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Hospitals and State Spar Over Money


There’s a lot of tension between New Hampshire and hospitals in the state right now.

The source of the problem....money, of course.

Thursday morning the two sides clashed in federal court over a cut in how much the state pays to treat low-income patients.

And then this afternoon, lawmakers drilled down on a tax dispute with some of the hospitals.

Even before the budget passed in June the state’s relationship with hospitals was strained.

But by the time the dust settled the relationship had been put in the ICU.

See, to balance the budget, lawmakers had taken $120 million dollars that had been earmarked for low-income Medicaid patients.

Hospital attorney Scott O’Connell says that last move was just too much.

“It’s reached the point of un-sustainability. The system is now broken.”

The gist of the hospital’s federal lawsuit is that reimbursement rates are now so low, it’s putting too much responsibility on hospitals to care for the poor.

And they argue that violates the state’s agreement with the federal government.

But in court, Senior Assistant Attorney General Nancy Smith says hospitals have no legal authority to question state reimbursement rates.

“The Medicaid program that Congress envisioned is a partnership between the federal government and the state.”

Federal Judge Steven McAuliffe pressed Smith on that point.

He repeatedly asked- if hospitals, doctors or Medicaid recipients themselves believe the agreement between the state and Washington isn’t working, is there any legal recourse.

Smith said no.

Finally, McAuliffe said that seems to be an “odd perception.”

While that case plays out in the courtroom, a separate but related dispute is marching on at the capitol.

The hospitals say they’ve been told by the federal government that they don’t need to pay $50 million dollars in a tax to the state.

But Health and Human Services Commissioner Nick Toumpas says he’s been talking to the federal Center for Medicare and Medicaid Services, or CMS.

And he thinks Washington and the state see eye-to-eye.

He says the hospitals can expect a letter in the coming days.

“It will not just be a letter from us, but it will be a letter that we will have reviewed by CMS so that there won’t be any challenging of that.”

New Hampshire Hospital Association President Steve Ahnen didn’t sound conciliatory after hearing about the letter.

He says he hasn’t seen any letter, and has no idea what CMS is telling the state.

“But I have no reason to believe the guidance that CMS issued last summer is anything other than the federal guidance that they will review New Hampshire, or anybody else’s state plan.”

Ahnen says ultimately hospitals will pay the tax that they owe.

The state might consider that a resolution.

But from the hospitals’ perspective, that cure for this ailing relationship will probably feel a whole lot like medieval blood-letting. 

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