Hos­pi­tals push back

New Hamp­shire, Wash­ing­ton sued for tak­ing funds

Modern Healthcare - - Regional News - Jaimy Lee

New Hamp­shire was the sec­ond state this month to be sued for leg­is­la­tion that fun­nels fed­eral pay­ments pre­vi­ously made to hos­pi­tals into state bud­gets. Ten hos­pi­tals in New Hamp­shire filed a law­suit last week in U.S. District Court in Con­cord, N.H., al­leg­ing that New Hamp­shire is vi­o­lat­ing the Med­i­caid Act by not pro­vid­ing suf­fi­cient re­im­burse­ment to hos­pi­tals and physi­cians to treat Med­i­caid pa­tients.

Ear­lier in July, the Wash­ing­ton State Hos­pi­tal As­so­ci­a­tion filed a law­suit in state court to block a law that would al­low the state to make up a short­age in its gen­eral fund with the pro­ceeds of a hos­pi­tal tax.

Also at hand is a case be­fore the U.S. Supreme Court that will de­ter­mine whether providers can sue in fed­eral courts to en­force Med­i­caid law. The ad­min­is­tra­tion filed an am­i­cus brief in May ar­gu­ing that they can­not. Ar­gu­ments in the case are sched­uled for Oct. 3.

Steve Ah­nen, pres­i­dent of the New Hamp- shire Hos­pi­tal As­so­ci­a­tion, said as­pects of the suit in Cal­i­for­nia are “con­sis­tent” with the suit in New Hamp­shire.

New Hamp­shire’s bud­get, which went into ef­fect July 1, will cut $230 mil­lion in dis­pro­por­tion­ate share fund­ing for some hos­pi­tals and health sys­tems in New Hamp­shire over the next two years. The hos­pi­tals al­lege that elim­i­nat­ing DSH pay­ments is “con­trary to the ex­press re­quire­ments of fed­eral law and the equally un­am­bigu­ous con­cerns of Congress.”

Hos­pi­tals that filed suit are Dart­mouthHitch­cock (Lebanon); El­liot Health Sys­tem (Manch­ester); Catholic Med­i­cal Cen­ter (Manch­ester); Went­worth-Dou­glass Hos­pi­tal (Dover); Ex­eter Health Re­sources (Ex­eter); South­ern New Hamp­shire Health Sys­tem (Nashua); St. Joseph Hos­pi­tal (Nashua); LRGHealth­care (La­co­nia); Cheshire Med­i­cal Cen­ter (Keene); and Fris­bie Me­mo­rial Hos­pi­tal (Rochester).

Sev­eral of those hos­pi­tals are plan­ning to close af­fil­i­ated physi­cian prac­tices to new Med- icaid pa­tients, shut down com­mu­nity-based pro­grams and cut jobs, ac­cord­ing to the law­suit. El­liot Health Sys­tem, which owns 264-bed El­liot Hos­pi­tal, said it laid off 182 em­ploy­ees as a re­sult. Cheshire Med­i­cal Cen­ter, a 140-bed hos­pi­tal, said it could cut up to 20 po­si­tions.

Dr. John Sch­legelmilch, chief med­i­cal of­fi­cer at Cheshire Med­i­cal Cen­ter, said the hos­pi­tal will take a $13 mil­lion hit this year, in­clud­ing the es­ti­mated $7.9 mil­lion it owes for the Med­i­caid En­hance­ment tax, and which will no longer be re­funded, and the roughly $5 mil­lion it ex­pects to spend on Med­i­caid pa­tients with­out be­ing re­im­bursed. “It will af­fect our abil­ity to main­tain ac­cess,” Sch­legelmilch said. “It’s a very large un­ex­pected ex­pense.”

The new bud­get is ex­pected to re­duce $230 mil­lion in DSH pay­ments and $28 mil­lion in other pay­ments, which in­clude grad­u­ate med­i­cal ed­u­ca­tion pay­ments, cat­a­strophic pay­ments and de­fer­ral of out­pa­tient cost set­tle­ments.

Prior to the change in the state bud­get, hos­pi­tals in New Hamp­shire paid 5.5% of their net pa­tient ser­vices rev­enue to the state as part of the Med­i­caid en­hance­ment tax. The pay­ments were matched by the fed­eral gov­ern­ment and re­turned to the hos­pi­tals. Now, the match­ing funds will be given to the state’s gen­eral fund.

Calls to the New Hamp­shire At­tor­ney Gen­eral’s of­fice were not re­turned.

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