AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE RELATING TO HOSPITAL BUDGET REVIEW.
What changed between versions
The Board's authority to prospectively approve or modify hospital budgets was eliminated. Section 9955, which allowed the Board to impose modified budgets on hospitals that failed their Performance Improvement Plans, was repealed and replaced with a less intrusive framework.
The requirement for hospitals to submit compliance plans when they exceed the spending benchmark now begins in 2027 instead of 2026, giving hospitals an additional year before this enforcement mechanism activates.
New definitions were added for 'Meaningful Cost Containment Arrangement,' 'Medicare or Medicaid Global Budget Arrangement' (requiring coverage of at least 50% of historical patient volumes and at least 3% of net patient revenue at risk), 'Substantial Financial Downside Risk Arrangement' (requiring total annual costs of at least 3% of net patient revenue, minimum 10% downside risk to the hospital, and for hospitals over $1 billion in budget, at least 5,000 covered patient lives), and 'Total annual costs.'
Hospitals participating in a Meaningful Cost Containment Arrangement are exempt from the Benchmark Compliance Plan process for that year, though they must still submit their detailed budget information to the Board annually. The exemption applies only to the BCP requirement, not to reporting obligations.
The 'Performance Improvement Plan' was renamed to 'Benchmark Compliance Plan' throughout the bill. The resubmission process was changed: if the Board finds a plan deficient, it must provide written guidance and the hospital has 30 days from receipt to address each deficiency and resubmit.
The Board is now required to issue written findings of fact and determinations on whether each hospital met the spending benchmark, satisfied its Benchmark Compliance Plan elements, and whether it qualifies for MCCA exemption. The Board may also make policy recommendations to the Delaware Health Care Commission and legislative health committees.
Hospital reporting requirements were adjusted: a new narrative requirement was added requiring hospitals to outline year-over-year changes and actions to meet the benchmark; payer contract information was narrowed to payments consistent with 45 C.F.R. Part 180 public disclosure rules; salary reporting was narrowed to officers, directors, key employees, and highest-compensated employees as disclosed on IRS Form 990; and a Uniform Reporting Manual must be adopted by the Board for consistency.
Hospitals must now submit audited financial statements to the Board within 30 days of finalization, beginning with statements for fiscal year 2023. The Board must also promulgate a Uniform Reporting Manual providing uniform definitions and submission criteria for budget reporting categories.
New enforcement provisions were added: if a hospital subject to budget approval fails to maintain its approved budget, the Board may factor excess net revenues into the following year's budget, or allow the hospital to retain surplus funds if achieved while staying within budget or generated primarily by volume exceeding projections. A notice and hearing requirement was added before penalty orders can be issued.
Board voting rules were clarified: four voting members constitute a quorum, and specific actions (budget approval, enforcement actions, regulation adoption, written findings on MCCA, and BCP approval) require the affirmative vote of a majority of all voting members rather than just those present.
A severability clause was added as Section 8, providing that if any provision is held invalid, the remaining provisions continue in effect.
