Hospitals will receive $164.3 million in state and federal funds under the budget deal legislators approved Tuesday, restoring some of the money Gov. Dannel P. Malloy cut from hospitals in September, as well as millions more in overdue payments.
For 27 of the state’s 29 hospitals, the agreement still means a funding cut compared to the budget lawmakers adopted in June. Overall, hospitals will receive just over $30 million less in state funds than the June budget called for. And since that state spending brings in federal dollars (more on that below), hospitals will receive $91.7 million less in federal and state funds than they would have under the enacted budget.
Unlike its counterparts, Johnson Memorial Hospital in Stafford Springs will get more money. Johnson is one of six hospitals that receive funding from a pool of money for small hospitals, and the way those funds are distributed was changed this fall, giving Johnson a higher total, according to Malloy’s budget office.
Two other hospitals, Connecticut Children’s Medical Center and UConn’s John Dempsey Hospital, don’t get money from the funding streams at issue. That’s because the money is tied to taxes hospitals pay to the state, and those two hospitals aren’t subject to the tax. But Connecticut Children’s did face a funding cut under this week’s budget deal, losing $146,055 from the $14.6 million grant it receives from the state.
Hospital funding has been a key source of contention, heated rhetoric and ads related to the budget in recent months. Hospitals faced two hits to their funding this fall:
- Malloy reduced budgeted hospital payments by $63.4 million in September through an emergency budget cut – a $192 million cut when factoring in federal payments.
- The administration also withheld another $21 million that was owed to hospitals during the first quarter of the fiscal year, which ended Sept. 30. At the time, an administration official indicated that it wasn’t clear whether the money would be paid at all because of budgetary concerns. Federal funds would have brought that funding up to nearly $64 million.
After an outcry from hospital officials and legislators, Malloy agreed to restore some funding to six small, independent hospitals.
What’s the money for?
The bulk of the funding at issue is known as supplemental payments. Those are payments that return to hospitals money the industry pays the state in taxes. Why the back-and-forth? It’s because by collecting money and returning it to hospitals, the state can generate matching funds from the federal government. Hospitals are projected to owe the state $556 million in taxes this fiscal year, up from $349 million last year.
A separate pot of money known as the small hospital pool goes to six small hospitals: Bristol, Day-Kimball in Putnam, Griffin in Derby, Charlotte Hungerford in Torrington, Johnson, and Milford. All six were independent when the budget was adopted in June; state regulators have since approved plans for Johnson to be purchased by Trinity Health – New England, the parent company of St. Francis Hospital and Medical Center in Hartford. The June budget included $14.8 million for the pool, but it was reduced to $14.1 million Tuesday.
Here’s how the money breaks down by hospital. The figures represent both state and federal money each hospital will receive.
Here’s a breakdown of the funding for the small hospital pool, which is calculated based on each hospital’s Medicaid revenue for inpatient care. Some hospitals are receiving more than they would have under the enacted budget, while others are getting less. This money is included in the figures in the chart above.