Regulator says no to Porter budget

We were obviously disappointed that the board did not restore our original request of 5.75% as we believe that this was an appropriate request to care for our community. — Ron Hallman

MIDDLEBURY — In a move that could have dire long-term consequences for Addison County’s nursing home, the Green Mountain Care Board (GMBC) on Tuesday rejected Porter Hospital’s request for a 5.75% increase in its commercial rate as part of its fiscal year 2021 budget, instead determining the hospital should make do with a 4% hike.

The board had been asked on Tuesday to reconsider its prior rejection of Porter’s proposed rate hike. The GMCB did however give Porter a little good news. The panel had originally ruled that 1% of the 4% increase for Porter should be tied to the COVID pandemic, which hospital leaders argued made the funding tenuous.

The board has now decided to remove COVID conditions for that 1%.

Green Mountain Care Board officials rejected Porter Hospital’s 5.75% rate hike proposal in large part because it included a subsidy for Helen Porter Rehabilitation & Nursing. The GMBC has had a long history of endorsing past Porter Hospital budgets that reflected Helen Porter assistance, but not this year.

Porter officials have contended that Helen Porter is a vital cog in the cradle-to-grave continuum of health care services for Addison County residents, and should thus be kept solvent. Helen Porter has been running an annual deficit of more than $2 million during the past few years, in large part because federal programs like Medicaid don’t reimburse the true costs of services. Currently, 70% of Helen Porter residents are Medicaid patients, according to PMC Chief Financial Officer Jenn Bertrand.

The nursing home’s fiscal year 2019 expense budget was $12,326,573, while it’s operating loss that year was $2,437,146. Losing the ability to subsidize Helen Porter through the hospital budget will create a $500,000 problem in the short-term, according to Porter Medical Center President Tom Thompson.

“Porter was gratified by the portion of the decision by the GMCB to approve the full 4% commercial rate increase rather than the original 3% plus 1% ‘COVID rate’ so that we have more predictability,” Porter spokesman Ron Hallman said through a Wednesday morning email to the Independent. “But we were obviously disappointed that the board did not restore our original request of 5.75% as we believe that this was an appropriate request to care for our community and was a key part of our overall request that fell within the budget GMCB guidelines.” 

Porter officials must now sharpen their budget pencils to see how they can continue to keep Helen Porter humming along as the only elder care facility in the county with skilled nursing services, catering to residents of all income levels. In addition to providing long-term care for those not able to live independently, Helen Porter offers short-term rehabilitation services for people recovering from various surgeries. The latter service has emerged as the more profitable component of the Helen Porter business plan.

“Helen Porter serves our mission,” Thompson said. “And quite honestly, as part of having a care model in our community, the availability of our post-acute services at Helen Porter specifically enables us to reduce stays at the hospital and people have a safer and happier transition back to their daily life. It lowers the total cost of care.”

He said supporting Helen Porter is in line with the state’s directive to deliver health care in more creative, holistic ways. And Thompson believes the GMBC should have more fully considered that rationale within the context of Porter’s budget plan.

“As a hospital community we are struggling with the degree to which the GMCB seems to be straying from its charge,” he said.

Hallman metaphorically likened the hospital’s overall financial burden to carrying a heavy bag of rocks. Each year, he said, regulators seem to add another rock. 

“At some point, that bag is going to break,” he said

Helen Porter is also part of the county’s economic engine, according to PMC officials. Bertrand said it annually supports approximately $6.8 million in salaries and $2.4 million in benefits, while maintaining business relationships with many local vendors for food, provisions, pharmaceuticals, and repair and maintenance needs, to name a few.

Thompson stressed there have been no discussions about closing Helen Porter, though University of Vermont Health Network (UVMHN) officials acknowledge its road has just gotten a lot bumpier. Porter is a network affiliate.

“As a result of the board’s proposed hospital budget cut, Addison County is now at risk of losing this treasured resource,” Dr. John R. Brumsted, president and CEO of UVMHN, wrote in a Sept. 23 letter to the Green Mountain Care Board.

On Wednesday, Brumsted provided this comment about the GMCB’s action from the previous day:

“We still believe there’s work to do to ensure that Vermont hospital budgets are regulated in an equitable, predictable way, but I appreciate the board’s willingness to consider hospitals’ concerns, especially as we continue to navigate through the complexity of the COVID-19 pandemic. The UVM Health Network will continue to focus on meeting the needs of our patients and communities, supporting our staff and working to improve health care affordability and accessibility.”

Reporter John Flowers is at johnf@addisonindependent.com.

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