Medicaid cuts drive conflict
CONCORD, NH – Ten New Hampshire hospitals have filed a federal lawsuit against the state of New Hampshire, seeking to enjoin the state from enacting its fiscal 2012-13 budget.
The suit was filed in U.S. District Court in late July, and claims that the state is violating the Medicaid Act by not providing sufficient reimbursement to hospitals and their physicians providing care to Medicaid patients.
The current New Hampshire state budget, which went into effect July 1, assessed a 5.5 percent tax on net patient service revenues at hospitals. Over the course of the two-year budget, the state's hospitals would be taxed more than $250 million.
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14.0pt">ospitals have been put in this extremely unfortunate position of shouldering spending cuts to balance the state budget by the action of current and previous legislative and executive branch officials,” said Steve Ahnen, president of the New Hampshire Hospital Association.
According to Ahnen, the current budget “breaks the commitment” that the State of New Hampshire made when the Medicaid Enhancement Tax (MET) and disproportionate share hospital (DSH) program were created.
“The goal [of the MET and DSH programs] was to leverage the tax on hospitals to generate additional federal revenue that could be used to help balance our state’s budget,” Ahnen said. “Hospitals reluctantly went along with this scheme because of the commitment made by state leaders at the time and which has been upheld over the years to ensure that hospitals were not harmed by the imposition of this tax.”
mso-fareast-font-family:"Times New Roman"">William O'Brien, the Republican Speaker of the New Hampshire House, criticized the lawsuit, calling it a “disservice to the public.” In an August op-ed in the normal">New Hampshire Union Leader, O’Brien said that lawmakers had little choice, given the “massive federal cut in Medicaid money.” He said the state budget moved $157 million over two years into the Medicaid program from the uncompensated care fund because New Hampshire’s larger hospitals are better able to manage the loss of uncompensated care, and that critical access hospitals would be protected.
“It was more important for the state to keep its commitment to the poor and disabled that are covered under Medicaid than to continue to provide the state’s largest hospitals with funding for their bad debt, unpaid care and other unreimbursed costs,” O’Brien wrote. 14.0pt">
Dartmouth-Hitchcock Medical Center, one of the hospitals participating in the lawsuit, is subject to a $40 million assessment under the tax in 2011. The medical center’s Boards of Trustees chair Wayne Granquist said it now faces the prospect of paying more to the state of New Hampshire than it receives in Medicaid reimbursements for caring for patients.
“This budget fundamentally threatens not only Dartmouth-Hitchcock, but the people throughout the region who rely on us for their health and well being,” Granquist said. “This lawsuit comes after we have exhausted all other avenues to express to the state legislature the impact of these draconian budget cuts.”
According to Granquist, New Hampshire has one of the lowest Medicaid reimbursement rates in the nation, and reimbursed Dartmouth-Hitchcock only $28 million of its costs in fiscal year 2010, against $88 million in care provided by the hospital to state Medicaid patients.
"Times New Roman"">U.S. District Court Judge Stephen McAuliffe has set a deadline of Sept. 28 for the state’s initial response to the lawsuit.
For more on reimbursement, see bit.ly/hfn-reimbursement