By Joseph Edelen

DOVER — After nearly four hours of heated debate, House lawmakers passed legislation Thursday that would establish a hospital cost review board in the First State.

As the controversial bill heads to the Senate, Thursday’s session in the House of Representatives was marked by lawmakers clashing, leading to several points of order, a motion to table the legislation, legal questioning and an anticlimactic end to the night as House Democrats invoked a special procedure to put an end to the lengthy discussion.

House Substitute 2 for House Bill 350 is led by Speaker of the House Valerie Longhurst, D-Bear, who introduced the measure March 12 as a way to control rising health care costs in Delaware.

Since the original bill’s introduction, it has been substituted twice, with the most recent version adding a performance improvement plan process before requiring a hospital to submit a proposed budget to the board beginning in 2026, exemptions for rehabilitative hospitals and the altering of board membership.

Since the implementation of Delaware’s health care spending benchmark in 2018, that figure has fluctuated between 3% and 4% growth. The benchmark has been met in just one year since; in 2020, during the COVID-19 pandemic

“You have heard from the opponents of this legislation that we are unfairly targeting hospitals with this bill — that other portions of our health care sector are driving costs,” Speaker Longhurst said. “Hospitals in Delaware (make up) 42% of all health care spending. That doesn’t account for pharmacy costs, visits to primary care doctors or specialists.”

Under the substituted legislation, the Diamond State Hospital Cost Review Board would evaluate the budgets of Delaware hospitals annually. In the case that hospitals fail to meet the spending benchmark, the board would work with the entity to implement a performance improvement plan.

If a hospital meets its budget targets over the course of three years, it would be exempt from having their budget reviewed, according to the legislation.

Throughout the debate, House Republicans called Delaware Healthcare Association president and CEO Brian Frazee as a witness. His organization represents the state’s five hospitals and has been a staunch opponent of the cost review board.

Mr. Frazee outlined several concerns with the bill, such as a clause requiring hospitals to charge no more than 250% of Medicare costs until the board is up and running, which he said will cost hospitals approximately $360 million; recruitment challenges; the fact that Delaware hospitals have largely been operating at a loss; and administrative constraints related to the breadth of information contained in hospital budgets.

“We want to be transparent with our communities … we’re willing to put (documents) on the table in the spirit of transparency. The act of having to turn over our entire budgets to the board up front is where we believe that’s a bridge too far,” Mr. Frazee said. “This impacts everything and really will have significant impacts quickly on our health care system.”

Speaker Longhurst leaned on former state representative and current Delaware deputy director of healthcare reform David Bentz as her witness, who explained the proposal is not solely based upon a similar model used in Vermont, but rather takes components of administrative guardrails used in other states, like Massachusetts.

“These sorts of cost drivers are pushing the total cost increases above the benchmarks, and that’ll all be apparent in the budgets, and the problem we have right now is a real lack of transparency on the budgets themselves. So we don’t necessarily know what the cost drivers are,” Mr. Bentz said.

“The reason why we chose this model is because there’s evidence around parts of the country that it works. And in those same states, they have better health care quality than us.”

Mr. Bentz was questioned numerous times regarding a clause in the bill that allows the state to impose a penalty on hospitals when their net revenues exceed the budgeted projection, which would be funneled to a fund within the state treasurer’s office.

The director said this clause was included so that the policy would be enforceable and would not be abused by the state in attempt to take revenue away from Delaware’s nonprofit hospitals.

“You have the claw back in there because at some point you need some enforcement mechanism,” Mr. Bentz said in response to a question by Rep. Valerie Jones Giltner, R-Georgetown.

Controversial vote

Throughout the night at Legislative Hall, there were several points of order called as lawmakers talked over one another and took jabs at colleagues and stakeholders in the chamber.

The first line of questioning came from Rep. Bryan Shupe, R-Milford, who grilled Speaker Longhurst over her decision to assign the bill to the House Administration Committee instead of the chamber’s health and human development contingent.

Rep. Shupe felt the bill should have been assigned to the House Health and Human Development Committee - of which he is a member of – and cited House Rule 9, which states that “ the Speaker shall determine the principal objective of a bill or resolution and…assign the same to the appropriate committee.”

“This is a bill… that’s making decisions on our entire health care industry here in Delaware and can affect every single family in the state of Delaware when it comes to health care, and the people that are appointed by leadership to make decisions on bills about health care did not get a chance to look at a bill that deals with health care, and it instead went to a five-person committee built out of leadership,” Rep. Shupe said.

House Minority Leader Mike Ramone, R-Newark, expanded on this issue and called Thursday’s hearing into question. Although, when House Democratic attorney Karen Lantz was summoned to discuss that challenge, she said that the move was indeed made indeed in accordance with House rules.

The speaker noted that, according to the chamber’s rules, she has that discretion, which was again pushed back by House Republicans.

Lawmakers attempted a motion to table the bill, but it was ultimately unsuccessful in a near party line vote, and despite calls for decorum and to respect the House of Representatives, lawmakers on both sides of the aisle disregarded those efforts throughout.

“I’ve been in the legislature for 20 years. I’ve served under three speakers of the House; never once has any male speaker, or anybody that’s ever served in this chamber as a speaker of the House, ever been asked what you are debating with her right now,” Speaker Longhurst said to applause from Democratic colleagues.

House Republicans continued to challenge the move, as well as the contents of the legislation, which led lawmakers to take a nearly 30-minute recess just after 9 p.m.

When the representatives returned, Rep. Ron Gray, R-Selbyville, rose to continue his dialogue on the legislation.

But before he could speak, Democratic lawmakers utilized a nondebatable House rule that suspended debate and led to a roll call vote.

Though House Republicans tried to contend the motion, the roll was called, resulting in the passage of House Substitute 2 for House Bill 350 by a vote of 21-16 with four lawmakers absent.

Following the bill’s approval, Rep. Sean Lynn, D-Dover, expressed his frustration with the tenor of Thursday’s session, as the lawmaker had been called on once during the debate, in which he made an unsuccessful attempt for a brief recess.

“I’m severely disappointed. I’ve been trying to stand up and have my comments heard for the last four hours… I’ve been completely rebuffed in every attempt to have my voice heard on behalf of my district,” he said. “We were deprived of a right to have questions asked and to have statements heard. I have significant issues about bond covenants and bonds that these entities have issued, which I think lead to significant preemption issues, and (have) not had the opportunity to be heard.”

That was echoed by Rep. Jeff Spiegelman, R-Clayton, who said that in his 12 years in office, he did not recall a bill having as much debate as House Bill 350.

“While, yes, it is in the rules for the majority… to be able to call for a vote in this manner…. on a bill of such importance in the state of Delaware, the minority of opinion, the minority of political opinion, was squashed by a vote today simply because it had run long,” he said.

House Minority Leader Mike Ramone, R-Newark, expressed similar thoughts, as did Rep. Danny Short, R-Seaford, who cited statistics and called out the hypocrisy of the state’s inability to hit their own spending benchmarks in recent years.

“We’re imposing a benchmark on a private industry. We can’t even make our own benchmark,” Rep. Short said. “We’re asking others to do what we can’t do ourselves.”

Though other lawmakers rose to speak Thursday, House Majority Leader Melissa Minor-Brown, D-New Castle, abruptly called for the chamber to adjourn its business for the night.

The House was slated to consider a number of other bills, which will likely be placed on this week’s agenda when lawmakers return to Legislative Hall.