After major budget shortfall projection, UVM Health Network suspends adolescent mental health unit project

Just after projecting a massive budget deficit for two of its hospitals, the largest health network in Vermont has paused plans for an inpatient psychiatric unit for children and adolescents in Burlington.

The Vermont Department of Mental Health in February began looking for candidates to open as many as 10 psychiatric beds for children and adolescents outside of the Brattleboro Retreat, the only hospital that offers such services.

Only the University of Vermont Medical Center responded, but did not commit, to the state’s request, according to Alison Krompf, the department’s deputy commissioner. The health center proposed setting up a psychiatric unit at its pediatric hospital in Burlington.

But any considerations of the project have been placed on hold after the UVM Health Network, parent of the Burlington hospital, didn’t get the hefty mid-year raise in charges it wanted from state regulators, Krompf said on Monday.

Health Network spokesperson Annie Mackin said the network had not been officially chosen for the project, but said the network has temporarily paused all its building renovations, improvements and construction until further review.

Krompf on Monday afternoon said the state is “working on a plan B” if the University of Vermont Medical Center backs out of the pediatric psychiatric unit. That would mean looking for other partners for the project.

The planned adolescent unit is the University of Vermont Health Network’s first potential cut to become public after the Green Mountain Care Board denied the network a hefty mid-year price increase.

It may not be the last.

University of Vermont Health Network executives previously said that two of its hospitals in Burlington and Berlin are slated to finish the current fiscal year with a $44 million shortfall. Earlier this month, state regulators allowed the network to up its service charges by more than $14 million this year, but the hospital network said it wasn’t enough to cover the deficit.

The network is seeking to bridge the multimillion-dollar gap by “temporarily restricting” spending on building and renovation projects until further review, Mackin said on Monday.

The review is ongoing and is still in its early stages, she said.

The health network has a series of projects on its priority list, including the replacement of the Fanny Allen outpatient surgical unit in Colchester, renovations to the medical center’s outpatient pharmacy in Williston and the construction of an adult inpatient psychiatric unit at Central Vermont Medical Center in Berlin.

In the works since 2018, construction of the 25-bed unit was put on hold in April 2020 because of the Covid-19 pandemic.

UVM Health Network leaders restarted the planning last year with the goal of opening the psychiatric unit sometime in 2025. The exact cost for the project remains in the works, but at one time, the network pitched a $150 million price tag.

As with the adolescent unit, the adult inpatient psychiatric unit is an urgent priority for the state. The pandemic pushed Vermont’s mental health system to the brink, and existing facilities, including the Brattleboro Retreat and the Vermont Psychiatric Care Hospital in Berlin, have struggled to accommodate the number of patients needing hospitalization. As a result, many adults in crisis have been waiting for mental health beds at emergency departments for hours and even days.

Mental health units, however, tend to make less money than other types of specialty care.

At the network’s budget adjustment hearings earlier this month, regulators said they worried about delays to the Central Vermont Medical Center project. Al Gobeille, a former regulator who presented on behalf of the network at the hearing, offered no assurances.

Mackin on Monday confirmed the adult unit at Central Vermont Medical Center is one of the many projects under evaluation.

“We’re reviewing all building and renovation projects,” she said.

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