Lamont, state hospitals getting closer to settling hospital tax lawsuit

The longstanding lawsuit filed by 20 Connecticut hospitals against the state over the divisive hospital tax could be getting closer to a settlement.

“We have been in discussions with the state, with a mutual goal of resolving this matter so the legislature could take it up by the end of this month,” according to a statement by the Connecticut Hospital Association, which represents the hospitals.

Gov. Ned Lamont acknowledged that progress has been made with the hospital association, with whom a tentative agreement was announced in May. The agreement would settle all outstanding claims and bring to an end the lawsuit filed by the association in 2015.

At issue is a provider tax, which the hospital group maintains has cost its member hospitals billions since it went into effect in 2011. The complaint filed by 20 hospitals in New Britain Superior Court alleges that, beginning in 2013, “the state”™s payments to hospitals from Hospitals Tax revenues have decreased, federal matching funds have decreased and the state has utilized the Hospitals Tax to balance the budget.”

Hospitals were further incensed after Lamont took office, when he decided against reducing the hospital tax as proposed by the bipartisan budget in favor of keeping it at a rate that generates $900 million for the state annually. The hospitals were expecting to see that $900 million annual sum reduced to $384 million.

“The parties have actively been engaged in discussions in a joint effort to commit their tentative agreement to writing, but those efforts, in combination with obtaining the necessary administrative and legislative approvals, will require additional months,” hospital association attorney Ronald W. Zdrojeski wrote to Connecticut Superior Court Judge Arnold Aronson last week.