Amended hospital bill passes Senate

May 17, 2024 3

An amended hospital bill passed the Senate May 16 by a 14-7 vote.

House Bill 350 now returns to the House for a vote because an amendment was included. The House had passed the original bill 21-16 with four absent April 26. Gov. John Carney has already said he intends to sign the bill into law.

Bucking his party’s line, Sen. Russ Huxtable, D-Lewes, said he voted against the bill because he has reservations on the state taking over a private company or nonprofit’s budget.

“[Republicans] made a compelling argument that I agreed with,” Huxtable said.

Under the amendment, a penalty section is eliminated that would have allowed the state to take revenue from a hospital if its budget exceeds what the state board approved. The original version of HB 350 created a state-appointed and state-paid, seven-member Diamond State Hospital Cost Review Board to approve hospital budgets. The Delaware Healthcare Association, representing hospitals across the state, took a neutral position when the amendment was introduced. It opposed the original version of the bill.

Still, Senate Republicans questioned a state takeover of a private company’s budget.

“Will this make our hospitals healthier, or will it harm them?” asked Senate Minority Whip Brian Pettyjohn, R-Georgetown.

Others questioned the speed of passage.

“Something needs to be done, so let’s do something,” said Sen. Eric Buckson, R-Dover South.

“This didn’t have eyes [on it]. When were the amendments discussed? It was passed through the House on some obscure rule … why the rush?” he asked.

Sen. Dave Lawson, R-Marydel, said there is hypocrisy in the state demanding budget control for others when the state continues to spend more than its set benchmarks. Over the past two years, he said, the General Assembly has spent 42% and 50% above its benchmarks.

“We can’t keep our bar, but we’re going to ask someone else to do so,” Lawson said.

Passing legislation that requires coverage for medications and treatments also raises healthcare costs, he said. For example, Lawson said, a state law requiring payment for obesity drugs has raised prices, which he said is not the hospitals’ fault, but the fault of a state mandate that has raised healthcare costs about 20%.

Bill sponsors say they have put forth the bill because of skyrocketing healthcare costs that are unsustainable. The bill originally would have required hospitals to charge no more than 250% of Medicare costs to any payer for hospital services in calendar year 2025; however, the amendment changes that requirement. For 2025 and 2026, the amendment allows either 2% growth over the previous year or the Core Consumer Price Index plus 1% over rates from the previous year, whichever is higher. The same provision was included in a now stricken HB 395 that was introduced May 7 and moved through committee the next day.

Under the bill, hospitals that are exclusively rehabilitative hospitals are exempt, and also hospitals that derive 45% or more of their revenue or whose patient population has 5% or less Medicare patients, from the 2025 reference pricing provision. It extends the interim reference pricing period to include 2026 and prohibits balance billing in reference pricing period.