University of Vermont Health Network President and CEO Sunny Eappen, and the network’s board of trustees announced his resignation Thursday, less than one week after the state health care regulator slammed the network for its high executive compensation and cost of care.

The president of UVM Medical Center, Stephen Leffler, will serve as the interim president and CEO, according to a press release.

An obstetric anesthesiologist, Eappen began at the UVM Health Network in November 2022, after working as a hospital administrator for 14 years at Brigham & Women’s Hospital in Boston. He replaced John Brumsted, who was the network’s president for more than 10 years.

The UVM Health Network includes three Vermont hospitals — including Middlebury’s Porter Medical Center — and three in upstate New York. In recent weeks, as the Green Mountain Care Board set annual hospital budgets for the coming fiscal year, the regulator took particular issue with the network’s reallocations of finances from its flagship University of Vermont Medical Center to its less profitable New York affiliates.  Porter Hospital’s proposed budget was OK’d after the regulator pared back some raises for health care administrators.

Under Eappen’s leadership, UVM Medical Center — the network’s largest hospital — has seen costs increase dramatically, as have other hospitals across the state and the country. However, the increases at the hospital have outpaced rates of medical inflation during that period, as the care board outlined during the hospital budget setting process.

At the end of 2024, the network’s 19 top executives made a collective $3 million in bonuses. That same year, it announced the end of kidney transplant surgeries at the University of Vermont Medical Center in Burlington, the end of the inpatient psychiatric unit at Central Vermont Medical Center in Berlin and the closure of two affiliated clinics in the Mad River Valley.

“It’s been my privilege to be part of this team, to see firsthand the way the people of this organization take care of our patients, our communities and each other,” Eappen said in a press release. “But I believe – based on everything that’s happening and all of the external pressures on our rural health system – that this organization needs to move forward in a different way. I’m committed to supporting Steve as a full partner in this transition.”

On Sept. 19, the Green Mountain Care Board approved a 6.4% decrease in the rates that UVM Medical Center charges commercial insurance and cut the hospital’s net revenue from those insurers from a proposed $1.16 billion to the approved $1.07 billion, leaving the hospital no margin to add to its reserves.