Green Mountain Care Board trims budget for struggling Springfield Hospital

Valley News Staff Writer
Published: 10/9/2020 2:55:24 PM
Modified: 10/9/2020 2:55:19 PM

MONTPELIER — The Green Mountain Care Board’s reduction to Springfield Hospital’s budget from the amount hospital leaders first proposed could mean the difference between a positive operating margin and a negative one for the struggling hospital.

The board, which limits the rates hospitals can charge insurers and the amount of revenue they can generate by providing health care, announced its decisions about how much hospital budgets will be allowed to grow in fiscal year 2021 in a news release last week.

Springfield’s reduction did not reflect a change to the hospital’s request for the rates it charges insurers, but instead it aimed to correct the hospital’s “aspirational” revenue estimates to put it more in line with the hospital’s previous performance, said Susan Barrett, the board’s executive director.

“Let’s be realistic,” she said.

The board approved budgets for the other two of the three Upper Valley hospitals subject to its review — Gifford Medical Center in Randolph and Mt. Ascutney Hospital and Health Center in Windsor — as hospital leaders proposed.

Statewide, the board approved an estimated weighted average increase in hospital charges to insurers of 5.6%, according to Thursday’s news release. The board also approved a 2.7% increase in revenues related to patient care. As part of its budget requirements, the board now is asking all 14 of the state’s hospitals to participate in sustainability planning.

As originally filed in August, Springfield’s budget of $53.1 million for the fiscal year that started Oct. 1 would have resulted in a positive operating margin of $185,000. But, as approved — unless hospital leaders make adjustments — the hospital is instead projected to see a loss on operations of $734,000.

Even such a loss would pale in comparison with some in recent years. The hospital, which last month released its plan to exit bankruptcy by the end of this year, saw losses on operations of $8.2 million in fiscal year 2019 and $7 million in 2018. In August, the hospital projected it would end fiscal year 2020 on Sept. 30 with an operating loss of $3.6 million.

Springfield Hospital interim CEO Mike Halstead was unavailable for comment Friday.

Should the plan filed last month — which hinges on $6 million in state funding — be approved by the federal bankruptcy court, the hospital would separate from the related clinics in Springfield Medical Care Systems but still retain a clinical relationship with them. Both organizations would refer patients to each other and accept the same insurances, Halstead said last month. They also would share some administrative services.

Since the Green Mountain Care Board heard budget presentations from the hospitals in August, Mt. Ascutney submitted a revised budget due to its decision to maintain its 2020 level of participation in contracts offered through the accountable care organization OneCare Vermont in 2021. Mt. Ascutney will participate in OneCare contracts with Medicaid, Medicare and Blue Cross/Blue Shield, according to a Sept. 11 letter Mt. Ascutney CFO David Sanville sent to the board.

That change brought the hospital’s FY 2021 operating budget to $59.8 million, up from the $59.7 million it had previously proposed in August. The additional expense also brings down the hospital’s projected operating margin for the year from $352,000 to $173,000.

“Assuming the estimates and information received from (OneCare) end up being close to reality, this should allow us to make a small margin and maintain our participation in these programs,” Sanville wrote.

Mt. Ascutney CEO Joseph Perras, who sits on OneCare’s board, said in August that he was struggling to reconcile the needs to balance Mt. Ascutney’s budget and to move forward with the state’s effort to reform health care, in part through OneCare contracts that pay health care providers on a per patient basis, rather than as fee-for-service.

In addition to money to participate in the contracts through OneCare, Mt. Ascutney’s 2021 budget also includes adding the new services of urology and neurology, and expanding the hospital’s ophthalmology and psychiatry services.

The care board also approved Gifford’s proposed operating budget of $52.58 million, with an anticipated positive operating margin of $987,000 for fiscal year 2021.

That would be a marked improvement over last year’s loss on operations of $413,000 and the $5.37 million deficit Gifford saw in 2018.

The board will issue written hospital budget decisions and orders by Oct. 14, according to the release.

The board’s decision came the same week hospital leaders in New Hampshire told legislators that they have received just $329.2 million in COVID-19 related grants to make up for $516.8 million in losses they’ve suffered between March and September due to the pandemic.

They project that those losses will grow to $597.1 million by the end of the year, according to a presentation the New Hampshire Hospital Association made to the New Hampshire Governor’s Office for Emergency Relief and Recovery last Tuesday.

“Without an infusion of financial resources, hospitals — both large and small — face the risk of running out of operating cash in the next several months,” according to the association’s presentation.

Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.




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