DelawareSB 213153rd General Assembly (2024–2026)Senate

AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE RELATING TO HOSPITAL BUDGET REVIEW.

Sponsored By: Bryan Townsend (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 0 benefits, 1 costs, 2 mixed.

Hospitals face plans for excess spending

Beginning in 2027, the state hospital review board must notify hospitals whose yearly cost growth exceeds the state’s target. The Board may require a spending-control plan within 45 days after its determination and notice. Plans must explain the causes, list specific steps and measurable results, and set a timeline no longer than 12 months. Hospitals must fix problems identified in written Board guidance and resubmit within 30 days of receiving that guidance. This process does not apply when the Board finds a qualifying cost-control arrangement for that plan year.

Hospitals shift from approvals to reporting

The law ends routine state approval of Delaware hospitals’ proposed budgets and replaces it with yearly spending reports. Reports cover finances, services, patient use, and insurer and other buyer payments consistent with federal public disclosure rules. Hospitals must explain yearly changes and steps taken or planned to meet the state’s health care spending growth target. Audited financial statements are due within 30 days of completion, starting with 2023 audits. Knowing failures to provide information or meet rules or deadlines can bring penalties up to $500,000; orders require notice and a chance to be heard.

Hospitals trade financial risk for exemptions

Hospitals are exempt from spending-control plans for a year when the Board finds they have a qualifying cost-control arrangement. A Medicare or Medicaid global budget must cover at least 50% of past patient volume and risk at least 3% of net patient revenue. A downside-risk arrangement must cover annual costs equal to at least 3% of net patient revenue, with at least 10% of those costs at risk to the hospital. For hospitals with operating budgets over $1 billion, that second arrangement must cover at least 5,000 patients. The Board may approve other written agreements or raise specified thresholds by regulation; exempt hospitals still must submit yearly reports.

Sponsors & Cosponsors

Sponsor

Bryan Townsend
Democratic • Senate

Cosponsors

Kerri Evelyn Harris
Democratic • House
S. Elizabeth Lockman
Democratic • Senate
Melissa Minor-Brown
Democratic • House
Edward S. Osienski
Democratic • House
David P. Sokola
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 54 • No: 7

House vote • 1/29/2026

Passed (SM required)

Yes: 33 • No: 7

Senate vote • 1/20/2026