Vermonters for Health Care Freedom is a 501 (c) (4) organization of individuals and businesses who are deeply concerned about health care reforms being implemented by Governor Shumlin, and seek patient-centered reforms that protect the traditional doctor-patient relationship.

Vermonters for Health Care Freedom Newsletter #48

Vermonters For Health Care Freedom is a reliable source of candid and insightful critiques of Vermont’s health care reform efforts. Through research and our own network of experts, VHCF regularly updates Vermonters on the state’s latest health care reform efforts.

We are proud to have played a significant role in exposing the pitfalls of a government-run single payer health care system, which fortunately met its demise at the end of 2014.

In 2015, we will focus on the impacts of the Shumlin administration’s continued push for a government-run health care system. We will continue to keep our readers informed about the facts that even the Shumlin administration would prefer not to reveal. No other Vermont organization is dedicated solely to this work.

State’s Fiscal Mismanagement – It Gets Worse

In This Issue:
  • Breaking News 
  • Auditor’s Report on State’s Medicaid Spending – No Goals, No Controls
  • We’re In a Deficit – But Can the Shumlin Administration Manage Money?
  • Legislators Decide To Take the Helm
  • Health Care Bill Collapses
Quotes of the Week:  
(That) “We don’t have indicators or we don’t even have targets, let alone assessments (of) whether we’re meeting those targets, is pretty startling.” 
Rep. Anne Donahue, (R-Northfield) Ranking Member, House Health Care Committee, commenting on Auditor Hoffer’s Medicaid spending report
 “We spend lots of money on IT projects and a number of them have been problematic.  We haven’t figured out how to do it right yet”.
Rep. Cynthia Browning, (D-Arlington), commenting on the state’s mismanagement of Vermont Health Connect 
“There’s no really wealthy class that you can sock it to in order to raise the kind of money they need to grow at 4.8% general fund (spending).  They have to raise taxes on the middle class.”
Tom Pelham, Former Vermont Tax Commissioner, Finance Commissioner and Deputy Secretary of Administration   
Breaking News:
New Mexico Halts Construction of State Exchange:  New Mexico is giving up on building its own exchange technology, and will instead lease the Federal exchange from CMS.  CMS has assured New Mexico that under the lease arrangement, New Mexico will still be considered a state-based exchange, and not at risk in the upcoming King vs Burwell  Supreme Court decision.  The leased exchange will also cost New Mexico less than a state-built exchange. 
Supreme Court Sides With Idaho Over Medicaid Payment Levels: The Supreme Court narrowly ruled last week that health-care providers cannot sue states in order to bump up Medicaid reimbursement rates they say are too low.  The justices ruled 5-4 that neither the Constitution nor federal law authorizes doctors or other health care providers to go to court to force states to raise their Medicaid reimbursement rates. 
In the case at court, two home health care providers sued Idaho, saying it set reimbursement rates too low to meet Medicaid’s standard that rates be “sufficient to enlist enough providers so that care and services are available” to Medicaid recipients as they are to the general population.  A federal judge agreed, as did the U.S. Court of Appeals for the 9th Circuit.  But state officials and the Obama administration said that is not how the system is supposed to work.  The Supreme Court sided with state officials, saying that it is up to the federal agencies that oversee Medicaid to decide whether the state is in compliance with reimbursement rules.
Auditor’s Report on State’s Medicaid Spending – No Goals, No Controls
Vermont taxpayers would be justified in asking how the State has spent and managed $675 million in taxpayer money on state Medicaid managed- care programs over the past 10 years.  Unfortunately however, the State Auditor says that he has tried and even he can’t figure it out.  Why?  Because the state’s management, monitoring and accountability for these funds has been as slipshod as it has been with Vermont Health Disconnect.    
In a letter to lawmakers two weeks ago, State Auditor Doug Hoffer outlined his efforts to determine whether – after spending two-thirds of a billion dollars -  the state and federal governments - and Vermont taxpayers - have gotten their moneys’ worth.  Hoffer’s letter came after an internal report in January by the Agency of Human Services (AHS) outlined many gaps in accountability.  The report examined practices across the following AHS departments:  Children and Families; Corrections; Disabilities, Aging and Independent Living; Health Access (responsible for Vermont Health Connect); and Mental Health.  
The gaps ranged from departments having no performance measures at all - to departments with performance benchmarks that were never measured.  The report said that fewer than half the departments provided results for their performance measures.  It went on to say that 80% of the Department of Mental Health’s (DMH) managed-care investments lacked performance targets, which the report said were “essential to performance measurement and improvement”.  In 2014, DMH received nearly 40%, over $39 million, of the $101 million that was distributed across AHS.  
Shumlin   Administration Can’t Manage 
Beyond the fact that the state has a $113m budget hole that must be filled this year, federal subsidies are also dwindling.  No magical rivers of gold are going to flow into our state.  Yet time after time, Vermonters learn that the Shumlin administration has failed to competently manage the taxpayers’ money it does have.  Part of that is due to the appointment of political cronies instead of the hiring of competent executives to head up critical state agencies.  
Perhaps the most costly example was the Governor’s appointment of then-Representative Mark Larson and Robin Lunge to head up the creation of Vermont Health Connect (VHC).   Neither had any managerial credentials; they were both policy wonks - e.g., theoreticians.   To say that both were completely over their heads would be an understatement.  Weeks and months went by; deadline after deadline was missed; contractor after contractor was hired and not held accountable; huge sums of money were wasted.  
When the state finally admitted that the original VHC contractor CGI had failed to perform and overcharged, did the Shumlin administration attempt to get any money back or enforce any performance penalties?  No.  Instead, they signed an exit agreement with CGI stating that Vermont would not sue CGI for either negligence or overcharges!  And rather than cutting his losses early and bringing in competent management for the VHC project, Shumlin let this dismal state of affairs continue for over a year, while more money was spent, new contractors were hired, and the state’s management of these contractors continues to be questionable. 
Next came the Jonathan Gruber contract.  The contract itself failed to include many of the mandatory provisions that would have protected the state, including the names and bios of subcontractors.  Gruber’s bills were two-liners that failed to show the work performed or who did it.  It now appears that Gruber may have billed or paid himself for hours he said his subcontractor worked.  Auditor Hoffer is trying to clean up the mess – an unnecessary duplication of effort had the administration done it right in the first place.
And last week we finally learned how much it cost to determine that Shumlin’s “single payer” scheme would bankrupt Vermont - as conservatives told him it would from the beginning.  Four years and $2.03m.  Of the $2.03m, Vermonter taxpayers paid the majority of it, $1.14m, while the feds paid about $891k. Worse, the $2.03m is not even a final number.  It does not include the cost of the work of 10 state offices, departments and agencies, which the administration declined to calculate.  Shumlin’s health care reform chief Lawrence Miller told Seven Days that it would be “impractical” to add up the staff time.  So there you go.
Legislators Decide To Take the Helm
The most important new development this year is the legislature’s recognition (finally), that the Shumlin administration cannot be left to their own devices when bidding, awarding, and managing high dollar contracts that have significant impacts on Vermonters.  Given the arrogant dismissal by the Governor of the problems Vermont Health Connect has caused Vermonters (“Nothingburger”), the legislature has finally realized that they need to oversee this administration
Legislators are rightfully leery of the state’s ability to bid, implement or manage new IT investments in the wake of the failed Vermont Health Connect (VHC).  VHC still does not work, and the state will spend $200m on it when all is said and done.  Rep. Cynthia Browning (D-Arlington) said the oversight is long overdue.  Browning also said that flaws in Vermont Health Connect might have been revealed early on had there been any independent monitoring.
House Bill H.371 was introduced by 10 House members this year.  The bill creates a Joint Legislative Information Technology Oversight Committee:   “to examine, oversee and improve the procurement and provision of Information Technology services by and within the Executive and Judicial branches of State government”.  Just in time to slow down another costly Shumlin initiative, a massive IT project for the Agency of Human Services (AHS).  The proposed new IT system would manage benefits and eligibility requirements for a number of state human services programs.  
Senate Appropriations Committee chair Jane Kitchel, (D-Caledonia) remarked, “If you’re building systems that are going to cost as much as the Tax Department (budget), then we have very serious questions about the operational sustainability”.  “This is an area of growing and very large expenditures, and the recent track record is very disturbing”, Kitchel said, referring to the exchange.  Kitchel is also concerned about building an IT project that could have operational costs significantly higher than those of the current system.  Estimated annual operating costs are as high as $18m. The feds will fund part of the project, but how much the state receives depends on an exception, that will – you guessed it - expire in 2018.
In addition to H.371, language in the capital bill would establish more oversight of large IT projects.  The joint fiscal offices would be authorized to use up to $250k of the amount of the IT project to hire an independent consultant to review technology projects.  
Health Care Bill Collapses
Governor Shumlin’s $90m health care bill has collapsed under its own weight.  When H.481 left the House Health Care Committee (HHC), it was pared down to $52m.  When it came back from the House Appropriations Committee (HAC) it was filleted – down to $20m.  Gone from the HAC version are the appropriation amounts for a health care payroll tax, exchange cost-sharing subsidies, the Medicaid cost shift, rate increases for other Medicaid providers, Blueprint for Health increases, area health education centers, office of the health care advocate, all-payer waiver rate-setting, and health homes.
Remaining provisions from the original H.481 include (without funding):
Under “Here We Go Again”:  (1) creates a Task Force on Universal Coverage to develop a proposal by 12/1/15 for achieving universal health care coverage; (2) directs the Joint Fiscal Office to estimate costs by 10/15/15, of providing universal primary care, with and without cost sharing, to all Vermonters beginning in 2017.
Under “Complete Overreach”:
(3) expands GMCB’s reach to include approval of Vermont Information Technology Leaders (VITL)’s annual budget; 
Under “You Must Be Kidding”:
(4) directs GMCB to investigate whether health care reimbursement in Vermont should be regulated as a public utility.
The rest of the HAC version covers the half cent (down from proposed 2 cents) sweetened beverage tax and increased tobacco taxes.  These revenues would be deposited in the State Health Care Resources Fund.  
We expect more changes as the bill goes over to the Senate, where not everyone agrees with the changes made to date.
We will keep you posted.


Call to Action

Please call these legislators today and ask them to vote NO in the Appropriation Committee on spending nearly $20 million on new “health care reform” programs. Call 802-828-2228 and leave messages for:

Earlier this month, a few dozen Vermonters gathered at the University of Vermont for a seminar billed as “Healthcare 101.” But first, they had to wait for a half hour in the fluorescently lit hallways of the George D. Aiken Center for a security guard to open the reserved classroom.

“This is what’s going to happen,” quipped one sardonic attendee, trying the door handle. “You’ll show up for health care and the doors will be locked.”

- Seven Days Newspaper; full article HERE.

  • Employers pay 40% of the healthcare costs – and were never consulted.
  • An appointed board will determine benefits, coverage, funding, deductibles, co-pays, premiums, technology, provider payments, etc.
  • Under this law, you will not be allowed to purchase insurance outside of the Vermont Health Benefit Exchange.