Christine Stuart photo

Gov. Dannel P. Malloy’s administration agreed to send the 2016 supplemental hospital payments when it signed the deficit mitigation package last week, but it never agreed to be nice about it.

Office of Policy and Management Secretary Ben Barnes sent a letter to Bristol Hospital on Monday accusing it of “using state government money in the form of Medicaid supplemental payments to finance construction of new facility expansions.”

Barnes is referring to Bristol Hospital’s proposal to build a downtown medical office complex.

“A new outpatient facility is not needed to ensure access or quality of care,” Barnes wrote Bristol Hospital President Kurt Bawis in a letter, which he shared with lawmakers and the media.

Bawis said Barnes’ letter made inaccurate statements about the project and included “unfounded allegations and innuendo” about the connection between state Medicaid funding and the project.

Bristol Hospital’s share of the $140 million was about $4.8 million.

“Given the state’s woefully inadequate and deficient funding of Medicaid to Bristol Hospital, the notion that the hospital is using or plans to use state of Connecticut Medicaid funds for the project is baseless and not credible,” Barwis said in statement. “We are disappointed and alarmed that Secretary Barnes has chosen to make these assertions.”

Bawis said the new facility would consolidate leases for other medical offices and labs. The new medical office would be funded through a private developer.

“All of the initial development costs are being capitalized and will be incorporated into the private developer financing structure,” Bawis wrote in response.

Barnes requested more information about the financing of the project.

“Since your hospital is largely being financed with taxpayer dollars, I would like to ensure that your earlier pleas for those dollars were based on the full fiscal reality that your organization was facing and not just part of a public relations campaign to obtain more taxpayer funded expansions of your hospital,” Barnes wrote in his letter to Bawis.

The back and forth between Barnes and Bawis stems from a long-running dispute over funding between the Malloy administration and the hospitals.

Malloy had suspended $140 million in state and federal funding to hospitals, but the funding was restored as part of an agreement with lawmakers to fix the 2016 budget deficit. However, the Malloy administration continues to argue that hospitals should be able to manage with less money based on their profit margins. Also, they argue that hospital executives are paid handsomely and maybe that’s contributing to their problems.