A lawsuit filed by ChristianaCare against the state and its budget oversight board is paused following an agreement signed by both parties.

The Diamond State Hospital Cost Review Board, created by House Bill 350, was set to oversee hospital budgets with the ability to modify them if they did not fall under spending benchmarks, and impose penalties for noncompliance.

In response, ChristianaCare filed a Chancery Court complaint stating oversight of a private hospital budget by the state violated corporate law and the state constitution.

Under the agreement signed by Gov. Matt Meyer and ChristianaCare CEO Dr. Janice Nevin, the lawsuit is paused with a caveat that legislation is introduced no later than Jan. 13, 2026, and enacted by Jan. 31, to eliminate the board’s authority to approve or modify hospital budgets.

The board, however, will continue to review hospital budgets, and those that miss a benchmark must submit a Benchmark Compliance Plan to the board unless exempt through specified cost-containment models. 

“With the cost of healthcare rising faster than ever before, we must hold our nonprofit hospitals to account, and we must do so within the law,” said Meyer in a press release Oct. 8. “Every Delawarean deserves access to world-class, affordable healthcare and together we are working to make that a reality. This agreement keeps healthcare dollars with patients, not in the courtroom.”

Nevin said ChristianaCare remains committed to providing high-quality, affordable healthcare.

“We are encouraged by this important step toward legislation that is reflective of a collaborative process and recognizes the value of working together with health systems to create real solutions on health care costs,” she said in a press release.

ChristianaCare also agrees that they will negotiate in good faith with the governor, other hospitals and stakeholders this fall on a healthcare worker loan forgiveness investment.

If the terms of the agreement are met, officials say, the litigation will be dismissed.