The Connecticut Hospital Association and other hospitals in the state say they will fight a ruling mandating they continue to pay a state tax on patient revenue that costs them over $500 million a year.
"CHA and Connecticut hospitals intend to pursue every legal option at our disposal as we continue our efforts to challenge the tax," said Michele Sharp, spokeswoman for the Connecticut Hospital Association.
The State of Connecticut's Department of Social Services and Department of Revenue Services handed up the ruling Thursday.
The departments have acted within the scope of state law by imposing the hospital user fee on inpatient and outpatient hospital services, according to the 179-page ruling.
Hospitals pay the fee quarterly. In 2013, they paid a 6 percent tax.
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The tax does not apply to other providers, which the hospitals said was discriminatory.
However, the state departments ruled the fee is not discriminatory because hospitals provide services that other providers do not.
"The declaratory ruling is unfortunate but not unexpected," Sharp said. "The hospital tax, which now totals a staggering $556 million a year and is nearly 30 times what any other organization pays, is bad public policy. The tax results in the loss of hospital services and staff, increases the cost of healthcare, and damages the state's economy."
In their petition filed in November, the association and hospitals asked the departments to invalidate the hospital user fee on five grounds, including questions of whether the tax was constitutional and the methodology used.
Department of Revenue Services Commissioner Kevin Sullivan and Department of Social Services Commissioner Roderick Bremby rejected all five grounds. They said state law created the tax and they were following the statutes in collecting it.
Twitter: @SusanJMorse