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Rep. Sredzinski Votes in Favor of Settlement Between State and Hospitals

Posted on December 19, 2019 by hbrooks


HARTFORD – State Rep. JP Sredzinski (R-112) on Wednesday voted in favor of an agreement reached between Connecticut hospitals and the state that settles a nearly 5 year old lawsuit that could have exposed the state to a roughly $4 billion liability.

Rep. Sredzinski expressed his support for the agreement Thursday morning:

“As I watched this process unfold over the last few years, it became clear to me that this agreement is the best way to rectify missteps taken by 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 as a government owe them fairness and transparency.”

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 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.

The legislature unanimously approved the agreement in a special session Wednesday.

Added Rep. Sredzinski: “This is a lesson learned for our state. We can’t continue to kick the can down the road to avoid our budgetary problems. As I’ve said all along, fiscal responsibility, not tax increases and more spending, is the only way to dig the state out of the mess that it’s in.”