As used in this subchapter:

(1) “Board” means the Diamond State Hospital Cost Review Board established by § 9952 of this title.

(2) “Core CPI” means as defined in § 2503 of Title 18.

(3) “Hospital” means as defined in § 1001 of this title, except that hospitals that exclusively provide psychiatric services, rehabilitative services, or long-term acute care services are excluded from the application of this subchapter.

(4) “Insurer” means as defined in § 9903 of this title.

(5) “Manual” means the Uniform Reporting Manual for Budget Submissions to be adopted by regulation by the Board to ensure the consistency of information provided by hospitals under this subchapter.

(6) “Meaningful Cost Containment Arrangement” means, with respect to the applicable benchmark compliance plan year, any of the following:

a. A Medicare or Medicaid Global Budget Arrangement.

b. A Substantial Financial Downside Risk Arrangement.

c. Any other qualifying written agreement approved by the Board on application of a hospital under § 9953(d)(7)c. of this title.

(7) “Medicare or Medicaid Global Budget Arrangement” means a written agreement among Medicare, Medicaid, or other applicable federal or state governmental payer authorities or public programs; a hospital, health system or affiliate; and, as applicable, any necessary third-party payers that is designed to cover the projected costs of hospital-based care for a defined patient population covering at least 50% of the hospital’s historical patient volumes and representing at least 3% of the hospital’s net patient revenue at risk for the applicable benchmark compliance plan year, reflecting a historical baseline calculation adjusted for inflation, demographic shifts, risk adjustment, and other factors for a defined performance period.

(8) “Payer” means as defined in § 9903 of this title.

(9) “Public programs” means as defined in § 9903 of this title.

(10) “Purchaser” means any governmental entity or unit, which offers coverage on a self-insured basis, or any employer that is self-insured within the definitions of the Employee Retirement Income Security Act (ERISA) [29 U.S.C. § 1001 et seq.].

(11) “Spending benchmark” means as defined in § 9903 of this title.

(12) a. “Substantial Financial Downside Risk Arrangement” means, for the applicable benchmark compliance year, 1 or more written agreements between a payer, purchaser, or insurer and a hospital, health system, or affiliate for providing health-care services to a defined patient population that provide all of the following:

1. That total annual costs are not less than 3% of the hospital’s net patient revenue.

2. That a minimum of 10% of the total annual costs for the defined patient population are at risk to the hospital.

3. That, for any hospital having an annual operating budget greater than $1,000,000,000, a minimum of 5,000 covered patient lives are subject to the agreement.

b. The Board may, by regulation, increase the amounts or percentages set forth in paragraphs (12)a.1., a.2., or a.3. of this section.

(13) “Total annual costs” means the aggregate yearly health-care costs of a defined patient population in a Meaningful Cost Containment Arrangement in the applicable benchmark compliance year.

84 Del. Laws, c. 270, § 2;  85 Del. Laws, c. 236, § 1; 

(a) There is established the Diamond State Hospital Cost Review Board for the purpose of carrying out hospital budget reviews and related functions under this chapter.

(b) (1) The Board consists of 8 members as follows:

a. Seven voting members, including at least 1 member from each county, appointed by the Governor and confirmed by the Senate.

b. The President and CEO of the Delaware Healthcare Association, who shall serve as a nonvoting member.

(2) The members appointed by the Governor shall serve a 4-year term, except that the initial members may be appointed for a term less than 4 years to create staggered terms. A member shall continue to serve on the Board until the member’s successor has been appointed and qualified. A member may serve more than 1 term.

(3) The Governor shall designate a member appointed by the Governor to serve as Chair of the Board, who shall serve as Chair at the pleasure of the Governor.

(c) All members of the Board appointed by the Governor must possess the following qualifications:

(1) Knowledge of health-care policy, health-care delivery, or business, finance, or accounting.

(2) Knowledge, experience, and characteristics that complement those of the remaining members of the Board.

(3) Impartiality and the ability to remain free from undue influence by a personal, business, or professional relationship with any person subject to supervision or regulation by the Board.

(d) The Chair of the Delaware Health Care Commission shall set the date for the initial meeting of the Board and shall set the date of the next meeting if the Chair is vacant.

(e) The members of the Board appointed by the Governor shall each receive a salary as appropriated in the annual Appropriations Act, to be paid in equal monthly payments by the Treasurer of the State.

(f) (1) Four voting members constitutes a quorum of the Board and, except as set forth in paragraph (f)(2) of this section, the Board may take action by affirmative vote of a majority of members present and voting.

(2) The following actions require the affirmative vote of a majority of the voting members of the Board:

a., b. [Repealed.]

c. An enforcement action under § 9957 of this title.

d. Approval of a benchmark compliance plan under § 9954 of this title.

e. Adoption of a regulation under this subchapter.

f. Adoption of written findings of fact and determinations under § 9953(d)(7) of this title.

(g) The Board shall promulgate rules and regulations necessary for the implementation of this subchapter including a schedule for submission of information required from hospitals under § 9953 of this title and a Manual providing uniform definitions and submission criteria for the budget reporting categories listed in § 9953 of this title.

84 Del. Laws, c. 270, § 2;  85 Del. Laws, c. 236, § 2; 

(a) Hospitals shall annually submit to the Board any of the following information required by the Board under rules, regulations, and guidance promulgated under this subchapter, including the Manual:

(1) The hospital’s expenditures and revenues for the most recently completed fiscal year, including the financial information described in paragraph (a)(3) of this section, redlined to reflect increases and changes from the fiscal year immediately preceding such fiscal year.

(2) [Repealed.]

(3) Financial information, including all of the following:

a. Costs of operations.

b. Revenues.

c. Assets.

d. Liabilities.

e. Rates and charges in accordance with paragraph (a)(8) of this section.

f. Labor costs by units of service and budget category.

(4) Scope of services and volume of service information, including inpatient services, outpatient services, and ancillary services by type of service provided.

(5) Utilization information.

(6), (7) [Repealed.]

(8) Information about payments by payers and purchasers consistent with information subject to public disclosure required by 45 C.F.R. Part 180.

(9) Other information the Board determines to be relevant to the Board’s obligations under this section, including information relevant to any determination by the Board under paragraph (d)(7)c. of this section.

(10) A narrative regarding the budget reporting categories of this subsection, outlining the changes in the year-over-year results and the actions the hospital has taken and will take in the coming year to adhere to the health-care spending benchmark.

(b) Hospitals shall submit audited financial statements to the Board, within 30 days of such audited financial statements becoming finalized. This requirement begins with audited financial statements for 2023.

(c) [Repealed.]

(d) The Board shall do all of the following:

(1) Review utilization information.

(2) Analyze and consider the other information submitted by the hospital under subsections (a) and (b) of this section.

(3) Meet with each hospital to review and discuss each hospital’s budget information.

(4) Review the hospital’s investments in workforce development initiatives.

(5) Consider the salaries for the hospital’s executive and clinical leadership whose compensation is publicly disclosed in the hospital’s Internal Revenue Service Form 990 filings.

(6) Offer the opportunity for the public to provide comment on hospital budgets and other aspects of hospital costs.

(7) Issue written findings of fact and determinations as to any of the following:

a. Whether a hospital has satisfied the State’s health-care spending policy directives, including, as applicable, the health-care spending benchmark and the annual rate filing cost containment requirements under § 2503 of Title 18.

b. Whether a hospital has satisfied the elements of the hospital’s benchmark compliance plan, if applicable.

c. On the application of a hospital, whether the hospital is participating in a Meaningful Cost Containment Arrangement and therefore is not subject to the benchmark compliance plan process under § 9954 of this title for the applicable benchmark compliance plan year.

1. The application must include a written attestation from the hospital’s chief executive officer of all of the following:

A. That the hospital is not in breach of any material provision of the Meaningful Cost Containment Arrangement.

B. That the hospital has not received a waiver of any penalties during the term of the Meaningful Cost Containment Arrangement.

C. That the penalties and risk provisions of the Meaningful Cost Containment Arrangement have not been modified during the term of the Meaningful Cost Containment Arrangement.

2. If during the applicable benchmark compliance year the hospital breaches any material provision of, receives a waiver of any penalties under, or negotiates new terms of the Meaningful Cost Containment Arrangement, the hospital shall notify the Board.

(e) A hospital’s violation of the Board’s standards and procedures is subject to enforcement under § 9957 of this title.

(f) (1) The Board may, by a written report, make policy recommendations to the Delaware Health Care Commission, Senate Health & Social Services Committee, and the House Health & Human Development Committee regarding how to better align hospital budgets with the benchmark, while promoting efficient and economic operations and maintaining the ability of hospitals to meet hospitals’ financial obligations and to provide quality care.

(2) If the Board submits a report under paragraph (f)(1) of this section, the Board shall provide a copy to the Director and Librarian of the Division of Legislative Services.

84 Del. Laws, c. 270, § 2;  85 Del. Laws, c. 236, § 3; 

(a) (1) Beginning in 2027, and except as provided in paragraph (a)(2) of this section, if the Board determines that a hospital’s actual annual cost growth has exceeded the spending benchmark, the Board shall send the hospital notice of that finding and may require the hospital to submit a benchmark compliance plan within 45 days.

(2) A hospital that the Board determines is participating in a Meaningful Cost Containment Arrangement, and for which the hospital’s chief executive officer has provided a written attestation in compliance with § 9953(d)(7)c.1. of this title, is not subject to this section for the applicable benchmark compliance plan year.

(b) The Board shall promulgate additional regulations and written guidance about the benchmark compliance plan process, including discretionary factors that the Board may consider in deciding whether a benchmark compliance plan is required, taking into account a hospital’s financial condition, any ongoing strategies or investments that the health-care entity is implementing to improve patient access and quality, future long-term efficiency, population growth in the hospital service area, and such other factors as the Board may determine to be relevant.

(c) A benchmark compliance plan submitted by a hospital must identify the causes of the hospital’s cost growth and must include specific strategies, adjustments, and action steps the hospital proposes to implement to improve cost performance. The benchmark compliance plan must include specific identifiable and measurable expected outcomes and a timetable for implementation. The timetable for a benchmark compliance plan may not exceed 12 months.

(d) If the Board determines that the benchmark compliance plan is incomplete, the Board shall provide written guidance explaining the criteria that have not been met and may provide an additional time period, up to 30 days, for resubmission. The hospital shall address each deficiency noted by the Board in the Board’s written guidance, and resubmit the hospital’s benchmark compliance plan to the Board, no later than 30 days from the date of the hospital’s receipt of the Board’s written guidance.

(e)-(g) [Repealed.]

84 Del. Laws, c. 270, § 2;  85 Del. Laws, c. 236, § 4; 

84 Del. Laws, c. 270, § 2;  repealed by 85 Del. Laws, c. 236, § 5, effective Jan. 30, 2026.; 

(a) A hospital affected by any final decision of the Board may appeal from such order to the Superior Court within 30 days from the date upon which such decision is served. The appeal shall be filed with the prothonotary of the Superior Court and the summons in the appeal shall be served upon the Chair of the Board and the Secretary of the Department of Health and Social Services, either personally or by certified mail.

(b) The appeal shall be based upon the record created before the Board.

(c) The scope of review before the Court shall be that the Board’s findings shall be upheld if they are supported by sufficient evidence, free of error of law, and not arbitrary or capricious. When factual issues are reviewed the Court shall take due account of the presumption of official regularity and the specialized competence of the Board.

84 Del. Laws, c. 270, § 2; 

(a) A hospital that knowingly fails to provide information or adhere to standards, procedures, and deadlines under this subchapter, or a rule or regulation promulgated under this subchapter, may be assessed a civil penalty of up to $500,000.

(b) [Repealed.]

(c) An order under subsection (a) of this section may be issued only after a hospital has received notice and an opportunity to be heard by the Board.

84 Del. Laws, c. 270, § 2;  85 Del. Laws, c. 236, § 6; 

(a) The Board is a public body, subject to the open meetings requirement of § 10004 of Title 29; provided, however, that the Board may schedule and conduct private meetings with hospitals when the content of the discussion will include information that is commercial or financial information of a privileged or confidential nature.

(b) (1) Except as provided under paragraph (b)(2) of this section, records submitted by hospitals to the Board are not public records for purposes of the Freedom of Information Act [Chapter 100 of Title 29].

(2) The following are public records and shall be posted on the Board’s or the Commission’s website:

a. Original and modified budgets.

b. Spending and revenue data.

c. Utilization information.

(c) (1) The Board shall annually convene at least 1 public hearing per hospital subject to this subchapter to allow the hospital to present financial information required under § 9953 of this title and any benchmark compliance plan required under § 9954 of this title to the Board and engage in dialogue with the Board regarding questions, concerns, or additional information necessary to determine whether the hospital’s actual and projected annual spend growth is in line with the spending benchmark, other health-care spending directives, and other discretionary factors that the Board may consider as promulgated in regulation.

84 Del. Laws, c. 270, § 2;  85 Del. Laws, c. 236, § 7; 

(a) Except as provided in subsection (c) of this section, for calendar years 2025 and 2026, a hospital may not charge any payer, purchaser, insurer, or public program an amount that exceeds the greater of 2% or Core CPI plus 1% over rates from the previous year.

(b) A hospital may not charge or collect from a patient or any other individual or entity any amount that exceeds the amount permitted to be billed under subsection (a) of this section for any service.

(c) This section does not apply to a hospital that serves less than 5% Medicare eligible patients per year or a hospital that derives 45% or more of its revenue from Medicaid or uninsured patients.

84 Del. Laws, c. 270, § 3;