Posted on December 17, 2019
HARTFORD – State Rep. Mitch Bolinsky (R-106) last week expressed his support for an agreement reached between Connecticut hospitals and the state that settles a nearly 5 year old lawsuit that could expose the state to a roughly $4 billion liability.
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.
At a public hearing on Friday, Rep. Bolinsky, who sits on the legislature’s Appropriations Committee, asked budget secretary Melissa McCaw about the state’s long-term ability to pay for the agreement given projected budget deficits over the next biennium.
“This agreement settles years of disputed and held back Medicaid reimbursements,” said Rep. Bolinsky. “It’s a forward-paying look back, though, into…errors of the past. Have we, in light of this agreement, also taken a look forward, not just in the impact of the settlement itself, but how it’s going to dovetail with future reimbursements and the state’s ability to manage that?”
Ms. McCaw, who heads the state’s Office of Policy and Management, responded that, while the settlement does place fiscal liability on the state, that amount is far outweighed by the potential debt service it could have incurred had the lawsuit gone unsettled.
After the public hearing, Rep. Bolinsky voiced his support for the agreement.
“This lawsuit was a mess inherited from a previous administration and legislature, and in light of the damage the state could have confronted, I think we avoided a real fiscal catastrophe with this agreement. We are now on a better footing with the hospital industry, which provides a vital service to our communities and represents one of the fastest-growing job sectors in the state.”
The 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.
Governor Ned Lamont announced earlier this month that the state had reached an agreement with the industry, which recently approved the settlement.
The legislature must now take final action and is expected to do so during a special session on Wednesday, December 18th.
Rep. Bolinsky added: “I urge my colleagues to join me in supporting this agreement so that we can move forward as a state and continue increasing the quality of care provided by our hospitals.”
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