By Joseph Edelen

DOVER — The establishment of the Diamond State Hospital Cost Review Board is imminent, after the House of Representatives voted to send the bill to Gov. John Carney’s desk Tuesday.

Following the near party-line vote, the term-limited governor committed to signing House Bill 350 into law and thanked lead sponsors Speaker of the House Valerie Longhurst, D-Bear, and Senate Majority Leader Bryan Townsend, D-Newark, as well as hospital leaders, for their work on the legislation.

“Rising health care costs are having a significant impact on Delaware families and state taxpayers,” Gov. Carney said after the bill was passed. “House Bill 350 will help lower the growth of health care costs in our state, while making sure we’re protecting health care quality and access.”

The controversial proposal had a tumultuous path through the General Assembly, after being introduced by Democratic leaders in March. The Delaware Healthcare Association launched a widespread effort opposing the creation of a state-appointed board to oversee hospital budgets, and that opposition was echoed by Republican lawmakers.

With the board set to become law, its eight members would oversee hospitals’ annual budgets in an attempt to control rising costs.

The state’s spending growth benchmark — which has fluctuated between 3%-4% since its establishment in 2018 — would serve as a basis for the review. If a facility’s spending continuously exceeds the benchmark, the board can put it through a performance improvement process to develop solutions.

The bill was substituted twice and amended once, and House Republicans continued their resistance Tuesday, albeit with a new concern that the proposal requires a two-thirds majority vote, according to the Delaware Constitution.

House Minority Leader Mike Ramone, R-Newark, argued that the state’s general corporation law requires entities to be managed under the direction of a board of directors, and according to the constitution, “No general incorporation law, nor any special act of incorporation, shall be enacted without the concurrence of two-thirds of all the members elected to each House of the General Assembly.”

Rep. Ramone went on to question House Democratic and Republican attorneys about the two-thirds requirement because HB 350 pertains to “vesting a state board with managerial authority over the budgets of the hospital corporations.”

House attorney Karen Lantz responded, “This is … a regulatory board performing a regulatory function. There are other boards that manage other industries that do something not exactly the same but similar.”

But, she added, “I don’t think that is what is happening here, … a takeover of the administrative functions of the hospital.”

Ms. Lantz also noted that hospitals can appeal any budget decisions to Delaware Superior Court.

HB 350 had only required a simple majority in the General Assembly, as it amends Delaware code pertaining to the Delaware Health Care Commission.

But, with Republican lawmakers questioning the threshold of support and the ability for the Diamond State Hospital Cost Review Board to impose a budget if a facility continuously exceeds the spending benchmark, they called House attorney Ron Smith to weigh in.

He stated that, by overriding the decisions of hospitals’ boards of directors, sections of Delaware law do indeed require a two-thirds majority vote.

“Either way, it’s a two-thirds bill to amend the charter; it’s a two-thirds bill to override the board of directors, assuming the charter says that the board of directors manages (financial) affairs,” Mr. Smith said.

Because the attorneys disagreed on the legislation’s vote requirements, Division of Research director Mark Cutrona was called as a witness to discuss what would be next if it is determined that a two-thirds vote is needed.

“Somebody would have to challenge this. (They) would have to argue that it did not receive the required constitutional vote, and then, a court of law could determine that the procedure here did not meet the constitutional requirements,” Mr. Cutrona said. “It wouldn’t be something that this body could determine.”

Following the debate, lawmakers moved to a roll call vote on the substituted version of HB 350 as amended. The measure passed, 24-16, with Democratic Reps. Sean Lynn of Dover and Sean Matthews of Brandywine voting against.