Lebanon
Under the tentative agreement announced last week, the state would appropriate an additional $23.4 million in fiscal year 2018, which ends on June 30, and an additional $22.2 million in 2019 for disproportionate share hospital payments, according to a news release issued on Thursday by Gov. Chris Sununu.
That’s less than the amount a recent court ruling found that hospitals across New Hampshire are due in disproportionate share hospital payments, but the New Hampshire Hospital Association said the compromise could be worth it if it means stability in the future.
“Right now, we have a tentative agreement to work on a seven-year deal whereby the hospital group has compromised and is willing to be paid less in the early years in exchange for stability and a higher yield in the (later) years of this agreement,” D-H General Counsel John Kacavas said in a phone interview on Monday.
Such payments, also known as DSH payments, are matched by the federal government and are intended to help cover hospitals’ costs related to uncompensated care.
The additional appropriations from Concord, slated to come from the general fund, would be added to the approximately $166 million already appropriated for such payments in each year.
“Our ultimate objective has always been to provide fiscal certainty and stability to both the state and the hospitals, and today we are one step closer to achieving that goal,” Sununu said in last week’s release.
Sununu’s release also states that the additional money represents a savings of $28 million from previous cost estimates.
The hospitals are owed an additional $36 million annually from the state, to be matched dollar for dollar by federal Medicaid payments, Joe Bouchard, assistant commissioner of the New Hampshire Department of Administrative Services, said in a phone interview on Monday.
Bouchard said he has yet to hear what the final word is on how much the state will be paying the hospitals.
“It’d be lovely if they negotiate it down,” he said.
Kacavas said the numbers are not final.
“The agreement is tentative still,” he said. “We haven’t signed anything.”
The payments were the subject of an April decision in federal district court in Washington, D.C., which voided a 2017 federal rule that reduced the amount owed to hospitals in such payments. The New Hampshire Legislature used the lower amount in creating the state’s budget, leading to a budget shortfall when the federal court found in the hospitals’ favor.
“Under this agreement, New Hampshire hospitals are agreeing to accept reduced reimbursements this year and next for care already provided in exchange for a longer-term and more sustainable structure,” the New Hampshire Hospital Association said in a news release when the deal was announced.
D-H, which has an annual operating budget of about $2 billion, is the largest provider of Medicaid services in the state and therefore receives the largest cut of DSH payments.
The D-H system — which in New Hampshire includes DHMC (technically operating as Mary Hitchcock Memorial Hospital) and Alice Peck Day Memorial Hospital in Lebanon, as well as Cheshire Medical Center in Keene and New London Hospital — expects to receive roughly a quarter of the total DSH payments made to the state’s hospitals.
Although D-H officials declined to discuss specific numbers, with the payments announced by Sununu to be doubled by the federal match totaling some $90 million, it appears that the agreement announced last week could secure roughly $22 million for the D-H hospitals over the next two years.
The DSH payments as a whole are “crucial” to the care provided by New Hampshire’s hospitals, said Kacavas.
“All our New Hampshire member hospitals really depend on these DSH payments,” he said. “It’s the difference (between) being able to provide certain services and not having the services.”
Kacavas said that while the DSH payments, which are partially paid by Medicaid enhancement tax payments made by the hospitals themselves, help cover the cost of uncompensated care, they do not cover it entirely.
In this way, the hospitals “still lose hundreds of millions,” he said.
The tentative agreement settles a dispute between the hospitals and lawmakers that heated up in late April when Senate President Chuck Morse, R-Salem, proposed a plan that would have taken $38 million from the state’s general fund and set it aside for the hospitals.
That plan, however, would have held the money in escrow until all legal appeals were exhausted.
The hospitals rejected that approach, saying they were owed the money by May 31, a federal deadline, and threatened litigation.
Last Thursday, the Senate approved the new plan announced by Sununu as an amendment to House Bill 1817.
“This legislation lays the groundwork for creating the financial certainty hospitals need in addition to being a good deal for our state by saving taxpayer dollars in the long run,” Morse said in the release from Sununu’s office.
To finalize the deal, next steps include passing the legislation, as well as revising a 2014 agreement with the hospitals relating to the payments and amending the state’s Medicaid plan.
Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.
