Thanks to Court Case, N.H. Faces a New Budget Hurdle

Apr 16, 2018

New Hampshire State House.
Credit Allegra Boverman for NHPR

The state of New Hampshire sets aside money in its budget for hospitals that treat patients who are uninsured or on Medicaid.  Thanks to a court decision last month, the state now owes much more to hospitals than it had planned to owe.

Reporter Ethan DeWitt of the Concord Monitor broke the story and he spoke with NHPR's Peter Biello.

(This transcript was lightly edited for clarity.

So the state pays for uncompensated care. The state is required through federal law to pay hospitals when they serve these populations - people with no insurance, people on Medicaid. And so the state budgeted?

$166 million for the next fiscal year. $165 million for the fiscal year after that.

Understood. OK. And now because of this court decision they actually need to pay a lot more than that 6 million dollars a year?

Yes, so under the law under the current calculations at least for this next year hospitals are owed $237 million in comparison $166 million. That's a $71 million difference that the state did not budget for. Now half of that comes from federal funds. So that comes down to $36 million.

Did lawmakers know this might happen?

There were some warnings at the time, definitely. The hospitals had warned that there would be further lawsuits and some Democrats did as well during the budget process and they argued that whatever happens with these lawsuits the legislature should set aside this money just in case. The legislature decided not to, and now  we are short up to $36 million.

So where does the state hope to find this money?

That becomes complicated. Right now there are negotiations going on at the highest level with the governor, the attorney general's office, and hospitals. those negotiations have been very quiet and they've been they've been going on for weeks. No agreement has been made yet. So there's very little known about what's happening there. Some observers on the outside have some ideas.

There was a about $26 and a half million tranche of funding that came through the CHIP program when the CHIP (Children's Health Insurance Program) program was reauthorized.

And some have said that because we found alternative funding in the state for our CHIP program we can now use that money for other uses, but some are more doubtful of that. Representative Neal Kurk, the House Finance chairman, has a proposal to increase taxes on providers and hospitals through what's known as Medicaid enhancement tax. That's going to come up for a hearing tomorrow. That's not expected to be very popular in the health care community. It's a pretty broad tax on services. So there are different ideas but what it's going to come down to is negotiation between the governor's office, the attorney general's office, and the hospitals themselves.

....Because the hospitals could decide to waive some of that so the state wouldn't owe as much.

Yes, so the state does owe $71 million following that lawsuit, but anything could be negotiated between the parties. And what legislators are trying to do is look long term. These payments have long been controversial. They've been fought in state lawsuits and federal lawsuits. And what legislators are looking to is perhaps this is an opportunity to find a long term solution, to find the more stable payment mechanism that keeps everybody happy. And so they're looking at that, and that might avoid the need to pay the full $36 million.

And all of this is happening as the state is looking at a plan to fund expanded Medicaid. Are we likely to continue to face this problem is this something that may occur over and over again lawsuits and unexpected costs?

Well, historically it certainly has. New Hampshire had its own internal lawsuit in 2014 that determined our funding lawsuit - our funding formula -- that has nothing to do with this. So pretty much every level of this there is contention and the reason ... it comes down to just sort of a basic political difference between hospitals who say that we are treating these low income, high risk patients and we should get some compensation, we should be made whole. And lawmakers who say that hospitals are gaming the system and both both ... this is sort of a disagreement that's going to continue definitely into the future.

OK. And if the state does not pay. What happens?

Well, that would potentially open the state up to lawsuits by the hospitals, similar to the ones that are ongoing but rooted in the latest decision not to pay.