The Vermont Statutes Online

Title 33: Human Services

Chapter 009: Division of Rate Setting

• § 900. Definitions

  As used in this chapter:

  (1) “Agency” means the Agency of Human Services.

  (2) “Director” means the Director of Rate Setting.

  (3) “Division” means the Division of Rate Setting.

  (4) “Provider” means any entity, excluding a hospital or a physician, providing services to State-assisted persons pursuant to a contract or other form of agreement with the State.

  (5) “Secretary” means the Secretary of Human Services.

  (6) “State-assisted” means a person eligible for or receiving benefits administered by or in coordination with the Agency.

  (7) “Community-based services” means the following services provided pursuant to Vermont’s Global Commitment to Health Section 1115 Medicaid demonstration or a successor program:

  (A) long-term services and supports provided to older adults and adults with disabilities in a home or community setting other than a nursing home, including enhanced residential care services;

  (B) home health and hospice services, adult day rehabilitation services, and assistive community care services; and

  (C) short- and long-term services and supports provided to individuals with mental conditions, individuals with substance use disorders, individuals with developmental or intellectual disabilities, and individuals with a brain injury, in a home or community setting that is not a clinical residential setting or a private nonmedical residential setting. (Added 1995, No. 160 (Adj. Sess.), § 9; amended 1997, No. 61, § 268; 2007, No. 172 (Adj. Sess.), § 9; 2013, No. 131 (Adj. Sess.), § 18, eff. May 20, 2014; 2025, No. 14, § 1, eff. May 13, 2025.)

• § 901. Reimbursement objectives

  Reimbursement rates for nursing homes shall reflect the following objectives:

  (1) maintain an equitable and fair balance between cost containment and quality care in nursing homes;

  (2) encourage nursing homes to admit persons without regard to their source of payment;

  (3) provide an incentive to nursing homes to admit and provide care to persons in need of comparatively greater care;

  (4) be manageable administratively for both the State and nursing homes; and

  (5) prevent unnecessary cost increases. (Added 1989, No. 267 (Adj. Sess.), § 1, eff. July 1, 1991; amended 1995, No. 160 (Adj. Sess.), § 10.)

• § 902. Division of Rate Setting, Director

  (a) There is hereby created in the Agency of Human Services a Division of Rate Setting, which shall provide the Agency of Human Services with special financial, accounting, auditing, and related legal expertise for the purpose of rate setting and such other duties as the Secretary shall direct.

  (b) The Division shall be headed by a director who shall report to the Secretary of the Agency or the Secretary’s designee.

  (c) [Repealed.] (Added 1977, No. 204 (Adj. Sess.), § 1; amended 1995, No. 160 (Adj. Sess.), § 11; 1997, No. 61, §§ 269, 271(b); 2005, No. 174 (Adj. Sess.), § 80; 2007, No. 172 (Adj. Sess.), § 9a.)

• § 903. Division, staff

  The Director, with the approval of the Secretary, may employ such professional and clerical personnel as are necessary for the implementation of this chapter. The Director, with the approval of the Secretary, may also enter into contracts with attorneys, private auditors, consultants, and registered or certified public accountants for additional services including auditing providers as may be necessary for the proper administration of this chapter. (Added 1977, No. 204 (Adj. Sess.), § 1; amended 1997, No. 61, § 270.)

• § 904. Rate setting

  (a) The Director shall establish by rule procedures for determining payment rates for care of State-assisted persons to nursing homes and to such other providers as the Secretary shall direct. The Secretary shall have the authority to establish rates that the Secretary deems sufficient to ensure that the quality standards prescribed by section 7117 of this title are maintained, subject to the provisions of section 906 of this title. Beginning in State fiscal year 2003, the Medicaid budget for care of State-assisted persons in nursing homes shall employ an annual inflation factor that is reasonable and that adequately reflects economic conditions, in accordance with the provisions of Section 5.8 of the rules adopted by the Division of Rate Setting (Methods, Standards, and Principles for Establishing Medicaid Payment Rates for Long-Term Care Facilities).

  (b) No payment shall be made to any nursing home, on account of any State-assisted person, unless the nursing home is certified to participate in the State/federal medical assistance program and has in effect a provider agreement. (Added 1977, No. 204 (Adj. Sess.), § 1; amended 1981, No. 224 (Adj. Sess.), § 1, eff. May 4, 1982; 1989, No. 267 (Adj. Sess.), § 2, eff. July 1, 1991; 1995, No. 160 (Adj. Sess.), § 12; 1997, No. 61, § 270a; 2001, No. 63, § 99; 2013, No. 131 (Adj. Sess.), § 19, eff. May 20, 2014; 2021, No. 20, § 280.)

• § 905. Basis for determination of nursing home rates

  (a)(1) Consistent with the objectives established under section 901 of this title, the Division shall develop a payment system based on cost categories established for each nursing home. The system shall include no fewer than the following three cost categories:

  (A) direct care costs, which refer, at a minimum, to nursing salaries and nursing assistant wages, fringe benefits, and payroll taxes associated therewith;

  (B) indirect costs, which refer to all operating costs not established under subdivision (1) of this subdivision; and

  (C) property and related costs.

  (2) At the discretion of the Director, the cost categories referred to in subdivision (1) of this subsection may be subdivided. Facilities may also be divided into groups, based on considerations such as size or other appropriate determinants within each cost category or subdivision thereof.

  (b)(1) The basis for reimbursement within the direct care cost category shall be a resident classification system, which shall group residents into classes according to similarity of their assessed condition and required services. Each resident shall be assigned to one of no fewer than three classes, based on the nature and extent of nursing care needed. The Director may subdivide these classes.

  (2) The direct care component of a nursing home’s payment rate shall be reflective of the necessary professional and paraprofessional nursing staff time and costs required to address the care needs of the residents of the facility.

  (3) Assessments of residents for classification purposes shall be made on the basis of standardized information made available by each facility to the Division. Each nursing home shall assess all of its residents not less often than annually, in accordance with standards and a schedule developed by the Department of Disabilities, Aging, and Independent Living. The accuracy of the information shall be verified and final classifications made by the Department of Disabilities, Aging, and Independent Living.

  (c) Rates shall be determined prospectively for each facility on the basis of cost reports submitted to the Director. The Director shall certify the rate for each facility annually by selecting a base year, setting a rate for the base year, and adjusting it annually by inflation factors that are reasonable and that adequately reflect economic conditions. The inflation factors may differ for direct care and other costs. The base years may be changed at different intervals for direct care and other costs. For direct care costs, such change shall occur no less frequently than once every three years, and, for other costs, no less frequently than once every four years, unless the Secretary of Human Services certifies to the General Assembly that it is not necessary to do so. (Added 1989, No. 267 (Adj. Sess.), § 3; amended 1995, No. 160 (Adj. Sess.), § 13; 2005, No. 174 (Adj. Sess.), § 81; 2013, No. 131 (Adj. Sess.), § 20, eff. May 20, 2014.)

• § 906. Facility payment

  (a) The payment rate for each facility shall be the sum of its per diem allowance for each cost category, subject to such limitations as the Secretary shall prescribe by rule pursuant to section 907 of this title.

  (b) The payment for each facility’s direct care costs shall be a function of the number of resident days of each resident class and shall be adjusted in a timely manner to reflect changes in the assessed needs of residents. (Added 1989, No. 267 (Adj. Sess.), § 4, eff. July 1, 1991; amended 1997, No. 61, § 270b.)

• § 907. Payment limits

  (a) The Director shall establish payment limits consistent with the provisions of section 901 of this title to encourage the economic and efficient operation of nursing homes and other providers.

  (b) The payment limits shall not act as a disincentive for nursing homes to address the assessed needs or improve the conditions of residents. (Added 1989, No. 267 (Adj. Sess.), § 5, eff. July 1, 1991; amended 1995, No. 160 (Adj. Sess.), § 14; 1997, No. 61, § 270c.)

• § 908. Powers and duties

  (a) Each nursing home or other provider shall file with the Division, on request, such data, statistics, schedules, or information as the Division may require to enable it to carry out its function. Information received from a nursing home under this section shall be available to the public, except that the specific salary and wage rates of employees, other than the salary of an administrator, shall not be disclosed unless disclosure is required under 1 V.S.A. § 317(b).

  (b) The Division shall have the power to examine books and accounts of any nursing home or other provider caring for State-assisted persons, to subpoena witnesses and documents, to administer oaths to witnesses, and to examine them on all matters of which the Division has jurisdiction.

  (c) The Secretary shall adopt all rules necessary for the implementation of this chapter. (Added 1977, No. 204 (Adj. Sess.), § 1; amended 1995, No. 160 (Adj. Sess.), § 15; 1997, No. 131 (Adj. Sess.), § 2; 2013, No. 131 (Adj. Sess.), § 21, eff. May 20, 2014; 2015, No. 29, § 9; 2021, No. 20, § 281.)

• § 909. Appeal

  (a) A nursing home that feels aggrieved by a final order of the Division may do any of the following:

  (1) Have the right of direct appeal to the Vermont Supreme Court pursuant to the Vermont Rules of Civil Procedure and the Vermont Rules of Appellate Procedure under the same terms and conditions as if the appeal were taken to the Supreme Court from the Superior Court pursuant to the laws of Vermont.

  (2) Have the right to appeal de novo to the Superior Court of the county where the nursing home facility is situated.

  (3) Request a review by the Secretary of Human Services. The Secretary of Human Services shall designate an independent appeals officer who shall be a registered or certified public accountant. The appeals officer shall conduct appeal hearings and make findings of fact and recommendations to the Secretary. The appeals officer shall have the power to subpoena witnesses and documents and administer oaths. A party aggrieved by a determination of the Secretary may obtain judicial review under the provisions of subdivision (1) or (2) of this subsection.

  (b) An appeal from any determination made under this chapter shall not be made under 3 V.S.A. § 3091. (Added 1977, No. 204 (Adj. Sess.), § 1; amended 1995, No. 160 (Adj. Sess.), § 16; 2021, No. 20, § 282.)

• § 910. Availability of payment for nursing home services

  The Secretary may, with 90 days’ notice to the nursing home, reduce the number of days of nursing home service or the number of nursing home beds for which payments are available under the State/federal medical assistance program in order to meet State budgetary goals, provided that the standards of care required by section 7117 of this title and by rule are maintained. (Added 1977, No. 204 (Adj. Sess.), § 1; amended 1995, No. 160 (Adj. Sess.), § 17; 2013, No. 131 (Adj. Sess.), § 22, eff. May 20, 2014; 2021, No. 20, § 283.)

• § 911. Payment rates for providers of community-based services

  (a) The Secretary of Human Services shall calculate payment rates for providers of community-based services that are reasonable and adequate to achieve the required outcomes for the populations they serve. When calculating these payment rates, the Secretary:

  (1) for informational purposes, shall ensure that the calculations take into account factors that include:

  (A) the reasonable cost of any governmental mandate that has been enacted, adopted, or imposed by any State or federal authority; and

  (B) a cost adjustment factor to reflect changes in reasonable costs of goods to and services of providers of community-based services, including those attributed to inflation and labor market dynamics; and

  (2) may consider geographic differences in wages, benefits, housing, and real estate costs in each region of the State.

  (b) The Secretary shall establish a methodology for calculating payment rates for providers of community-based services in accordance with this section. The methodology shall:

  (1) provide a schedule for conducting studies of the Medicaid reimbursement rates paid to the providers of community-based services, including the rates’ adequacy and their underlying methodologies, that includes studying the rates paid to providers for each type of service at least once every five years;

  (2) set forth a predictable timeline for redetermination of base rates;

  (3) include a process for calculating an annual inflationary rate adjustment;

  (4) to the extent permitted by the Centers for Medicare and Medicaid Services, take into account the financial needs of providers whose reimbursements may be negatively affected by client absences; and

  (5) use Vermont labor market rates and Vermont costs of operation.

  (c) The Secretary shall establish a process by which a provider of community-based services whose financial condition places it at imminent risk of closure may request provider stabilization from the Agency.

  (d) The Secretary shall recalculate the payment rates for providers of community-based services in accordance with this section at least annually and shall report those rates, and the amounts necessary to fund them, to the House Committees on Appropriations, on Human Services, and on Health Care and the Senate Committees on Appropriations and on Health and Welfare annually as part of the Agency’s budget presentation. (Added 2025, No. 14, § 2, eff. May 13, 2025.)