Honestly, I expected SCOV to take Friday off this week, due to Independence Day and all. And for all I really know, SCOV did, but two opinions issued on Friday the 5th anyway.
First up, we have a decision dealing with the Green Mountain Care Board (GMCB) and two hospital systems appealing GMCB's approval of its proposed budgets subject to certain conditions. SCOV concludes that the hospital systems didn't properly challenge the conditions below and therefore affirms.
This really isn't my area of practice, so today I learned that the GMCB is an independent board responsible for "several regulatory functions in the health care industry," among these is reducing "the per-capita rate of growth in expenditures for health services in Vermont across all payers while ensuring that access to care and quality of care are not compromised." There's even a whole chapter of statutes covering this stuff. Who knew? Probably a whole lot of people but not me.
Anywho, this is a pretty straightforward opinion. In its 2024 process, GMCB put caps on commercial rate increases, noted that said caps applied while approving these budgets and neither hospital system brought up the issue during its respective hearing on the budget. Both hospital systems appeal, arguing due process and lack of authority to impose the caps.
SCOV punts and goes with the not-raised-below-not-considering-it-here approach. GMCB argues that neither hospital system raised the issues it now raises below and SCOV agrees. SCOV looks over the record and concludes that while the hospitals were on notice of the caps and had the opportunity to raise the issue at the admin level, they failed to do so. So, SCOV affirms. In re Northwestern Medical Center Fiscal Year 2024, 2024 VT 39.
Next up, we have another GMCB decision. This one deals with OneCare, a statewide accountable care organization (ACO) that makes payments to hospitals on behalf of certain individuals, supplementing their insurance to provide more-uniform payments to providers rather than the wide variations in payments that occur with private as well as state-and-federal backed public insurance programs. At least that's how I read it. OneCare's website is here if you're curious.
So, in approving OneCare's 2023 budget, GMCB required two things of OneCare: (1) that it get affidavits from its member hospitals that its incentive payments were in fact being used to fund primary care and that the member hospitals outline the historical and prospective use of the funds; and (2) that OneCare's "compensation for top executives at the median level of OneCare’s internal compensation benchmarks," and that the remainder be allocated to population health activities.
OneCare didn't like them conditions. It fires off a litany of five objections to the conditions, two of which SCOV considers, reasoning that the remaining three were unpreserved for appeal. And so we proceed on the statutory authority and due process gripes. On those issues, SCOV reasons that GMCB gave adequate notice and acted within its statutory authority. So, spoiler alert, this one also gets affirmed.
A good chunk of the controversy here originates from OneCare's loss of its Blue Cross Blue Shield contract, resulting in the loss of more that 83,000-plus people from OneCare's commercial-payer program. This required revision of the budget and during that process GMCB raised questions about the use of the incentive payments. OneCare said, and I'm paraphrasing, "Uh. We don't keep track of that." One GMCB board member also noted that from FY 2021 to 2023 exec-level compensation jumped 62% and suggested a condition capping exec-level compensation at the median for ACOs nationwide. The conditions passed but no written decision issued and OneCare didn't file anything objecting to the conditions.
After some additional hearings and public comment, GMCB did issue a 27-factual-findings written order that included the two conditions on appeal. OneCare timely appeals.
SCOV quickly disposes—as noted above—of three out of the five arguments on appeal. GMCB argues that because OneCare never raised the three arguments (the Vermont Administrative Procedures Act, sufficiency of the evidence, and the Contracts Clause of the United States Constitution) below, they are unpreserved. What did one strawberry say to the other strawberry? "If you weren't so fresh, we wouldn't be in this jam." It fits.
Turning to the due-process argument (based on inadequate notice), SCOV notes that the issues were raised all along the way and that OneCare can't now claim surprise. Concluding that OneCare had notice, that the first "order" (referred to above as not generating a written decision) was not a final order, and that OneCare got its opportunity to be heard, SCOV reasons that the overall process was fair and that OneCare was not subjected to "unfair surprise." Accordingly, SCOV rejects OneCare's due-process argument.
Next, SCOV takes up whether GMCB had statutory authority to impose the conditions it done did. "Ayup," says SCOV. "Twarn't 'side the scope." Why do I have SCOV talking like it's from the deep, deep woods? I don't know; I just do.
At any rate, SCOV concludes that the "enabling legislation here requires the Board to consider various statutory factors in 'reviewing, modifying, and approving the budgets of ACOs.'" (quoting sub section (b)(1) of this statute) (emphasis in SCOV's opinion). SCOV concludes that GMCB's authority to modify budgets coupled with its mandate to "contain systemic healthcare costs," certainly implies—whether or not explicitly stated—GMCB's power to set budget conditions related to the statutory factors.
Thus, if GMCB wants to know where the money is going and asks OneCare to get that information, it's within its authority. Likewise, if GMCB wants to impose a condition on—and here SCOV notes again the 62% increase in executive-level compensation—exec-level pay to contain operational expenses, it's again within its power to do so. SCOV thus rejects OneCare's statutory-authority arguments and this one also gets affirmed. In re OneCare Vermont Accountable Care Organization, LLC, 2024 VT 38.
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