Billing – Gov. Scott Signs Bill to Reduce Healthcare Paperwork, Aims to Improve Patient Care

On Monday evening, Governor Phil Scott signed H.766, a bill aimed at addressing health insurance company practices, such as “prior authorization,” and alleviating the administrative burden on healthcare practitioners.

“The objective of this bill is to enhance the health outcomes for Vermonters, which could potentially reduce overall healthcare costs by ensuring timely access to essential healthcare services,” Scott stated in a letter to lawmakers.

In his letter, Scott also directed the state’s Agency of Human Services and Department of Financial Regulation to study the legislation’s impact on healthcare costs and outcomes. This study will evaluate similar legislation in other states and explore how successful strategies can be applied to the implementation and improvement of this law.

H.766 seeks to streamline interactions between healthcare practitioners and insurance companies. By limiting practices such as prior authorization, where insurers require approval before a procedure, the bill aims to give providers more autonomy over patient care.

The bill establishes time limits for insurers to respond to prior authorization requests and eliminates this requirement for primary care, except for prescription drugs and out-of-network services. It also limits situations in which insurers can deny coverage for clinician-prescribed medications and mandates coverage—without prior authorization—of certain asthma medications, addressing complaints about the difficulty patients face in accessing these drugs.

Additionally, the legislation tightens restrictions on claims submitted by clinicians, making it harder for insurers to reject bills for services provided by doctors and nurses. The primary goals are to improve and expedite Vermonters’ access to care and reduce paperwork burdens on healthcare providers. Advocates hope the bill will help strengthen an understaffed critical industry, particularly in primary care.

“We are thrilled,” said Jessa Barnard, executive director of the Vermont Medical Society. The bill “significantly benefits patients and patient care, and we hope it accelerates access to necessary and appropriate healthcare services.”

However, insurers have warned that the legislation could further increase insurance premiums, which are already unaffordable for many Vermonters. Sara Teachout, spokesperson for Blue Cross Blue Shield of Vermont, the state’s largest private insurer, expressed gratitude to the governor for assigning state officials to study the legislation’s impact.

“We appreciate the Governor’s efforts to balance the concerns of our members by requesting an analysis of the impacts, which will be shared with Vermonters paying premiums,” Teachout stated in a text message Monday evening.

Last week, Blue Cross Blue Shield indicated that the bill could add approximately 2 percentage points to the growth of insurance premiums for individual and small group plans next year. Deborah Brundage, an administrator with MVP, predicted that premiums for these plans would increase by an additional 10 percentage points if the legislation passed.

“Despite good intentions, the timing and effects of H.766 will be devastating for Vermont families and employers, further straining their budgets,” Brundage said in a statement last week.

An MVP representative did not immediately respond to a request for comment on Monday evening.

In the Senate, the bill narrowly avoided a last-minute bid to delay its implementation due to concerns that it might increase healthcare costs. Last month, some legislators unsuccessfully attempted to postpone the bill’s provisions until the Department of Financial Regulation could analyze its impacts.

Most of the bill will take effect in January 2025. The governor’s letter did not specify when the study by the Department of Financial Regulation and Agency of Human Services will be completed, but it indicates Scott’s concern that the bill could elevate healthcare costs for Vermonters.

“Healthcare providers need to prove the insurance companies wrong by demonstrating that reducing these barriers to care saves both time and money,” Scott stated in his letter.