UPDATED: HB 350 Passed in the State House

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UPDATED – 05/21/24 – After nearly an hour of discussion on the House floor, House Substitute 2 for House Bill 350 was approved with a simple majority of 24 for the bill and 16 against with 1 absent. The measure now goes to the Governor for his signature.

Governor John Carney issued the following statement today on the passage of House Substitute 2 for House Bill 350.

“Rising health care costs are having a significant impact on Delaware families and state taxpayers,” said Governor Carney. “House Bill 350 will help lower the growth of health care costs in our state, while making sure we’re protecting health care quality and access. I want to thank the hospital systems, members of the General Assembly – particularly Speaker Longhurst and Senator Townsend – and the Department of Health and Social Services for collaborating on this important piece of legislation. I look forward to signing it into law.”

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UPDATED – 05/20/24 – House Substitute 2 for House Bill 350 is on the House Agenda for Tuesday. This would create the Diamond State Hospital Cost Review Board – which would be responsible for the annual review of hospital budgets and related financial information. Submission of hospital budgets and financial information would begin in 2025 for the 2026 calendar year.

This measure was passed in the State Senate last week.

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ORIGINAL STORY – 05/07/24 – Several organizations and community leaders are opposed to House Bill 350–the Hospital Cost Review Board Bill. Today they joined the Delaware Healthcare Association in submitting a joint letter to bill sponsors Governor John Carney, Speaker Valerie Longhurst, and Senate Majority Leader Bryan Townsend ahead of the Senate Executive Committee hearing at 4:00 pm today. The letter, signed by organizations and community leaders with deep knowledge in business, healthcare, and nonprofit work states that HB 350 in its current form is NOT the way to achieve the goal of reducing healthcare costs–adding that this bill will have “disastrous ramifications on not just the hospital systems but on the business and nonprofit communities.” Brian Frazee, President & Chief Executive Officer of the Delaware Healthcare Association, noted that while targeted at hospitals, the cuts in HB 350 will negatively impact Delaware’s entire economy through the loss of jobs, nonprofit investment, and the damage to Delaware’s reputation as a business-friendly state. You’ll find the full letter as well as information about the bill at talkofdelmarva.com.

The following is the Joint Letter that was released:

May 7, 2024
The Honorable John Carney
Governor
Tatnall Building
150 Martin Luther King Blvd South
Dover, DE 19901
Delaware General Assembly
Legislative Hall
411 Legislative Avenue
Dover, DE 19901


Dear Governor Carney and Members of the Delaware General Assembly,


We the undersigned agree that healthcare costs should be addressed in Delaware. Our group is
composed of leaders with deep knowledge of healthcare, business and nonprofit work in
Delaware and in our region. It is with that expertise and a great passion for our state and the
work we do in our communities, that we write you to say HB 350 in its current form is NOT
the way to achieve the goal of reducing healthcare costs. This bill will have disastrous
ramifications on not just the hospital systems but on the business and nonprofit communities. It
is our hope that we can bring all parties together inclusive of the business community, nonprofit
leaders, healthcare systems, providers, payors, pharmaceutical companies, pharmacy benefit
managers, state unions, community advocates and patients to determine a strong path forward for
our state. That is the Delaware way.


Sincerely,
Organizations
Association of Chambers of Commerce of Delaware
Bayhealth
Beebe Healthcare
Bethany-Fenwick Area Chamber of Commerce
Central Delaware Chamber of Commerce (CDCC)
ChristianaCare
College Ave Student Loans
DANA, the Delaware Alliance for Nonprofit Advancement
Delaware Academy of Medicine/Delaware Public Health Association
Delaware Business Roundtable
Delaware Coalition Against Domestic Violence
Delaware Healthcare Association
Delaware Psychological Association
Delaware State Chamber of Commerce
Kent Sussex Leadership Alliance
Kool Kolored Kid Generation LLC
Latin American Community Center
Lewes Chamber of Commerce
Nason Construction
Nemours Children’s Health
New Castle County Chamber of Commerce
Rehoboth Beach – Dewey Beach Chamber of Commerce
Saint Francis Hospital
Sussex County Health Coalition
The Precisionists, Inc.
TidalHealth Nanticoke
Wohlsen Construction
Community Leaders
Andrew Hartstein
Arthur and Cynthia Pollard
Barry Niziolek
Brian DiSabatino
Catharine N. Lyons
Charlie McDowell
Chip Rossi
Dan Cruce
Darryl Chambers, M.A., Center for Structural Equity
David Stratton
Doneene Damon
Dr. Francisco Padilla
Dr. Richard Simons
Dr. Sandra Palavecino
Ernie B. Lopez
Ernie Dianastasis
Fred Mast
George Foutrakis
Jocelyn Stewart
Joe DePaulo
Kathleen McDonough
Lolita Lopez
Lossie Freeman
Maria Lehman, Board Chair
Marie Holliday, CPA
Michele Procino-Wells
Michelle A. Taylor, Ed.D.
Perry Beberman
Rita M. Landgraf
Robert Asante
Sean Steward
Susan Moore, MD
Susan Williams, MD
Terrance Keeling, President and CEO of Central Baptist CDC
Tom Moore
Tom Nason and Julie Topkis Nason
Tracy Neilson
Tynetta T. Brow

View Parent Bill:

HB 350Introduced on:

4/23/24Primary Sponsor:

LonghurstAdditional Sponsor(s):

Sen. Townsend

AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE RELATING TO HOSPITAL COSTS. Original Synopsis:

This Act creates the Diamond State Hospital Cost Review Board, which will be responsible for an annual review of hospital budgets and related financial information. The Board will have 7 members: 6 appointed by the Governor and confirmed by the Senate, and the Executive Director of the Delaware Healthcare Association. This Act creates a requirement that hospitals submit yearly budgets, audited financial statements, and related financial information to the Board for review. Where a hospital fails to meet the state’s budget benchmark for increases in hospital costs it is required to engage with the Board on a performance improvement plan. If the Board and the hospital cannot agree on an improvement plan or where the hospital fails to successfully implement a performance plan, the Board may require the hospital to have its future budget approved by the Board. The submission of hospital budget and financial information will begin in 2025 for calendar year 2026. In reviewing performance improvement plans or proposed budgets, the Board will consider adherence as closely to the spending benchmark as is reasonable given the hospital’s financial position and associated economic factors, the promotion of efficient and economic operations of the hospital, and maintenance of the hospital’s ability to meet its financial obligations and provide quality health care. As a temporary measure until the Board begins operations, hospitals are required to charge no more than 250% of Medicare costs to any payer for hospital services in calendar year 2025. This Substitute Bill incorporates all of the following changes which were incorporated into House Substitute No. 1 for House Bill No. 350: It provides additional detail regarding the operation of the Board, budget modifications, and provides an appeal right to the Superior Court. It changes the application of the definition of hospital to exclude psychiatric facilities. Because hospitals may have different fiscal years, the deadline for the Board to issue a final decision on a budget is changed to 90 days before the start of a hospital’s fiscal year rather than a fixed date. The confidentiality provisions for hospital records have been updated. Technical corrections have been made. In addition, House Substitute No. 2 contains the following changes: It adds a performance improvement plan process as an interim step prior to requiring a hospital to submit a proposed budget for approval or modification by the Board. With this change, the Board will only accept and review budget information in its first year of operation in 2025. In 2026, it may direct hospitals to submit a performance improvement plan. It exempts hospitals that are exclusively rehabilitative hospitals. It changes the composition of the Board as set forth above. It exempts hospitals who 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.


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