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Malloy Tries To Help 6 Hospitals, But Legislative Leaders Aren’t Impressed

by | Oct 9, 2015 2:21pm () Comments | Commenting has expired | Share
Posted to: Business, Health Care, Insurance, Jobs, Labor, Nonprofits, Public Health, Poverty

After significantly cutting hospital funding and making bold comments about hospital profits and hospital executive pay, Gov. Dannel P. Malloy’s budget office announced Friday that it would distribute $14.1 million to six small hospitals.

Malloy’s budget office said there are “massive differences between large hospitals and small ones in profit margins.”

The six hospitals set to receive payments are Bristol, Day Kimball, Griffin, Charlotte Hungerford, Johnson, and Milford. This money is available because Malloy’s budget office is reprioritizing a portion of the remaining quarter of Medicaid supplemental payments — that is, from that portion of the supplemental pool that was not rescinded.

The Malloy administration is still going forward with its decision to reduce the Medicaid supplemental and small hospital pool payments by $63.5 million, which represents a $192 million reduction in funding because the cut also means the loss of federal matching grants.

“We know that hospitals are not one-size-fits all, and that’s why we’re proactively reprioritizing and reallocating dollars to support small hospitals that need support most,” Office of Policy and Management Secretary Ben Barnes said in a statement. “To be clear, hospital systems are seeing extraordinary revenues, but today we’re working to reprioritize and reallocate payments so we can assist the small hospitals and support patient care.”

But the decision didn’t satisfy lawmakers on either side of the aisle.

Senate President Martin Looney, D-New Haven, said he appreciates that the governor listened to Democratic lawmakers and took “a first step in reversing these ill-conceived and devastating cuts to our community hospitals.”

However, he said “the restorations cannot end here. These cuts will have a multiplier effect — jeopardizing federal reimbursements — adding to my concerns about the financial viability of the smaller, community-based hospitals.”

House Speaker Brendan Sharkey echoed his remarks.

“Simply reshuffling already overdue payments for the first quarter toward smaller hospitals is not an adequate resolution and amounts to randomly picking winners and losers,” Sharkey said. “Democrats will soon be recommending serious alternatives for the governor to consider, and it’s time for minority Republicans, who voted against the state budget but are now also opposing the governor’s cuts, to step up to the plate with some real ideas.”

Malloy, who has been beating back bipartisan criticism of the mid-year hospital cuts, repeated his previous statements on Thursday that hospital profits were in excess of $916.4 million in 2014.

“There’s no doubt that the hospitals had a great run when they took an additional billion in state funds over a very short period of time,” Malloy said Thursday. “But we can’t afford to do that any longer.”

He said making a “supplemental payment to people who made $916 million last year or to use the majority leader’s number of a half billion, doesn’t make sense when you’ve got to find savings.”

Senate Minority Leader Len Fasano doesn’t believe the hospitals made $916 million last year. He said when his staff does the math it ends up being $35 million. He said that’s because the pre-tax profits were amounted to $591 million. The hospitals were then taxed $556 million, which means their entire profit will be reduced to $35 million, Fasano said. He said most of that money will be eaten up by infrastructure and technology improvements that are mandated by the Affordable Care Act.

He said the governor needs to stop referring to the payments to hospitals as “subsidies.”

“These are not subsidies or grants hospitals receive to help maintain their business. Rather these funds help pay for services that hospitals provide to the Medicaid population,” Fasano said.

House Minority Leader Themis Klarides said “this token action does nothing to restore critical Medicaid funding for services to the poor.”

Klarides said they still need a special session to fix the budget.

Jennifer Jackson, CEO of the Connecticut Hospital Association, said Malloy’s decision to restore less than six percent of his cuts to hospitals “is simply a political smokescreen to cover up and divert attention from the devastating $190 million in cuts he unveiled two weeks ago. Let’s be clear: This is a Band-Aid on a bone-deep wound.”

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(7) Archived Comments

posted by: LE 2015 | October 10, 2015  6:21am

Voters need to decide what they want. We can either have our taxes raised every year or we can elect people who will cut spending. Voters need to wake up.

posted by: State_of_Connecticut_Ombudsman | October 10, 2015  7:21am

This move by the Malloy Administration reveals how he operates.  Without a sound strategic finance plan and fueled by liberal spreading of hard earned taxpayer dollars to cover up mistakes.

Over “40%” of the state budget goes to paying pension and healthcare obligations of state workers.  Fix the cause, not the effect, and there will be no need to cut these critical funds and programs.

posted by: spenmoll | October 10, 2015  1:54pm

Fasano is not being honest with his numbers. Except for the withheld funds, the hospital tax goes right back to the hospitals along with matching Medicaid funds. They are not left sitting on $35 million.

posted by: dano860 | October 11, 2015  2:45pm

Well, for Day Kimball it was to little to late. They are still going ahead with the 23 layoffs and no replacement of retirees. Definitely old school cost cutting management style.

posted by: Janster57 | October 11, 2015  3:23pm

Hospital CEOs deserve every kind of lashing the Malloy administration can give them. Greedy insensitive penny pinchers who are vastly overpaid for the abuses they inflict on the honest working folk of Connecticut. And while we’re at it, what about those vastly overpaid executives at the Connecticut Resource Recovery Authority? Unlike hospital CEOs they have absolutely no experience and .... sorry, they’re political jobs. Never mind.

posted by: oldtimer | October 13, 2015  8:16am

Waterbury Hospital employees are being asked to take a 17 percent cut in wages and benefits thanks to Malloy’s reneging on his Medicaid contract. Meanwhile the state employees are lavished with benefits that exceed the private sector by 25 to 40 percent.

posted by: oldtimer | October 13, 2015  10:55am

Correction… Due to Malloy’s ineptitude, Waterbury Hospital is taking 25 percent in wages and benefits from non-union workers and asking union employees to give back 17 percent. Should WH not get the concessions, their merger with Prospect Healthcare will definitely fall through… If they do get the concessions there’s still a good chance the deal may fall through. If that happens, WH will likely close its doors.

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