ChristianaCare has filed a lawsuit to address what it considers constitutional and corporate franchise issues in Delaware legislation that would establish a hospital cost review board.
The system, which has headquarters in Wilmington and its principal place of business in Newark, Del., announced the lawsuit July 29.
At issue is House Bill 350, which was signed into law June 13 and creates the Diamond State Hospital Cost Review Board. The board is tasked with reviewing hospital budgets and related financial information, according to the legislature website. Beginning in 2025, hospitals will be required to submit yearly budgets, audited financial statements and related financial information for calendar year 2026 to the board for review. If a hospital fails to meet the state's budget benchmark for increases in hospital costs, it must develop a performance improvement plan.
In the lawsuit, which was shared with Becker's, ChristianaCare contends that the law is "antithetical to ChristianaCare's charitable and educational mission, threatens its ability to serve its constituents, violates Delaware law, and infringes on ChristianaCare's fundamental constitutional rights."
ChristianaCare argues the law does so by authorizing the "unelected and unaccountable" review board to "override the strategic and budgetary decisions made by the hospitals' duly-elected directors."
The health system also argues that the law is unconstitutional "through the take-over of private hospital governance and budgets, by forcing private hospitals to disclose confidential information about its future priorities and strategy, and by unfairly targeting only a few private hospitals."
House Bill 350 has faced opposition from some of the state's largest health systems, including ChristianaCare, Dover-based Bayhealth and Lewes-based Beebe Healthcare.
Hospital leaders and lawmakers negotiated several provisions of the original House Bill 350 to reduce the immediate harm to healthcare organizations, patients and communities, according to Brian Frazee, CEO of the Delaware Healthcare Association.
"However, DHA and its members remained firmly opposed to some components of the legislation that were not addressed during the legislative process," Mr. Frazee told Delaware Live News..
"DHA supports our members, including ChristianaCare, as they seek a better path forward, and looks forward to continuing working with policymakers and all stakeholders to ensure access to high-quality, affordable care for Delawareans today and for generations to come."
The Delaware House of Representatives Republican Caucus told Becker's that it fully supports ChristianaCare's lawsuit and that a revised version of House Bill 350 "was enacted about six weeks ago, giving a politically appointed board full authority over critical hospital spending decisions."
Democrats backed by the governor argue that hospital charges are a large portion of state and resident healthcare costs and should be controlled, according to Delaware Live News.
ChristianaCare filed the lawsuit in Delaware's Court of Chancery.