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Hospital cost review board bill passes with new amendment in Senate, heads to House for final vote

Senate Minority Whip Brian Pettyjohn speaks in opposition of a bill to establish a hospital cost review board in Delaware on Thursday in the Senate Chamber.
Sarah Petrowich
Delaware Public Media
Senate Minority Whip Brian Pettyjohn speaks in opposition of a bill to establish a hospital cost review board in Delaware on Thursday in the Senate Chamber.

The contentious bill to establish a hospital cost review board in Delaware passes in the Senate with a new amendment, sending it back to the House for a final vote.

After actively opposing the legislation that would require hospitals to submit their budgets annually to the Diamond State Hospital Cost Review Board for approval, healthcare leaders announced they would be neutral if a new amendment was added to the bill.

The new amendment makes several changes, with one of the largest being the removal of a temporary reference pricing measure with a new method based on the state healthcare spending benchmark and the Core Consumer Price Index.

The original measure required hospitals to not charge more than 250% of the cost of care charged to the Medicare program for 2025 and 2026. After that, the board would begin reviewing budgets to ensure their compliance to the spending benchmark.

Healthcare leaders spoke in strong opposition to the Medicare pricing index, arguing they would have to make massive program and staffing cuts under the temporary restraint.

While Republican senators agreed removing the measure is a step in the right direction, they did not vote for the new amendment, citing their overall opposition to the creation of the board and their disappointment with the rushed legislative process.

“See, here’s the thing — we’re going to vote no, and why? It isn’t because we don’t want affordable healthcare. We do, but process has to matter," said State Sen. Eric Buckson (R-Dover South). "We're making a lifetime decision based on two months of back and forth. That doesn't make sense to me."

While not making an official motion, Buckson said the bill should be tabled to allow for more thorough conversations with stakeholders.

Senate Minority Whip Brian Pettyjohn (R-Georgetown) agreed, noting he was happy to see the Medicare pricing index removed, but argued it should have happened sooner.

"Taking the cost cap off was a great step, and that's something that happened after negotiations. But after the bill had originally been done. After it had been filed, after it had gone through the House, after it had been amended and substituted in the House," Pettyjohn said. "Those were some of the first things that should have happened before that bill even hit the floor of the chamber next door.”

State Sen. Trey Paradee (D-Dover) agreed the Medicare reference pricing needed to change, admitting he probably would not have voted to pass the bill if it had remained in the legislation, but argued oversight of the hospital budget process is still necessary and a similar process is already working in Delaware to regulate utility rates.

"My concern is that there's not somebody in the room when these decisions are being made that is saying, 'what is our return on investment?'," Paradee said, which is something he argues utility companies have to present to the Public Service Commission to prove any investments they make will not be detrimental to existing rate payers.

Pettyjohn stuck closely to the sentiment that the board is governmental overreach and said he hopes to see more negotiations and transparency in the future.

“Despite the deal that was struck, the corner that our community hospitals were backed into — this is the beginning of an attack on our hospital systems. We’ve taken the heavy hammer of seizing assets off the table with this amendment, and I can’t even begin to understand why this was a consideration in the first place," Pettyjohn said.

The bill's sponsor Senate Majority Leader Bryan Townsend (D-Newark) said he is committed to making the process as fair and equitable as possible moving forward.

"[I want to roll this out] in good faith on the basis of transparency, on the basis of data, on the basis of a framework that very purposefully has been crafted to give flexibility for different hospitals in different corners of Delaware for the different needs and forces that they are subject to," Townsend said.

The bill passed the Senate on a near party-line vote, with State Sen. Russ Huxtable (D-Lewes) being the only Democrat to defect. It now heads back to the House for reconsideration after passing on a near party-line vote last month.

Before residing in Dover, Delaware, Sarah Petrowich moved around the country with her family, spending eight years in Fairbanks, Alaska, 10 years in Carbondale, Illinois and four years in Indianapolis, Indiana. She graduated from the University of Missouri in 2023 with a dual degree in Journalism and Political Science.
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