Hospital tax tango continues at the Capitol

HARTFORD, Conn. (WTNH) — The Malloy administration is scrambling to change a key part of the state budget passed by the House and Senate last week.

The Governor must decide if he will sign or veto the budget no later than Wednesday, and is pushing to change language in the budget that he says will result in a billion dollar hole.

Related Content: Billion-dollar budget problem or budget brinkmanship?

For the second time since the budget passed the Assembly last Thursday, top lawyers for the Hospital Association met with the legal staff for the Malloy Adminstration at the State Capitol Monday afternoon.  At stake is whether the language in the budget actually will comply with federal rules to change the Medicaid reimbursement rates for health services. It’s this change in rates that’s supposed to bring many more federal dollars to the hospitals.

In return, the hospitals will pay the state millions more in Hospital Taxes.

The Governor also released a copy of a letter he has sent to all the leaders of the legislature urging them to call lawmakers back to the Capitol by Wednesday of this week to make changes in the language saying “…there is no guarantee that the federal Centers for Medicare and Medicaid Services will approve any request, but I believe failing to amend the language you passed will almost certainly cause them to reject this one.”

Web Extra: Letter from Governor Malloy to legislative leaders on Hospital Tax issues

In an exclusive interview, the Republican leader in the State Senate, Sen. Len Fasano (R-North Haven) tells News 8 that many lawmakers believe the Governor is just using all this as leverage to get the hospitals to drop their lawsuit against the tax.  That’s an allegation the Governor’s office has denied, and says the real problem is the budget language leaves the state holding the billion dollar bag.

Fasano says it’s really about who controls the decision saying, “If it comes to a time, if the federal plan he submits, the Governor submits the federal plan and it doesn’t happen, the legislature will walk in the very next day and say ‘pay the tax.’ So we still control it, it’s just that he doesn’t control it and he doesn’t like that.”

We have been told two sources at the Capitol that a legislative session on Wednesday to address this is “possible.”

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