The University of Vermont Health Network has reached a tentative agreement with the Green Mountain Care Board to resolve a dispute over the fact that the hospital network brought in roughly $80 million more patient revenue in the 2023 fiscal year than it was allowed to. 

Under a proposed settlement announced Tuesday, the network would pay $11 million to “non-hospital” primary care providers and $12 million to the insurer Blue Cross Blue Shield. It would also fund a team of consultants and an “independent liaison” to review the network’s finances and operations. 

The settlement also includes restrictions on bonuses paid out to hospital executives. In the 2026 fiscal year, at least half of executives’ bonuses would be tied to specific factors: reducing the usage of emergency departments, payments from New York hospitals to Vermont hospitals, and reducing prices charged to commercial health insurers and revenue from those insurers.

In return, the care board would loosen its 2025 restrictions on UVM Medical Center in Burlington, allowing it to take in more revenue from patients in 2026 and 2027. And the regulator would forgo taking action to address a separate instance in which network hospitals exceeded their budgets, in the 2024 fiscal year.    

The agreement would, hopefully, “change course for our health system,” Sunny Eappen, the president and CEO of the network, said at a Wednesday meeting of the Green Mountain Care Board. “It’ll change course for our working relationship with the Green Mountain Care Board, and most importantly, it’ll make care more affordable for Vermonters.”

The settlement represents a thaw in the sometimes frosty relationship between a powerful state health care regulator and Vermont’s largest hospital network.

Owen Foster, the chair of the Green Mountain Care Board, said at Wednesday’s meeting that he and other board members had spent months discussing the terms of the agreement with the hospital network’s leadership. 

“There were some really candid and honest discussions, some very hard discussions,” Foster said. “I found it difficult at times, but also really critical that we all roll up our sleeves on behalf of the state.”

The agreement appears to be something of a conciliatory gesture from the network, which has drawn a firestorm of criticism in past months over cuts to services across the state, the movement of money from Vermont to New York hospitals, and the payouts of several million dollars in bonuses to executives. 

In an interview Wednesday, Eappen apologized to patients about the way the network announced and implemented its service cuts last year.

“What we heard from our community members when we dropped these services is that, ‘Hey, how can you possibly do that? We rely on you,’” he said. “And so I think there is a loss of trust, and we’re trying to build that back up and acknowledging that, hey, we could have done this better, and we’re sorry about that.”

But that trust was sometimes elusive at Wednesday’s meeting. Several members of the public used the forum to express frustration about the high cost of health care in Vermont — and the network’s role in those high costs. 

“I think the trust will start to grow when the premium rates go down,” said Alex LeClair, an employee at a physical therapy practice. 

Others questioned the confidential negotiations that had led to the settlement — and the terms it contained. Why, some asked, would the payments included in the settlement not simply be used to buy down insurance rates for Vermonters?  

“If I had an ability to influence what’s before you today, I would attempt to move towards more immediate rate relief for Vermonters,” Mike Fisher, Vermont’s chief health care advocate, said at the meeting.

A spokesperson for Blue Cross Blue shield declined to comment Wednesday.

The agreement must still be approved by the hospital network’s board of trustees and the Green Mountain Care Board, which has scheduled a vote for April 2. Members of the public are able to submit comments to the board until then.