State Sen. Kevin Kelly (R-21) Wednesday, Dec. 18, voted in support of a settlement between the state of Connecticut and the state’s hospitals that the senator said would result in the withdrawal of a lawsuit against the state challenging former Gov. Dannel P. Malloy’s abuse of the hospital tax system.

“This settlement is a pro-jobs, pro-healthcare agreement. It puts an end to expensive litigation and will greatly benefit taxpayers, hospital workers and patients,” said Sen. Kelly.

Kelly said Malloy and Democratic lawmakers abused the hospital tax system for many years.

“Promises were made, and promises were broken,” added Kelly. “Hospitals were taken advantage of to balance past budgets, ultimately hurting patients and employees. This settlement rights the wrongs of the Malloy administration, saves good-paying healthcare jobs, and gives hospitals the tools they need to improve both health care quality and access.”

The hospital tax was initially designed to be a net gain for hospitals. Hospitals would pay a tax to the state, and the state was supposed to leverage those dollars to attain more federal funding for Connecticut’s hospitals. However, over the years, Kelly said Malloy and Democratic lawmakers returned less of the money promised to hospitals. The hospital tax became a financial burden that took funds away from hospitals and put more strain on healthcare access and affordability, said Kelly

“It is my hope that lawmakers will learn from this situation and will stop passing policies that leave our state open to more lawsuits, like truck-only tolls, because Connecticut taxpayers are the ones who ultimately pay,” said Kelly. “This deal recognizes the damage caused by the policies under Gov. Malloy and marks a new start to the state’s relationship supporting hospitals, growing jobs and improving quality and access to health care.”

The agreement would also increase Medicaid hospital reimbursement rates by about 2 percent per year after years of little movement, Kelly said. She said this would reduce the shortfall that results from Medicare and Medicaid paying hospitals less than the cost of care for beneficiaries of public programs. This would also enable hospitals to do more to improve the patient experience, said Kelly, such as investing in capital improvements and improving access to care.

The seven-year agreement would give Connecticut hospitals and their employees the stability they need to continue providing care and services to people across our state, said Kelly, adding that it would also protect taxpayers from the financial risk, uncertainty and expense of ongoing litigation that resulted from Malloy’s abuse of the hospital tax system.