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Governor Ned Lamont

12/05/2019

Governor Lamont Announces Historic Partnership Between State and Hospitals

Agreement Resolves All Outstanding Legal Claims Against the State

(HARTFORD, CT) – Governor Ned Lamont, Attorney General William Tong, and the Connecticut Hospital Association (CHA) today announced completion of a historic settlement agreement that will result in a withdrawal of all pending legal claims that various hospitals filed against the state challenging the first hospital user fee, including the lawsuits filed in 2016, and all of the rate appeals brought by hospitals challenging Medicaid payments. The agreement represents a new chapter in the relationship between the State of Connecticut and its hospitals, institutions that serve a critical role in their communities.

The seven-year agreement stabilizes user fee revenues for both the state and the hospitals, and will help fund the state’s share of the Medicaid program and other state programs. This agreement also provides stability in the Medicaid payment system for hospitals and resolves potential state liability.

For both the state and the hospitals, settling these claims avoids a sizable financial risk, uncertainty, and expense of ongoing litigation, and provides predictability and stability over the term of the agreement. By securing this settlement:

  • The State of Connecticut is able to abrogate legal claims that potentially exposed the state to up to $4 billion in liability.
  • Connecticut’s hospitals will have a more stable and predictable user fee schedule, with the agreement providing for a reduction in the user fee from $900 million to $820 million by FY 2026.
  • The agreement increases Medicaid hospital rates by about two percent per year, sets supplemental payments, and provides one-time Medicaid payments this fiscal year.
  • Further, the parties retain the ability to negotiate changes to the agreement in the event of changes in federal requirements that would impact the terms of the settlement.

**Download: Executive summary and financial breakdown of agreement

“This agreement represents a new chapter in the state’s relationship with its hospitals,” Governor Ned Lamont said. “Throughout this process, my administration and the Connecticut Hospital Association have been respectful and honest, which has proven instrumental in reaching this settlement. This historic agreement will reduce our state’s potential exposure to billions of dollars in liability and removes that uncertainty for years to come. It is my hope that we can continue down this path to work with our hospitals and providers to increase the quality of care while simultaneously addressing the cost of that care.”

“This is a fair and reasonable settlement that ends over four years of legal and financial risk and uncertainty and provides necessary predictability for both the state and Connecticut’s hospitals,” Attorney General William Tong said. “We are pleased that the hospitals and the Governor have come to an agreement that serves everyone’s interests in this very complex dispute.”

“We want to thank Governor Lamont, his administration, and the legislative leaders and legislators of both parties for their years of support,” Jennifer Jackson, CEO of CHA, said. “This agreement is a win for patients, hospitals, and the state. Governor Lamont has paved the way for a new, collaborative relationship in which we are working together to provide patients with quality healthcare and strengthen Connecticut’s economy.”

Because the settlement exceeds $2.5 million in value, the matter now must go before the Connecticut General Assembly for approval and adoption of implementing legislation.

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