House Republican Leader Rep. Themis Klarides issued a press release Thursday saying the decision by Gov. Malloy to withhold millions in funding for hospitals could lead to further layoffs and a reduction in services.
“Hospitals are struggling to meet their core functions and serve the neediest in their host communities and surrounding towns. Typically, they are the largest employers anywhere and this added bad news will only make things worse,’’ Klarides said.
The hospitals had been assured by the Department of Social Services that it was in the process of applying for the reimbursements as they have for the past five years from the federal government, Klarides said. As recently as last week they insisted the application was being prepared.
The Office of Police and Management disclosed on Wednesday night that any further payments were doubtful this year.
The administration knew the state’s budget crisis was far worse that previously disclosed and misled the hospitals about the additional funding, Klarides said.
The hospitals pay the state about $550 million annually under a provider tax Gov. Malloy and the Democrats imposed beginning in 2011. In exchange, the hospitals were promised 100 percent reimbursement.
That figure has fluctuated since the tax was imposed and this year there will be no more money flowing.
Many hospitals have had to lay off workers and cut back on services for needy patients the last few years. Medicaid cases are the fastest growing sector of the insurance industry. Hospitals warned that cuts to services and personnel may occur as a result of the lack of funding.
Jennifer Jackson, CEO, Connecticut Hospital Association (CHA), made the following statement in response to Gov. Malloy’s actions stopping payments to hospitals.
“We are outraged by the Governor’s refusal to pay hospitals for care provided to patients. His actions are breaking the healthcare system and increasing costs for patients. Because of the Governor’s actions, over 3,000 jobs have been lost since 2013. And the Governor’s actions are further damaging our already fragile economy.
We need the legislature to step in and ensure hospitals are reimbursed for the care they are providing 24 hours a day, 7 days a week.
Let’s be clear, this is effectively a tax increase of $140 million. When the hospital tax was established in 2012, the promise was that the state would return the money it taxed hospitals, and hospitals would be made whole. Four short years later, hospitals are paying $556 million per year and getting virtually nothing back.”