Vermont Legislature SmartTranscripts:

[Rep. Alyssa Black (Chair)]: Hi. Welcome afternoon, April 23, and I've asked Nolan to come in and sort of remind the committee about sort of the some of the federal changes. It's been several months, and I just want to kind of refresh the committee as we think about all sorts of things, like what we're facing and or not facing, I mean, what's going on with that. So getting a refresher.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Great. For the record, the whole language for the fiscal office. I'm just gonna I was asked to sort of do a high level refresher of some of the federal things, changes that happened in the last year between things that expired under ARPA and what happened to HR1. And so I'm gonna present to you several of the things that impact health insurance, healthcare, Medicaid, eligibility, etcetera. I have my disclaimers. This is high level. Also just keep in mind that, just because it's not in this presentation, it doesn't

[Rep. Alyssa Black (Chair)]: Go back up to your previous slide. This one? Is she date bound? Yeah. Sure is.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: When I said it was an old presentation, I remember.

[Rep. Brian Cina (Member)]: If you've seen one big beautiful bill, you've seen

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: one big It beautiful

[Rep. Alyssa Black (Chair)]: never gets old.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Old. It's just a joke that she sung you. Keep going, didn't you? All right, thank you. I just update it,

[Rep. Leslie Goldman (Member)]: because what we're getting, it's the old date. So Centra is new. Okay, thanks.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So just because I don't mention it doesn't mean it didn't exist. It doesn't mean just because I mention it in front of foreign. I'm just sort of hitting highlights of things. I'm exhaustive. And some of the numbers that I have might be old. We haven't looked at this stuff in a while. Some of this stuff is from presentations that we did over the summer. So that's my disclaimer. If you want to dig deep into some of these things, I would recommend you bring in the right people. My job is to sort of help remind you what they were and not get into the weeds of it. That said, feel free to ask, and if I know, I'll answer. But if I don't, I am not going to pretend to know. So I am going to start with the expiration of the premium tax credits. Always feel like I have to give background. So the advanced premium tax credit, they were established under the Affordable Care Act. There are subsidies for eligible families up to 400% of the federal poverty level for folks who purchase on the individual market due to exchange. This is not small businesses, and it's not people who purchase outside the exchange. Under the ARPA, which is the American Rescue Plan Act in 2021, and then it was created enhanced premium tax credits. They did, and then it was extended again through 2025 by the Inflation Reduction Act of 2022. What this did was it eliminated the cliff. So it just sort of went for everybody over 400% until it got to a point where the subsidies didn't exist. There'd a point where it just kind of crossed the line. I don't know what that number is. It's probably 500, 600, 700 percent of federal problems. Those expired. And so one of the reasons people often conflate this with HR1 is because HR1 did not address this. And so what happened, because it wasn't included in HR1, which is what some people were trying to extend on, they just expired. So that's why I'm sort of not just on HR1. With the expiration of that, we're now back to the pre COVID ACA premium tax credits. The one thing I sort of flagged, too, is actually, I'll get there when I get to another slide. Actually, I'm at that slide. Okay. So what this does is this is applicable percentage of your household income. So on the left side is sort of the Affordable Care Act percentages. So in those particular ranges, you're tapped at that percentage of your income. On the right side, you'll see what it was the enhanced premium tax credits. And you'll notice that for folks under 200%, some of them went from between 26% of their income to 0% of their income. What happened was that this isn't just folks over 400% that completely lost their subsidies, the folks that were already having subsidies were getting even better subsidies. So everybody saw their premiums go up that were getting a subsidy. The other thing that people often didn't realize is because of that, we actually saved a little bit of state dollars because we have a state subsidy as well. We are doing an additional 1.5%. So if you were getting a 4%, your income was such that you were getting a cap of 4%, we were giving you an extra 1.5, so it's an extra, so it's actually spread to 5.5. But when that went down, people went to zero. We didn't have to pay anything for those folks anymore. So we were actually saving state dollars as well. So that's a thing that in the budget that a lot of people didn't realize. But anyway, I flagged this because this is the world that went from, it was the left, and then under the ARPA and IRA, it was the slide on the right, and now we're back into the left. So you're hearing stories of people who went from $250 a month to $2,000 a month, or whatever. This because of this. This is what we're seeing.

[Rep. Leslie Goldman (Member)]: That's something stupid.

[Rep. Alyssa Black (Chair)]: Numbers on the left, not red, was prior to that.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: That's the Affordable Care Act. Did

[Rep. Alyssa Black (Chair)]: they add together or? No. Was just Sure were. Okay. Thank you. Alright. Some ways then, went in some groups, they went down.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: No, everybody's premiums went up. That's what I'm confused about,

[Rep. Leslie Goldman (Member)]: because if I'm looking at 200 to $2.50, it went from 6.6 to 8, and then on the right, it's two to four. So I just didn't understand that. I'm sorry.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: I'm not following.

[Rep. Alyssa Black (Chair)]: The box in the red is 2,025. And then the black Oh, okay, that's helpful, thank you. Or the enhanced. Yeah, is fine.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Got it. Two separate. And this stuff is confusing.

[Rep. Leslie Goldman (Member)]: Yes. Well, yeah, didn't see the little 25s up your side.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So this gives you a sense of the shift that a lot of people saw. So this is the report that you often get about the market. And so what I have here is on the left side, it was the DIVA report on how many people were getting subsidies in exchange as of 09/30/2025, before the expiration. And then the most recent one we have available is the January 1. This one came out in so that's why there's always a full Oath way. But it gives you a sense of the pre and post expiration and what we saw. So if you look at the, so we saw QHP enrollment in aggregate decreased by 2,400 people in the individual market. We saw 45,400 people without any subsidy. The big drop you saw was the federal subsidy holders. So you see 9,200 people lost their subsidy. So a lot of those folks might have probably moved into the no subsidy line. And so what happens is a lot of those folks either moved into the no subsidy line, or they're just completely uninsured and not even income. So as for the increase by 3,100 of those being state and federal, I don't know what that is, it could be the economy, it could be another thing. But I always talk about how a big change like this is kind of like shaking up the snow globe and then seeing where everything lands after the fact in the world.

[Rep. Alyssa Black (Chair)]: And I think when Addy was in here last week, there was also that sort of flip from gold to bronze.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Sure, there was. Which is true, yeah. So a lot of times when you have a better subsidy, people are just upping their plan because they can afford to. So they're going get the same subsidy as based on the silver plan, but then that gives you a little bit more money to say, well, you're gonna take the savings or the planet savings into a gold plan or platinum plan. So a lot of people might've just enriched their benefits more and still probably saved some money, but

[Rep. Karen Lueders (Member)]: Sorry, I just, so in the no subsidy, that's $16.48 who had tax.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Those are folks that didn't have a subsidy.

[Rep. Alyssa Black (Chair)]: And were on the exchange?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So basically, yeah, those are people that were high exchange products with no subsidy.

[Rep. Alyssa Black (Chair)]: And so now there's 6,216 of those people?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: It's an increase of We 4,005 don't know why. I would assume that a lot of those come from the federal subsidy line. So some of that nine thousand two and seventy two drop into the forty five-sixty eight.

[Rep. Alyssa Black (Chair)]: Oh, okay, gotcha.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Yeah, they're not unique. Some of those people move from one bucket to the other. And so I would assume. And so I would say a good chunk of that ninety two-seventy two became part of the 45. And some of those folks are uninsured and they're not gonna show up anyway. But then there's also people that are new and known, so there's a lot of, this isn't definitive, but this is really more meant to, I can't tell you each individual thing is definitely correlated, but it just sort of shows you, it indicates there was a big shift and this is how it's playing out. We'll see even better when we get the next report what that looks like. Other impacts. So there was a report, and this is also old data. A lot of you are familiar. Addy presented a presentation about technical analysis that they did. And they came up with different solutions on how things could be done. But in that report, they asked that their actuaries or manate, whoever they hired, estimated that the loss of federal subsidies could be as much as $65,000,000 Those are not my numbers, so don't quote me. And then I think Digger later quoted saying that the number could have been up to $75,000,000 The reality is we don't know because we weren't implementing the program. The federal government was. So we don't actually know how many people lost their federal subsidies. We don't know how much people were getting. We don't know because the federal government had that information, not us. We can just infer from either the change in the numbers from the report, which is what I have here, or what outside hired experts were estimating it could be. But what we do know is that loss of subsidies will result in increased premiums. And what we also know is the number of uninsured in Vermont has likely increased.

[Rep. Karen Lueders (Member)]: And underinsured.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: And underinsured.

[Rep. Brian Cina (Member)]: How will we know the exact amount?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: When somebody does a study on it?

[Rep. Brian Cina (Member)]: There's no regular monitoring of those rates. What do you mean? Like the state doesn't have a mechanism to monitor the rates of insurance and under insurance. They do, it's

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: called the Vermont Household Health Insurance Survey and there's not one scheduled to be done. We do it every two, three to five years. When was the last one? Probably three or four years ago.

[Rep. Brian Cina (Member)]: We do the one?

[Rep. Alyssa Black (Chair)]: Was year, wasn't it?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Was it last year?

[Rep. Alyssa Black (Chair)]: Last year is when we found it wasn't covered, right? No, it didn't? Where we found out they didn't build it in and then found that it was.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Okay, so it's been a while. We generally do it every two to three years. One year we did it one year. After the Affordable Care Act, we did it two years in a row just to see the change. Otherwise, it tends to be over three to five. These studies are about $500,000 so they're not insignificant to do these studies. But I personally think that they're very valuable because it helps you guys, decision makers, see the changes over time. Can we use rural health transformation money for Okay, just checking. Not for that.

[Rep. Alyssa Black (Chair)]: So it was '25.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Okay, what's '25?

[Rep. Alyssa Black (Chair)]: I remember it came out last year because Mike Fisher was super excited the day it came out. We love it.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: We all love it. Okay, it's done by the health department by the way, that study. So the next thing I want to flag, this to me is the other big thing in the bill is, this is HR one, so we're texting on HR one now, is the changes to provider tax. And there's two big things that happened in HR one around provider taxes. One is it prohibited states from enacting any new provider tax. So, we currently have the ones that are listed here. Now, the inpatient and outpatient are combined. We just call it hospital. These are the categories as defined by federal law. So, we have the inpatient and outpatient, which is one, in my opinion, that's hospital. We have nursing homes. We have the service of intermediate care facilities, which is on the books. We actually don't have any more of these facilities anymore. We have outpatient prescription drugs, and then we have EMS services. Actually, I guess I didn't put that one slide. Thought I had Would you The only one Oh, sorry.

[Rep. Alyssa Black (Chair)]: I was gonna say, would you mind refreshing the committee on the theory of why we have a provider charge? Because people hear tax and they just, oh, that's bad.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: It's funny because I wasn't sure which part of the order, when I talk about the two provider tax pieces, which I should do first because for exactly the reason. So, what provider taxes are is basically your taxes on, it's actually written statute, I'm sorry, it's federal law. And if you want a deeper dive on this, Jen and I do a tag team of this and she gets into all of this nuances. But just at a high level, basically when you tax, there's rules about how much we can tax hospitals, nursing, any of these particular things. We can only tax them at what is called, there is different terms, there is home harmless, there is safe harbor, but we can only tax them at 6% lower if we do a tax. Now, by the way, we've looked at expanding these taxes in the past and they're complicated. And they're not telling you, you can just tax them. There's some complications.

[Rep. Alyssa Black (Chair)]: Can you have a seat over there if you wish? If like to sit down.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Whatever. No, not over there.

[Rep. Alyssa Black (Chair)]: Yeah, you can't sit there, but you're welcome to sit over there by the on the bench.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Else do you have a provider tax rate? It's the hospitals. Yeah, so all the ones that have stars. And so you can only tax these providers, the amount you can tax in this cap is 6%. Now, there's all kinds of rules about that, and I'll get into what we're taxing in different ones. But taxing a new provider is complicated. The most recent one we did was emergency medical services. You can't just say, Oh, it's taxing. There's a lot of things that have happened. But we actually also eliminated a provider tax several years ago for the home health. I have

[Rep. Alyssa Black (Chair)]: a question.

[Rep. Leslie Goldman (Member)]: All patient construction fund suitcase is that?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: It's per script, so it's the pharmacy level.

[Rep. Alyssa Black (Chair)]: Pharmacies pay that per I'm sorry, you're welcome to be in here, but you're not able to disturb or talk while we're having our committee. So

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: what HR1 does, it's a phase down of the provider tax rate, often called the safe harbor threshold, and it reduces the tax from 6% to 3.5% over between 2028 and 2032. And what it does is it goes down by 0.5% per year until it gets to 2032. Now what I have listed here is all the different taxes that we have. Oh, that brief is really good. And in short, of all the providers we have, we have these five provider taxes. The only one that will actually get impacted through HR1 is the hospital provider tax. And the reason is because nursing home provider taxes are excluded. Our ambulance provider tax is below the 3.5% threshold. We don't have any intermediate care facilities left and pharmacy is also below. So that said, we say, oh, it's only hospital. Well, hospitals make up 90% of the provider tax, right? So essentially what it's gonna do is it's gonna disrupt our provider tax. Now, why are all these rules around provider taxes? That's because what happens is states do these taxes on the providers, and then that money is often used to draw federal match. So for instance, we'll raise $200,000,000 from the hospitals and then that money gets matched and becomes $4.50 to 500,000,000, right? Now that's a rule of 100% because then they would say, Oh, it's Mediscam. We're gonna tax you. We're gonna give you all their money back. That's why there's all kinds of rules and provider taxes about, I can't say, Okay, your hospital, I'm taxing a million dollars, but wait, wait, I'm gonna make sure you get it back. You can't do that. You could tax everybody uniformly, and then you get that money back to the extent that you have Medicaid beneficiaries. So, there's often winners and losers in terms of how much you pay and how much you get back, right? So that's the controversy sort of about provider tax. Now, just because the hospitals are gonna see a reduction in provider taxes, it doesn't mean the hospitals are going, Yes. Because they also recognize that given that they're a big share, what does that mean when we have less funds to fund the programs? I mean, we're gonna cut rates. So they get that. Now, several years ago, that money went into a special fund. It doesn't do that. Go to the general fund now. So now we really can't say, okay, that money from provider taxes goes specifically to, it goes into the pond, it uses water, right? It goes into the pond, becomes another water molecule with everything else that's going into there and coming out. So there's a lot of rules around provider taxes. So what are we gonna do to respond to provider taxes? Well, maybe the three levers are cut services, raise new revenue, or get general fund from elsewhere in the government. Or not get it, but just take it from other places in the government. So, those are the gonna be the levers, because you have a less cuts or cut rates. So, I say cut services. And

[Rep. Karen Lueders (Member)]: when you say move from somewhere else in the general fund, that means you're cutting something else in the general fund, because there's not money just laying around to move around. You're cutting programs to put

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: somewhere You're freeing up general fund from another program to reallocate here. So you might say, okay, because we have less provider taxes, okay, we're gonna make a pet in fish and wildlife and use some of that money. Those are what I'm just saying as an example. Of. But anyway, those are the policy levers that you will have to be taking into consideration. So our next budget that we do for fiscal year twenty eight next year will be the first year that we're gonna start seeing a decrease. So this is rather Nolan estimates of what I think it's gonna look like. AHS has some stuff that they've done. Our numbers are slightly different, but we're kind of all on the same page. Like the answer is we just don't know. And part of the reason my number is a little bit different than theirs is because mine are on a state fiscal year, there's a lot of federal fiscal year. But in short, starting in 2028, we could see as much as a $60,000,000 decrease in general fund, and then it compounds each year. So then in 2029, it will go to 39, and then in '30, it will go to 65, just compounds each year until we hit 2032, which we could see as much as $130,000,000 less in general fund revenue. Now, a lot of that will depend on what the FMAP rates are. FMAP, if you recall, is the Federal Matching Assistance rate. That's the rate that the federal government matched. So this is all assuming what I think the FMAP will do too. But it gives you

[Rep. Alyssa Black (Chair)]: a sense. The numbers are big. This also takes into account where our revenue is right now. It doesn't take into account five years from now.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Just that. Yeah. Habanova's, whatever they call it. On your previous slide, you had yes for hospitals, no for the others. Does that mean those won't be taxed? Those won't be affected by this tax. There won't be a change in them because they're either excluded or the tax rate is below the new floor. So they won't be affected by it, because they're lower. The hospitals, to my point, was they're the biggest. And

[Rep. Alyssa Black (Chair)]: do these numbers reflect the hospital share and the federal match?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: No, this is, again, because it's a good question. So this is just a general fund, because I'm not gonna make an assumption that this is all gonna come out of these general funds. You might say, okay, well, we're losing $65,000,000 in general fund, but it doesn't mean you're gonna cut Medicaid. Like I said, you might cut some other place in the budget and pull general funds from elsewhere. Those are the policy decisions that you'll have to make. So again, your levers are raise new revenue, cut services or rates, or find resources elsewhere in state government.

[Rep. Daisy Berbeco (Ranking Member)]: Oh, I'm sorry. Can I just

[Rep. Karen Lueders (Member)]: clarify what you said to Karen's question? So this is $16,000,000

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: General fund.

[Rep. Alyssa Black (Chair)]: General fund. But that

[Rep. Karen Lueders (Member)]: doesn't include what we're getting from the feds?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: This is pure the general fund piece.

[Rep. Daisy Berbeco (Ranking Member)]: Us- So if we're matching with

[Rep. Karen Lueders (Member)]: federal dollars, the federal dollars don't go into the general fund, that stays in Medicaid?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Yeah, so that's a great question. So this gets into the budget. We use our general funds and everything is matched at the AHS central office. So, a lot of times, you'll see, if you're looking at the ups and downs, you'll see general fund, federal funds, and then you'll look in the department, it'll say global commitment fund, and it'll be the general and the state share combined. So it's matched to HS central office. This some of the general funds that are gonna be used to draw a federal match. Now, if you say these monies are 100% dedicated to withdrawing those funds, then you can make that assumption, but I just don't make that assumption.

[Rep. Alyssa Black (Chair)]: If our FMAP remained the same and the general assembly in 3032 decides that all of this is going back into Medicaid, how much buying power are we losing for like $133,000,000

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: $317,000,000 under the current Current FMAP. Under the current FMAP.

[Rep. Karen Lueders (Member)]: So I'm sorry, I must not be getting this. So in fiscal year twenty eight, we're losing 16,000,000 out of the general fund, but we're also losing money coming from the Feds.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Only if you assume that this money is, that is why I say, you might say, okay, we are losing $16,000,000 in general fund. That translates to what I say it was.

[Rep. Alyssa Black (Chair)]: So if we do not use the $16,000,000

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: It is $38,000,000 So you can say, you can either say, okay, we are going to lose $38,000,000 growth. So we either going to lose $22,000,000 in federal dollars or you can say,

[Rep. Karen Lueders (Member)]: We are going to find $16,000,000 to make sure we still get that money.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Got it. Taking it somewhere else in the government. Again, that's your policy. Sorry. No wonder nobody's running again, right?

[Rep. Alyssa Black (Chair)]: After this question.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Sorry. Used to joke around like, I'm here. Interesting thing that the

[Rep. Leslie Goldman (Member)]: thought about keeping this number whole so we get the FMAT and be really thinking about that.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: One way to look at it is, this is the beauty of, I did some of my FMAT presentation, it's double edged sword. Dollars 1 gets you $2.3 in services, right? Or $2 whatever. But when you lose it, every $1 you cut, you lose $2.6 in services, right? So it's a double edged sword.

[Rep. Leslie Goldman (Member)]: What I mean about keeping the $60,000,000 whole if we need to take it from whatever in order to get the bank.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: You do maximize the time line. But everyone feels the pain.

[Rep. Alyssa Black (Chair)]: As they should. I think it's really important though, because this chart gets shown a lot and we keep hearing we'll have $16,000,000 less. But no, it's not 16,000,000. Yeah.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: And the reason I don't do that is because I don't wanna make I an know you can't

[Rep. Alyssa Black (Chair)]: make assumptions.

[Rep. Karen Lueders (Member)]: But I think we do need to show both numbers. Because it truly is not some people might say, oh, 16,000,000. We can figure

[Rep. Alyssa Black (Chair)]: that out. But it's

[Rep. Karen Lueders (Member)]: not 16,000,000. It's what did you say? 22,000,000 plus 38,000,000.

[Rep. Leslie Goldman (Member)]: 32,000,000.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Unless you find it elsewhere.

[Rep. Alyssa Black (Chair)]: Or people will say cut 16,000,000 in Medicaid spending, but you're not cutting it. It's not 16,000,000. It's 38,000,000 in Medicaid spending. And the purpose of this reduction is so the feds pay less in Medicaid. Yes.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Yes, that's the savings. When they score it, they score it as states are going to raise less money, and when they have less money, they're gonna match less. And that's what they put in their savings of the bill to help offset. So when they talk about how they're reducing the bill achieved savings and Medicaid and others who spend elsewhere, this is one of those areas where they're assuming savings or reductions is because they're gonna make an assumption that states aren't gonna completely offset this loss and match it with other funds, because this is such a big revenue source. And where else do you go?

[Rep. Alyssa Black (Chair)]: Can't use the word transformation.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: It can't match federal dollars with federal dollars.

[Rep. Brian Cina (Member)]: Can you create an income tax surcharge on the wealthiest Vermonters who had Trump tax breaks?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: I will say is you can use other general funds.

[Rep. Brian Cina (Member)]: So, matter how we raise the money-

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: It does matter as long as it doesn't fall. This is where Jen would come in and caution you. There are certain things if you try to tax the providers in other ways, it's still seen as a proper provider.

[Rep. Brian Cina (Member)]: If you tax individuals though, would that be considered taxing providers?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So what I will say again is I'm not a lawyer. So I would just say, if you can raise other general fund revenues in other ways, that money can be matched. Just can't into, just can't be defined as a provider tax. And I'll leave it at that.

[Rep. Brian Cina (Member)]: And so basically, I'm not saying, I'm asking you to answer a question, I'm just trying to make sure I heard what you said, that we would need a lawyer to review the limits and to make sure that any policy decision we make about raising revenue or that raise it means makes doesn't break those limits that the Feds have set around.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Yeah, what I'll say to that point is the general fund that we use to pay for Medicaid comes from many other sources, not just this, taxes, income taxes, other things. So if you come up with other ways of raising general fund revenues that aren't falling into this particular definition, then it is matchable. So for instance, a new income tax or something else, right?

[Rep. Brian Cina (Member)]: Soda tax. So

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: we have other things that we use, we use the claims assessment. We have an employer assessment, tobacco. That's all that? That's all stuff that we use to draw

[Rep. Brian Cina (Member)]: a match. Can you tax drug companies?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Okay, we're not gonna get into specifics.

[Rep. Alyssa Black (Chair)]: Do you have a licensing fee on a hospital, a yearly licensing fee equal to 3.5% of your revenue?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: I'm not gonna answer that question. Not without my lawyer present.

[Rep. Alyssa Black (Chair)]: I need to think outside the box here.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: I hear you. I would just say they'll do it out loud in public. Okay. All right, so that is my provider tax field. Other selected provisions. So you've heard about these. I'm just going to refresh your memory. We have work requirements, and this is where the states must establish community engagement, the term community engagement requirements for the Affordable Care Act expansion population. These are the folks that we often refer to as the new adults, as a condition of eligibility for able-bodied adults from age of nineteen sixty four. So this goes into effect no later than 01/01/2027. There are some exemptions allowed for states that demonstrate good faith efforts to comply.

[Rep. Alyssa Black (Chair)]: Can you remind us what the federal match is on new adults?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Ninetyten on most of them. Some of them we have no match. So there's two different, you have childless adults, the childless adults we get the ninetyten on, and the others we get the straight match up.

[Rep. Alyssa Black (Chair)]: By losing that Medicaid population due to this, our federal match is even

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: You lose federal You're losing For anybody in that population that falls off, it's a reduction of federal dollars coming to state.

[Rep. Brian Cina (Member)]: Community engagement requirements.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Yes. I have to Google what they mean, I don't know if I'm wrong. Okay.

[Rep. Alyssa Black (Chair)]: You bumped here. There's a term

[Rep. Brian Cina (Member)]: No wondering,

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: yeah. I think they've defined it, and I think it's like, well, actually, I'm not gonna say think because I would have to, I would say just Google it to what community under HR1. It'll tell you what they mean by community. It's probably like looking for a job. It could be finding other services. Don't know. Think if you Google it, it will tell you what they define it as. Don't remember.

[Rep. Brian Cina (Member)]: Didn't I'm just wondering if perhaps a solution here for Vermont is to look at those criteria and figure out how to integrate that into the care people get so that perhaps providers who are or the state or whoever certifying this is looking at what a person's existing strengths and activities are and seeing what can be counted and also what could be, there might be things people want to do to have a more fulfilling life that we could help them do that would then meet those requirements. So it's not just jumping through a hoop to get federal money, it's actually helping that person improve their life and making the best of this policy. Like there's lots of people who want to work and don't because they're afraid of losing their benefits, because if they work more than ten hours a week or whatever it is, they lose their benefits. But if there's a way we can help work that so that they can, because research shows that work helps people with mental health issues feel better usually when they have, work meaning meaningful engagement in the community, it doesn't have to be paid. I know, I just think that there's a piece here that we might be able to find a silver lining if we indeed have to go forward with it, but I think I need to know more about exactly what she needs.

[Rep. Alyssa Black (Chair)]: Paid employment, volunteering with approved organizations, participating in vocational training, job search, and work readiness programs, or enrolled at least half time in higher education or career technical programs.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Not the worst Leslie,

[Rep. Leslie Goldman (Member)]: but any of this could change at any time. If we had a

[Rep. Alyssa Black (Chair)]: new Congress or whatever, right? Or war or something?

[Rep. Leslie Goldman (Member)]: I don't know. I'm just saying this is the way it stands now.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: This is the current law.

[Rep. Leslie Goldman (Member)]: Yeah, current law, but it could shift.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: But anything could shift. If there's any law that

[Rep. Brian Cina (Member)]: could shift Asian, mean, knows? Affordable care,

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: I could go away. I'm just

[Rep. Leslie Goldman (Member)]: I'm just saying saying it that, could shift. We could shift it. It could be shifted. We.

[Rep. Alyssa Black (Chair)]: Yeah, was gonna say we cannot. Oh, federal, I get it.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: This the current law, federal law of the land.

[Rep. Brian Cina (Member)]: I'm wondering how much power do we have to spin this though into something good? Maybe we can't change those criteria, but we might find a way to help people improve their lives and meet the requirements. I'm trying to see the ways we can make, because I don't think we're going to change this and I don't think the feds are gonna change

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: this anytime soon, but who knows what'll happen? The next one-

[Rep. Alyssa Black (Chair)]: I'll take that.

[Rep. Brian Cina (Member)]: We can get invaded by China.

[Rep. Leslie Goldman (Member)]: I wasn't going there. Oh, okay.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So the next one is retroactive coverage levels. So right now, if you are, let's say uninsured, but you're Medicaid eligible and you wind up in the ER, can actually, they can sign you up for Medicaid and you can be retroactive up to a certain period. So what this does is it shortens the retroactive coverage for expenses incurred from three months, because so currently if that happened anytime within the last three months, to two months for traditional Medicaid and CHIP, which is Children's Health Insurance Program, or one month for the expansion population. So basically, it just shortens that period of that time for people to be able to get coverage. And that again takes place 01/01/2027. So a lot of times when people are uninsured and they come to the hospital and they're injured and they don't have insurance, the people at the desk will be like, okay, well, you might be Medicaid eligible, fill out this application form. And a lot of times people will find out they're eligible and they go from being uninsured to actually having Medicaid to cover their service. This is one you heard about in the budget. This is the eligibility determinations. And what it does is it increases the frequency of eligibility redeterminations for the Affordable Care Act population from annually to every six months. Right now, people have to do it annually. What this does is this increases the amount of paperwork and burden for these folks to every six months. That's why Addison and other folks came in and said, We need, I think, seven people and a or million whatever. Because it is, it's more work. There's a lot more work that has to be done to do this. It's to meet the standard. This goes into effect fiscal year seven and January 1. There's the Planned Parenthood. This prohibits Medicaid reimbursements to Planned Parenthood for one year. AHS backfilled this with general funds. I think it was about $1,100,000 And apparently, it's subject to ongoing litigation at the federal.

[Rep. Alyssa Black (Chair)]: The one year is up, though, I think. July 1, maybe, or October?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: I think so. I think it went the July 2. Yeah, I think it was

[Rep. Alyssa Black (Chair)]: July 1. But then the backfill is for FY

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Current year, right now.

[Rep. Alyssa Black (Chair)]: So that'll be over also. Should be over. Unless they decide to extend it. They

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: could. I haven't seen You're

[Rep. Leslie Goldman (Member)]: saying it's just for one year from them, so they could get reinstated, but that doesn't seem There's

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: a federal budget that has lots of proposals. Don't know what's in it. This could be in it, might not be. I don't know.

[Rep. Alyssa Black (Chair)]: Guessing it's not a priority.

[Rep. Leslie Goldman (Member)]: I would think not.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So we have cost sharing requirements. This requires states to impose cost sharing for Affordable Care Act expansion adults with incomes over 100%. So cost sharing must be greater than a dollar, but no less than $35 for services. It excludes primary, prenatal and pediatric care, emergency services, mental health and substance use disorder. We currently have some cost sharing of prescription drugs. You'll see if you recall in the budget, it's currently one and three. The governor proposed four and eight. The House concurred with four and eight. The Senate is proposing to go back to one and three. So that's in the works.

[Rep. Alyssa Black (Chair)]: What's that?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: In terms of that particular piece. I don't yeah, fix that, impose. That's two typos. That's two. Usually there's only one in your presentations. So for me, I do that intentionally because I wanna make sure people are paying attention.

[Rep. Alyssa Black (Chair)]: I was super excited about the first one before you even started the presentation. You are good at that.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Yeah, they're little nibblets that I put in there intentionally, make sure you're thankful.

[Rep. Alyssa Black (Chair)]: Always paying attention.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: At my own expense. State directed payments, this one's interesting. So, it's a mechanism where states require their managed care plans, which our global commitment is considered managed care, for healthcare providers specific targeted amounts to achieve state policy goals. So for instance, this will impact blueprint payments. Blueprint payments are considered state directed payment. And I've talked to folks at IHS about this, and they are working on rethinking how this happens to comply with this law. But also, if you recall, there were some conversations around home and community based services and giving them specific rate increases, 3%, 4%, 3.5%, whatever. We have been advised that by saying everybody gets a 3% increase, that is actually considered a state directed payment as well. So what the budget has done is it's saying, well, we're gonna put 2,000,000, 3,000,000, 4,000,000 into rates, but it doesn't tie to a specific rate increase. So when people are going, well, what if the rate increase, what did we get? You can say, well, it's not determined based on the rates anymore, because if it was, it would be potentially in conflict with HR1. So how AHS will be applying that money will be a little bit different than it has been in the past because they want to ensure it does comply with new federal law. But we have to think about things now, want to get providers this, we want get more money to the blueprint. It's not that easy anymore because it may fly in the face of federal law. So we have to rethink incentive payments and those kinds of things when you're in the future thinking about how do you push for better primary care or community health teams or whatever. Non citizens, so this prohibits Medicaid coverage premium assistance for asylees, refugees and non citizens.

[Rep. Alyssa Black (Chair)]: Could you just go back to that state directed payment chart? What is the actual impact? What does it allow or not allow?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So you can't say we're gonna be, we, it can't be so it can't be a target amount to achieve a state goal, right? So for instance, Blueprint, it's there to try to achieve a goal. We're giving these practices money because we want them to do a better job of, like entice primary care, right? Be part of the hub and spoke or whatever, right? They are incentive payments. And so incentive payments would be exactly what you would want, exactly targeting amounts to achieve a goal, incentive, right? So now it's like we have to think about, if we wanna get this money for practices, we have to rethink the purpose and how it's done. It can't just be like, We're giving you this money to do this because we think it's important and we're incentivizing you to engage in this behavior. But that's a state directed statement. So we have to rethink. We wanna get money out to primary care practices. It has to be in a different way going forward. So there's still some time. NHS is thinking about this, and I'm sure we'll see something in next year's budget about how they're actually thinking it. And then finally, Rural Health Transformation grants. Maybe you've heard of this, but I wanna remind people, this was HR1. This was one of the things that was added to the bill because a lot of states, to offset some of the impacts that states were feeling, the federal government allocated $10,000,000,000 from 2026 to 2030 to states to support rural providers and things that fit within there. I don't think I need to go into the details of this because we've heard a lot about this.

[Rep. Alyssa Black (Chair)]: My only question is, are they committed to $195,000,000

[Rep. Leslie Goldman (Member)]: a year, or can So that we don't know what that variation could be.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: The variation will depend on our application.

[Rep. Alyssa Black (Chair)]: So we have to reapply every year. We have

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: to apply every year with a different list of what we want to do, and then the Feds have to approve it, and then the amount of money will be dependent on the quality of our application and the things in it.

[Rep. Leslie Goldman (Member)]: So we don't know if we can reinvest in what we've already been doing, or does it have to be new stuff every year?

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: That's a question for Jill that I don't really have Thank

[Rep. Alyssa Black (Chair)]: you, Nolan. I would say that the reason I asked Nolan to do this is because Ways and Means had some amendments on a bill that they're working on that focus on some healthcare things, and it might be something that we will have to do a flyover drive by of and I wanted to make sure that everyone kind of understood the context. So thank you, and you said there's no way I can fill thirty minutes, and it was four to five.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: You could add some questions. I know, you forget that

[Rep. Alyssa Black (Chair)]: we like to ask questions. And the jokes. Thank you Nolan. Thanks Nolan.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: Thank you.

[Rep. Alyssa Black (Chair)]: Alright, so we have, we're moving on to, if you recall the other day, had in Claire, it was Claire Martin, right? And Howard to talk about some closures that they're wrestling with. So, thought we would have a mental health in to help us understand this better and see what's going on with this. So thank you, Samantha, for joining us.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Of course. Thanks for inviting us in. Are we ready to get started? We're ready. Okay. For the record, I'm Samantha Sweet, Deputy Commissioner at the Department of Mental Health. And we just have a few slides to share because as with everything, things are confusing. And so we want to make sure that I explain to you a little bit about the transition of CRT out of being a program, residentials, and then I'll just open it up for questions. And unfortunately, yesterday I had our Ashley Berliner was gonna join me to speak to the Medicaid policy aspects, and today she wasn't available. So I will do my best, but if there's questions that I'm not able to answer, I will definitely bring it back. So last July 2025, we had to make a decision around what we call the CRT program. And so CRT meant community rehabilitation and treatment. It was a program, a community program at each one of the designated agencies and SSAs that served adults with severe mental illness. It was a program since 1999, I believe, and we had to move it. We had two choices. We could keep it in HCBS and keep it in the waiver and do what Dale is doing, which is a conflict free case management, which means another agency develops the assessment, does the treatment plan, and then an agency provides the treatment and that's habilitative care. And that is the direction that our sister agency department is doing at Dale. We made the decision to move it out of the waiver into the state plan amendment. And by doing that, we went the rehabilitation route. And so, you will see, we truly believe in, recovery and providing hope and providing treatment and focusing on reducing symptoms of severe mental illness, building skills, having, the individual develop their own goals on what they want to work on, to be able to live as successfully as they want to live in the community. So that is the reason why we went the direction of rehabilitative care and moving out of the waiver into the state plan. And so as I spoke about CRT, it was a program. We could no longer have a program once we moved into the state plan amendment. We had to have, it's a unified mental health service model. So it's kind of everything's under one umbrella. We have a continuum of services. And so depending on someone's needs, someone's diagnosis, someone's treatment history, that determines where they fall on that kind of line of services and what they need to recover and live successfully. So we had a lot of conversations with all the designated agencies with Pathways. Please interrupt me if you have any questions about this because it does get confusing. And so, like I said, we had a lot of conversations with the designated agencies and with Pathways to talk about moving out of the waiver into the state plan. And so, we'll go to the next slide now, Stephanie. So what that means is that every service that's provided by the agencies have to have a medical necessity is required. So we took, and I'll talk about this a little bit later in a further slide, around the criteria for, we no longer call it CRT, it's now called SMI. You'll also hear TPL 63 a little bit. We wanted to move away from using TPL 63. It's a code. It's a code in the MMIS Medicaid world. MMIS is a platform for billing in Medicaid and TPL 63 is a code. So we're trying to steer away from using that, but you will hear that a little bit when people talk. So I just wanted to make sure you understood that language. It's all the same, like CRT, SMI, TPL 63, we're talking about the same populations. We implemented Hold on one sec, Sam. Sorry, Before didn't have to take

[Rep. Daisy Berbeco (Ranking Member)]: you dig further, that's a lot of acronyms.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: I think I'm following. But can you describe a bit who these folks are, what their day to day lives are like, and the things that they might struggle with? Yep, absolutely. So before I came to the Department of Mental Health eight years ago, I worked with the CRT population. So it's the program that serves adults with severe mental illness for over twenty years. And I was CRT director for eight years of that. And so I know this population very, very well. And so it's adults that have been diagnosed with schizophrenia, bipolar, the most severe mental illnesses that we have. And their functioning is affected because of their mental health diagnosis. So they may have a treatment history and that treatment history hasn't been shown to, make a lot of improvements. They need residential care. They've been in and out of the hospital because of their mental illness. So it's really that mental illness is affecting their day to day living. And so that's the population that we're talking about today.

[Rep. Daisy Berbeco (Ranking Member)]: I don't mean to monetize human beings, but would you say that these are some of the costliest folks in terms of what they or the public might pay in terms of their healthcare costs per year?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yeah, they could be. And so probably there's continuum, right? Some people need less services, but these are the most severe. So it's probably similar to folks with the most severe medical complex situations that they are in and out of medical hospitals. They have diabetes. They have high blood pressure. It's a very similar thing to folks that have been diagnosed with a severe mental illness. They could be in and out of inpatient units. They could have case management, psychiatry, therapy. They need residential care, which we categorize residential care as the highest level of community services in the community at our DAs. So if you remember that pyramid that we showed at the beginning in January, it showed inpatient care is the highest level. And then from there it goes down to residential and then community. So we really view residential as the highest level of community treatment we have. Does that answer your Yeah, thank you. Yeah. So by qualifying for SMI, which is severe mental illness, what we're saying is that you are eligible for these five services that we bulleted out. So you could have residential treatment, dental benefits, specialized service funds that help someone to, pay for those dental benefits or pay for eyeglasses, community support funds. We have a bucket of money that helps the adults with SMI to pay for first month's rent, security deposit, pay for a short term voucher system. And then we have targeted case management. So those are the case managers that help people with the day to day living, helping with budgeting, helping with people to gain skills to leave their house and go to the grocery store or to connect them to the bank to set up an account. It's the kind of the day to day living that case management can help with. Okay, next slide, Stephanie. So I wanted to talk a little bit because it sounds like there was some confusion and I want to clarify that, there's nothing that changed with the criteria from what we used to have as a CRT program to what we have now is, SMI, determination. And so there's a couple reasons why we have to still categorize a population. And so even though it'd be ideal if we didn't have to, we have to report up to the feds how many folks with SMI we serve in the state of Vermont. So somehow we have to track that population in order to do that reporting. The other reason is, which I get to in the last bullet here, is once someone has been deemed in this SMI category and they don't have Medicaid, that makes them qualify for Medicaid for those mental health services that they're going to get. So we call that group the Medicaid expansion group. And so, it gets confusing, but it's basically saying, if you meet this criteria, you can have Medicaid for your mental health services at that agency. And so it's really beneficial for those that don't have Medicaid for whatever reason, they're over income, if they're on their parents' insurance, if they're just never applying, like those are the individuals, they'll have Medicaid for those. So that's another reason why we have to have some sort of line in the sand that says, here's the SMI population. So we did not change the diagnosis. Diagnoses are the same for this, criteria. Same with the treatment history. We moved the prior to, July 1, we had just a checkbox for functioning level. And we took that checkbox and moved it into the adults in need strengths assessment that we have agencies do. And so nothing changed as far as the functioning level for this criteria. It remained the same. We asked them instead of a checkbox, tell us where their needs and strengths are because that assessment can go right into a treatment plan. If you tell me someone has a need, then that is determining the treatment plan for that person.

[Rep. Daisy Berbeco (Ranking Member)]: Then the only,

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: was someone going

[Rep. Alyssa Black (Chair)]: to Brian has a question. I

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: don't know

[Rep. Alyssa Black (Chair)]: if you wanted to, before you went on to your next slide or finish your thought or

[Rep. Brian Cina (Member)]: finish Finish your thought, but it's about the answer, the question. Okay,

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: we'll go back to that. And then the last bullet, I just wanted to say that the criteria did not change, but what did is that DMH has to review through a prior authorization, anyone going to residential and anyone that meets the SMI criteria that does not have Medicaid, because that's when we can give that individual the Medicaid expansion, meaning they can have Medicaid now. So that's, I wanted to be clear on the criteria because it sounds like there was some confusion earlier in the week.

[Rep. Brian Cina (Member)]: I'm looking at the standard comprehensive adult needs and strengths assessment three point zero. I don't know if that's the version, the most recent We

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: have a Vermont version. So there was a group probably two years ago between the designated agencies, Pathways and DMH created a Vermont version of the ANSA, and that's on our website.

[Rep. Brian Cina (Member)]: I have a question about it. It says page not found when I clicked on it, so maybe I'm clicking on the wrong one. Here it is. The twenty twenty one one, is that the one you're referring That

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: sounds about right.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: So I'm

[Rep. Brian Cina (Member)]: just scanning ahead to see if it's structured. It looks like it is structured similar, that it looks like a human being makes a judgment of another human being. Like, they go through and they make a decision. There's someone administering this, right? And they're deciding, is there an evidence? Is there a need that requires monitoring? Is action required? Is the need dangerous or disabling? Like how does individual conducting the assessment make this judgment? Is it just a clinical decision that they make based on their observation? Is there training that they receive in advance to educate them on what these different ratings mean? What kind of bias training do they receive so that they can put their personal bias aside when ranking someone, does anyone double check it? Because someone could just check threes a lot if they want someone to get the services. And there's no medical test. So I'm curious, I understand this is like what the federal government does, and we're just following along, but I'm curious if you could say more about how this assessment is conducted.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yeah, so everyone that performs an ANSA needs to have training done by the university that put the ANSA out, that publishes the ANSA. And there is a CANS version, so it's a child version of the ANSA. So we stuck with the ANSA to keep the, if someone came right up through our system, we could see like the growth and the change and how their needs changed. So there is a training that everybody has to go through every other year and they have to pass a test at the end of a training, receive 80% or better. And then on top of that, where we collect the data, we review it, we see it if they are, like I said, needing the highest level of care, so residential, or if they don't have Medicaid, we view their ANSA and see what it is. The other thing which I'm forgetting now, the training I forgot the other thing I was going to say, Brian, but I'll come back to it around the ANSA. Oh, we have ongoing trainings at DMH. So not only is there like a one time online thing where you have to pass a test, we have ongoing training and we have pulled in someone from every DA to be part of every other month meeting to talk about where are the gaps in people learning about the ANSA. Several of the agencies have also implemented the ANSA with the psychosocial. So it's now one document. So it's not just, psychosocial here when someone comes in for services and an ANSA over here, they put them together. So it's one document. The ANSA is also used as a communication tool amongst the treatment team. So it's not one person. It's not supposed to be one person making the determination on the ANSA answers. It's really collaborating with the treatment team to determine where this person is at.

[Rep. Brian Cina (Member)]: Is the individual part of that treatment team?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yes, absolutely.

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: That's what I thought.

[Rep. Brian Cina (Member)]: All right, well, thanks for giving us a little more detail, because I think what you've demonstrated is that this isn't an arbitrary process, and it's done by an individual and a supportive group around them connected to the community, that there's extensive training involved, so that there's consistency between the way these are conducted. That's just good to know that the state's putting in that effort to make sure that there's accountability, and also that people are included in their treatment. So thank you.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yes, absolutely. We want the individual to be driving their treatment. So we're here to help guide and help with skill building, whatever the person needs, but hopefully they're at the driver's seat. We want to see them recover. We want to see them live as healthy as they can in the community. I'm going to keep going on unless there's any other questions I can answer so far.

[Rep. Daisy Berbeco (Ranking Member)]: Yeah, I'm really interested in the answer too. Was

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: it made to develop or determine eligibility for services? It was developed as a communication tool amongst the treatment team. So that's how it was University of Kentucky that developed the ANSSA. And it is supposed to be a tool to get the treatment team working together and answering the questions. What we did with ANSSA, we very much use it in that way. And we also worked with University of Kentucky to figure out here's the functioning that we want to see within CRT or lack of functioning for this population, how can we work that into the ANSA to see if are they, needing more skill building around this certain function? And so that's where the weighting of scores come in with the ANSSA that helps us determine if this person meets SMI criteria.

[Rep. Daisy Berbeco (Ranking Member)]: So you're using it as an eligibility tool, as a communication tool, and as a treatment planning

[Rep. Alyssa Black (Chair)]: tool? Yes. Yes. That's all. Okay.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Next. Yeah. So I'll keep going and please interrupt me again. So we part of the changes that needed to happen is with residential payments and the programs. As you probably are not shocked to see and to hear is that every residential facility is unique and different, and we learned that very quickly when we started exploring what needed to happen. So once we moved, SMI out of the waiver into the state plan and because of CCBHCs, which I know we've been here to talk a little bit about CCBHCs, we had to look at moving residentials out of the into the fee for service world. So Many of our residentials are functioning like permanent housing now. And what we can't have, unfortunately, we know how important permanent housing is, we can't use Medicaid dollars to pay for permanent housing. So, what we have said is tell us what the treatment goals are to live in the residential. So residentials are supposed to be for folks that qualify for SMI, previously known as CRT, and tell us how you are treating them through mental health treatment and what they're accessing to gain the skill set they need to move to the next level of treatment, a lower level of treatment. Or we also know we have some folks living in our residentials that may need a higher level of care. And we're trying to figure that out as well. There is no, long term or short term timeframe that we have put on any treatment. We know that there are going to be individuals in our system that will be lifelong treatment receivers. And so that was not prescribed at all by DMH. We think where that's coming into play is, at the residentials. If a residential is licensed through Dale as a therapeutic community residence, a TCR, then the length of stay should be no greater than twenty four months due to the regulation of that licensure at that residential. What we have in our system now is people are living at the TCR and that is against the regulation. So we're trying to figure out, we know we need some residentials in our system that provide the up to twenty four months, the intensive community based treatment. Then we also know we need some residentials to convert into more of a residential community care home where they can live their life and live there for as long as they want, and that's deemed their home. So we're trying to figure out how do we have both of these. If we have a residential care home, that cannot be paid for under DMH with Medicaid dollars. So, that is where we're at now with some of those residentials. Next slide, Stephanie. So we started looking at rates and how to figure out the rate structure. And because we have been in case rate for the last seven years. And so we needed to look at how much does it cost to have a head in the bed at midnight, right? And so that's how we calculate who's there, how many people, the services, the treatment, all of that. And so we started the work back in February 2025 to look at some sort of reimbursement model and to be as flexible and appropriate as possible. We had set a go live date for oneone of this year and quickly determined that that was just not feasible. We couldn't get all the residentials aligned. We have some of them just have leases. Some of them are owned by housing authorities. Some are it's just all over the place. And so we moved the date from oneone to sevenone to really align with the CCBHC transition as we already have two agencies are functioning as CCBHCs and we potentially have five more coming on sevenone. So we moved the date to accommodate for that. CCBHCs cannot pay for any service or treatment that's over twenty four hours. So we knew that we needed to have a separate rate, not just for the state plan amendment, but because of CCBHCs. And any agency that was going that CCBHC route and they were doing that work definitely knew that we could not pay for crisis beds or residentials under the CCBHC rate. So what you also heard is that we lost our financial director, or she retired. We didn't lose her. She retired in December year. And so we have definitely felt that huge loss. And like I mentioned, the complexities that we're seeing across our whole system with our residentials and our crisis beds are all functioning so differently that we have contracted with Guidehouse who does this nationally. And so we are now contracted with them to help us develop the rates. They quickly came to us and they were like, Why do you not have one rate for all residential beds like the rest of the nation? Again, that's another Vermont likes to be a unicorn. And so it's taking more time for Guidehouse to figure out the rates because every residential is very different. And so we also recognize how HUD played a big role in our residentials for years. And many years ago, HUD paid for transitional housing. And a few years ago, they changed and they were no longer paying for transitional housing. They would only pay for permanent housing. And our residentials got caught up in that for sure. Some of them still continue to receive HUD funding and are functioning like permanent housing. And we need to figure out how we can continue to have those in our system, but maybe not under DMH, because we cannot pay for that with, DMH Medicaid dollars. Next slide. So, this is, I might actually stop and see if there's any questions because our next slide gets into a lot more kind of nitty gritty if you have any questions about that. Any questions about anything I've said so far?

[Rep. Leslie Goldman (Member)]: I have a question that I'm sure you can't answer.

[Rep. Alyssa Black (Chair)]: Go ahead, Leslie. Well, I come from the

[Rep. Leslie Goldman (Member)]: physical health world, not the mental health world. So I'm just trying to understand when you talk about serious mental illness, I mean, I don't necessarily think it's equivalent to like diabetes or hypertension. I'm just trying to get my head around this. Could it be considered equivalent to people on dialysis or people who might be on ventilators in a nursing home? Can I understand the level of need? Guess that's what

[Rep. Alyssa Black (Chair)]: I'm trying to figure out.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yeah, that's a good question. And I don't know if there's an equivalent. I would say, because every diagnosis is so different. You could have someone with severe mental illness and has the diagnosis of schizophrenia and you could have severe mental illness and someone's diagnosis is bipolar. And so the, and their needs and their strengths and their, treatment looks very different because they have two very distinct, diagnoses that need different things, but they still have serious mental illness. So some have families that help, and so the need for more services at the designated agency might be minimal, while others may have no family, no, informal supports and will need everything at the agency. You know, some have serious mental illness and do not want meds. And so they don't want to meet with a psychiatrist while others see a psychiatrist once a month and come in and out of the crisis bed. They may live in a residential. They may be in and out of inpatient. So it completely depends on the diagnosis there. You know, there's complicating factors. If someone does have diabetes, if someone does have high blood pressure, if someone's using substances, you know, there's a lot of complicating factors.

[Rep. Leslie Goldman (Member)]: I totally understand. I think the number came up the other day that this was going to affect one hundred people who might lose their housing. That, did I get that right?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: I think I heard that on testimony and I don't know where that number comes from. So since we started reviewing everybody, we started having to do prior authorizations. You can take a nap down now, Stephanie. Started doing prior authorizations on July 1. And since that date, we have seen five denials for residential. Two of those were, due to lack of paperwork, that were sent in. One was due to a primary diagnosis of substance use and two others were denied because they did not have a severe mental illness. So I don't know where this number of a 100 comes from.

[Rep. Daisy Berbeco (Ranking Member)]: Yeah, we did hear that.

[Rep. Leslie Goldman (Member)]: Yeah, okay. Well, there's a big difference between 105 for sure.

[Rep. Daisy Berbeco (Ranking Member)]: Yeah. Well, I think that you're talking, Sam, about ineligibility and what Leslie's talking about is people being unhoused. We heard a number of people being unhoused, which is around, I think we heard 64, but

[Rep. Alyssa Black (Chair)]: there was 100 total that were

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: in that sort of vulnerable

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: area. I don't know where that number comes from exactly, so I'd have to check with them. But I'm speculating that what they're doing is looking at the residentials that receive HUD funding, that are, there's leases at the facility because we can't pay Medicaid dollars with anyone that's leased. And so by the way, they're counting all of those folks. What we're trying to do right now is figuring out, is there a way that we can still have those beds in our system and have them be under another department or, we know how valuable they are. And we also know some people have lived there all their lives, maybe since they left Vermont State Hospital. We don't want to lose any more beds in our system. So what we're trying to do is be as creative as possible. You're going

[Rep. Leslie Goldman (Member)]: to say we don't want to

[Rep. Daisy Berbeco (Ranking Member)]: lose any more people in our system because that's where my

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: brain is with I feel

[Rep. Daisy Berbeco (Ranking Member)]: like I want to orient, and just confirm with me that I'm orienting myself to the issue correctly. And when I was there at EMH in 2019, we were working on conflict free case management in that white paper. And I'm just clear why back then, DMH wasn't looking for a payment mechanism. Why did you wait until 2025? And you don't have to answer that. It's a rhetorical question. But this is not a surprise issue that you are going to lose Medicaid funding for these folks. I'm just not sure why it's a surprise. You knew that changing the status from to rehabilitative or whatever was going to cost us the loss of those Medicaid dollars. So I'm not clear what the plan was and why there was a lack of a plan, it seems.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yeah. And I can't speak to what was going on in 2019 with I know in the last couple of years, when we have been working on moving out of the waiver into the state plan and being rehabilitation. Everything has been communicated with the agencies around this. And so I think that it was a bit of a surprise around not knowing that agencies had buildings that were owned by housing authorities or buildings that were had leases. Like we have always functioned that these are residential homes. People should come and go as they need treatment. So there should always be turnover, right? And I've said this in testimony before is everything is contingent on turning, right? So we need, there's people in the emergency room waiting for inpatient beds. And once those inpatient beds are free, someone's stepping down into a residential or intensive residential and then into the community. And we need everybody to be turning over in order to I'm keep the flow

[Rep. Daisy Berbeco (Ranking Member)]: sorry to interrupt, but I feel like we're talking past each other because that is not the population that you told us at the top of the conversation we were talking about. We were talking about the most seriously mentally ill folks who need assistance with daily living tasks. And those people are not rehabilitative. They do not turn through, right? Mean, we have people that have been in that management use residentials for decades.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: And because they've been functioning like that's their home, and that may be where they function the best and that's maybe their best. And that's what they need in order to be successful. But there is always treatment to be worked on. There is always something to do. I would say there's always hope. These are individuals that can live successfully in the community and they may, the rest of their lives, need treatment and services, but that doesn't mean that they need to be categorized as this is habilitative and we're just, this is it, this is it for you. Like, we really want to give them hope and recovery. And, so I think that we're thinking of it very black and white and there's a lot of gray in rehabilitative care.

[Rep. Daisy Berbeco (Ranking Member)]: Yeah, I remember these conversations from when I held that white paper at DMH, and they were very different regarding this population.

[Rep. Alyssa Black (Chair)]: Brian?

[Rep. Brian Cina (Member)]: So just two things. My only concern is, or I shouldn't say my only, because I always have, there's always many things to be concerned about. Any concern I have is people falling through the cracks if it's determined that they don't need the rehabilitative or the group home or funding is cut for some of these group homes, but there's nothing in place for them, The housing market doesn't have options for them. I've seen way too many people on the streets in the last few years in wheelchairs with mental illnesses, like the most disabled people being thrown into the streets, and so I'm just concerned about that as if we shut group homes and stuff. The other thing I wanted to ask about is how much has DMH or the agency human services been looking at like, this is something Daisy sent me the other day from the federal government. It's about the Trump administration has this executive order to accelerate medical treatments for serious mental illness. And if you read I don't if you've seen this, but it lists some really interesting interventions, but it's not clear what some of these are. Some of them, they're talking about interventions for people with extremely serious mental illnesses that are cutting edge interventions, like neuromodulation and psychedelic therapy, using saliva samples to capture stress physiology, endocrine modulation, and inflammatory signaling, large scale clinical trials to identify microbiome modulating interventions that target the gut brain axis, where integrating continuous wearable device data with electronic health records at unprecedented scale to predict and prevent behavioral health disorders. So I just share this because these are some really futuristic treatments involving neuroscience, psychedelic medicine, hormones, diet. And I'm curious if we're talking about people with serious ill mental illness at a moment in history where their housing is being threatened, are we at least considering some of these breakthrough innovations first that might help people take a big leap forward in their recovery who've been stuck because we haven't had these kinds of interventions available?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yeah, I have not seen that article and I'd be interested to see it if you don't mind sharing it. But again, that's talking about treatment, which all these individuals are entitled to receive as treatment to aid in their recovery. So we want the same things. We do not want to see anyone with a mental illness out on the streets. We are not here to on house anyone. We will figure this out. And so we just need to be creative with some of the facilities that have non traditional residential situations.

[Rep. Daisy Berbeco (Ranking Member)]: Yeah, and it makes sense to me that this is a hurdle because when you think about it, the Department of Mental Health can and should provide mental health services, but they shouldn't really be responsible for housing in many ways. So we have to allow space for those partnerships to happen. And I think I would hope you would look to the legislature as a thought partner in that and doing that proactively, not when folks are on the street and decompensating from the good care that they've been receiving for the last couple of decades.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yeah, no one wants to see anything like that, Daisy. So I agree. I think that there's been a lot of work around transition from being in the waiver to being in the state plan amendment that has undergone years. It takes our system a long time to move and to change. And so we don't want to see anyone on house. We want to keep the same number of beds that we have in the system. We just got to figure out how to pay for them.

[Rep. Alyssa Black (Chair)]: Thank you. I think I just have I'm not sure if it's a comment or a question. It just seems as though we go from one crisis to the next and that there's not really a coordinated plan. I mean, we just heard testimony yesterday on gaps in care around forensic. We respond to crises around kids in emergency departments and bed closures here and bed closures there. This seems like another crisis. We have designated agencies reaching out to us, identifying that we don't know what we're going to do July 1. Where do we go from here? What is DMH planning on doing? What can we do to mitigate what some are falling might be a disaster? Where do we go from here? What action are we taking right now?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: So the agencies that have residentials need to be out seven one of the payment structure like the CCBHCs. We do have a plan for contingency payments, and then we'll figure out reconciliation down the road. We're not sevenone will not change the number of beds that we have in our system. So we are trying to figure this out.

[Rep. Alyssa Black (Chair)]: Will change the people that are in those beds?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: We have not denied anyone to stay in their beds. If, As long as the DAs have told us the treatment that they're working on, we cannot have people just living. Staff are providing what? What are staff providing at the treatment house, right? In the residential. So they're at the residential for some reason. And what is that reason? As long as that is clear, they have been approved to stay there.

[Rep. Alyssa Black (Chair)]: Brian, and then we're gonna finish up.

[Rep. Brian Cina (Member)]: Oh yeah, don't mean to separate on it either, but it's it's an important topic. If the treatment providers say it's simply that this person needs, continues to need support with daily living, Is that enough for them to stay in one of these places?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yes. Tell me what they need for activities of daily living. What skill building? Are they budgeting? Are they helping them to learn to cook? Are they teaching them healthy coping skills? Like what activities of daily living need help?

[Rep. Brian Cina (Member)]: So like, for example, if I had a client living in one of these facilities, and we said that the facility is necessary for them to maintain a regular diet, stable sleep, medication, and hygiene, and without those things, they'll be stabilized and end up in a hospital, that would be enough? Yeah. Okay, well that's, I feel like that's the basic for most of it even.

[Rep. Leslie Goldman (Member)]: The only thing that was alarming, I think, was this conversation about people becoming homeless. And that was scary. So that's, I think, part of what's driving some of at least my thinking or worry about what might happen. And I guess what I'm hearing is that you're not going to do that. Not going to let people become homeless. I guess that's what I need to hear from DMH and whatever other AHS agencies are involved in this population.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Yeah, no. And I said this to all the DAs when we started this, we are not in the business of making anyone homeless. We do not want anyone to lose their housing. We do not, this is a population that needs the most treatment, needs the most care in our system. And we are trying to figure out how can we do that. And so we're not going to make anyone on house. We will not kick anyone out. We are trying to figure this out.

[Rep. Alyssa Black (Chair)]: Thank you, Samantha. Thanks for joining us today.

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: Thanks, Sam, and thanks to

[Rep. Daisy Berbeco (Ranking Member)]: the DAs who are listening. If any of you have clients who are going to be

[Rep. Alyssa Black (Chair)]: unhoused, reach out to me.

[Rep. Leslie Goldman (Member)]: Yeah, you should let us know. Yeah, I because just ask this very quick. When did the DAs learn about this change? And have they had enough time to actually do the work?

[Samantha Sweet (Deputy Commissioner, Vermont Department of Mental Health)]: The change with residentials or CRT? Communications, was on February 2025.

[Rep. Leslie Goldman (Member)]: Thank you.

[Rep. Daisy Berbeco (Ranking Member)]: Thank you. Thanks, Sam. We are done.

[Rep. Alyssa Black (Chair)]: We are back here after the floor tomorrow, and we just have tomorrow morning.

[Rep. Brian Cina (Member)]: Can I share a quick piece of info?

[Rep. Alyssa Black (Chair)]: Is it something you wanna be on a mic for?

[Rep. Brian Cina (Member)]: Yeah. Okay. Just that the because it's policy really that the senate voted eight fourteen out with no changes. Neurological rights. Yeah. So I found out from Ginny Lyons, and I checked the record, just so people know. So that's all.

[Rep. Alyssa Black (Chair)]: We also had a Biden simply.

[Rep. Brian Cina (Member)]: Not yet.

[Rep. Alyssa Black (Chair)]: Voted out without the formal amendment, so it's going to the governor's desk. Number Can I

[Rep. Brian Cina (Member)]: make it through the floor, yeah?

[Rep. Leslie Goldman (Member)]: The APRNs.

[Rep. Alyssa Black (Chair)]: APRNs and PAs. Yes. Great. And No. No. The is in the hospital. Yeah. S-one 63. S-one 64. Oh, toppers though. And let's see. And I believe that House Ways and Means is hearing S142 tomorrow. That's the pathway to licensure for international positions. Yeah, so the Senate took down eight seventeen, the youth mental health one yesterday. I'm so excited.

[Rep. Brian Cina (Member)]: And I see that they're looking at eight sixteen. They're working on that stuff. When say, if Considine 14 cleared, I'd love should know because it's likely not coming back to the committee. If it passes the senate unamended, it may get amended, but it doesn't yeah. It doesn't seem like

[Rep. Alyssa Black (Chair)]: She's trying to get through. He sent a lot and and human services sent a lot

[Rep. Karen Lueders (Member)]: to I'm sure. Right? Go that day.

[Rep. Alyssa Black (Chair)]: She's got a

[Nolan Langfeldt (Fiscal Analyst, Vermont Joint Fiscal Office)]: big

[Rep. Alyssa Black (Chair)]: wall that she's working through.