Hospital budgets approved virtually unscathed by board

State regulators approved a 3.1 percent overall increase in hospital revenue for the coming year, budgeting a combined $2.2 billion for Vermont’s 14 hospitals.
http://vtdigger.org/2014/09/11/hospital-budgets-approved-virtually-unscathed-board/

HOSPITAL BUDGETS APPROVED VIRTUALLY UNSCATHED BY BOARD MORGAN TRUE SEP. 11 2014, 6:46 PM The entrance to Central Vermont Medical Center in Berlin. Photo by Roger Crowley/for VTDigger The entrance to Central Vermont Medical Center in Berlin. Photo by Roger Crowley/for VTDigger State regulators approved a 3.1 percent overall increase in hospital revenue for the coming year, budgeting a combined $2.2 billion for Vermont’s 14 hospitals. The Green Mountain Care Board approved the six remaining hospital budgets at its Thursday meeting, though the revenue figures won’t be final until hospitals receive signed orders Monday. The hospital budget year begins Oct. 1. The overall increase is worth $67.8 million, and is larger than the approved increase from last year of $57.9 million. The lion’s share of that increase, 57 percent or $38.7 million, will go to the state’s largest hospital and only academic medical center, Fletcher Allen Health Care. When the budgets were submitted in July, the board reported that the requests were “historically low,” but after requested accounting changes were approved for four hospitals, the overall increase is higher than last year’s 2.7 percent growth. Al Gobeille, chairman of the Green Mountain Care Board. Photo by Morgan True/VTDigger Al Gobeille, chairman of the Green Mountain Care Board. Photo by Morgan True/VTDigger Board Chairman Al Gobeille said he believes the takeaway is that, in the aggregate, hospitals stayed well within the board’s guidance for revenue growth, which asked that they not exceed 3.8 percent. “There was also a large portion of this revenue increase that hospitals are using to invest in health care reforms,” Gobeille said, which could lower the state’s spending on hospital services in the future. Hospital patient revenue growth has shrunk since the board took over the hospital budgeting process in 2012. Increases for that year and the previous four averaged 6 percent or $110 million. Nationally, spending on hospital services grew 4.9 percent in 2012 and 3.5 in 2011, according to figures from the federal Centers for Medicare and Medicaid Services. Vermont’s actual hospital spending for last year won’t be known until January, when the board will receive an accounting of hospital revenue. It will then take several months to determine whether hospitals stayed within their revenue limits. In fiscal year 2013, the first year the board was responsible for hospital budgets, the systemwide budget was exceeded by roughly $12 million, said Mike Davis, who, as a state regulator, has led the hospital budgeting process for 28 years. The board can call in hospitals that don’t stay within revenue limits to testify about why, and it can increase its scrutiny of hospitals that take in too much money from patient services. There are no penalties for exceeding revenue targets. Of the $2.2 billion in combined revenue requested by the hospitals, the board rejected $292,000. All of that patient revenue was struck from Springfield Hospital’s budget. Springfield’s $54.7 million revenue request included a 5.1 percent increase, which board staff said wasn’t justified in a way that met its criteria. The hospital serves an economically depressed part of the state, and has the highest rate of uncollectible patient debt and charity, or discounted, care in Vermont. Its budget was built on revenue assumptions that are overly optimistic, according to the board, and the reduction will still allow Springfield to achieve its targeted operating surplus. Hospital budgets as approved: • Fletcher Allen Health Care in Burlington: $1.08 billion budget; $38.7 million increase, or 3.7 percent increase in patient revenue; no increase in charge rates. • Central Vermont Medical Center in Berlin: $166 million budget; $5.1 million, or 3.2 percent, increase in patient revenue; 5.9 percent increase in charge rates. • Southwestern Vermont Medical Center in Bennington: $139 million budget; $4.3 million, or 3.1 percent, increase in patient revenue; 4.5 percent increase in charge rates. • Copley Hospital in Morrisville: $59.6 million; $1.8 million, or 3.1 percent, increase in patient revenue; no increase in charge rates. • Springfield Hospital: $54.3 million; $54.3 million, or 4.6 percent, increase in patient revenue; 5.4 percent increase in charge rates. • Brattleboro Memorial Hospital: $71.3 million budget; $1.5 million, or 2.1 percent, increase in patient revenue; 2.7 percent increase in charge rates. • Grace Cottage Hospital in Townshend: $17.9 million budget; $1.4 million, or 8.6 percent, increase in patient revenue; 5 percent increase in charge rates. • Mt. Ascutney Hospital in Windsor: $48.5 million budget; $1.6 million, or 3.4 percent, increase in patient revenue; 3.2 percent increase in charge rates. • North County Hospital in Newport: $73.5 million budget; $1.7 million, or 2.4 percent, decrease in patient revenue; 8.3 percent increase in charge rates. • Northeastern Vermont Regional Hospital in St. Johnsbury: $65.3 million budget; $636,900, or 1 percent, increase in patient revenue; 5 percent increase in charge rates. • Northwestern Medical Center in St. Albans: $90.7 million budget; $3 million, or 3.5 percent, increase in patient revenue; 6.4 percent increase in charge rates. • Porter Medical Center in Middlebury: $72.6 million budget; $2.8 million, or 4.1 percent, increase in patient revenue; 5 percent increase in charge rates. • Rutland Regional Medical Center: $224 million budget; $6.3 million, or 2.9 percent, increase in patient revenue; 8.4 percent increase in charge rates.