Lebanon
Of those totals, Dartmouth-Hitchcock, the state’s largest hospital system, paid $50.1 million on April 15 and received almost $51.3 million in its so-called “disproportionate share hospital” — or DSH — payment on Tuesday.
The payments were made in accordance with a 2014 settlement between the hospitals and the state, said Steve Ahnen, president of the New Hampshire Hospital Association. The settlement enabled New Hampshire to continue to collect money under the state’s Medicaid enhancement tax to leverage tens of millions of dollars in federal Medicaid funds.
To explain why D-H received more than it paid in this year, D-H spokesman Rick Adams said that in recent years, D-H’s payments have outweighed the amount the Lebanon-based system has gotten back.
Since 2002, D-H has made more than $582 million in MET payments to the state, or approximately $135.5 million more than the hospital system has received in DSH payments over that time period, Adams said in an email on Friday.
“The MET is, essentially, a 5 percent sales tax on hospital revenue,” he said.
This year’s exchange of funds seems to have gone smoothly, despite the hospitals’ concerns earlier this year that the state had allocated insufficient funds for the payment.
But hospital officials also say a new federal rule and future changes to Medicaid threaten the long-term stability of the program, which New Hampshire relies on to cover a substantial portion of the cost of care for low-income patients.
Earlier this year, the state budgeted $33 million less than the amount called for in the 2014 agreement for this year’s DSH payments, and Gov. Chris Sununu proposed a budget for the upcoming biennium that included just $166 million in DSH payments in each of the next two fiscal years, well below the $241 million the hospitals were expecting.
On April 3, a lawyer representing the hospital association wrote the Attorney General’s Office and said that because the dedicated funding had not been met, the hospitals might put their payments in escrow, meaning officials in Concord couldn’t use the tax revenue to leverage the federal money.
The dispute in the current year, however, appears to have been resolved based on the recent payments.
An emailed request for comment from Sununu’s office was not returned by deadline on Friday.
Though the New Hampshire Legislature has yet to approve a budget for the two years beginning on July 1, state Rep. Sharon Nordgren, D-Hanover, said she expects it will include sufficient funds to cover DSH payments to hospitals.
“If it’s not there, it will be there before we vote on the budget as a whole (on) the 22nd of June,” Nordgren said.
Hospital officials say the larger problem for the funding system may come from the federal level.
“What’s happening in Washington could have some serious implications for New Hampshire’s Medicaid program,” Ahnen said.
President Donald Trump’s proposed budget cuts Medicaid by about $610 billion over the next 10 years.
Such cuts, along with the potential repeal of the Affordable Care Act would “move us backwards in efforts to increase coverage,” Ahnen said.
Without insurance coverage, patients are less likely to receive preventative care and more likely to end up needing expensive emergency care, Ahnen said.
Seeing patients in primary care settings is “more effective for them (and) less costly over time,” Ahnen said.
In addition to federal threats to Medicaid, hospital groups have expressed concerns about a rule issued in late March by the Centers for Medicare and Medicaid Services. The rule detailed how hospital’s DSH payments ought to be calculated.
Hospital groups, such as the American Hospital Association, maintain that these payments ought to be made based only on the difference between the cost of care and the amount hospitals receive from Medicaid. But, the new rule indicates that other payments, such as those from Medicare and private insurance, should also be subtracted from the amount hospitals are entitled to in DSH payments.
“The AHA is deeply disappointed in CMS’s action to finalize its rule regarding how third-party payments are treated when calculating the hospital-specific limitation on Medicaid DSH payments,” according to a release issued on March 31. “Of particular concern is the decision by CMS to ignore requests to apply this change in policy in a prospective manner to give states and hospitals sufficient time to make needed adjustments to ensure compliance.”
D-H is among those with concerns about the new federal rule and is “weighing our options going forward.” said Adams, the D-H spokesman.
Despite the new federal rule, Adams said the hospitals’ position is bolstered by a March decision by U.S. District Judge Landya McCafferty, who is based in Concord, which found in favor of the formula the state currently uses to calculate DSH payments.
“We were very pleased with Judge McCaffrey’s March ruling ensuring that long-standing policy with respect to the calculation of Medicaid uncompensated care is maintained,” Adams said.
Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.
