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Press Releases

Governor Ned Lamont

12/18/2019

Governor Lamont Applauds Legislative Approval of Agreement His Administration Reached With State’s Hospitals

(HARTFORD, CT) – Governor Ned Lamont is applauding both chambers of the Connecticut General Assembly for voting today to approve an historic agreement his administration reached with the state’s hospitals that will result in the withdrawal of all pending legal claims that various hospitals filed against the state. The governor said that he intends to sign the legislation shortly.

The agreement is the result of a months-long effort between the Lamont administration and the Connecticut Hospital Association (CHA) to bring conclusion to the various claims against the state challenging the hospital user fee. The governor explained that it represents a new chapter in the relationship between the State of Connecticut and its hospitals and he looks forward to maintaining this connection in the years to come.

“Today marks the start of a desperately needed reset between the state and our hospitals, and I am thankful that we were able to come together and negotiate a settlement in good faith that provides stability for both sides while reducing the losses the state would have incurred in the absence of this agreement,” Governor Lamont said. “Prolonging litigation in court would benefit nobody, and certainly not the residents of our state. This agreement eliminates the state’s potential exposure to billions of dollars in liability and removes fiscal uncertainty for years to come. Going forward, it is my hope that this partnership will put us on a new path in which we can work with our hospitals and partner in a way that benefits the quality of care for our state’s residents while simultaneously addressing the cost of that care. I want to thank the Connecticut Hospital Association for working with my administration on this agreement, Attorney General William Tong for his leadership, and the overwhelming number of legislators in both chambers of the General Assembly for understanding the importance of what we were able to achieve. In particular, I want to express my gratitude to OPM Secretary Melissa McCaw, my General Counsel Bob Clark, and the rest of our team for their efforts on getting us to this point.”

“This is a fair and reasonable settlement that limits and manages the state’s long-term risk and provides both the state and hospitals with predictability when it comes to user fee and Medicaid rates over the next seven years,” Attorney General William Tong said. “Together with the Office of Governor Ned Lamont and the Connecticut Hospital Association, we were able to create a path forward for the state and our hospitals. The Office of the Attorney General, led by Assistant Attorney General and Department Head Henry Salton, was at the table for every step of the negotiations. I want to thank our staff for their hard work in negotiating this comprehensive settlement.”

“Today marks the start of a new partnership with the state that will strengthen healthcare in Connecticut for the benefit of everyone who lives here,” Jennifer Jackson, CEO of CHA, said. “We want to thank Governor Lamont, his administration, and Attorney General William Tong for their leadership and dedication to finding a resolution to this issue, and paving the way for a new collaborative relationship. We also want to thank bipartisan legislative leaders and legislators for their support of hospitals. By voting in favor of the settlement agreement, they have demonstrated compassion for all Connecticut residents served by our hospitals, as well as a commitment to building a healthier Connecticut.”

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.

The package of bills implementing the agreement are:

  • Senate Bill 1221, An Act Concerning Implementation of the Approved Settlement Agreement in the Connecticut Hospital Association Et Al. v. Connecticut Department of Social Services Et Al. and Making Appropriations Therefor; and
  • Senate Bill 1222, An Act Approving the Settlement Agreement Between the State of Connecticut Et Al., and the Connecticut Hospital Association Et Al.

Both bills were approved in the House of Representatives and the Senate by unanimous votes.

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