The state of Vermont announced it has reduced the amount it pays the University of Vermont Medical Center, as well as six other hospitals, to treat Medicaid patients.
In a document released Thursday, the Department of Vermont Health Access said it would trim the reimbursement rate to 74.76 percent of what Medicare -- a separate federal program with higher reimbursement rates -- pays Dartmouth-Hitchcock Medical Center in Lebanon, New Hampshire.
According to published reports, Dartmouth-Hitchcock sued Vermont in November 2015, claiming the state was not paying it as much as in-state hospitals to treat Vermont Medicaid patients. About 40 percent of Dartmouth-Hitchcock's patients come from Vermont; not all of them are insured through Medicaid.
Learn on-demand, earn credit, find products and solutions. Get Started >>
The reimbursement cuts affect in-state facilities without Critical Access Hospital designation. In-state hospitals with CAH designation are targeted for an increase in reimbursement, from 92.79 percent of the national median rate set by Medicare to 112.17 percent.
"With these rates, DVHA has factored in an assumption related to provider-based billing that will yield estimated annualized payments of $20 million to hospitals," said DVHA in its statement. "Hospitals for the first time were able to be reimbursed for provider based billing in 2014. The $20 million represents the estimated amount of provider based billing that Medicaid will reimburse for in 2016."
Six hospitals will see a rate cut: Rutland Regional Medical Center, Northwestern Medical Center in St. Albans, Central Vermont Medical Center in Berlin, Southwestern Vermont Medical Center in Bennington, Brattleboro Memorial Hospital, and the Brattleboro retreat.
"We are very concerned about this unexpected, mid-year cut," the Vermont Association of Hospitals and Health Systems said in a statement. "This is an example of the unpredictability of healthcare finance, and of the volatility that can make it challenging for our hospitals to meet the healthcare needs of their communities. If Vermont is to succeed in healthcare reform efforts, it's critical that Medicaid be a reliable and predictable partner."
The rate changes were made effective retroactively to March 1.
Eight critical access hospitals will see a rate increase: Copley Hospital, Grace Cottage Hospital, Gifford Medical Center, Mount Ascutney Hospital, North Country Hospital, Northeastern Vermont Regional Hospital, Porter Medical Center and Springfield Hospital.