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Published on April 11, 2022

Green Mountain Care Board Denies Rate Increase Request

Recently, Rutland Regional was in the news as the Green Mountain Care Board denied our hospital's request for a mid-year rate increase. Vermont's hospital budget review process means that hospital budgets are completed nearly six months before they take effect. As you can imagine, sometimes those budgets do not reflect the facts on the ground when the new fiscal year starts.

Although a little unusual, the opportunity to request a mid-year rate increase is built into the state's budget process. It's designed to allow hospitals to request an increase in the event of “…exceptional or unforeseen circumstances.” As you know, late summer and fall of last year saw an unprecedented shortage of workers nationwide. This shortage was especially acute in healthcare, which The Atlantic magazine estimates to have lost as much as 20 percent of its workforce since 2020.

To make sure that we had enough nurses and other crucial staff to care for patients during the Delta and Omicron surges, we did three key things:

  • we raised pay for employees to match the rapidly increasing pay nationwide for hospital staff.
  • we created an incentive program to encourage staff to pick up extra shifts and avoid uncovered shifts.
  • we hired a record number of traveling clinical staff to plug holes caused by open positions.

This created a large operating deficit, and we believed that it should be considered an “exceptional or unforeseen circumstance.” Our rate increase would have brought our hospital back to break-even and provided us breathing room while we looked for increased efficiencies to allow us to create an operating margin.

Now that the state has denied our request, we must come to terms with what that means for our organization. We will take our time to look at where we can reduce our costs and how much of our deficit we can realistically fund from our reserves. This work will coincide with our budget process that is already underway and will be guided by our organization’s mission, vision, and values.

During the hearings, the Green Mountain Care Board remarked that Rutland Regional is one of the best run hospitals in the state. That is not by accident. We are successful because we put our patients, our staff, and our community first. We will continue to do so throughout this process and will keep you informed of our progress as we go forward.

News about the Green Mountain Care Board Decision

Rutland Hospital is short $7.6 million this year, and its request for higher service charges has been rejected. Now what?
by Liora Engel-Smith, April 3, VTDigger

Hospital CEO hopes to avoid drastic measures
by Gordon Dritschilo, April 1, The Rutland Herald

Hospital rate hike rejected
by Gordon Dritschilo, March 31, The Rutland Herald

Regulators reject Rutland hospital’s request for higher service charges
by Liora Engel-Smith, March 30, VTDigger

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