This story was produced by Spotlight Delaware as part of a partnership with Delaware Online/The News Journal. For more about Spotlight Delaware, visit www.spotlightdelaware.org.

A controversial state government board tasked with reining in costs at Delaware hospitals held its first meeting on Tuesday with members discussing how and when they will require health care providers to hand over their sensitive budget information.

The meeting occurred even as a lawsuit brought by ChristianaCare, the state’s largest hospital system, threatens to dissolve the oversight group’s authority. 

It also occurred while negotiations to amend the law that created the Diamond State Hospital Cost Review Board are ongoing between lawmakers and a hospital lobbying group, according to Brian Frazee, the president of the Delaware Healthcare Association who is involved in the talks and a non-voting member of the review board. 

Last month, a Delaware Chancery Court judge heard arguments for and against the state’s motion to toss out ChristianaCare’s lawsuit. At the time, hospital lawyers called the hospital review board “draconian,” saying it strips away hospital officials’ ability to control their own budget decisions.

The state’s lawyers argued the lawsuit has no place in Delaware’s business court. Last year, state lawmakers who approved the creation of the new regulatory board said it was needed to slow the growth of health care costs in the state. 

BOARD MEMBERS: Delaware’s hospital review board, at center of lawsuit, sees first members approved

At this point, the review board is incomplete as two members nominated by Gov. Matt Meyer await State Senate confirmation. The two prospects each previously worked at ChristianaCare. One was a doctor, while the other was an executive. 

Could changes be coming?

Last June, then-Gov. John Carney signed House Bill 350, which created the board tasked with reducing health care costs for Delawareans at a time when the state ranks as one of the highest for hospital costs in the nation. 

Before the bill passed, hospitals put up a major lobbying front, with staff flooding into Dover wearing white coats while speaking in opposition. Ultimately a compromise version of the legislation was reached last summer and quickly signed into effect.

Just weeks later though, ChristianaCare filed its lawsuit. And in November, Meyer, who had been more ambivalent in his support of the board, was elected as Delaware’s next governor.

LEGAL CHALLENGES: ChristianaCare files lawsuit over controversial health care cost oversight law

Shortly after the election, Frazee said Meyer had shown a willingness to make changes to the new law.

Frazee declined at the time to reveal details of those potential changes. But he did state that among his group’s primary contentions is the review board’s legal authority under the new law to modify hospital budgets if certain costs are not brought down.

In 2026, if the board determines a hospital’s spending exceeds a benchmark set by the state, it could require a hospital to send in a “performance improvement plan.” If the board finds the plan to be “unacceptable,” it may require a hospital to submit its annual budget for approval by the review board for at least three years. 

At the end of his term in December, Carney nominated five of the seven voting members of the new board, rather than leave it to Meyer, who took office a month later.

Tuesday’s review board meeting was uneventful and closer to an orientation for the members, where much of the conversation centered around what will be expected of the board. The review board has seven voting members, as well as Frazee, who is a non-voting member. 

REVIEW BOARD BACKGROUND: How a hospital cost review board in Delaware aims to rein in health care costs

Frazee said there was confusion around timelines and exactly what the board was supposed to do and what documents they’d seek from hospitals. He blamed that on what he called a “lack of stakeholder process that led to now a very messy, complicated and complex and confusing charge.”

“There was clearly a lot of confusion around timelines and some other logistics around the legislation,” Frazee said in an interview after the meeting.

On Wednesday, the Senate Executive Committee held a hearing to consider confirming the nominations of the remaining members of the board. During the meeting, they did little to question the two ChristianaCare veterans nominated by Meyer last month. 

The committee did not move the nominations forward for a full vote by the Senate on Wednesday evening, despite considering other nominees for other roles that were heard the same day. It is typical for nominees to receive confirmation votes on the same day as their Executive Committee hearing. 

When asked, a spokesperson for the Senate Democratic Caucus, which controls the chamber, did not elaborate as to the delay in the health board nominees. She said the appointees would go up for a confirmation vote in the Senate this week.

Transparency notice: David Singleton, who is a review board member, serves on the board of advisors for Spotlight Delaware. Advisors have no role in the editorial decision-making of Spotlight Delaware. For more information, see our Boards page.

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