Governor Lamont Announces Historic Partnership Between State and Hospitals

Press Release

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.

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