Dive Brief:
- Connecticut Governor Dannel Malloy (D) cut hospital funding to help close a $350 million state budget gap, infuriating hospital executives.
- Malloy's argues since hospitals are making money from the ACA and hospital CEOs are paid millions, they don't need financial assistance from the state.
- The hospitals say they got a bad deal when the state passed a hospital tax in 2012 requiring them to pay the state $350 million every year. That money was to be returned to the hospitals as Medicaid payments. Since the state budget wasn't balanced, Malloy wanted to cut yet another $63 million to hospitals, but that amount was cut in half.
Dive Insight:
Patrick Charmel, CEO at Griffen Hospital, a nonprofit hospital in Derby, Connecticut told Kaiser Health News, "So, now we're talking over half a billion dollars. That's what hospitals are paying in terms of tax. And, essentially we're not getting any of that back." He added the payment cuts end up affecting care delivery. "There's nobody else to shift it to," he explained.
However, the state argues Medicaid payments to hospitals have more than doubled over the past 10 years with more people signing up via the ACA. But, Dr. John Murphy, president and CEO of Western Connecticut Health Network, told KHN hospitals lose 60 cents on every dollar of Medicaid service and more Medicaid patients "really isn't a windfall for us. In fact, it's a greater economic burden."
Although the state's budget is now balanced, the hospitals want the hospital tax ruled invalid.