Connecticut hospitals will receive $1.8B under provider tax settlement

Connecticut hospitals have reached an agreement with the state, ending a four-year legal battle over the provider tax imposed on hospitals in 2011, according to The CT Mirror.

Under the agreement, which is headed to the state legislature for final action, Connecticut hospitals would receive a total of $1.8 billion through 2026. The agreement would increase state payments to Connecticut hospitals and reduce taxes on hospitals, according to the report.

"This agreement represents a new chapter in the state's relationship with its hospitals," Connecticut Gov. Ned Lamont said, according to The CT Mirror. "This historic agreement will reduce our state's potential exposure to billions of dollars in liability and removes that uncertainty for years to come. It is my hope that we can continue down this path to work with our hospitals and providers to increase the quality of care while simultaneously addressing the cost of that care."

A hospital provider fee, or provider tax, collects money from hospitals and pays them back through reimbursements. The amount hospitals get back hinges on their amount of Medicaid business.

The lawsuit, filed in 2015, alleged the state abused the hospital provider fee. Despite an increase in the federal reimbursement rate, the tax grew between 2013 and 2017 and payments back to Connecticut hospitals shrank, according to the report.

Connecticut Hospital Association CEO Jennifer Jackson said the agreement is a win for hospitals, patients and the state. "Governor Lamont has paved the way for a new, collaborative relationship in which we are working together to provide patients with quality healthcare and strengthen Connecticut's economy," she said in a statement to The CT Mirror.

Access the full article from The CT Mirror here.

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