Vermont has been active in cost containment and transparency through a number of state planning initiatives, rate and premium control, and the VHCURES all-payer claims database. Vermont also attempted to be the first state to operate a single-payer healthcare system, however, the state gave up on the plan in 2014. In the 2017 legislative term, Vermont proposed legislation to create a public option, increase transparency on prescription drug pricing, and curb the State’s spending of prescription drugs to no higher than the Department of Veteran Affairs. However none of these proposals carried on into the next legislative term.
In the 2018 legislative term, Vermont passed legislation to allow the wholesale purchase of prescription drugs from Canada and to create a state mandate for minimum essential health care. The mandate to require all residents to have health insurance will take affect in January 2010 and is designed to keep healthier people enrolled in the states’ Affordable Care Act insurance marketplaces and premium prices low. In addition, the Legislature also passed a drug price transparency bill (S 92) which requires state officials to identify 15 drugs whose wholesale acquisition costs rose by 50 percent or more over the last five years, and 15 medicines that rose 15 percent or more over a 12-month period. The drugs’ makers must justify the price increases to the state’s attorney general and the information is made public.
Vermont’s most recent legislative session ran from 1/3/2018 – 5/4/2018.
Recent Legislative Developments
|2018||S 92||Would require pharmacists to dispense the lowest priced generic or interchangeable product. Would require an insurer to annually file a summary of proposed rates, including an analysis of the impact of drug cost on premium increases. Separately, would require insurers of different sizes to report on a specified number of most frequently prescribed drugs by average wholesale price for each drug, by the total spend, and by higher year on year price increases. Would require a subset of manufacturers to provide cost justification to the Attorney General, who will provide the report from the information received from manufacturers. Green Mountain Care Board shall post the report on its website, Requires manufacturers notice to the Attorney General of new drug launches priced at more than $670 and supply information about marketing and sales volume and other information to the Attorney General. Would require pharmacy benefit manager transparency as well.||Passed – Signed by Governor 5/30/18. (Act 193)|
|H886||This bill proposes to prohibit any prohibit any provision in a contract between a pharmacy benefit manager or other entity paying pharmacy claims and a pharmacy that would limit a pharmacist’s ability to disclose to a customer the cash price of a prescription drug.||Inactive/Dead.|
|H659||This bill proposes that upon ordering a procedure or surgery, the patient’s health care provider shall direct the patient to the finance department at the health care facility at which the procedure or surgery will be performed to discuss the costs of the procedure or surgery under the patient’s health insurance or other health benefit plan and to set up a payment plan, if necessary.||Inactive/Dead.|
|2017||S 57||Proposes to require pharmacy benefit manages to provide explanations of benefits for prescription drug claims. It would also direct the Dept. of Financial Regulation to amend its rules to require Exchange plans to post online the range of actual coinsurance amounts for each prescription drug on their plan formularies based on the lowest and highest process currently available at pharmacies in Vermont.||Inactive/Dead.|
|2015-2016||S0139||ALL PAYER MODEL: requires the Secretary of Administration or designee and the Green Mountain Care Board to jointly explore an all-payer model. The Secretary or designee and the Board are required to consider a model that includes payment for a broad array of health services, including: payment for a broad array of health services, a model applicable to hospitals only, and a model that enables the state to establish global hospital budgets for each hospital licensed in Vermont.
|Passed – Signed by the Governor on 6/5/15.|
|H0077/S0113||HEALTH CARE QUALITY AND PRICE COMPARISON DATABASE: would require the Green Mountain Care Board to create an online database through which consumers could compare the cost and quality of health care services in the state.
H0077 would also require pharmacies to post in their store and online, the price charged to a consumer who does not have prescription drug coverage, for the 20 most commonly prescribed medications dispensed at that pharmacy, as well as the average price for each of those prescriptions.
|Inactive – Died.|
|H0197||PATIENT SERVICE PRICE DISCLOSURE: would require health care providers, except in an emergency, to disclose to a patient or other health care consumer the cost of a health care services prior to the patient or consumer incurring any charges. The patient or consumer would be required to sign a written acknowledgement of the cost disclosure.
H1097 would also require hospital bills to list each service provided in language commonly understood by patients.
|Inactive – Died.|
|2018||H 713||This bill proposes to prohibit prescription drug manufacturers and wholesale distributors from engaging in price gouging in the sale of essential off-patent or generic drugs.||Inactive/Dead.|
|S175||This bill proposes to establish a program to allow wholesale importation of prescription drugs from Canada into Vermont. It would create a bulk purchasing program for prescription drugs through the Department of Health and require prescription drug manufacturers to provide notice before introducing new, high-cost drugs to the market. The bill would also require health insurers to provide information about the impact of prescription drug spending on premium rates as part of the Green Mountain Care Board’s rate review process and direct the Board to publish an annual report demonstrating the overall impact of drug costs on health insurance premiums.||Passed – Sent to Governor 5/7/2018. (18 V.S.A. § 4651)|
|S190||This bill proposes to establish a mechanism by which a portion of hospital budget surpluses would be reinvested by local communities to fund programs affecting social determinants of health. It would also specify sources of changes to hospitals’ net patient revenue amounts that the Green Mountain Care Board must exempt from any net patient revenue growth rate target that the Board establishes.||Inactive/Dead.|
|2017||S19||This bill proposes to delay for once a year a requirement that the Dept. of Vermont Health Access apply for a federal waiver that would seek to ensure the continued availability of bronze-level Exchange plans that meet Vermont’s out-of-pocket prescription drug limit. This bill would also direct an advisory group developing options for bronze-level Exchange plans to report on potential changes to a statute or rule that would ensure the continued availability of these plans.||Inactive – Died.|
|S146||This bill proposes to prohibit State entities, including Medicaid and the State employees’ health plan, from paying more for a prescription drug than the lowest price paid for the same drug by the U.S. Department of Veteran Affairs.||Inactive – Died.|
|2018||S163||This bill proposes to direct the Agency of Human Services to explore opportunities to work with other states to create a public multistate pharmacy benefit management program. The Agency of Human Services shall explore opportunities to work with other states to create a public pharmacy benefit management program in order to contain prescription drug costs, determine prescription drug formularies, and increase the transparency of pharmacy benefit management for all individuals enrolled in health benefit programs offered by or on behalf of the State, including Medicaid and the State Employees’ Health Benefit Plan.||Inactive/Dead.|
|H822||This bill proposes to repeal Vermont’s certificate of need laws.||Inactive/Dead.|
|H696||This bill proposes to require all Vermont residents to maintain minimum essential health coverage or pay a penalty.||Passed – Signed by the Governor on 5/28/18. (32 V.S.A § 10451)|
|S50||This bill proposes to require Medicaid and health insurance coverage for telemedicine services delivered in or outside a health care facility by several types of health care providers.||Passed – Signed by Governor on 6/7/17. (8 V.S.A § 4100)|
|2017||H28||This bill proposes to create a public option for health care coverage that would be available to all Vermont residents and employers and would be publicly funded. It would remove health insurance benefits from the bargainable subjects for public employees who are subject to a collective bargaining agreement and instead specify that employees who wish to have health insurance coverage would be covered under the public option.||Inactive – Died.|
|H29||Proposes that a health insurance company, hospital or medical service corporation, or health maintenance organization use a community rating method for determining premiums for Medicare supplemental insurance policies. A health insurance company, hospital or medical service corporation, or health maintenance organization that issues Medicare supplemental insurance policies may offer expense discounts to encourage timely, full payment of premiums. A health insurance company, hospital or medical service corporation, or health maintenance organization that issues Medicare supplemental insurance policies shall not offer reduced premiums or other discounts related to a person’s age, gender, marital status, or other demographic criteria.||Inactive – Died.|
We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.
- 33 V.S.A. §§ 1801-1812 establishes the Vermont Health Benefit Exchange under the Affordable Care Act with the purpose of ultimately obtaining a federal waiver to use the Exchange as a mechanism to create the Green Mountain Care single-payer system.
- 33 V.S.A. §§ 1821-1832 sets out the provisions for Vermont’s Green Mountain Care (GMC) system, a publicly financed single-payer health care system that provides universal coverage to all residents of Vermont. Vermont aims to obtain a waiver under federal law to obtain federal fund contribution in lieu of federal premium tax credits, cost-sharing subsidies, and small business tax credits under the ACA. GMC will not become active until a federal waiver is obtained and sustainable financing has been determined for the system.
Transparency in Healthcare
- 18 V.S.A. § 9410 creates the Vermont Health Care Uniform Reporting and Evaluation System (VHCURES), Vermont’s all-payer claims database (APCD). An APCD is a database for aggregating health care claims data from payer sources in order to compare costs among physicians and health care systems.
- 18 V.S.A. 9405 requires the state agencies to adopt a State Health Plan and Health Resource Allocation Plan in order to coordinate health care services, programs, facilities, and resources.
- 18 V.S.A. 9405b requires the Commissioner of Health in the Department of Financial Regulation to publish an annual Hospital Report Card based on information about quality, financial health, costs for services, and other hospital characteristics.
- 18 V.S.A. 9414a requires that health insurers on the Vermont Health Benefit Exchange issue an annual report to the Commissioner of Financial Regulation containing information about the health insurers operations, including claims data, salary data, marketing and advertising expenses, lobbying expenses, political contributions, legal expenses, and charitable contribution data.
- 18 V.S.A. § 9418e prohibits any contracting entity from offering, amending, or entering into a contract with a provider, hospital, or pharmacy that includes a most favored nation clause. A most favored nations clause is an agreement between a payer (such as an insurance company) and a provider that typically requires a provider to give the payer the lowest rate that it gave to any other comparable payer, which can be anticompetitive by encouraging oligopolistic pricing by large payers and increasing barriers for new entrants.
- 32 V.S.A § 10451 requires all Vermont residents to maintain minimum essential health coverage or pay a penalty.
- 8 V.S.A § 4100 requires Medicaid and health insurance coverage for telemedicine services delivered in or outside a health care facility by several types of health care providers.
- 18 V.S.A. § 4651 established a program to allow wholesale importation of prescription drugs from Canada into Vermont. It created a bulk purchasing program for prescription drugs through the Department of Health and required prescription drug manufacturers to provide notice before introducing new, high-cost drugs to the market. It also requires health insurers to provide information about the impact of prescription drug spending on premium rates as part of the Green Mountain Care Board’s rate review process and directs the Board to publish an annual report demonstrating the overall impact of drug costs on health insurance premiums.
- 18 V.S.A. § 9434 requires certain healthcare providers and facilities to obtain a Certificate of Need (CON) before building certain types of facilities or offering new or expanded services. A Certificate of Need is obtained subject to a regulatory review that ensures that there is a genuine need in the community for new or expanded services to promote cost containment and unnecessary duplication of services. Vermont requires that a CON applicant must show that their application for new or expanded services is consistent with the Health Resource Allocation Plan, a state-wide planning document geared towards establishing health delivery priorities.
- 18 V.S.A. §§ 9371-9381 establishes the Green Mountain Care Board with the goal of providing universal coverage for all Vermonters while maintaining the ethos of transparency, cost containment, and fairness. The Green Mountain Care Board is charged with a number of health care reform and cost containment duties:
- 18 V.S.A. § 9351 – reviewing the statewide Health Information Technology Plan (aimed at reducing the cost of delivering quality health care through technological advancement);
- 18 V.S.A. § 9376 – setting reimbursement rates for health care providers;
- 8 V.S.A. § 4062 – approving insurance rates and premiums (see Vermont Rate Review website);
- 18 § 9375a – developing a unified health care budget to serve as a guideline within which health care costs are controlled and resources are allocated, including an annual report on projected health care expenditures on behalf of Vermont residents;
- 18 V.S.A. § 9456 – reviewing and approving hospital budgets (see Hospital Budget Review website); and
- recommending the benefit plan for and monitoring the unimplemented Green Mountain Care single-payer system.
- 18 V.S.A. §§ 702-709 creates the Vermont Blueprint for Health initiative, defined as a “program for integrating a system of health care for patients, improving the health of the overall population, and improving control over health care costs by promoting health maintenance, prevention, and care coordination and management.” The Blueprint for Health provides clinical quality and performance measures as well as guidelines to establish patient-centered medical homes, community health teams, and accountable care organizations. Under the Green Mountain Care single-payer system, it is the intent of the legislature that within 5 years after the system is implemented, an individual enrolled in GMC will have a primary health professional who is involved with the Blueprint for Health.
- 8 V.S.A. §§ 4721-4726 prohibits unfair methods of competitive and unfair or deceptive acts in the provision of insurance.
FY 2018 BUDGET
Vermont’s fiscal year begins on July 1 and end on June 30 the following year. Vermont enacted its budget during a special legislative session. To view Vermont’s FY 2018 Budget, click here.
- On January 17, 2017 the commissioner of the Department of Financial Regulation announced that MVP Health Insurance Company has paid the state of Vermont $70, 500 in administrative penalties and $158, 915 as reimbursement to Vermont residents for consistent overcharging for colorectal screenings.
- Administrative orders issued by the Department of Financial Regulation respecting insurance market conduct can be found here.