A hospital review board bill and its amendment each passed unanimously through the Senate Jan. 20.

The legislation is part of a court settlement with ChristianaCare. Passage by the House is needed by Saturday, Jan. 31, to avoid a continued lawsuit.

The state was sued by ChristianaCare after a 2024 law signed by former Gov. John Carney created a Diamond State Hospital Review Board to oversee and approve hospital budgets in the state. Hospitals claimed that the bill was an overreach of power.

Although the board continues under Senate Bill 213 to review detailed budget information for hospitals annually, the new bill requires the board to evaluate hospitals based on actual expenditure and revenue information for the most recent year, rather than prospectively approving future budgets. 

The amendment addresses what are called meaningful cost containment agreements, which were part of the settlement between the state and hospitals, and are another mechanism for hospitals to push down costs, said bill sponsor and Senate Majority Leader Bryan Townsend, D-Newark.

“That is new to the framework overall but was part of the product of settlement discussions and overall something we thought was appropriate,” he said.

Senate Republicans, none of whom supported the previous bill that was signed into law, supported the new bill and amendment, but some said they wished the previous bill was not rushed into passage.

“This is different, and unfortunately, it took the court to come in and force the sides to come to the table and reach a consensus,” said Senate Minority Whip Brian Pettyjohn, R-Georgetown. “I wish that consensus had been reached before while we were discussing House Bill 350 and these changes could have been incorporated into that so we didn’t have to go through the expense, not only on the state side, but also Christiana’s side of litigation.” 

He said he sees the new bill as a start to try to keep healthcare costs down.

“We’ve got to do something about costs,” he said.

Under the bill, beginning in 2027, hospitals that fail to meet the benchmark would have to submit a benchmark compliance plan for the board’s approval, and the bill imposes up to $500,000 in civil penalties for hospitals that knowingly fail to comply with reporting standards. 

Townsend said he believes it may take two to three years to implement the cost-saving process.

“The hope this entire time has been that we can achieve better hospital pricing in Delaware than we currently see because of having transparency on the front end,” he said.

Representatives from the hospitals attended and were offered the chance to speak but made no comments in addition to Townsend’s description of the bill.