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Gov. Malloy: State Receives Partial Federal Approval of Hospital Proposal

(HARTFORD, CT) – Governor Dannel P. Malloy today announced that the U.S. Centers for Medicare and Medicaid Services (CMS) has approved part of Connecticut’s hospital plan. Specifically, CMS approved the administration’s request for a waiver of the federal broad-based requirements related to the hospital user fees, which represents one portion of the overall hospital legislation adopted late last year that made revisions to the biennial budget (Public Act 17-4, June Special Session).

“We are thankful for the approval by CMS, as the revenue generated by the user fees is essential for the state budget, allowing the state to make significant investments in hospitals, above the fees they already receive for treating Connecticut residents on HUSKY,” Governor Malloy said. “The agreement with hospitals still has some components waiting federal sign-off, but this approval is a key step in the overall arrangement adopted in the budget. I appreciate the hard work of staff at the Office of Policy and Management, the Department of Social Services, and the Department of Revenue Services, which led to this agreement and approval, and was so critical to reaching any budget agreement in 2017. We should remember that failure to secure federal approval of this agreement would have added hundreds of millions of dollars in deficit this year, next year, and into the future.”

Connecticut’s hospital user fee was enacted in 2011 as part of the state’s FY12-13 biennial budget that also increased state payments to hospitals. On September 29, 2017, the Department of Social Services submitted a waiver request to CMS for inpatient and outpatient hospital user fees. The state updated the request on November 22, 2017, shortly after the FY18-19 biennial budget was adopted. The waiver was required as the user fees levied in Public Act 17-4, June Special Session, exceeded six percent, which is the general threshold set by CMS for user fees.

The state has not yet received approval from CMS on the companion pieces to the user fees (i.e., Medicaid State Plan Amendments regarding hospital supplemental payments and rate increases), however the administration is optimistic that the state will soon receive them, allowing the negotiated proposal to be fully implemented. Assuming that approval is received in the coming weeks, the administration expects the balance of the FY18 supplemental payments will be made to hospitals in early July.

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