Olivia Gieger<\/a>
\n\t\t\t\t\t\tDecember 30, 2025, 5:21 pmDecember 30, 2025, 5:21 pm\t\t\t\t<\/p>\n\u201cWe don\u2019t have a lot of margin for error when it comes to addressing this issue, and we want to move quickly,\u201d said Devon Green, spokesperson for the Vermont Association of Hospitals and Health Systems.<\/p>\n
What could the hospitals or the state do? \u201cThat\u2019s what we\u2019re grappling with now,\u201d Green said.\u00a0<\/p>\n
Cost, charge and payments\u00a0<\/p>\n
To understand the differences in what patients end up paying, it helps to know how three different numbers come into play.\u00a0<\/p>\n
First, there is the cost of the service the hospital provides \u2014 how much money it takes to administer an MRI or replace a hip, say.\u00a0<\/p>\n
Then, there is the charge the hospital posts, which is essentially the price they ask insurers to base their payments on. Often this number is double the cost but sometimes can be higher, even five or six times the hospital\u2019s cost of the service. Each hospital sets these lists of charges for billable services, which then serve as the basis for each insurer to negotiate their individual rates. It\u2019s unusual for an insurer to pay exactly what\u2019s listed.\u00a0<\/p>\n
What Medicare actually pays the hospital is a third separate number \u2014 101% of the cost of the service, minus the patient\u2019s share.<\/p>\n
At the small, rural hospitals Medicare designates as \u201ccritical access hospitals,\u201d Medicare beneficiaries are responsible for paying 20% of the hospital\u2019s charges for their outpatient care.\u00a0<\/p>\n
At large hospitals without this designation, patients pay 20% of the Medicare payment amount. Because Medicare\u2019s payment essentially matches the cost, a share based on the payment is consistently less than a share based on the hospital\u2019s charge. It means that at a larger hospital, a Medicare patient would pay less for a service with the same cost than a patient at a critical access hospital.\u00a0<\/p>\n
The Green Mountain Care Board used a Feb. 11 hearing to discuss the issue. The board invited Jeffrey Stensland, a former analyst with the Medicare Payment Advisory Commission, which is an independent government group that does policy research and offers legislative advice on Medicare.\u00a0<\/p>\n
Stensland outlined just how burdensome this imbalance could become for some rural patients.\u00a0<\/p>\n
Take an MRI that costs the hospital $600 to administer, for instance. The hospital may post the charge as $1,000, to cover the cost and build a revenue buffer. At a critical access hospital, the patient \u2014 or their secondary insurer, such as a MediGap plan \u2014 would be responsible for 20% of the charge, or $200.\u00a0<\/p>\n
Medicare would pay the hospital the remaining $406, Stensland explained, to meet 101% of the full cost of the service ($606).\u00a0<\/p>\n
But, if the hospital posts higher charges, the patient\u2019s payment share grows as Medicare\u2019s shrinks.\u00a0<\/p>\n
\u201cThe hospital will get the same amount, but it\u2019s the portion of that payment that matters, \u201c David Murman, a care board member, said during the meeting.<\/p>\n
\u201cThe higher the charges are, the more the patient pays, and the less Medicare pays. So if you have very high charges, Medicare pays very little. If the charges are lower, then we have more Medicare revenue coming into the state, and are putting less on our local populations.\u00a0<\/p>\n
\u201cIt\u2019s a bizarre situation,\u201d he added.\u00a0<\/p>\n
If a critical access hospital posts a $1,500 charge for that $600 MRI, the patient would pay $300 (20% of the charge), while Medicare pays $306.<\/p>\n
Expenses to patients can quickly run rampant, Stensland showed. If the charges are five times the cost, then the patient ends up footing the entire bill \u2014\u00a0since 20% of the charge ends up being 100% of the cost, which is all Medicare is responsible for.\u00a0<\/p>\n
Worse yet, Stensland said, if the charges are higher than five times the cost, the patient pays more than what Medicare would have paid.\u00a0<\/p>\n
\u201cIn that perverse situation where the charges are really really high, the beneficiary can actually be subsidizing the Medicare program,\u201d Sensland told the care board.<\/p>\n
Changing locally\u00a0<\/p>\n
It\u2019s a breakdown that worries the board chair, Owen Foster, as not only inequitable but also illegal.\u00a0<\/p>\n
\u201cIt is really, really troubling that some of our seniors may be paying a lot more if they\u2019re in a rural community as opposed to in Chittenden County,\u201d he said in the February meeting.<\/p>\n
Foster followed that meeting by sending Vermont\u2019s critical access hospitals, its industry group and insurers a letter outlining the parts of Vermont law he sees this clashing with: \u201cFinancing of health care in Vermont must be sufficient, fair, predictable, transparent, sustainable, and shared equitably.\u201d\u00a0<\/p>\n
He requested further information from the hospitals about their charges and revenue, and he sought the hospitals\u2019 participation and ideas on solutions the state could pursue to address this.<\/p>\n
Solving it, though, is another issue, said Green, the hospital association spokesperson.\u00a0<\/p>\n
\u201cWe are alarmed this is happening,\u201d she said. \u201cWe understand the problem that needs to be solved and the impact to Vermonters and hospitals. This is not good for either of us.\u201d\u00a0<\/p>\n
The hospitals, the Medicare policy advisory group and the care board have floated a number of possible solutions on the state and federal level.<\/p>\n
Green says the hospitals do support recommendations to tackle the issue federally, since Medicare dictates these rules.<\/p>\n
Other potential changes, like reducing the cost of the charges, would be untenable to many of the state\u2019s small critical access hospitals.\u00a0<\/p>\n
In a letter back to Foster, the CEO of Grace Cottage Family Health and Hospital in Townshend, wrote that even without detailed calculations, the loss of revenue from reducing its charges would \u201csurely bankrupt\u201d the hospital.\u00a0\u00a0<\/p>\n
It\u2019s a sentiment representatives from nearly all of the state\u2019s eight critical access hospitals voiced.\u00a0<\/p>\n
The problem is not unique to Vermont, but it\u2019s likely heightened here since so many more patients receive care at rural hospitals.\u00a0<\/p>\n
Foster and the care board are pushing for more information by March 16 so that the inequity can be righted for next fiscal year\u2019s budgets. The care board has authority to set and enforce hospital budgets but has little sway over a hospital\u2019s agreement with insurers. The state has no authority over federal Medicare rules.\u00a0<\/p>\n
\u201cWhat cannot happen is delay,\u201d Foster wrote in a subsequent letter. \u201cWe already know that rural Vermonters are being charged prices that are neither defensible nor sustainable. It is unacceptable for this to persist into another fiscal year.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Owen Foster, chair of the Green Mountain Care Board, on Nov. 30, 2023. File photo by Glenn Russell\/VTDigger…\n","protected":false},"author":2,"featured_media":516324,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[77107,97,252,253,1342,132338,18960,8742],"class_list":["post-516323","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-green-mountain-care-board","tag-health","tag-health-care","tag-healthcare","tag-medicare","tag-owen-foster","tag-rural-health-care","tag-vermont-association-of-hospitals-and-health-systems"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/516323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=516323"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/516323\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/516324"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=516323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=516323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=516323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"A](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/03\/owen-foster-3-20231130-1200x799.jpg\")
Owen Foster, chair of the Green Mountain Care Board, on Nov. 30, 2023. File photo by Glenn Russell\/VTDigger<\/p>\n![\"Vermont](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/03\/Dartmouth-Health-telehealth-1-1200x900.jpg\")
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