Regulators may get more flexible on UVMMC mental health care investment

On its face, the question the Green Mountain Care Board will decide over the coming two weeks is bureaucratic. But to Vermonters struggling to access mental health treatment for themselves or loved ones, the answer is anything but mundane.

Should the board allow Burlington’s University of Vermont Medical Center to divert what remains of $21 million in surplus health care revenue from 2017 away from a plan to construct a new hospital-based inpatient psychiatric facility? 

The alternative would be a wider range of investments to increase mental health care capacity determined in conjunction with the Vermont Department of Mental Health. The board is seeking public comment on the question in advance of a possible March 8 vote. 

The care board’s staff recommend loosening the board’s requirements. 

“We’re suggesting that those funds could be more beneficial and more immediately used for the state if that restriction were broadened,” Sarah Lindberg, the care board’s director of health systems finances, told its five members at Wednesday’s afternoon meeting. 

Statewide, the unmet need for both emergency and ongoing mental health care remains large. “This funding is at risk of being of less value as time goes on,” Lindberg said. 

Rick Vincent, CFO of the UVM Health Network, wrote in a Feb. 9 letter to the Green Mountain Care Board that the network still intends to use the remaining funds, around $18 million, to address mental health needs. 

Leaders of the organization — which includes UVMMC, Central Vermont Medical Center in Berlin and Porter Medical Center in Middlebury — “look forward to discussions with you, and others in State government, about the best use of the funds,” he wrote. 

The 2017 funds were considered a surplus for the nonprofit hospital because the amount was higher than the budget that the board and UVMMC had agreed upon at the start of the fiscal year. The board’s annual budget agreements with the state’s 14 hospitals, which it tracks against actual earning and spending, are a significant portion of its oversight work. 

The April 2018 “enforcement action” required the $21 million in excess revenue “be used solely for investments that measurably increase inpatient mental health capacity in Vermont.” The UVM Health Network spent several years planning for a 40-bed facility that would be part of Central Vermont Medical Center, which would have added 25 new inpatient beds. 

The project was estimated to cost more than $150 million and was expected to add operating deficits of more than $20 million due to the lower than cost reimbursement rates for many mental health services. The health network stepped away from the project early last year, citing large budget deficits.

In its 2023 budget agreement, with the cost of care escalating largely due to increased staffing costs, the Green Mountain Care Board allowed UVMMC to raise its commercial insurance rates just under 15%, less than the almost 20% increase requested by the hospital. The board suggested at that time the hospital could petition to make use of the mental health care funds to close the gap. 

UVM Health Network’s financial woes, along with those of other health care service organizations around the state, have not abated. Its three hospitals lost a combined $22 million in the first quarter of the current fiscal year, Vincent said in his letter. 

While acknowledging needs at every level of mental health care, several board members expressed concerns about removing the focus of the one-time funds from a new inpatient facility. Without it, they said, the system does not serve patients well and results in more expensive health care.

“The fact that our emergency departments are clogged with people needing mental health care services, sometimes residing in the emergency department for weeks at a time, tells us there is a desperate need for inpatient services,” board member Thom Walsh said. “They are in the hospital, in the highest cost possible setting, as we speak.”