Last Friday, the Green Mountain Care Board, Vermont’s statewide medical regulator, approved a settlement agreement with the University of Vermont Health Network that resolves significant budget overages from 2023 and 2024. WAMC North Country Bureau Chief Pat Bradley spoke with UVM Health Network president and Chief Operating Officer Dr. Stephen Leffler about the settlement.
As the Care Board began its deliberations, Chair Owen Foster offered the background leading to the settlement and said the agreement is an important step toward system-wide improvements at the hospital network.
"In 2023, the Care Board correctly, in my opinion, limited UVM's price growth and then enforced 100% of a budget overage, which led to lower commercial prices for Vermonters at UVM. What ensued after that is a black mark. UVM cut sensitive life-saving services, frightened our community members and its own patients, blamed its regulator, and as came to light more recently, some of the executives then accepted large bonuses after that. Legislative leaders, providers, the Care Board itself, public advocates, and most importantly the public rebuked UVM's conduct. We all agreed something needed to change and change rather dramatically. UVM and its leaders have publicly apologized and vowed to be a part of the solution that Vermont needs. It has recognized that it needs to conduct its business differently. I think the steps that UVM has taken are significant and important. UVM, I anticipate and I think they anticipate, will follow through on the promises and spirit of this commitment and no one will have any tolerance to the contrary," Foster told the board.
Dr. Stephen Leffler says the settlement is important for the entire state, not just the health network.
This agreement helps set a new and more collaborative path forward between the network, our regulator and the state of Vermont on working together to solve the problems that we face rather than arguing about them, suing each other about them. So I see this as important step for everyone.
What were some of the things that the Health Network wanted to make sure were included in the settlement?
We were focused on trying to figure out ways to use some of this money, the enforcement dollars, to work to try and make healthcare more affordable to Vermonters to help make us more efficient as an institution. There were other short term things in there that really mattered to the state of Vermont and the Green Mountain Care Board like funding for primary care in this gap year of ’26. Our commercial insurer in Vermont, Blue Cross, had a disagreement with the medical center over some previous years revenue and so we were able to solve that. So I think there was a lot in there that was important to everyone, but some groups cared more about a piece of it than others.
One of the criticisms that has come up regarding the health network is that there's been too many administrators and that costs could be lowered if you got rid of some of the administration. How much of a factor was that in the settlement?
Well, we agreed with the Green Mountain Care Board that we bring in some consulting help to make sure that we are as efficient as possible with our administration. So our network administration oversees more than six hospitals, home health and hospice, a medical group and so on. And so we're going to get some outside consultation that can benchmark how we're doing it, give us best practices and we will use that advice to try and be more efficient.
This was a settlement with the Green Mountain Care Board in Vermont, but the health network has hospital facilities in New York. How do the New York facilities play into the settlement?
Well, the network is really, if you think about it, a big family that expands across two states. Every hospital do have their own budgets. The three Vermont hospitals submit our budgets to our regulator in Vermont, the Green Mountain Care Board. But in our budget you can see things that we work with New York on. The New York hospitals don't present their budgets to the Green Mountain Care Board, but they have their own unique regulatory structure in New York. And so what I would say is the network is committed to providing high quality, safe and efficient health care to all the people in our region, which includes upstate New York. The Green Mountain Care Board they want to understand a little better how the finances of that play out and we're going to be more transparent on that going forward. So on the day to day basis, I don't think it has a huge impact on the New York hospitals. But I do think you're going to see more transparency about how we make decisions across two states to make sure that everyone's getting the best possible care as close to home as they can.
How will the settlement directly impact patients?
We're making an investment in primary care in the state of Vermont in ‘26 so people who see those providers, those providers will be able to function as they are now. We're settling our Blue Cross issues, so that will help our Vermont insurance company to continue doing normal business as usual. And we have committed to a compliant budget for ‘26 that will help give Vermonters predictable cost of health care and insurance for the next year and going forward. After that, as we use the consultants, hopefully we'll be able to bring down some of our costs to make health care even more affordable.
Dr. Leffler, along with the consultants, the Green Mountain Care Board says that it's forming a work group that will include some of their members and some of the trustees from the Health Network and the UVM Medical Center itself. What do you anticipate the work group will actually be doing as it moves forward to make sure the settlement agreement is advancing properly?
Yeah. So the work group has a board member from the UVM Health Network, a board member from the UVM Medical Center, two board members from the Green Mountain Care Board, an independent liaison appointed by the Green Mountain Care Board. But that liaison will report to both the UVM Health Network board and the Green Mountain Care Board to assure alignment and to assure that the terms of the agreement are being accurately carried out. This work group will oversee the work of the consultants, will receive reports from the consultants and have that work be reflected back to the Green Mountain Care Board and the Health Network board, and will oversee budget submissions in Vermont, will oversee information around how dollars move back and forth between Vermont and New York and will be a group that can give opinions on that. But ultimately, the network board will make appropriate decisions for the UVM Health Network.
A couple of the provisions in the settlement basically says they rely on the UVM Medical Center dismissing pending appeals, as it says here, related to the fiscal year 23 and 25 budget orders. How long will that take? What does that entail?
We had litigation pending in Vermont Superior Court, in Vermont Supreme Court, around some decisions on previous budgets in ‘23 and ’25. As part of this agreement we're dropping those appeals and those suits immediately.
The agreement basically sets in motion a series of actions. You mentioned the consultant. We've talked about, the task force. I think a lot of people think the settlement is done, everything's going to be done. But that's not the case. You've got work to do in the wake of the settlement, don't you?
Absolutely this work group will have a lot of work. The independent liaison getting embedded into things that we're doing for the next 16 months, finding the right consultants, having them come do their work, present back and then make appropriate changes. In some ways, as much work as it took to get to the settlement, that's the easy part. Enacting all these steps is going to be hard work, but we actually look forward to being better.
Will this actually lower prices for patients?
Healthcare inflation right now is high. I do think this work will make sure that every person who's spending a healthcare dollar at the UVM Health Network will get the maximum value out of that dollar that they can. I think it's possible some prices on some things will be able to come down. And I'm not sure overall for everything it'll be cheaper but I do think you'll see cheaper for some things. And I do think you'll see people get more value for the dollars they spend in healthcare, meaning we will do more to keep them healthier. They might be able to have a telehealth visit instead of an in person visit. Maybe they'll need one less day in the hospital so they can get home sooner. Maybe we can do more of their care closer up to a hospital at home, which will be cheaper for them. Those are the kind of things we’re going to be very focused on.
Did the hospital network get most of what it was seeking through this settlement?
It took about 12 weeks to put this together. We did a lot of hard but important work with the Green Mountain Care Board, with the network board, the medical center board, the medical center and I think it ended up in a place that was as good as it could be for all involved. And so yes, we are very grateful that we were able to get this deal. The Green Mountain Care Board voted unanimously to support it. I think that's a testament to all the hard work that went into it and we are happy to have the agreements and eager to get starting to work on enacting it.
The settlement requires the UVM Health Network to invest $11 million in non-hospital primary care services; pay $12 million to Blue Cross Blue Shield of Vermont to resolve overpayment disputes; and invest up to $15 million in third party independent consultants to assess hospital operations.
