A bill repealing a controversial 2024 law requiring state board approval of hospital budgets awaits action when Delaware’s General Assembly returns Tuesday, Jan. 13.

Senate Bill 213, sponsored by top Democrat leadership in both House and Senate, is the result of a lawsuit filed by ChristianaCare after former Gov. John Carney signed into law House Bill 350, which created a Diamond State Hospital Cost Review Board tasked with overseeing hospital budgets with the ability to modify them if they did not fall under spending benchmarks. For hospitals in noncompliance, the law gave the board the ability to impose penalties.

ChristianaCare’s Chancery Court lawsuit stated the hospital review board violated state corporate law and the Delaware Constitution, but the lawsuit was paused in October following an agreement signed by Gov. Matt Meyer and ChristianaCare CEO Janice Nevin. Under the agreement, the lawsuit is paused as long as legislation to eliminate the board’s authority to approve or modify hospital budgets is introduced by Jan. 13 and enacted by Saturday, Jan. 31.

SB 213 satisfies the Jan. 13 deadline and awaits action in Senate Executive Committee.

Under the bill, the Diamond State Hospital Cost Review Board will no longer vote to approve or revise a hospital’s budget.

Instead of submitting an operating budget for the forthcoming year, a hospital would submit expenditures and revenues to reflect increases and changes from the previous year.

“The board will evaluate hospitals based on actual expenditure and revenue information for the most recent year, rather than prospectively approving future budgets,” the bill’s synopsis reads.

The bill repeals board review of each hospital’s proposed budget and approval or modifications of a hospital budget.

However, under the bill, a hospital that knowingly fails to provide information or adhere to standards, procedures and deadlines may be penalized up to $500,000, which would begin in 2027.

Brian Frazee, president and CEO of the Delaware Healthcare Association, represented hospitals throughout the HB 350 debate and said the new legislation is a chance for hospitals and policymakers to move forward together.

“Delaware hospitals support transparency and accountability to drive affordability,” he said. “As we face unprecedented uncertainty on the national level, solving for healthcare at home deserves an all-hands-on-deck collaborative approach. Our vision is for Delaware to be the best place to practice medicine, the best place to receive healthcare, and home to the healthiest population in the nation. This legislation is an important step toward accomplishing our shared goals. We stand ready to partner with the state and healthcare stakeholders on policy solutions that ensure affordable, accessible, and quality healthcare for generations to come.”