Connecticut Hospitals Testify on the Urgent Need To Increase State Medicaid Rates, Protect Public Health

The Connecticut Hospital Association (CHA) testified at the Appropriations Committee public hearing on Thursday, April 3, to advocate in support of increasing Medicaid rates across the healthcare continuum — including for care provided at hospitals — to protect healthcare access and improve public health at a critical time for our state and nation.

HB 7254, An Act Concerning The Department Of Social Services’ Implementation Of Changes Resulting From The Medicaid Rate Study, proposes to phase in reimbursement increases for a broad range of Medicaid providers to address the substantial underpayment identified in the two-part Medicaid rate study commissioned by the Department of Social Services (DSS).  However, the study and the bill fail to identify and address the substantial Medicaid underpayment for hospital inpatient and outpatient services. 

Connecticut hospitals have developed an innovative Medicaid redesign framework that can leverage Connecticut’s hospital tax program, in combination with other sources of funds, to reduce or eliminate the shortfall, benefitting the state, taxpayers, patients, and the hospital and other Medicaid providers on whom they depend for care.  CHA continues to advocate for advancing this comprehensive plan.

“We believe that a new payment model is needed — one that capitalizes on the role that multi-sector health partnerships can play in addressing the root-cause drivers of poor health,” Mark Schaefer, vice president of system innovation and financing, CHA, testified before the Appropriations Committee, explaining hospitals’ recommendation to invest in place-based health initiatives and funnel 100% of the shared savings back into hospitals and communities.

Hospitals are reimbursed less than 60 cents on the dollar for services provided to Medicaid beneficiaries after accounting for the taxes they pay to fund the state share of the Medicaid program.  According to a recent Office of Health Strategy (OHS) report, Connecticut’s Medicaid shortfall, measured as a percentage of operating expenses, is 79% higher than the national average.

“Medicaid underfunding is widely recognized by bipartisan state lawmakers as something on which our state must act this year to support healthcare delivery, access, affordability, and residents in communities across the state,” said Jennifer Jackson, CEO, CHA.  “The need to include hospitals in immediate efforts is crucial and becomes even more so as the hospital tax settlement expires in the upcoming biennium, and protections intended to ensure access to care evaporate.  Lawmakers and hospitals can and must work together to make sure Medicaid, supported by the hospital tax, is able to best meet the needs of Connecticut residents in the short- and long-term.”

Hospitals are seeking the continued partnership of state lawmakers and the Appropriations Committee in working with care providers and the Governor to prioritize healthcare in the state budget.  Hospitals are specifically advocating for modifications to the Lamont administration’s budget proposals that would jeopardize patient care and access by adding more financial strain to hospitals and that fail to address Medicaid underpayment. 

“We know the Governor’s intent is not to weaken local hospitals and public health resources, but if the administration’s budget proposals advance unmodified, that’s what would happen.  There is an opportunity to pursue a better path forward together.  It’s time for the state to meet the needs of its Medicaid program, which underpins the structure of healthcare in Connecticut, and ensure it is paying fairly for the care provided to patients by all caregivers, including at hospitals,” said Jackson.  “It is imperative that we collaborate to fortify the healthcare delivery system here in Connecticut, advancing policies that drive the achievement of quality, equity, affordability, and accessibility goals.” 

Learn more:

• Read CHA’s testimony on HB 7254 here
• Learn more about Connecticut hospitals’ support for increasing Medicaid rates across the healthcare continuum and reimagining Medicaid to better address root-cause drivers of chronic disease and poor health outcomes here
• Learn more about the Lamont administration’s budget proposals that would weaken local hospitals and jeopardize access to care here
• Learn more about Connecticut’s hospital tax here