DELAWARE- The Delaware Court of Chancery has ruled that ChristianaCare can move forward with a lawsuit challenging the constitutionality of a new state hospital oversight law.
The lawsuit targets House Bill 350, which created the Diamond State Hospital Cost Review Board. ChristianaCare and other hospital plaintiffs argue the law oversteps state authority by allowing a government-appointed board to influence hospital budgets and governance.
In Friday’s ruling, the court dismissed several claims but allowed one key constitutional claim to proceed. The court found there was sufficient legal ground to examine whether the law improperly interferes with hospital operations.
Delaware Healthcare Association President & CEO Brian Frazee said the decision affirms concerns about government overreach.
“Today’s Court of Chancery decision recognizes the stark difference between oversight and overreach,” Frazee said in a statement. “The law authorizes a state-run board to step into local hospitals’ private governance… Today’s opinion shows that this law raises significant constitutional questions.”
Frazee also reiterated a call to work collaboratively on healthcare reform, saying HB 350 was modeled after a “failing Vermont model” that doesn’t fit Delaware’s needs.
Senate Majority Leader Bryan Townsend, a lead sponsor of the bill, defended the law in a statement, emphasizing its goal to increase transparency and control rising healthcare costs.
“House Bill 350 was driven by legislators’ insistence on affordable care and better outcomes,” Townsend said. “It is disappointing but not surprising that ChristianaCare filed suit... they have resisted any kind of transparency and accountability.”
Townsend also noted that the court dismissed all but one of ChristianaCare’s claims and said the transparency measures in the law remain in place. He said lawmakers will continue evaluating how to protect patients and taxpayers moving forward.
The remaining claim will now proceed through the court system.