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UVM Medical Center Takes Legal Action in Effort to Prevent Additional Patient Care Cuts

Regulatory Action Penalized Hospital for Providing More Care to Patients Than Expected

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Burlington – On Monday, University of Vermont Medical Center filed a motion with the Green Mountain Care Board (GMCB) to delay a board order that penalizes the hospital for delivering necessary care to patients in fiscal year 2023.  Unless the GMCB’s enforcement action is overturned, it will force UVM Medical Center, the academic medical center that anchors University of Vermont Health Network, to cut patient care and support services.

Because the board penalized UVM Medical Center without first providing the hospital an enforcement hearing or taking any testimony regarding the consequences of the ordered cuts, UVM Medical Center will appeal the enforcement action as an illegal exercise of the board’s authority. The motion UVM Medical Center filed yesterday, if granted by the board, would allow the hospital to postpone some of the service cuts while its appeal is pending.

“By seeking care with us, our patients have shown they need more access to health care services, not less,” said Stephen Leffler, MD, president and chief operating officer of UVM Medical Center. “We filed this motion because it is our responsibility to take every possible step to limit the impact of the board’s decisions on our patients, communities and staff and we want to have the opportunity to present our case about why this decision is wrong.”

UVM Medical Center Received No Opportunity for Due Process

This past May, the board informed UVM Medical Center it was in violation of its budget orders for the 2023 fiscal year, exceeding its approved net patient revenue by approximately $80 million. This was a direct result of the hospital providing higher volumes of patient care that responded to community needs, as well as initiatives to reduce wait times and backlogs. All of the unbudgeted revenue was used to cover the additional expense of providing necessary care to those patients; none of it was retained by the hospital as a positive margin. In fact, the hospital lost $23 million providing the additional care, but continued its efforts to increase access to much needed health care as part of its nonprofit mission.

The enforcement comes as the board commissioned the recently published Act 167 report calling for reduced health care services at a time when Vermont hospitals are providing more care.

“There were serious problems with the way this enforcement action was handed down, and due to the potential impacts on patient care, we need to highlight those issues,” Dr. Leffler said.

Budget Orders and Enforcement Action Significant Enough to Impact Patient Care

The cumulative impact of the board’s reductions on UVM Health Network’s Vermont hospitals and enforcement action on UVM Medical Center has created the need to cut approximately $122 million of patient care revenue for the current fiscal year – the equivalent of closing the health system’s Vermont hospitals for 17 days.

Additionally, the enforcement on UVM Medical Center reduces the FY25 commercial insurance rates it can charge by 1%, which essentially is a “give back” to insurance companies.  But that “give back” will result in no decrease to the rates that insurance companies charge their members this year.

UVM Health Network recently paused construction on the planned Outpatient Surgery Center in South Burlington due to the impact of the regulator’s orders. The health system also shared with patients, as well as government and community stakeholders, that reductions to clinical services impacting patients and to the administrative departments that indirectly support care would be needed. The decision to pause the outpatient surgery center was a first step, with additional actions necessary if the enforcement order proceeds. The health system is approaching these decisions carefully with the goal of minimizing the impact on patients and employees to the extent possible.

Next Steps

UVM Health Network will appeal both the FY23 enforcement action and its FY25 hospital budget. At the same time, leaders from across the health system are working to identify cuts to non-clinical expenses as a way to exhaust all options before making reductions to patient care.

Last year, in response to regulator budget orders, the health system reduced 130 open non-clinical positions and cut overall administrative costs by nearly $20 million.

To view the full Motion to Stay, click here.