Vt. regulators give UVM Health Network ‘flexibility’ on $18M mental health spending plan

BURLINGTON, Vt. (WCAX) - Vermont’s mental health care system was under the microscope again Wednesday as state regulators unanimously voted to give the UVM Health Network greater flexibility on how it spends funds originally earmarked for adult inpatient psychiatric care.

The Green Mountain Care Board in 2018 ordered the network to set aside $21 million in surplus funds dedicated to increasing inpatient mental health capacity. The network and GMCB agreed to build a $158 million adult inpatient facility at Central Vermont Medical Center to expand the current unit’s 15-bed capacity to 40. Three million of that funding was spent on planning and designs. But the project was put on ice last April following pandemic budget shortfalls, leaving the remaining $18 million in limbo.

Some called Wednesday’s board vote concerning, saying that if regulators don’t compel private providers to invest in inpatient psychiatric care, the state’s critical bed shortage will never get solved, fueling long wait times that continue to leave Vermonters stranded in emergency rooms for days.

But the vote also marks a win for the network and other providers, who are facing financial pressures and are risk-averse when it comes to Medicaid reimbursement rates for mental health care.

“There’s no value, for example, if we figure out how to pay for a building but then can’t run it,” said UVM Health Network president & CEO Sunny Eappen. He acknowledges financial feasibility often governs the organization’s choice to prioritize one capacity or improvement project over another. The network submitted a proposal to the GMCB last month for a new $130 million outpatient surgery center on its Tilley Drive campus in South Burlington. It comes after leaders last spring scrapped the inpatient psychiatric facility with a $158 million price tag.

“The cost of the building quote, frankly, is about the same, maybe it’s a little bit more. But the cost to run it -- we couldn’t figure out a way how we could turn that into a self-sustaining model,” Eappen said.

And if it’s not self-sustaining, Eappen says other patient services would suffer. The network estimates the outpatient surgery center will start paying for itself within six months. In comparison, Eappen says the shelved $158 million psychiatric unit would have operated at a $20 million annual deficit, digging a deeper and deeper financial hole that would be impossible to climb out of.

It’s a Catch-22 that underlines the disparity between insurance reimbursement rates for medical services and mental health services. As an example, UVM Health Network says Medicaid covered 21% of inpatient psychiatric services at Central Vermont Medical Center in fiscal year 2021. Commercial payers covered about 58% and Medicare covered about 38%. The reimbursement rates are far from on par with medical services.

Michael Del Trecco with the Vermont Association of Hospitals and Health Systems says project decisions come down to meeting the bottom line, not padding pockets. “Profitability often gets confused with, ‘We would like to be able to do the service, just to be made whole.’ And if we can be made whole, that would be incentive to keep moving forward in some of these large building projects or thinking about building projects,” he said.

Del Trecco says despite Wednesday’s decision, there are signs of progress. He points to the private-public partnership that nearly doubled the Brattleboro Retreat’s in-patient capacity from 45 patients to almost 100. “It would be difficult for me to say it’s not hard work because it is hard work. And it’s an ongoing effort, and it’s something that we’re focusing on every day,” he said.

Data from the association shows that on any given day, between 25 and 30 people in crisis in emergency rooms are awaiting a transfer to inpatient mental health care -- the majority for more than 24 hours, and some for a week or longer. Those individuals are occupying between 15 to 20% of all the state’s ER beds. That means many medical patients presenting in the ER don’t get immediate care.

According to the Vermont Department of Mental Health, last week’s daily average availability for adult inpatient beds was seven. And for adolescents, the number drops to only four, not nearly enough to meet demand. And it comes as facilities have been forced to close two dozen vacant inpatient beds because they can’t staff them.

Deputy Mental Health Commissioner Alison Krompf also attributes these struggles to reimbursement rates. “Those who have been in the mental health field for decades have been sort of shouting from the rooftops, ‘Hey, let’s increase the value of mental health services,’ for some time. The state, we’re the Medicaid payer, and so one thing we can do -- and have done -- is engage in working out alternative payment models for paying for Medicaid services. We need commercial insurers to come along with us,” she said.

Meanwhile, how the UVM Health Network is going to capitalize on the $18 million they have while wrestling with the flawed system is up for debate.

Several Vermont emergency department directors are imploring the GMCB to ensure the $18 million is invested in inpatient resources for acute cases. In the group’s written comment to regulators, they suggest interventions like renovating current inpatient beds, expanding bed capacity in current units, bolstering staffing so existing beds that are currently closed can be used, or adding a transitional care unit. Calling the backlog a “full-on human rights crisis,” the directors write, “the terrible irony is that it’s the sickest patients, the most vulnerable, who often wait the longest -- and in most cases they simply cannot be served in an outpatient setting.”

Green Mountain Care Board Chair Owen Foster says greater flexibility for the funds is a victory for Vermonters so the network can find a balance between inpatient and outpatient resources.

Reporter Christina Guessferd: The disparity in reimbursement rates -- can the GMCB develop an imminent solution to break down that barrier?

Owen Foster: I don’t think there are immediate steps in our toolbox that could be deployed as of now to help start solving the problem.

Reporter Christina Guessferd: Who could come up with the solution then?

Owen Foster: I think the problem is so multi-faceted that it takes a village. It’s going to take the Legislature, it’s going to take money, it’s going to take AHS, it’s going to take the governor’s office, it’s going to take the GMCB, insurers, hospitals, all providers.

Reporter Christina Guessferd: Vermonters want to know regulators are taking meaningful, imminent steps towards a solution to the state’s mental health crisis. Some are disappointed by this decision to give the network leeway when we know we urgently need inpatient capacity. What do you say to them?

Owen Foster: Mental health problems in the state of Vermont are multi-faceted, and there are a lot of potential solutions that are needed. It’s not just inpatient beds. That’s a big component of it and a huge need. But we need more than that. We need outpatient. We need emergency services. So this flexibility will allow the money to be targeted in the most efficient and productive way.

The UVM Health Network, in consultation with the Vermont Department of Mental Health, is now tasked with submitting a proposal to the GMCB by the end of May for how to spend the $18 million. The network was also ordered to include an analysis of how the funds will specifically reduce the frequency and length of ER stays for adults and kids, plus an analysis of how the investment will increase capacity for mental health services.

In a statement to Channel 3 News, UVM Health Network writes, “The UVM Health Network is committed to being a leader in developing a mental health system that meets patient needs, and we look forward to continuing our strong partnership with the Department of Mental Health as we collectively look to build systems for both outpatient and inpatient mental health care. We are reviewing the Green Mountain Care Board’s decision and in-depth deliberations today and will identify next steps.”

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