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August 22, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Lamont, Connecticut hospitals reach tentative agreement on hospital tax lawsuit

A tentative agreement has been reached to resolve the long-simmering fight between the state and the Connecticut Hospital Association over the controversial hospital tax.

Gov. Ned Lamont and CHA executives briefed Democratic and Republican legislative leaders on the tentative agreement yesterday, and CHA said it planned to bring the agreement to its members soon. Pending approval by CHA and its member hospitals, as well as by state Attorney General William Tong, the tentative agreement will be submitted to the legislature for its review and approval. The agreement settles all outstanding claims and brings to an end a lawsuit filed against the state by CHA in 2015.

At issue is a provider tax, which CHA maintains has cost its member hospitals billions since it went into effect in 2011. The complaint filed by 20 hospitals in New Britain Superior Court alleges that, beginning in 2013, “the state’s payments to hospitals from Hospitals Tax revenues have decreased, federal matching funds have decreased and the state has utilized the Hospitals Tax to balance the budget.”

Hospitals were further incensed after Lamont took office, when he decided against reducing the hospital tax as proposed by the bipartisan budget in favor of keeping it at a rate that generates $900 million for the state annually. With details about the tentative agreement not available, it is uncertain what the effect will be on the budget.

“The beginning of my administration marked a reset of the relationship between the state of Connecticut and its hospitals,” Lamont said. “I was clear that this ongoing litigation benefited neither party, and certainly not the taxpayers of our state. Both sides came to the table and negotiated a good faith settlement that will provide predictability and stability for both the state and the hospitals, and reduces the losses the state would have incurred in the absence of this agreement.

“This is a path forward that provides fiscal stability for the hospital industry and marks a new chapter in our state’s relationships with the hospitals,” he said.

“We are grateful for the leadership and support of Governor Lamont, his administration, and the legislative leaders and legislators of both parties,” CHA CEO Jennifer Jackson said. “This agreement represents a path forward for hospitals and the state that recognizes the important role hospitals play in providing patients with quality health care and in strengthening our state’s economy.”