Connecticut Hospitals, Governor Reach Legal Settlement Deal

December 06, 2019 - 9:02 am

HARTFORD, Conn. (AP) — Gov. Ned Lamont and the Connecticut Hospital Association announced a long-awaited settlement agreement Thursday that will lead to the withdrawal of legal claims that potentially exposed Connecticut to as much as $4 billion in liability.

The Democratic governor said the seven-year deal, which still needs approval by the General Assembly, marks a new chapter in the state's relationship with its hospitals.

“This historic agreement will reduce our potential exposure to billions of dollars in liability and removes that uncertainty for years to come,” said Lamont, who expressed hope both sides can continue to cooperate on ways to improve the quality of health care and reduce prices.

The hospitals have been at odds with the state for years over a so-called “provider tax” that was first imposed in 2012 as a complicated way of securing more federal Medicaid reimbursement funds for both the state and the hospitals. But ultimately, the hospitals ended up paying more in taxes, prompting the legal action.

Jennifer Jackson, CEO of the hospital association, called Thursday's agreement “a win for patients, hospitals and the state.” The plan increases Medicaid hospital rates by about 2% per year while stabilizing the amount of taxes the hospitals pay.