Scott rejects regulators’ ask for Medicaid funding boost – vtdigger.org

Last month, Kevin Mullin, chair of the Green Mountain Care Board, which regulates Vermont health care spending, urged Scott to include more Medicaid funding in the budget he will present in January.  

In a letter, Mullin told the governor that the state needs more funding to help address the Medicaid “cost shift,” which occurs when hospitals increase revenue from  patients with private insurance to offset insufficient Medicaid reimbursements. 

He said that in previous years, the state’s Medicaid program has seen saw larger, more regular funding increases.

According to Mullin, the low Medicaid reimbursement rates have made it hard for rural hospitals to take part in the state’s transition to an all-payer health care system and have helped lead to higher insurance rates —  including the double digit rate increases for insurance plans on Vermont Health Connect approved by the care board in July. 

Responding to Mullin this week, the governor said that in recent years the state has increased the rate that Medicaid pays providers, while, at the same time, the number of Vermonters in the program has decreased. 

In a Sept. 10 letter, the governor told Mullin that “the root of the problem” of rising insurance rates is that the cost of health care is too high and continues to rise — not that the state’s Medicaid program has been underfunded. 

“While your letter makes clear your frustration with the sharp rise in commercial insurance premium rates you approved, its attempt to shift responsibility for this increase to Vermont’s Medicaid program is, in my opinion, wrong,” Scott wrote. 

Scott noted that in recent years participation in Vermont’s Medicaid program has decreased 21%, with about 43,000 fewer members since 2016. 

“As you surely recall from your time in the Legislature, when there are fewer people enrolled in a program, appropriations for that program do not grow as quickly, or at all,” Scott wrote in the letter to Mullin, a former Republican state senator who was appointed to the Green Mountain Care Board by Scott.

Still, Scott noted that over the last five years the state has boosted the amount it reimburses providers for Medicaid services by $40 million, though he acknowledged that none of the money has gone directly to hospitals. 

It instead has been spent on increasing reimbursements for providers, including  primary care doctors, community health providers and the designated agencies that offer mental health services. 

Scott said these increases have lowered health care costs because “they buffer Vermont’s downstream, community-based health providers to mitigate upstream costs in more expensive settings.” 

In a recent interview, Mullin said that the state should fund the Medicaid program up to the federal cap — which would mean about $70 million in additional dollars. 

Mullin wants to harness part of the additional funding to draw down tens of millions of federal dollars to help hospitals invest in the transition to the all-payer model. 

He says that low reimbursement rates are making it more difficult for small rural hospitals to afford the transition to the all-payer system run by OneCare Vermont, which pools Medicaid, Medicare and commercial insurance monies and distributes payments to providers on a flat per-patient basis. 

Lawmakers, including Sen. President Pro Tem

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