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6:22 pm
Tue May 6, 2014

Lawmakers Look For Medicaid Tax Solution

A recent ruling declaring a state tax on hospitals unconstitutional is leaving lawmakers scrambling for a fix. On Tuesday, three amendments were put forward, each offering a different path.

Representatives Cindy Rosenwald (D-Nashua) and Neal Kurk (R-Weare) are co-sponsoring a plan that changes technical language within the Medicaid Enhancement Tax and designates that none of the revenue be allocated to the state's general fund.

“We need to rethink the nature of the MET, the purpose and the partnership,” said Rosenwald.

Representatives Neal Kurk and Cindy Rosenwald testify before lawmakers.
Credit Todd Bookman / NHPR

Two lower courts found the current application is unfair because it taxes certain procedures at hospitals differently than if those same procedures were done outside of a hospital.

A second idea put forward by Representative David Hess (R-Hookset) seeks to broaden the tax to more of those providers, including ambulatory surgery centers and ambulance services, but lowers the overall rate by 10%.

Representative Mary Jane Wallner (D-Concord) presented the amendment to a House Committee, but stressed it is just a starting point.

“This is not in granite; this is not carved in stone,” said Wallner.

Earlier Tuesday, Senate President Chuck Morse put forward his own proposal that seeks to phase the MET out over time. It quickly won support from a committee and will go before the full Senate next week.

Revenue commissioner John Beardmore says lawmakers need to act fast, with the state counting on $185 million in MET revenue in this year’s budget. 

“The risk to the state is greater the longer this conversation goes on,” said Beardmore.

New Hampshire’s Supreme Court will likely decide the final fate of the current MET, though lawmakers say these amendments could alter that outcome by providing a clearer message on the intent of the law.

Another possible outcome is the hospitals settle the lawsuit in favor of a negotiated fix. N.H. Hospital Association President Steve Ahnen cautions that there is no simple solution.

“We have 26 community hospitals and two rehabilitation hospitals that currently pay the Medicaid Enhancement Tax, all with very different circumstances, all with very different communities,” said Ahnen. 

Governor Maggie Hassan says she remains open to further talks.

“I remain focused on negotiating with all relevant stakeholders, including legislators from both parties, hospitals and providers, and it is critical that we take steps that will allow these ideas to move through the legislative process as quickly as possible.”