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Delaware committee hears hours of testimony on SB 1 to expand primary care and cap some hospital prices
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Summary
Senate Health and Social Services held a lengthy hearing on Senate Bill 1, a package that would expand primary-care investment and authorize hospital price ceilings or global budgets; witnesses were sharply divided on a proposed 250%‑of‑Medicare reference cap and on projected fiscal impacts for hospitals and rural providers.
The Delaware Senate Health and Social Services Committee spent the day hearing expert testimony and public comment on Senate Bill 1, a sponsor‑backed effort to expand primary‑care investment and to impose service‑level price ceilings or allow hospitals to enter global budgets.
Senator Townsend, the bill sponsor, told the committee the measure builds on earlier reforms and is intended to increase investment in primary care, improve outcomes and reduce overall health spending. "We have to invest in primary care," he said, arguing the "status quo is not sustainable" and that the bill would broaden participation beyond the fully insured population covered by earlier law.
Supporters — including the Medical Society of Delaware and independent primary‑care groups — said the legislation is needed to bolster practices that have struggled with low reimbursement and rising administrative burdens. "Independent primary‑care practices improve outcomes and reduce the overall cost of care," said Dr. Richard Henderson of the Medical Society. Dr. Mike Bradley, a Dover family physician, urged eliminating sunset language, including Medicaid and state employee plans, and adopting a multi‑year glide path for increased payments so practices can invest in teams and infrastructure.
Researchers and the Department of Insurance presented data that formed the core of the hearing. Insurance Commissioner Navarro said commercial investment in primary care rose from roughly $30 million in 2022 to about $70 million last year under earlier initiatives and argued SB1 would scale those gains. Rosalyn Murray, a health‑policy researcher at Brown University, cited multi‑state evidence that growth caps and service‑level price limits can reduce facility fees and premiums without clear evidence of reduced access when designed with safeguards.
Hospitals and hospital associations strongly contested the bill’s pricing proposals. Brian Frazee of the Delaware Healthcare Association said an independent consultant estimated reference‑based pricing at 250% of Medicare would cut about $413 million from hospital revenue; several hospital leaders warned of significant programmatic and service impacts. "This proposed price cap would result in an approximate reduction of $70,000,000 to our revenue" at Beebe Healthcare, said Dr. Tam, the system’s CEO, who described high Medicare payer mix and rural‑specific costs such as trauma and medevac services.
ChristianaCare’s Rebecca Ford and other hospital speakers reiterated that Medicare often underpays and that hospitals cross‑subsidize specialists, community programs and capital investments. "Destabilizing hospital financing is not going to move us toward this goal," Ford said, while acknowledging the need for more primary‑care investment.
Committee members pressed witnesses on several technical points: whether a 250% cap is an upper payment limit or a uniform rate; how pediatric hospitals and critical access or rural hospitals would be protected; whether caps would apply immediately to the whole commercial market or initially to a subset; and what timeline the bill uses to phase in changes. Researchers and the commissioner said 250% is presented as a price ceiling and that the bill allows alternative pathways such as global budgeting; they also emphasized the bill phases changes and extends primary‑care investments to larger populations over time.
Public comment reflected the split. Independent primary‑care physicians and advocacy groups urged passage to preserve community practices and improve access; hospital leaders, clinicians and pediatric specialists opposed the bill as written and asked for more nuance, timelines and protections for pediatric and rural providers. Speakers repeatedly asked the General Assembly to keep working with stakeholders; Senator Townsend said he would file clarifying language to reflect earlier drafts where appropriate.
No committee vote on SB1 occurred during the session. The committee accepted additional written testimony for 24 hours and adjourned after a motion by Senator Poore and second by Senator Townsend.
What happens next: lawmakers and DOI staff will continue negotiations and technical fixes to the bill language; witnesses and stakeholders said they plan to submit further written analyses and cost modeling to the committee.
