HARTFORD, Conn. (AP) – Gov. Ned Lamont and the Connecticut Hospital Association on Thursday announced a long-awaited settlement agreement that will result in the removal of rights that have potentially suspended up to $4 billion in liability in Connecticut. Under the terms of the deal, the state of Connecticut is in a position to prohibit claims that have potentially suspended it from $4 billion in liability. At the same time, hospitals will have a more stable and predictable timetable for user fees, with the agreement providing for a reduction in the user fee from $900 million to $820 million by fiscal year 2026. The Republican speaker of the House of Representatives, Themis Klarides, expressed support for the agreement. The federal government has granted all necessary approvals for a $1.8 billion agreement between the Lamont administration and the Connecticut Hospital Association, which would settle years of litigation over the government`s hospital revenue tax. The agreement also increases Medicaid hospitalization rates by about 2% per year, sets additional payments and provides for one-time Medicaid payments this fiscal year. Finally, the parties retain the opportunity to negotiate amendments to the agreement if changes are made to federal requirements that would affect the terms of the transaction. “With the agreement of this court, the agreement can be fully implemented, which provides the state and its hospitals with some degree of fiscal stability for years to come,” they wrote. As Governor Ned Lamont, Attorney General William Tong and CHA have described in detail, the comparison will lead to a withdrawal of all pending claims filed against the state by various hospitals challenging the first hospital tax or “hospital tax,” including complaints filed in 2016 and all lawsuits brought by hospitals challenging Medicaid payments. “We are pleased to have obtained all federal approvals and look forward to continuing our improved relationship with public hospitals,” Lamont spokesman Max Reiss said Tuesday.
Sen. Doug McCrory, D-Hartford, said hospitals have a greater responsibility to the communities they serve because they are tax-exempt. The comparison involves certain measures of protection for the state when financial conditions deteriorate. “Today is the beginning of an urgent setback between the state and our hospitals, and I am grateful that we have been able to come together and negotiate a good faith settlement that brings stability to both sides while reducing the losses that the state would have suffered without this agreement,” Lamont said after the agreement was adopted. The Connecticut Hospital Association and most of the state`s acute hospitals sued the state in 2016 after it stopped returning money it had originally promised hospitals. In May, an interim agreement was reached between cha and the State; in October, both sides suggested that a resolution was approaching. Senator John Fonfara, D-Hartford, said the comparison “does not prohibit the legislature from considering or levying new taxes as long as the hospital tax is proportional.” Connecticut hospitals have reached an agreement with the state, ending a four-year dispute over the 2011 supplier tax introduced for hospitals, according to the CT Mirror. The hospital association did not immediately respond to a request for advice. The lawyers did not directly mention the pandemic in their court application this week, but alluded to the security measures that allow the parties to try to renegotiate the terms. Under the agreement, if an amended agreement is not possible, hospitals could reopen their disputes against the state.
While lawmakers welcomed the increase in Medicaid funding for hospitals, some wondered if hospitals could not give a little more as part of the deal.