A trio of healthcare bills passed through Delaware Governor Matt Meyer’s desk Monday that, among other actions, brings a temporary ban on private equity’s hospital purchases and sets a multi-year phase-in of hospital price caps.
The legislation was applauded by the Delaware Healthcare Association (DHA), which had initially pushed back against an earlier iteration of the price caps when that bill was first introduced in March.
Other items in the bills include broadened eligibility to financial assistance from nonprofit hospitals access and outlines minimum primary care spending levels plus value-based care program requirements for individual insurance plans.
“This was a historically consequential session for healthcare in Delaware,” Brian Frazee, president and CEO of the DHA, said in a Monday statement.
The newly signed private equity acquisition ban, Senate Bill No. 313, is the latest state-level action from leaders concerned by firms obtaining and extracting wealth from provider organizations.
The bill describes practices such as sale-leasebacks and incremental service line cutbacks as threats to sustained care delivery in the state. It puts a block on various forms of transaction, changes in governance or other approaches in which private equity could gain influence over the state’s nonprofit acute care hospitals through July 1, 2028—but promises future action after the temporary ban’s expiry.
“A moratorium on such transactions by private equity is necessary to allow the State time to develop permanent statutory safeguards appropriate to Delaware’s healthcare market and the characteristics of its hospital systems,” the legislation reads.
On financial assistance, Senate Bill 13 lowers the cutoffs for mandatory free or discounted care.
Delaware nonprofit hospitals are now required to provide free care to those whose incomes are below 300% of the federal poverty level, 75% discounted care to those between 300% and 350%, and 50% discounted care for those between 350% and 400%. Others with incomes up to 500% of the federal poverty level will also qualify for at least a 50% “medical hardship” discount if medical bills exceed 10% of their annual income, per the legislation. The bill includes requirements for how hospitals must screen for discount eligibility, and clearly and prominently communicate the availability of financial assistance to patients.
The remaining law, Senate Bill 1, picked up early support from the physician-focused Medical Society of Delaware for its various primary care spending and payment items but proved more contentious with the local hospital industry.
Its original incarnation extended an existing healthcare spending benchmark an additional year, and then would require a cap on the cost per service hospitals billed to plans of 250% of Medicare reimbursement for comparable services.
DHA quickly protested, warning that the draft’s reference-based pricing policies would lead to $413 million in annual service cuts and 4,000 at-risk job, estimates nearly triple that of the projections shared by lawmakers.
“We need healthcare solutions that will close the gaps, not close hospital doors,” Frazee said at the time. “… To attract and retain doctors, nurses and allied health professionals, we need strong hospitals. Siloed policies like Senate Bill 1 will not enhance recruitment and retention at a time when we need more health care, not less, in our uniquely growing and aging state.”
A substitute version of the bill was introduced a couple months later. While it shared the 250% Medicare reference, hospitals wouldn’t be required to hit that mark until plan year 2033. A year-by-year phase-in would begin in plan year 2029, where outpatient services would be tied to 275% of the Medicare rate and outpatient services 310%. It also outlines some smaller facilities that would be exempted from these and other requirements.
DHA ultimately threw its weight behind the updated bill, and noted that hospitals will require continued collaboration with policymakers and stakeholders as operating pressures mount.
“Even as the healthcare sector faces major headwinds, Delaware hospitals continue to step up to be part of the solution to healthcare access and affordability,” Frazee said Monday. “The work will continue. These new laws will require intentional implementation as hospitals brace for the negative impacts to operations, workforce, and health outcomes as a result of upcoming federal policy challenges, including significant changes to Medicaid coming in 2027. We cannot lose sight of these dynamics.”