Category Archives: Governor

Capitol Beat with the Governor 4-24-15

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Gov. Peter Shumlin and Vermont Press Bureau chief Neal Goswami discuss competing health care plans, the governor’s intention to sign gun legislation and the merits of lowering the state’s sales tax by expanding it to services.

Shumlin says he will sign gun bill

MONTPELIER — Gov. Peter Shumlin said Friday he intends to sign a gun bill passed by both chambers after it is reviewed by his administration’s legal team.

Shumlin, a third-term Democrat, had remained noncommittal through Friday on whether he would sign the measure that cleared its final legislative hurdle on Thursday. The bill awaiting the governor’s signature makes it a crime at the state level for some convicts to possess a firearm. It also requires that the state report to a federal database the names of people found by a court to be mentally ill and a danger to themselves or others.

The Senate concurred Thursday with changes to S.141 made by the House that removed a waiting period of 18 months for those reported to the federal database to apply to have their names removed. The waiting period was a concern, according to Shumlin, who said Friday he was glad to see it removed.

After review Shumlin said he intends to sign the bill.

“I always like to read the bills and make sure that what I’ve been told is actually in there. But, if what I have been told is in that bill I will sign it,” Shumlin said in an interview Friday. “We always have our lawyers review them.”

The bill is a far cry from what was initially proposed. The original legislation, backed strongly by Gun Sense Vermont, included an expansion of federal background checks. Gun rights advocates turned out in force to a public hearing and the background check provision was scuttled.

But advocates of the legislation were able to keep the bill’s other components alive and guide it through the legislative process. In the end, one of the groups that opposed the bill most, the Vermont Federation of Sportsmens Clubs, the National Rifle Association’s state affiliate, dropped its objections.

Shumlin said the bill was scaled back enough for him to drop his own objections.

“I am very happy that the bill is a shadow of the bill that I objected to in the beginning. [Senate Judiciary Committee Chairman Dick] Sears and others took out the parts that I really objected to. I think, now, most reasonable people would agree that it makes some common sense changes, similar to the kind of changes that I voted for when we didn’t allow … folks to take guns to schools,” the governor said.

While Gun Sense Vermont has indicated they view the legislation as a first step, Shumlin said he is no hurry to revisit the debate on expanded background checks.

“I feel that Vermont’s gun laws serve us well. I’d probably feel differently if I was the mayor of Chicago or the mayor of New York where you have all kinds of challenges. But, we in Vermont have a culture of using guns to manager our natural resources. We have a culture of hunting and caring for our natural resources that has served us well. We have a traditional respect for guns,” Shumlin said. “It’s different in a small rural state where you have a culture like Vermonters where we take care of each other, look out for each other. So that’s just what I feel and you’re not going to change my feelings.”

A full story will appear in Saturday’s editions of the Barre-Montpelier Times Argus and the Rutland Herald.

neal.goswami@timesargus.com

Shumlin apologizes for suicide remark

MONTPELIER — Gov. Peter Shumlin, facing more questions from reporters about the poor operation of Vermont Heath Connect, let loose his frustration Tuesday with a joke alluding to suicide during a news conference.

The governor last month promised that a key function missing from the state’s online health insurance marketplace would be in place by May 31. But with the self-imposed deadline fast approaching, the governor has faced continuing questions about what happens if the deadline is missed.

Last month, Shumlin promised that the so-called change of circumstance function, the ability for customers to change their personal information in their online accounts, would function by May 31. An automated renewal process was promised by the end of October. Missing either those deadlines would result in the administration beginning the process of switching to an exchange operated by the federal government, or perhaps a state-federal hybrid.

But the governor has seemed to back away from the first deadline, saying his administration would determine how to move forward in October — well after the initial May 31 deadline. House Speaker Shap Smith said last week that he wants to begin the process of moving away from Vermont Health Connect in June if change of circumstance is not working.

Asked several times what he intends to do on June 1 if change of circumstance is not working, the governor offered an off-color response.

“I’m going to find a high building,” Shumlin said. “I’m at the end of my rope. I don’t think the fifth floor [of the Pavillion Building where his office is located] is high enough.”

The governor’s office later issued a statement from the governor apologizing for the remark.

“Using that saying was an inappropriate way to express my frustration. It was insensitive and I apologize,” the governor said in the statement.

The governor’s remarks followed an emotional debate on the House floor last week over gun legislation in which mental illness and suicide were discussed.

Earlier in his exchange with reporters on Tuesday, Shumlin cautioned against creating conflicts over the deadline.

“I check on this with my team every day, sometimes three times a day. We all really want this to succeed. But, let’s focus on what we’re doing here. We’re on track. We’re optimistic that we’re on track. Why are we trying to create a fight over something that we may well never have to fight about,” he said.

“Let’s not create conflicts that we don’t need to have. I’m focused on trying to get the job done and I know the Legislature joins me in wanting the exchange to work,” Shumlin added.

Asked why he created the May 31 deadline in the first place, Shumlin said he wanted to ensure the public that his administration would seek other options if those lacking functions could not be completed.

“Because I feel like we’re all fed up. We’re all frustrated. Listen, this has been the most frustrating and disappointing experience of my public life. I’ve told you a million times that Vermonters and I are fed up. It’s incredibly frustrating,” he said.

neal.goswami@timesargus.com

Capitol Beat with the Governor 4-17-15

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Gov. Peter Shumlin discusses an audit of Vermont Health Connect and the exchange’s future.

Governor, speaker at odds over the future of Vermont Health Connect

MONTPELIER — House Speaker Shap Smith says he expects the state to move away from Vermont Health Connect if a key automated function is not in place by the end of May as promised by the Shumlin administration.

Smith’s comments, made Friday on WDEV’s The Mark Johnson Show, are in contrast to how the administration views the self-imposed deadline of May 31 to incorporate the so-called change of circumstance function into the state’s troubled online health insurance marketplace.

“If we don’t actually meet the May 31 deadline I just don’t see how we can go back to Vermonters and suggest that they should continue to have confidence in us to make the system work. So, I think that at that point in time we have to basically reassess where we’re going and my strong believe is that we need to explore other options,” Smith said.

House Speaker Shap Smith speaks on WDEV's The Mark Johnson show Friday, April, 17.

House Speaker Shap Smith speaks on WDEV’s The Mark Johnson show Friday, April, 17.

Gov. Peter Shumlin laid out a new time line for upgrading the exchange last month. He promised that change of circumstance, the ability for customers to make changes to their personal information online, would be working by the end of May. He also said that an automated system allowing costumers to sign up for health plans online would be in place by the fall.

At the time, Shumlin said if either of the new deadlines are missed the state would begin the process of moving to the exchange run by the federal government, or perhaps a state-federal hybrid model.

A performance audit released Thursday by Auditor Doug Hoffer questioned the state’s ability to meet those deadlines. Smith said he was troubled by the report.

“It caused some real concerns for me whether or not we’re going to be able to meet the May 31 deadline, which was set out by the administration. It calls into question, for me, whether the design of the system and the implementation date on May 31 is one that’s achievable,” he said.

Shumlin and Lawrence Miller, his chief of health care reform, now say that the administration will continue working on the change of circumstance functionality through the fall if it is not ready by May 31. They’ll determine whether to continue with Vermont Health Connect in the fall.

“If those aren’t working by November, by the end of November, we’re done. We’re going to either the federal exchange, which is a terrible choice for us, … or to some other hybrid,” Shumlin said in an interview Friday. “We believe that we will have change of circumstance working on May 31.”

Smith said he is not content to wait until the fall to determine how the state will proceed, however.

“The reality is that many Vermonters already have lost confidence in the exchange and I think that if we don’t meet another deadline it’s going to be almost impossible to get any confidence back at all,” he said.

Smith said Friday he is considering ways to force the administration to act if the May deadline is missed. It could involve having lawmakers return over the summer, although Smith acknowledged that only the governor has the authority to call them back into session.

“I could ask, and I think that we ought to be in a place where we have a structure set out that we can move in a different direction. Whether it needs to have the Legislature come back or there’s some other structure to do that, I think, is a matter for discussion,” Smith said.

Other options include using the Legislature’s Health Oversight Committee, Joint Fiscal Committee or Emergency Board to set in place a process to “have decision points to move to a different exchange.”

Shumlin on Friday maintained that the future of Vermont Health Connect will be determined by his administration this fall.

Gov. Peter Shumlin

Gov. Peter Shumlin

“What I laid out a month ago was that change of circumstance has to be working and have to have the bugs fixed to sign up folks in November and that’s when we’ll make that decision,” Shumlin said. “I think the speaker and I agree, this thing’s got to work.”

The governor declined to discuss the options laid out by Smith.

“We’re focused on getting it done,” Shumlin said. “I’m not going to sit here and talk about what happens if it doesn’t work. We’ve said what’s going to happen if it doesn’t work. If the two functions don’t work we’re moving on.”

neal.goswami@timesargus.com

Audit: Exchange remains high risk despite improvements

MONTPELIER — The state has been paying for work that hasn’t been performed and is at a high risk of failing to meet pending key deadlines in the development of the state’s online health insurance exchange, according to a performance audit released Thursday by State Auditor Doug Hoffer.

The audit also indicates growing unease by the state’s largest health insurance carrier, Blue Cross Blue Shield, over billing discrepancies amounting to millions of dollars in unpaid premiums on the company’s ledger.

The myriad malfunctions and setbacks associated with Vermont Health Connect have been well-documented since its bungled launch in October 2013. Key automated functions expected to be part of the online marketplace remain absent, and small businesses must still enroll offline directly through insurance carriers.

Doug Hoffer

Doug Hoffer

That is after nearly $200 million in federal funding has been spent by the state on planning, developing and implementing the exchange to meet requirements laid out in the federal Affordable Care Act.

Rather than rehash the exchange’s known shortcomings, Hoffer’s office spent the past several months reviewing the Shumlin administration’s response to those challenges and whether appropriate changes have been made to achieve the administration’s desired outcomes.

The results outlined in the report are mixed.

Gov. Peter Shumlin, a third-term Democrat, announced last month a new time frame for bringing key automated functions online. The ability to make online changes to one’s personal information, known as change of circumstance, will be in place by May 30, the administration now promises. An automated coverage renewal process will follow and in place by the fall — in time for the next open enrollment period.

Should those deadlines be missed, the administration said last month it will begin to transition away from its own exchange and attempt to migrate to one run by the federal government.

Hoffer’s report outlines several issues that makes meeting the deadlines questionable.

The state’s contract with Optum, the firm now developing VHC, contains no provision allowing the state to seek monetary consequences if it fails to deliver the missing functions. There are no financial penalties or liquidated damages like those in place with the state’s previous contractor, CGI, which the state parted ways with last fall. Nor is there a provision allowing the state to retain payment until the project is complete.

“Without these types of clauses, Optum has assumed little contractual risk and the State has limited its ability to seek recourse if the contractor’s performance is unacceptable. This seems to be a result of the State’s limited leverage to negotiate better terms,” the report states.

Meanwhile, the state does not have a contract in place to complete the second upgrade slated for the fall. If a contract is in place in the next couple of months then completing the project “is considered feasible,” according to the report.

Still, the state will not know if it has the funding to pay for all of the development work until it negotiates a price with Optum. The state would have to reduce the scope of work or find additional funding sources if the developer’s prices is higher than the federal funding available.

“According to an independent verification and validation contractor, as of April 3, 2015, the VHC development project has been in long-term “red,” or high-risk, status due to continuous contracting delays and unresolved agreement on the scope to support all VHC requirements,” the report states.

Hoffer’s report also raises concerns about competition for the staffing and technical resources within state government needed to meet the administration’s self-imposed deadlines. It notes that a March 16 internal project status report indicated that the resources to help meet those deadlines had not yet been confirmed. And there was a lack of agreement between various Agency of Human Services departments about which resources would be allocated to the VHC system development project.

Lawrence Miller, Shumlin’s chief of health care reform and the man charged with righting the ship, acknowledged the report is highly critical and lacks confidence in the administration’s ability to meets its deadlines.

Lawrence Miller

Lawrence Miller

“I don’t know that the track record of Vermont Health Connect has given anybody the basis for confidence,” he said in an interview before the audit’s release. “I think that the auditor’s assessment of the risk of completing the project on time is accurate. There is not a lot of slack in the schedule.”

Still, Miller said the administration remains confident the work will be completed on time.

“This has been done with a good, detailed project plan. Optum and the carriers are saying it’s achievable,” he said. “Things are happening on time.”

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State workers, supporters rally against cuts

MONTPELIER — Hundreds rallied at the State House Saturday to oppose cuts to the state budget and $10.8 million in labor savings sought by both the Shumlin administration and lawmakers in an event organized by the Vermont State Employees Association.

The state employees’s union was joined by other unions and groups, including the Vermont NEA, AFSCME and the Vermont Workers Center, to protest the the budget plan sought by Gov. Peter Shumlin and lawmakers.

VSEA members and supporters held a rally at the State House Saturday, April 11, 2015.

VSEA members and supporters held a rally at the State House Saturday, April 11, 2015.

The House has passed a budget that uses $33 million in new tax revenue, $53 million in cuts and $25 million in one-time funds to close a $113 million budget gap. The VSEA and others, however, want to see more tax revenue raised and fewer cuts.

The House-passed budget includes $10.8 million in labor savings that Shumlin, a Democrat, proposed. He has asked the VSEA to renegotiate its contract to help achieve the savings. Failing to do so will result in hundreds of layoffs, according to the administration.

About $2 million in labor savings has been identified by the administration, but $8.8 million remains of its target. It wants to delay by six months a 2.5 percent cost of living increase due to state employees in the 2016 fiscal year, and delay by one-year step-increases that average out to an additional 1.7 percent pay increase next year. Those steps would require union approval.

The union has so far refused to renegotiate, and has proposed ways to raise additional revenue instead. The 500 or so people gathered at the State House Saturday heard from Ed Olsen, a snow plow driver for the Agency of Transportation, about why the union is not willing to renegotiate.

“I pay taxes to this great state of Vermont, just like all the other hardworking, middle-class people. As a matter of fact, we, the middle-class Vermonters, pay more than 10 percent of our wages to this beautiful statehouse behind me, unlike the wealthy citizens who pay back 8 percent of their wages to our economy,” Olsen said. “That ain’t right. It pisses me off. That’s the biggest reason why I came here today.”

Olsen said the state’s wealthiest residents “aren’t being asked to give up anything.”

Agency of Transportation worker Ed Olsen speaks at State House rally Saturday, April 11, 2015.

Agency of Transportation worker Ed Olsen speaks at State House rally Saturday, April 11, 2015.

“I’m tired of being asked to give back more and more of my wages and benefits to help rescue Vermont’s economy,” he said. “I need every bit of the cash I earn. Vermont has a budget deficit and they always want to balance the budget on the backs of hardworking, middle-class citizens of Vermont.”

Several speakers compared Shumlin to Wisconsin Republican Gov. Scott Walker, who has sought concessions from union workers to help save money in that state, including Rev. Earl Kooperkamp of Church of the Good Shepherd in Barre.

“Vermont is not Wisconsin. Peter Shumlin is not Scott Walker. But it’s getting pretty damn hard to tell the difference,” he said.

Kooperkamp equated the effort to obtain savings from state workers to the seventh commandment — thou shalt not steal.

“It’s wrong, it’s immoral, and we’re here to say that,” Kooperkamp said.

The Shumlin administration is expected to meet again early next week to continue negotiations.

neal.goswami@timesargus.com

Capitol Beat with the Governor 04-10-15

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Gov. Peter Shumlin chats with Vermont Press Bureau chief Neal Goswami about the ongoing process to find $10.8 million in labor savings from the Vermont State Employees Association. He also discusses a failed effort to ban teacher strikes and lawmakers’ efforts pare down his legislative proposals.

Administration, VSEA find some savings, still far short of $10.8 million target

MONTPELIER — Ongoing talks between the Shumlin administration and the Vermont State Employees Association have resulted in some identified savings, but the union is still not interested in reopening its contract to help secure the remainder of the $10.8 million in labor savings the administration is seeking.

The administration says it needs to cut $10.8 million in labor costs in order to close a $113 million budget gap. The union, meanwhile, has proposed ways to raise revenue instead. The administration has shrugged off those proposals, however, and says it will seek as many as 300 layoffs to achieve the requisite savings if the union does not renegotiate some terms.

The House has passed a passed a budget that incorporates a generic $10.8 million in labor savings.

Justin Johnson

Justin Johnson

Secretary of Administration Justin Johnson, following another meeting with the union Thursday, said his team has found about $2 million in savings by freezing salaries for exempt employees earning more than $100,000 a year, reducing the use of temporary employees and rescinding some benefits to designated managers.

The administration is also considering encouraging employee retirements.

“We have had a long conversation about the idea of retirement incentives,” Johnson said.

But the full benefit of offering retirement incentives is unclear. Johnson said the state treasurer’s office has some concerns because savings to the general fund would be offset elsewhere because of the need to begin paying out benefits. He said the expected savings is between $500,000 and $1 million.

“That would require us not to fill any of the positions that retired. That’s problematic,” Johnson said.

If all of the proposed savings were realized, that would leave about $7.3 million that still needs to be achieved.

With the union’s blessing, Johnson said the administration would look to institute a six-month delay in the 2.5 percent cost of living salary increase the contract calls for in the 2016 fiscal year. That would save about $2.5 million.

“It wouldn’t cost anyone anything because no one’s pay would go down,” he said.

Eliminating one year of “step increases” would save $3.9 million. State workers are grouped into various pay grades, each containing 15 steps. The first five step increases occur in successive years. The next few step increases come every two years, and the remaining step increases come every three years. The pay raises average out to 1.7 percent annually.

Those ideas would require approval from the union.

“There are some big chunks of money that you could save by doing things, but they are contractual,” Johnson said.

The administration is also considering instituting five furlough days to save $3.5 million.

“That in some ways is worse than delaying the cost of living because it means people would actually get a cut in pay,” Johnson said.

Finally, a 50 percent reduction in mileage reimbursements would save more than $800,000.

All of those ideas were outlined in a memo to VSEA President Shelley Martin following a meeting between the two sides on Thursday.

“We’re just making the point that you could get to the numbers by doing some of these things. But, we can get to the numbers anyway,” Johnson said.

VSEA Executive Director Steve Howard said the union is willing to work with the administration on savings “right up to the last hour of the legislative session, but we’re not opening our contract.”

Steve Howard

Steve Howard

“We have been consistent throughout the whole effort … that state employees cannot be asked to dip into their paychecks to balance the state budget before wealthy Vermonters are asked to pay more,” he said.

Union members have been “actively engaged” in the process are not interested in renegotiating the terms of their contract.

The two sides are expected to meet early next week to continue discussions.

neal.goswami@timesargus.com

Read the memo to VSEA President Shelley Martin:

 

Read the Response from VSEA:

Shumlin decries price hike in opiate overdose antidote

MONTPELIER — Gov. Peter Shumlin is asking the maker of a drug that serves as an antidote for opiate overdoses and has saved nearly 200 lives in Vermont to curb rapidly-rising prices as demand for the drug grows.

Shumlin, speaking at a State House news conference Wednesday, said the price of naloxone, made by Amphastar Pharmaceuticals, has jumped 62 percent in about a month. The cost of 10 doses of the nasal spray cost the state $113 in early March. Now, that cost has jumped 62 percent to $183, according to Shumlin.

“As the demand has increased, as smart states like Vermont have said, ‘We’re not going to let folks who suffer from disease die before our eyes because we don’t have the courage to have the rescue kits available,’ the company CEO has said, ‘Great, how can we make some more money on this?’” Shumlin said.

Gov. Peter Shumlin speaks at a State House news conference Wednesday, April 8, 2015.

Gov. Peter Shumlin speaks at a State House news conference Wednesday, April 8, 2015.

“My suspicion is the price increase is the result of capitalist instincts for more money,” the governor added.

Shumlin and members of his Criminal Justice and Substance Abuse Cabinet sent a letter to Amphastar CEO Jack Zhang Wednesday asking that the company “return to more reasonable prices.”

State officials say nearly 1,900 doses of Naloxone have been distributed around the state. Shumlin signed legislation to equip every Vermont State Trooper with the drug and distribute it to first responders and addiction treatment centers.

Shumlin said about 10 percent of the naloxone kits have been used and saved a life.

“We have saved 190 lives that we know about, that have been recorded by my Department of Health, as a result of getting this simple procedure in folks’ pockets,” he said.

But Bob Bick, CEO of the Howard Center in Burlington, said the state continues to battle opiate addiction and treatment needs are still not being met.

“The reality is that we continue to have a significant opiate addiction problem in the state of Vermont. We need to be focusing on prevention, treatment and intervention,” he said.

Bick said the Howard Center has 305 people on a waiting list and another 500 people have made contact with the agency but have not yet made it on to a waiting list. Those are the people that are most likely to need doses of naloxone, according to Bick.

“It’s really about those folks who are on the waiting list and the folks who have contacted us that we’re having this conversation today about naloxone. It really is about saving lives and the reality is, and I know it sounds trite, but this is a life and death issue,” he said.

The letter asks for the company to extend the same $6 rebates it negotiated with New York to other states.

“We implore your company to stop the steep increase in the price of naloxone, which is threatening our efforts to distribute rescue kits and save lives,” the letter reads. “Opiate addiction is a disease, and in Vermont we are treating it as such. We are reducing the stigma associated with addiction, expanding treatment, and saving lives. The soaring cost of naloxone threatens to thwart our progress.”

Shumlin said the company has not offered the state any explanation for the rapid hike in price. He said he doubts that higher demand for the drug is the cause.

“It’s entirely possible that’s the case, and if so, I would urge the company to make more of it because they’re being successful. But, generally, in the pharmaceutical industry, the trend has never been quite that altruistic when it comes to pricing for Americans buying pharmaceutical products,” he said.

Vermont Sen. Bernie Sanders and Maryland Rep. Elijah Cummings sent their own letter to Amphastar last month inquiring about the rising cost of naloxone.

neal.goswami@timesargus.com

State, insurance carriers work to fix billing discrepancies

MONTPELIER — The Shumlin administration is working with the state’s health insurance carriers to reconcile millions of dollars in billing discrepancies resulting from Vermont Health Connect’s lack of key functions.

The reconciliation process has been ongoing for about three weeks, according to Lawrence Miller, Gov. Peter Shumlin’s chief of health care reform. Because automated functions on the state’s online insurance exchange are not working, the state’s carriers — Blue Cross Blue Shield and MVP Health Care — have billed out millions in premiums that have not been paid.

“It’s all because the automated change of circumstance functionality isn’t working,” Miller said.

Lawrence Miller

Lawrence Miller

The state worked with carriers to create contingency plans and develop manual processes to ensure people received coverage when the exchange launched in October 2013 with the automated functions in place. But the nature of those processes did not allow information to be easily shared between the state and the carriers.

Miller said the state focused its attention on signing people up for health plans and manually processing so-called change of circumstance requests for those who needed personal information change in order to receive benefits. Left at the back of the line were requests that would have resulted in the termination of coverage.

“They were not necessarily processing terminations or cancellations as a very high priority,” Miller said.

As a result, the insurance carriers in many cases were not informed by the state that they should stop billing customers. That left the carriers with gaping holes on their own ledgers that must be addressed through a laborious process of comparing records with the state. They are now working with the state and its contractors to determine if they are really owed money for the unpaid premiums on their books.

There is also a pool of money collected by Benaissance, a health care benefits administration firm the state uses to process payments, that has not been distributed. The money is the result of premium payments sent in by customers but without enough information to apply the credit to an account. There are at least “a few hundred checks” in that category, according to Miller.

All sides are hesitant to definitively state how much money is at stake. But Miller said at one point BCBS thought it could be as high as $4 million.

“I hesitate to quantify it until they’ve actually gone through the work,” Miller said. “It represents maximum exposure because if there are claims in there where people were covered and they do actually owe money, then we’ll go ahead and work with them to collect that.”

Cory Gustafson director of government and public relations for BCBS, said the company does not have a clear idea of how large the discrepancy is.360healthbystate_doc_6c2e5968

“It continues to change and the reconciliation process changes that even further,” he said. “I wouldn’t use that math. I know that that number has been up and done and all over the place.”

Miller said about 70 percent of the cases that have been resolved are the result of customers terminating their policy without the carriers knowing. If that percentage were to hold for all of the cases in question, the carriers could still be owed a significant amount of money.

“There is a chance,” Gustafson admitted.

The amount of money in question is significantly higher for BCBS than it is for MVP. BCBS sells more insurance plans in Vermont, but it also had a policy of keeping those plans on the books rather than risk mistakenly terminating them.

Miller said BCBS was more willing to take on risk to avoid creating unintended coverage gaps for customers. MVP, meanwhile, canceled policies more freely to avoid such a risk.

“They didn’t want that exposure. We had a bunch of people that we had to intervene with — hundreds — where MVP didn’t check with Vermont Health Connect,” Miller said. “They just did it.”

Gustafson said BCBS was looking to ensure the smoothest transactions possible for its customers, and therefore did not terminate policies unless there was very clear reason to do so.

“From our perspective, it’s all about the members,” he said. “Every choice we’ve made, every contingency, has been with the perspective that it will be better for the people that are buying plans on Vermont Health Connect. How we feel about it is irrelevant,” Gustafson said.

Still, he said clearing up the discrepancies remains a priority for BCBS. And he said the company is counting on the Shumlin administration to deliver on its promise to complete work on the automated systems the exchange now lacks to avoid a continuation of the existing problems.

“Any time there’s accounts receivable Blue Cross Blue Shield takes it seriously,” Gustafson said. “To us, our accounts receivable balance really symbolizes how important it is for the governor’s plan to be implemented to get to a fully functional exchange. The exchange isn’t going anywhere.”

The administration has said those automated functions will be in place by the end of May. If not, the administration has said it will abandon the state exchange and transition to one managed by the federal government.

Miller said the next release of the website is expected by May 30, at which time he expects all of the 2014 billing issues to be resolved, as well as any new ones created this year.

“It all has to be wrapped up before go live,” he said. “We want a clean and stable data set.”

For now, the carriers and the state are working together to resolve the issue. Both the state and the insurance carriers said they were aware that issues were likely when the exchange launched in October 2013 without all of the automated functions working.

“We all knew we were going to have to go through the reconciliation process and we all knew it would be a bear the first year. The automated reconciliation stuff isn’t set up yet and we have all these manual processes,” Miller said. “This is not a dispute between the state and Blue Cross right now, or MVP.”

Some “differences of opinion” could emerge once the reconciliation process is completed if the carriers’ books are not balanced, Miller said.

“If there is some bad debt at the end of that process it’s going to be a question of what’s the expected rate of bad debt accumulation at a carrier,” Miller said. “We shouldn’t cover what’s normal.”

imagesMVP spokeswoman Jacqueline Marciniak issued a brief statement Tuesday,

“MVP Health Care is committed to working with exchange officials to reconcile discrepancies and develop a solution that is mutually beneficial to our members and to the state of Vermont,” she wrote in an email.

neal.goswami@timesargus.com

Capitol Beat 4-6-15

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Vermont Press Bureau chief Neal P. Goswami and VPB reporter Josh O’Gorman talk health care, education, voter registration and the week ahead at the State House in this week’s episode.

Capitol Beat with the Governor 4-3-15

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Gov. Peter Shumlin chats with Vermont Press Bureau chief Neal Goswami about the House’s health care bill. He’s not a fan.

Beverage tax advances to support health care spending

MONTPELIER — The House Ways and Means Committee on Thursday advanced a sweetened beverage tax and a hike in the state’s cigarette tax to cover the cost of proposed health care initiatives after weeks of wrangling.

Thursday’s vote came after a number of potential revenue sources were laboriously explored. Committee Chairwoman Janet Ancel, D-Calais, and Democratic House leaders considered myriad options before piecing together a plan that raises about $18 million and could also garner enough votes.

In the end, the committee found just enough votes to pass the bill out on a 6 to 5 vote.

Rep. Janet Ancel

Rep. Janet Ancel

“I would like to have a stronger vote coming out of the committee than we’re going to have, but I really appreciate the work that people have done to get to where we are,” Ancel said before the vote.

The committee-passed revenue plan includes a half-penny excise tax on sweetened beverages, including diet drinks and any beverage with artificial sweeteners. It also includes a 25-cent increase in the cigarette tax with a proportional increase in the tax on other related products like chewing tobacco. In addition, the plan eliminates the current sales tax exemption on dietary supplements.

Competing revenue plans sought to eliminate sales tax exemptions on soda, candy, bottled water and other products, but never found enough support on the committee, which features centrist Democrat Jim Condon of Colchester and independent Adam Greshin of Warren.

“Anytime you have an array of taxes and you’re looking at sales tax exemptions, which is kind of the alternative funding sources that we looked at, you have issues because of folks who live on the New Hampshire border,” Ancel said. “I think the retailers have been successful lobbyists against any sales tax on candy and soda for years. It was a whole variety of things. I think if you talk to any member of the committee they would have their own reasons for having trouble getting to yes.”

Democrats waited patiently for days for all committee members to be present. With Rep. Johanna Donovan, D-Burlington, back at the State House Thursday after several days away, Democrats finally had enough votes in place to advance the revenue package.

The bill that arrived from the House Health Care Committee was a non-starter for many members of Ways and Means. That plan sought to spend about $52 million on health care and used a 0.3 percent payroll tax and a 2-cent per ounce excise tax on sugar-sweetened beverages.

Through its weeks-long deliberations, Ways and Means killed off the payroll tax — first proposed by Democratic Gov. Peter Shumlin in January at 0.7 percent — and lowered the beverage tax significantly. Ways and Means also extended the beverage tax to diet drinks and anything that is sweetened with either natural or artificial sweeteners. Maple syrup, the state’s hallmark product, is exempt.

For Reps. Sam Young, D-Glover, and Jim Masland, D-Thetford, the two-cent tax was just too high. But eliminating it altogether was not an option for Rep. George Till, D-Jericho, a medical doctor, who sought an increase in the cigarette tax.

The final Ways and Means revenue plan nearly hit another roadblock Thursday when Young made a motion to reduce to the increase in the cigarette tax. Young agreed to withdraw the amendment after Till threatened to drop his support for the entire measure.

Opponents of the excise tax vowed to continue fighting against. Jim Harrison, president of the Vermont Retailers and Grocers Association, said the Ways and Means plan “is totally going in the wrong direction.”

“The excise tax is absolutely a nonstarter for us. This is a very regressive tax on food products that’s going to do nothing except hurt Vermonters in their pocketbook and send more retail business out of state because products in Vermont will be more expensive,” Harrison said.

And Andrew MacLean, a lobbyist for the beverage industry, said the original “health care aspects of the bill have dissipated” as lawmakers have moved beyond just sugar-sweetened beverages. It is now “strictly a revenue generator,” he said.

Andrew MacLean

Andrew MacLean

“I think the problem with the excise tax is it puts a stigma on a particular business and a particular product and its something that can be raised over time,” MacLean said.

The bill passed Thursday by Ways and Means discarded the House Health Care Committee’s previous policies and spending. The Health Care Committee’s revised plan that takes into account the available revenue will be finalized by the House Appropriations Committee.

That plan, outlined this week will provide about $3.3 million in state funding during the 2016 fiscal year to boost Medicaid reimbursement rates for primary care providers. That would draw down $3.7 million in federal funds.

The health care proposal would also provide $2.45 million for a Medicaid rate increase for professional services, drawing down $2.77 million. No additional state funds will be applied to hospital outpatient rate increases.

The House Health Care Committee’s plan provides just a fraction of the Medicaid rate increases that Shumlin proposed in his January budget address.

neal.goswami@timesargus.com

Capitol Beat with the Governor 3-27-15

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Gov. Peter Shumlin chats with Vermont Press Bureau chief Neal P. Goswami about the health care package in play in the House, new unemployment numbers and gun legislation that cleared the Senate this week.

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