies. On January 26, 2023, GMCB staff provided an update to the legislature on the status of each workstream (presentation slide deck).

Image shows the four workstreams of Act 167 of 2022 Sections 1 and 2. Section 1 has three workstreams: Subsequent All-Payer Model Agreement (AHS leads, GMCB Collab.); Developing Value-Based Payment Models, Hospital Global Budget Development (GMCB Lead, AHS Collab); Evolving GMCB Regulatory Processes, GMCB Hospital Budget Review Process (GMCB). Section 2 has one workstream: Community Engagement to Support Hospital Transformation (GMCB Lead, AHS Collab.).

While Act 167 focuses on hospitals and hospital-based services, hospitals are one part of the broader health care system, and the stakeholder process and health care needs analysis will take a broader look. While hospitals comprise 47% of health care spending in Vermont, the availability of other services directly impacts when Vermonters need hospital services and how often. Therefore, the GMCB will be seeking broad input from communities about their experiences with Vermont’s health care system and recommendations for the future. 

Stakeholders are encouraged to check this page for updates about this project. Click here to submit a public comment.

The Latest Updates

Subsequent APM Agreement: In December 2022, a short-term extension of the current APM agreement was signed by the Governor, Secretary of AHS, and Chair of GMCB, providing a bridge to a potential future federal-state model. AHS is leading Vermont’s collaboration with the federal Center for Medicare and Medicaid Innovation (CMMI) to inform future federal-state models, informed by the members of the Health Care Reform Work Group. 

Developing Value-Based Payment Models – Hospital Global Budget Development: In January 2023, GMCB and AHS co-convened a Hospital Global Budget Technical Advisory Group which is expected to run through the end of 2023.

Evolving GMCB Regulatory Processes – Hospital Budget Review Process: The GMCB is undertaking a dedicated scope of work to review and update its regulation of hospital budgets. 

Community Engagement to Support Hospital Transformation: This work includes conducting a data-informed stakeholder process to gain a deeper understanding of the current state of Vermont’s health care system, including the experiences of Vermonters and their health care providers, and to support hospitals in identifying short, medium, and long-term actions to keep them financially sustainable while providing high-quality care to their communities. The GMCB has issued a Request for Proposal (RFP) that was developed in collaboration with the Agency of Human Services (AHS). The RFP seeks support in carrying out data analysis and community and provider engagement to support hospital transformation, as required by Act 167 of 2022. The RFP was informed by input from a broad spectrum of provider organizations, consumer advocates, insurers, and other stakeholders.


Past Work on Hospital Sustainability

Act 159 of 2020 required that the GMCB consider ways to increase the financial sustainability of Vermont hospitals in order to achieve population based health improvements while maintaining community access to services.