Skip to main content
Delaware House Republicans

Agreement Announced to Pause a Lawsuit Contesting State Control Over Hospitals

October 11, 2025
a statue of lady justice with a blurred picture of a hospital corridor in the background

Earlier this week, the State of Delaware and ChristianaCare announced an agreement that pauses ongoing litigation over a controversial law that placed the budgeting authority of Delaware’s private non-profit hospitals under state control.

House Substitute 2 for House Bill 350 (as amended) passed the General Assembly last year in a contested vote that broke mainly along party lines, with Republicans in opposition. Then-Governor John Carney and House and Senate Democrats leveraged their control of the lawmaking process to enact the legislation despite the concerns expressed by healthcare providers. The measure was signed into law in June 2024.

Under the law, hospitals must submit their operating budgets, capital budgets, recent expenditures, and workforce development efforts to the seven-member Diamond State Hospital Cost Review Board for annual review.

Hospitals with budgets exceeding a benchmark targeted growth rate set by the state or not meeting other performance parameters are required to fashion an improvement plan. The law allows the board to coerce compliance by imposing fines of up to $500,000 on hospitals that fail to conform.

ChristianaCare filed a lawsuit in Chancery Court last summer seeking to overturn the statute. The complaint asserted that the law violates Delaware’s general corporation statutes and the state constitution by seizing the decision-making authority of private non-profit hospitals and giving it to an “unelected and unaccountable” state board. All of Delaware’s general acute care and pediatric hospitals are nonprofit.

The complaint also argued that the law contradicts the U.S. Constitution by taking over private hospital governance and budgets, forcing them to disclose confidential information, and unfairly targeting them.

The agreement announced on Wednesday could settle the case.

The agreement includes the following items:

  • The governor and ChristianaCare will work with legislators to draft and enact legislation reforming the current law. The legislation must be enacted by the end of January 2026 or the parties may return to litigation.
  • Hospitals must continue disclosing detailed spending and revenue data; financial information including costs of operations, revenues, assets, liabilities, rates, charges, units of service, and wage, salary, and other labor costs; service utilization data; and other information central to the board’s mission to determine whether hospitals have met the annual healthcare spending benchmark.
  • The authority granted to the state board to approve and modify hospital budgets will be eliminated.
  • Hospitals that don’t meet the growth benchmark must still submit a Benchmark Compliance Plan (BCP). However, willing participation in proven practices that lower healthcare costs may exempt hospitals from this requirement.

Additionally, ChristianaCare will negotiate in good faith with the governor, other hospitals, and other stakeholders this fall on a health care worker loan forgiveness investment.

If the terms of the agreement are met, the litigation will be dismissed.

To read the complete agreement, click here.

Recent Updates


Filter by Category

Marathon Last Night of the Legislative Session Reveals Need for Proposal

Earlier this year, State Rep. Lyndon Yearick (R-Camden, Woodside) introduced House Bill 428, a proposed constitutional amendment to establish a “Crossover Day” in Delaware. Under the amendment, each chamber of the General Assembly would be prohibited from passing bills and […]

Marathon Last Night of the Legislative Session Reveals Need for Proposal

A Tale of Two First Responder Bills

It was the best of times for supporters of a measure to increase penalties for people who wantonly damage emergency equipment, but the worst of times for the sponsors of a bill to create a safe zone around working first […]

A Tale of Two First Responder Bills

Marathon Last Night of the Legislative Session Reveals Need for Proposal

Earlier this year, State Rep. Lyndon Yearick (R-Camden, Woodside) introduced House Bill 428, a proposed constitutional amendment to establish a “Crossover Day” in Delaware. Under the amendment, each chamber of the General Assembly would be prohibited from passing bills and […]

Marathon Last Night of the Legislative Session Reveals Need for Proposal

A Tale of Two First Responder Bills

It was the best of times for supporters of a measure to increase penalties for people who wantonly damage emergency equipment, but the worst of times for the sponsors of a bill to create a safe zone around working first […]

A Tale of Two First Responder Bills

New Law Expands Hunting Opportunities in Delaware

The Statute Also Broadens Ammunition Allowed for Deer Hunting For Immediate Release: June 17, 2026 For More Information: Joseph Fulgham, 302-744-4184 A bill recently signed into law by Gov. Matt Meyer expands hunting in the First State by removing restrictions […]

State Rep. Jeff Hilovsky Not Seeking Reelection

For Immediate Release: Thursday, May 7, 2026For More Information: Joseph Fulgham, 302-744-4184 State Rep. Jeff Hilovsky (R-Long Neck, Oak Orchard) announced today that he will not seek reelection this fall. The two-term legislator said his decision was mainly motivated by […]

State Rep. Jeff Hilovsky Not Seeking Reelection

The Road to Equity: Delaware’s Property Reassessment Crisis

by Rep. Mike Smith For the first time in over 40 years, Delaware underwent a comprehensive statewide property reassessment. This process has understandably caused “sticker shock” and frustration for many. It is essential to clarify that this was not a […]

The Road to Equity: Delaware’s Property Reassessment Crisis

Time to Transform Delaware Public Education

By Dr. Jeff Hilovsky, State Representative, District 4 The world is changing nearly faster than we can react. Education in Delaware can lead the way by wisely incorporating Artificial Intelligence (AI) into classrooms now. Education must change, as the centuries-old […]

Time to Transform Delaware Public Education

Here’s the Thing…About Practicing What You Preach

Joseph Fulgham, Director of Policy and Communications,Delaware House of Representatives Republican Caucus Earlier this week, the House passed legislation requiring electric utilities to establish separate, higher rates for commercial facilities that use large amounts of energy. While this bill addresses […]