HB 5165, An Act Requiring An Evaluation Of The Appointment Of A Receiver To Manage Hospitals In Financial Distress Or Operational Crisis

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE PUBLIC HEALTH COMMITTEE

Wednesday, February 18, 2026

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning HB 5165, An Act Requiring An Evaluation Of The Appointment Of A Receiver To Manage Hospitals In Financial Distress Or Operational Crisis.  CHA offers comments on the bill.

Connecticut hospitals make our state stronger by delivering nationally recognized, world-class care, supporting jobs and economic growth, and serving communities across Connecticut.  Every day, hospitals improve access, affordability, and health equity — providing care to all patients regardless of ability to pay.  At the same time, hospitals invest in their workforce and local communities, even as they navigate significant financial and federal challenges.

The legislation requires the Department of Public Health (DPH) commissioner to evaluate whether the attorney general should be authorized to petition the Superior Court for the appointment of a receiver to manage hospitals in “financial distress or operational crisis” and then report back to the Public Health Committee about the evaluation by October 1, 2027.

It is evident that Connecticut’s chronic underfunding of hospitals is not sustainable.  The primary cause of hospital financial distress is the state’s insufficient support of the Medicaid program.  CHA has offered overwhelming evidence to the Office of Health Strategy (OHS) and the Department of Social Services (DSS) that financial distress is virtually inevitable for many hospitals unless there is course correction soon.

Before the use of receivership is considered, we believe the legislature should task the DPH commissioner, along with the DSS commissioner and the secretary of the Office of Policy and Management (OPM), with evaluating and reporting all feasible solutions that Connecticut could adopt to avoid “financial distress” and “operational crisis” for hospitals, including but not limited to evaluating how a reasonable and stable approach to Medicaid reimbursement for hospitals would create financial sustainability.  In addition, we urge that the bill be amended to require the DPH commissioner to include significant stakeholder involvement in the evaluation.

A receivership law triggered by “financial distress or operational crisis” should be defined in a narrow way and only used if and when all other remedies, including considering an expedited certificate of need (CON) process, are utilized.  This is imperative, especially when the state’s Medicaid reimbursement policies are helping to create the distress and crisis.

Thank you for your consideration of our position.  For additional information, contact CHA Government Relations at (203) 294-7301.