N.H. Judge: Medicaid Tax On Hospitals Unconstitutional
A judge has ruled that New Hampshire cannot collect a Medicaid Enhancement Tax from hospitals.
In a ruling released Friday, Hillsborough County Superior Court Philip Mangones says the state should have stopped collecting the tax in 2011 when a loophole in the Medicaid reimbursement system closed. He says the tax is unconstitutional.
Catholic Medical Center, St. Joseph Hospital and Exeter Hospital sued in 2011, challenging the $31 million they paid in the tax that year. Before 2011, hospitals paid the tax and the state paid them back plus 3 percent--the enhancement--using federal Medicaid dollars. The state was reimbursed by the federal government and that money went into the state's general fund.
Mangones ruled that the state intended to eliminate the tax when the federal loophole closed.