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Connecticut lawmakers pass settlement with state hospitals

HARTFORD — Connecticut lawmakers on Wednesday approved a long-awaited $1.8 billion settlement agreement reached between Democratic Gov. Ned Lamont and the state's hospital association that will trigger the withdrawal of legal claims that potentially exposed the state to as much as $4 billion liability.

Both Democrats and Republicans noted the seven-year deal marks a new chapter in the state's relationship with the hospitals, which was rocky under former Democratic Gov. Dannel P. Malloy's tenure.

“Today we’re fixing a wrong and making it right,” said Senate Republican Leader Len Fasano, who accused the Malloy administration of being unfair to the hospitals by holding back funds during the state's budget deficit challenges. The hospitals and the state have been at odds for years over a so-called “provider tax” that was first imposed in 2012 as part of a complicated plan to secure more federal Medicaid reimbursement funds for both the state and the hospitals. But ultimately, the hospitals ended up paying more in taxes, prompting legal action.

Lawmakers returned to the state Capitol for a special session Wednesday to vote on the hospital agreement, as well as a second bill that attempts to address concerns raised by restaurant owners facing class action lawsuits over state wage and hour rules. The restaurant wage bill cleared both the House of Representatives and Senate, with some Democrats opposing the measure because they contend it could be harmful to workers and restrict their ability to seek unpaid wages.

“There are far too many people taken advantage of,” said Sen. Mae Flexer, D-Danielson.

Among other things, the bill repeals a state regulation that governs when restaurant workers are paid the “tip wage,” which is lower than the state's minimum wage. The state labor commissioner must adopt new regulations. In the meantime, court awards in cases alleging wait staff were paid the lower wage when they shouldn't have been will be limited.

“Although the compromise language keeps tipped workers from being able to join together in class action for a period of time, it allows the current class actions to proceed," said Sal Luciano, president of the Connecticut AFL-CIO, in a written statement. He also praised the legislation for providing funding for three additional wage and hour investigators at the state Department of Labor.

Meanwhile, the hospital agreement received unanimous support in both chambers.

Reaching an agreement with the state's hospitals has been a key goal for Lamont, who took office about a year ago.

“Today marks the start of a desperately needed reset between the state and our hospitals," Lamont said after the bill cleared both chambers. He said prolonging the litigation wouldn't have benefited anybody.

Connecticut Hospital Association CEO Jennifer Jackson thanked Lamont and Attorney General William Tong for their efforts to reach the settlement, which includes a stead tax rate and consistent stream of Medicaid increases for the hospitals. They're now set to receive guaranteed 2% annual increases for in-patient services and 2.2% annual increases for outpatient services.

“Today marks the start of a new partnership with the state that will strengthen health care in Connecticut for the benefit of everyone who lives here,” Jackson said.

Lawmakers are not expected to take up a major transportation improvement bill until a yet-to-be scheduled special session in January. But dozens of toll supporters and opponents still appeared at the state Capitol on Wednesday with signs and T-shirts, hoping to sway legislators' opinions.

 

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