State healthcare regulators have approved the budgets of Vermont’s 14 hospitals for fiscal year 2026.
The Green Mountain Care Board went into this year’s budget review process with an ambitious goal of reining in costs, as insurance premiums in Vermont have seen double-digit increases over the past few years. That task was made trickier by the fact that many of the state’s hospitals are in a state of financial duress.
For the most part, hospitals proposed budgets that met the targets set by the Green Mountain Care Board, limiting operating expense growth and commercial insurance rate increases to 3%.
In a written statement, Green Mountain Care Board Chair Owen Foster said the board’s decisions “reflect our commitment to support hospital stability” while also protecting Vermonters from “unsustainable healthcare costs.”
“There were a number of hospitals with very reasonable and fair budgets,” Foster said. “I think that really speaks to their recognition of their community’s problems and challenges with health care affordability.”
The board approved eight hospitals’ budgets as submitted.
In an effort to reduce administrative burden, it implemented a new policy this year allowing hospitals that met all of the board’s benchmarks to bypass the budget hearing process.
Grace Cottage Hospital in Townshend, North Country Hospital in Newport, and St. Johnsbury’s Northeastern Vermont Regional Hospital all went this route.
Across the 14 hospitals, net patient revenue, which is the amount of money hospitals are allowed to collect from patients, is within the board’s 3.5% benchmark, and commercial insurance rates were reduced by 4.7%.
In total, the Green Mountain Care Board trimmed $94.5 million from the proposed budgets, and it made the vast majority of those reductions to the state’s largest hospital.
The board made deep cuts to the University of Vermont Medical Center budget, and accused the UVM Health Network, which manages three hospitals in Vermont and three in New York, with moving Vermont health care dollars into New York to make up for financial losses at the New York hospitals.
The board cut the UVM Medical Center’s proposal by more than $88 million.
Southwestern Vermont Medical Center was asking for a 5.2% increase in its commercial insurance rates, largely to help make up for possible losses due to a new cap on some pharmaceutical prices known as the 340B program.
The board turned down the Bennington hospital’s proposed insurance rate hike, approving only a 3% increase.
“Vermonters with commercial health insurance coverage cannot continue to cover hospital shortfalls,” Green Mountain Care Board member Sara Teachout said ahead of the vote. “It’s especially irksome that the 340B program that generates hospital revenue on the margin between discounted drugs and higher prices charged to commercial patients with private health insurance is the reason for this extra increase. This is perpetuating the dysfunction in our healthcare system.”
Brattleboro Memorial Hospital turned in financial reports which the board said were incomplete and inaccurate, and the hospital was facing the prospect of being the first in the state to have to work with an independent observer.
Lawmakers this year passed several healthcare reform laws to give the board more options to rein in hospital costs, and Act 49 authorizes the board to appoint an independent observer if it thinks a hospital’s finances need some oversight.
The board approved a reduced budget for Brattleboro Memorial Hospital, cutting both its projected revenue, and its insurance reimbursement rate.
The board also gave the hospital until Jan. 31, 2026, to resubmit its budget, at which point it will revisit its decision
“The hospital is working with a contractor to try to sort out these reporting issues,” Green Mountain Care Board staff attorney Mark Hengstler told the board. If it’s unable to resolve the financial discrepancies, the board could still decide to appoint an independent observer.
The board also voted on the budget for Copley Hospital, reducing the hospital’s request to raise its insurance rate from 4.2% down to 3%.
The board expressed concern and frustration with Copley Hospital’s decision to close its birthing center in an attempt to save money.
Foster said that while Copley itself did not have a large administrative operation, Vermonters were pouring too many healthcare dollars into executive pay at other hospitals, which puts a strain on the entire system.
“There are places where there are healthcare dollars that could be used for this,” Foster said. “I don’t think that we need 14 full, back office C-suites at all these hospitals across the state. I think we should see a consolidation of some of the C-suite operations. There is money and savings that can happen, but it’s going to be painful. It will be people’s jobs, and it will likely be administrators’ jobs. But I would rather have that happen than closure of sensitive services.”
