Courtesy of CT-N
Griffin Hospital CEO Patrick Charmel (Courtesy of CT-N)

The Connecticut Hospital Association says it doesn’t believe the governor’s proposal to change how hospitals are funded will result in more money for hospitals, even though Gov. Dannel P. Malloy’s administration has included more money for hospitals in its budget.

It’s an issue of trust.

Griffin Hospital CEO Patrick Charmel told the Appropriations Committee last week that the provider tax was supposed to increase the amount of money hospitals received by about $50 million. The hospitals were also supposed to receive all of the tax they were charged back. However, the tax is now costing the hospitals about $550 million a year.

As part of Malloy’s budget, he proposed allowing municipalities to levy a property tax on hospitals. If all of the municipalities were to implement the tax then it would raise about $212 million in property tax revenue. The state would then provide $250.3 million in supplemental Medicaid payments to hospitals to help offset the potential tax loss.

“Once that property tax exemption is taken away, it will never come back,” Charmel said.

He said it would be “foolhardy to double down with the approach the state has used with the provider tax” and think that “the federal government is going to continue to provide that matching fund.”

The Connecticut Hospital Association is still battling the calculation of the provider tax in Superior Court and with the Centers for Medicare and Medicaid Services.

He said based on everything that’s being talked about in Washington, it doesn’t look like that’s realistic.

At the moment, the Republican majority in Congress seems poised to allow states like Connecticut that expanded Medicaid to keep the extra federal funds “for a limited period of time,” but they would go back to the regular federal matching rate at a date certain, according to the sparse outline of the plan released last week.

Charmel said Connecticut is using the same proposal as it did for the provider tax, and “that one didn’t work out so well.”

Should we conclude “it’s going to work out this time?” Charmel asked. “We’ve seen this movie before it didn’t end well.”

The Malloy administration is hoping the hospitals give it a second chance.

“Let’s be clear: in a budget that includes $1.3 billion in spending cuts, the governor’s plan would increase total funding to the hospital industry by $28 million,” Chris McClure, a spokesman for Malloy, said.

The Connecticut Hospital Association still doesn’t trust the administration and has launched an ad campaign against the proposal. The ad calculates how much the current provider tax costs patients from a wide variety of professions.

The ad is running on network and cable TV across the state. The association declined to say how much it plans to spend on the campaign.

“After more than $2 billion taxed and cut from hospitals in the past five years, we have no choice but to once again fight back against these dangerous and unprecedented attacks on patients, hospitals, and our healthcare system,” Michele Sharp, vice president of communications, said.

The Malloy administration maintains that it’s helping the hospitals.

“For one of the few sectors that does well in the budget to cry foul and distort the facts is unfortunate, especially when the proposal would also inject more dollars into local municipalities,” McClure said. “For an industry that repeatedly claims to be in dire financial circumstances, it’s remarkable that they can find millions of dollars every year for paid advertising.”