Connecticut hospitals, state to settle lawsuit on billion-dollar provider tax

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The Connecticut Hospital Association and the state government tentatively reached a settlement over a controversial provider tax that has extracted billions from hospitals, according to the Hartford Courant.

On May 28, Democratic Gov. Ned Lamont and CHA said they tentatively settled a 2015 lawsuit contesting the 2011 provider tax. Details of the settlement, which requires approval from the General Assembly, state attorney general's office and CHA's member hospitals, were not disclosed.

The hospital industry sued the state in 2015, alleging that its budgetary policies violated federal Medicaid rules. Under an original agreement with the state, Connecticut hospitals agreed to pay in $350 million each year. Those funds, plus an additional $50 million in federal Medicaid funds, where to be redistributed back to hospitals. However, state budget deficits led to the tax increasing while payments back to the industry decreased, even as federal reimbursement rates grew, according to the Hartford Courant.

In addition to the feud, the state government and hospitals resolved a dispute concerning more than $200 million in payments related to uninsured and underinsured treatment.

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