ChristianaCare filed a lawsuit in Chancery Court on Monday alleging that Delaware House Bill 350 is unlawful and infringes on the health care system’s state and federal rights, reigniting discussion over a controversial health care cost law that divided lawmakers and providers.
The bill, which was signed into law on June 13, requires hospitals to submit annual budgets, audited financial statements and related financial information to a newly created Diamond State Hospital Cost Review Board in an attempt to rein in health care costs.
If the board finds that a hospital did not meet the state’s benchmark for increases in hospital costs, the law states that the board will work with the hospital to meet that benchmark going forward. And if the goal still isn’t met — or the hospital can’t agree on an improvement plan — the law allows the Diamond State Hospital Cost Review Board to require its approval of the hospital’s future budgets.
These requirements force private hospitals to “disclose confidential information about their future priorities and strategy,” according to ChristianaCare's press release, and are "unfairly targeting only a few private hospitals."
The Delaware House of Representatives Republican Caucus said it “fully supports” ChristianaCare’s lawsuit in a press release Monday evening. The caucus that the “poorly conceived law” and those like it has made entities like ChristianaCare “forced to head to court to secure the fair consideration they should have received in the legislature and by the governor.”
The bill was the center of major discourse throughout the legislative process, with health care providers and community advocates challenging the bill until several amendments were made. At one point, nearly 70 community leaders and organizations across Delaware — including ChristianaCare — submitted a letter to lawmakers warning that HB 350's passage would have “disastrous ramifications” on hospital systems as well as the “business and nonprofit communities.”
Most of these health care providers ultimately reached a compromise with lawmakers after legislators agreed to a more flexible price index and give “greater certainty around the role and operations of the Diamond State Hospital Cost Review Board,” according to a news release from the Delaware Healthcare Association.
In their Monday news release, ChristianaCare called the Diamond State Review Board "a politically appointed, unelected and unaccountable 'super-board' ... with authority to override the strategic and budgetary decisions made by the hospitals’ duly elected directors."
“This lawsuit is necessary to preserve and ensure independence in clinical decision-making and patient care, critically necessary hospital services and resources, non-profit board autonomy, and a strong health care delivery system in this community for generations to come,” said Lolita Lopez, chair of ChristianaCare’s Health Services Board.
House Speaker Valerie Longhurst, the primary sponsor of HB 350, and Senate Majority Leader Bryan Townsend issued a joint statement in response to the lawsuit, sharing their confidence that the review board “will withstand judicial and constitutional scrutiny.“
“We are disappointed that the state’s largest hospital system has chosen to continue in an oppositional posture,” the joint statement said, “rather than working with the General Assembly and other stakeholders to fine tune the structure and operation of the Board – which they have not even allowed to get off the ground before working to undermine it.”
Send story tips or ideas to Hannah Edelman at hedelman@delawareonline.com. For more reporting, follow them on X at @h_edelman.
This article originally appeared on Delaware News Journal: ChristianaCare files lawsuit over controversial health care cost oversight law
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