Budget bill closes loophole that allows hospitals to end services without state approval

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A measure included in this year’s state budget bill aims to end cuts to hospital services that proponents say circumvent state law.

In March 2020, Governor Ned Lamont issued an executive order temporarily allowing hospitals to suspend services without going through the official state approval process. The order was intended to allow hospitals to meet the overwhelming demands of COVID.

That month, Prospect Medical Holdings, the Rockville hospital’s parent company, advised the state it would suspend surgical services to free up more beds to treat COVID patients. The following month, Johnson Memorial followed suit with its labor and delivery services, among other things.

In May 2021, Lamont ended the COVID waiver. At this point, any hospital that suspended services should have resumed them. But neither Rockville nor Johnson Memorial did, and services remain partially or fully suspended to this day.

Neither company has applied for a Certificate of Need, which grants state approval for closures, insisting they are just ‘suspensions’ and have no intentions to permanently close the units.

the 673-page budget bill contains two lines that define “termination of services” in a hospital as “termination of services for more than 180 days,” directly addressing long-term suspensions that were previously difficult for the state to control.

“[Hospitals] were terminating services under a suspension,” Rep. Kerry Wood, D-Newington, explained during the House debate on the bill. “It clearly defines what a termination is. So now if [a unit] is closed for 180 days or more, you will need to request a certificate of need.

The budget bill was passed in the House early Tuesday morning. The Senate is expected to consider it later on Tuesday.

In November 2021, Prospect requested an extension of the waiver to continue the surgical hold. The Office of Health Strategy denied it, ordering the hospital to file a certificate of need or resume services. The company did neither, and OHS issued a fine of $118,000. The company is appealing the fine.

According to public documents, the company resumed “some services” in February 2022, meaning the Rockville hospital operated for nearly two years without surgical services.

As for Trinity Health, the company sent a letter to OHS last November explaining that staffing issues are preventing the reopening of labor and delivery at the Johnson Memorial. Although the hospital had operated without birthing services for almost two years, Trinity insisted that he had no plans to close the unit permanently, so he would not be asking for a certificate of need.

The Office of Health Strategy has opened an investigation into the suspension of labor and delivery at Johnson Memorial, which is currently ongoing.

Neither Prospect nor Trinity responded to requests for comment.

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