By Kathy Kennedy
State Rep., R-119
Kathy Kennedy
In December, the General Assembly held a Special Session, to vote on an agreement reached between Connecticut hospitals and the state that settles a nearly five-year-old lawsuit that could have exposed the state to a roughly $4 billion liability.
Milford Hospital was one of the affected hospitals in the lawsuit, and before the fiscal repercussions permanently damaged the state or the hospital it became clear to me that this agreement was the best way to rectify missteps taken by former Gov. Dannel Malloy and the previous legislatures. Ideally, we wouldn’t be in this situation to begin with, but given that the hospital industry provides an essential service to our community and is one of the fastest-growing job sectors in the state, we in state government owe them fairness and transparency.
The hospital lawsuit dates back to a 2011 expansion of the provider tax to include hospitals. At that point, the entirety of the annual $350 million paid by hospitals – plus $50 million more – was returned to the industry.
But as the state struggled to recover from the recession and budget deficits grew, the user fee increased while payments to hospitals decreased, prompting the hospital industry to sue the state in 2015 for abusing its fiduciary responsibility and violating federal guidelines.
Gov. Ned Lamont announced earlier this month that the state had struck a settlement with the Connecticut Hospital Association, the state’s leading hospital industry group and the plaintiff in the suit.
Under the agreement, the state will make a one-time payment of $79.3 million in unappropriated monies and unpaid Medicaid payments to hospitals, as well as increase Medicaid reimbursement rates and decrease taxes on hospitals between now and 2026. Altogether, the agreement costs the state $180.7 million over the next two fiscal years.
Both the House and Senate unanimously approved the agreement in a special session on Dec. 18.
The hospital settlement is an important lesson for the state, and we must learn from it going forward. The state must keep its commitments and not continue to kick the can down the road to avoid our budgetary problems.
There is a lot of mistrust of both state and federal government right now, and my hope is this hospital settlement will set us on a new path of fiscal responsibility in 2020 – not just more tax increases, tolls and more state spending as the only way to dig the state out of the fiscal mess that we find ourselves in each and every year.
If you have any questions, concerns or ideas please feel free to contact me by phone at 1-800-842-1423 or by email at Kathy.Kennedy@housegop.ct.gov.