Bud­get squeezes hos­pi­tals

Some New Hamp­shire hos­pi­tals say state’s spend­ing plan will force them to shift costs, shut­ter pro­grams

Modern Healthcare - - Regional News - Jaimy Lee

Hos­pi­tals in New Hamp­shire are fac­ing mil­lions of dol­lars in cuts in dis­pro­por­tion­ate share pay­ments as a re­sult of the state’s bud­get, which went into ef­fect July 1.

The bud­get is ex­pected to gen­er­ate $258 mil­lion in rev­enue for the state over the next two years by cut­ting $230 mil­lion in DSH pay­ments and $28 mil­lion in other pay­ments, in­clud­ing sus­pend­ing grad­u­ate med­i­cal ed­u­ca­tion pay­ments, cat­a­strophic pay­ments and de­fer­ral of out­pa­tient cost set­tle­ments.

The Med­i­caid en­hance­ment tax re­quired hos­pi­tals to pay 5.5% of net pa­tient ser­vices rev­enue to the state. The pay­ments were matched by the fed­eral gov­ern­ment and the money was re­funded to the hos­pi­tals, al­low­ing New Hamp­shire to pocket the dif­fer­ence.

Now, large hos­pi­tals will not re­ceive DSH pay­ments for care pro­vided to Med­i­caid re­cip­i­ents and the unin­sured, al­low­ing the state to keep a greater share of the tax pro­ceeds.

Of the 24 acute-care hos­pi­tals in New Hamp­shire, 13 crit­i­cal-ac­cess fa­cil­i­ties are ex­pected to con­tinue to re­ceive DSH pay­ments, al­though the re­im­burse­ment rate for treat­ing Med­i­caid and unin­sured pa­tients may be re­duced if there are in­suf­fi­cient funds, said Steve Ah­nen, pres­i­dent of the New Hamp­shire Hos­pi­tal As­so­ci­a­tion.

Also, Ah­nen said, the tax may yield sig­nif­i­cantly less rev­enue. “It’s not quite clear that the tax will gen­er­ate all the rev­enue that the state as­sumes it will,” he said.

As a re­sult of the changes, hos­pi­tals in New Hamp­shire ar­gue that the cuts will force them to shift costs and shut­ter pro­grams and ser­vices. They also say they may in­crease rates for in­sur­ers.

Rick El­well, se­nior vice pres­i­dent and chief fi­nan­cial of­fi­cer for El­liot Hos­pi­tal in Manch­ester, N.H., said the tax will have a “sig­nif­i­cant im­pact” on the 264-bed fa­cil­ity.

Last year, El­liot Hos­pi­tal paid $15 mil­lion and re­ceived about $17 mil­lion back from the state in DSH pay­ments.

This year, El­well said, the hos­pi­tal will be ex­pected to pay about $15 mil­lion in Septem­ber and cut $ 15 mil­lion in costs be­cause it will not re­ceive the state’s re­im­burse­ment.

Ac­cord­ing to El­well, $15 mil­lion makes up roughly 5% to 6% of the hos­pi­tal’s con­trol­lable ex­penses. El­liot ex­ec­u­tives are ex­pected to present cost-cut­ting sug­ges­tions to the board this month. El­well said the ef­fect of the cost-cut­ting will carry over to pa­tients and the com­mu­nity.

“The com­mu­nity and pa­tients are prob­a­bly go­ing to have more ac­cess is­sues get­ting into the sys­tem,” El­well said.

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