Hartford Business Journal

HARTFORDBUSINESS.COM | NOVEMBER 27, 2023 13 In a Nov. 2 report to CHEFA's board of directors, staff members Dan Kurowski, manager of program development, and Michael F. Morris, managing director, provided a preliminary financing summary for the project. The total cost of the new Walling- ford facility, including equipment, is approximately $75.1 million, according to the report. Connecticut Proton Therapy Center LLC intends to issue approximately $30 million of fixed-rate, privately placed bonds to finance the project. The issuance would consist of two series of bonds, including a $25 million tax-exempt and $5 million taxable issue, according to the report. In addition to bond proceeds, Yale and Hartford HealthCare will loan funds to the Connecticut Proton Therapy Center LLC toward the project cost, documents show. Bond proceeds will finance a portion of construction and provide working capital during the facility's startup phase. CHEFA staff, in a September memorandum, noted some existing proton therapy centers have faced financial struggles. At least 10 proton therapy centers in the United States have been financed through the issuance of tax-exempt debt. Of the 10 known transactions, nine have been in technical or actual payment default, and three of the centers filed for bankruptcy, with insufficient patient revenue a primary factor, the memorandum states. CHEFA's board is expected to consider the financing in early 2024. An example of a proton therapy treatment room at the proposed Danbury facility. RENDERING | CONTRIBUTED The state Office of Health Strategy (OHS), which regulates the health- care industry, originally approved the project in April 2022, with a certificate of need (CON) valid through April 7, 2024. In September, Yale and Hartford HealthCare asked for an extension of time to complete the project. They want the CON expiration date to be extended to April 7, 2026. Tina Kumar-Hyde, director of communications for OHS, said in November the request is under review. The applicants can't proceed with financing until the expiration deadline is extended. This is needed to give potential bond purchasers assurance that the project will be completed and the center will open as planned, documents show. Potential competition Meantime, an unrelated proposal for a competing proton treatment center in Danbury is pending. Danbury Proton LLC on Nov. 6 filed a new certificate of need application with OHS to establish an estimated $90 million proton therapy center at 85 Wooster Heights Road in Danbury. OHS previously denied Danbury Proton's plan, citing factors such as the financial feasibility of the project. Drew Crandall, a spokesperson for Danbury Proton, said communi- cation between it and OHS has been "significantly enhanced" since Dr. Deidre Gifford took over as executive director. He said Danbury Proton will work with OHS staff to develop a proposal it can support. Crandall said there is high enough demand in Connecticut for both the Danbury and Wallingford centers. The closest existing facilities in Boston and New York City have had to turn away patients because of the level of demand and need for proton therapy, Crandall said. Kumar-Hyde said Danbury Proton's latest application is now undergoing preliminary review. Trinity Health, Cigna in contract negotiations as deadline looms By Michelle Tuccitto Sullo msullo@hartfordbusiness.com P atients could see an impact come January if Trinity Health Of New England and health insurance provider Cigna fail to reach a new contract. Trinity Health Of New England includes St. Francis, St. Mary's, Johnson Memorial, and Mount Sinai Rehabilitation hospitals. Trinity Health said it has been negotiating with Cigna for a new contract that "more adequately covers the care we provide to our patients in Connecticut with Cigna commercial health plans." No deal had been reached as of Nov. 21. Trinity noted that periodic negoti- ations between health systems and insurance companies are a routine part of doing business. However, those negotiations have gotten more contentious in recent years, as healthcare providers contend with rising costs and insurers face pres- sure to rein in premium increases. The current contract ends Jan. 1, 2024 for St. Francis Hospital, Mount Sinai Rehabilitation Hospital, and Trinity Health Of New England Medical Group providers in Connecticut; and May 1, 2024 for St. Mary's and Johnson Memorial hospitals. After those dates, if no agreement is reached, patients with Cigna health insurance plans may no longer have in-network access to Trinity Health Of New England hospitals, facilities or providers. That could result in patients having to pay higher out-of-pocket costs for care, Trinity Health said. Until those dates, Trinity remains in-network, with no change for Cigna-insured patients. According to Trinity, as a not-for- profit health system, it has to contend with rising supply and labor costs. Trinity Health Of New England reported a $46 million loss from oper- ations in fiscal 2022 vs. a $34.7 million surplus a year earlier, according to the Office of Health Strategy. "We are doing our best to adapt and innovate, but we rely on fair reimbursement to keep our doors open," Trinity said. "Without it, we cannot provide the care and services patients depend on and need." Trinity Health asserted that Cigna to date has not offered a contract that "puts patients' health over their own wealth." Cigna in 2022 reported $180.5 billion in revenue and a $6.7 billion profit. A spokesperson for Cigna said the insurer will continue to negotiate with Trinity in good faith to reach a fair agreement. "We believe we have a shared responsibility to keep healthcare affordable, but Trinity continues to seek an unreasonable increase that is more than four times higher than the state of Connecticut's cost growth benchmark, which seeks to limit the rate of growth for health- care spending," Cigna said. "This increase will make health care unaffordable for local companies, their employees and their families, who directly pay the bills." If Trinity Health leaves its network, Cigna said it will work with customers to help them find in-network providers nearby. St. Francis Hospital is part of Trinity Health Of New England. HBJ FILE PHOTO

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