HARTFORD, CT — The 20 Connecticut hospitals that sued the state in 2016 could be close to a deal with Gov. Ned Lamont that will save taxpayers money.
“We had good productive negotiations with the hospitals,” Lamont said Monday. “And we’ve got a proposal on the table.”
Lamont said they’ve been waiting to hear back from the hospitals for a few weeks now.
“If we get that done by the end of the month that would be great,” Lamont added. “It represents significant savings to Connecticut taxpayers and takes out a level of uncertainty for what the lawsuit could have cost the state.”
The lawsuit, filed in New Britain Superior Court, says that starting 2013 Connecticut abandoned the idea of giving the hospitals back some of the money it leveraged with the hospital provider tax through federal matching grants.
“Over time, the State’s payments to hospitals from Hospitals Tax revenues have decreased, federal matching funds have decreased and the State has utilized the Hospitals Tax to balance the budget,” the original complaint states.
On Monday the Connecticut Hospital Association said in a statement, “We have been in discussions with the state, with a mutual goal of resolving this matter so the legislature could take it up by the end of this month.”
Ronald Zdrojeski, an attorney for the Connecticut Hospital Association, told Judge Arnold Aronson on Oct. 15 that the parties have “actively been engaged in discussions in a joint effort to commit their tentative agreement in writing, but those efforts, in combination with obtaining the necessary administrative and legislative approvals, will require additional months.”
Since May the Lamont administration has declined to offer any details about the financials of the deal. Every monthly budget projection excludes any impact the deal may have on the budget.
After two years of paying $900 million annually in provider taxes, hospitals were supposed to see the tax drop to $384 million. Lamont’s original budget maintained the tax at $900 million and gave them back $453 million as part of a calculation to get more federal Medicaid reimbursement. That ends up being a $43 million loss per year for the hospitals.
In addition, Lamont’s budget didn’t change the calculation for the inpatient hospital rates. That means hospitals will lose about 16.8% or about $170 million annually. The decision will save the state about $59.1 million in 2020 and $61.8 million in 2021.