Rutland (Vt.) Regional Medical Center CEO Tom Huebner told the Green Mountain Care Board Thursday the hospital will reduce reimbursement charges to insurance companies by 3.7 percent starting May 1, reports VT Digger.
The reimbursement cuts are a way for the hospital to rectify insurance overpayments it collected during fiscal year 2015.
Under Vermont law, the Green Mountain Care Board is in charge of controlling the rate of growth in healthcare costs. The board attempts to curb cost growth by limiting the amount of money hospitals can receive from patient services.
Rutland Regional was among nine Vermont hospitals that took in more insurance money for patient care than allowed last year. Altogether, the hospitals took in $49.2 million in excess payer reimbursement, according to the article.
A financial analysis from the Green Mountain Care Board found the hospitals took in excess revenue because they anticipated writing off $145.3 million in uncompensated care. Instead, the nine hospitals wrote off a combined $98.8 million in bad debt and charity care, a difference of $46.5 million.
In dropping reimbursement rates 3.5 percent, commercial health insurers associated with Rutland Regional will have an annual savings of about $5.4 million. Blue Cross Blue Shield of Vermont will get around $3.6 million of that savings.
Mr. Huebner told the board Rutland Regional will spread the reimbursement rate cuts "over different services in the hospital, not evenly," and that Rutland has targeted services where prices are "more important to people".
Last week, Burlington-based University of Vermont Health Network, said it will give $15 million of its estimated $29.1 million in excess revenues to public health initiatives and use up to $14.1 million to lower reimbursement rates during coming months.