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September 28. 2012 10:17PM
Federal judge refuses to dismiss NH hospitals' Medicaid lawsuit
CONCORD — A federal judge Thursday refused to grant the state's request to dismiss much of the lawsuit filed by 10 of the state's 13 largest hospitals challenging reductions in Medicaid payment rates.
The state reduced provider payments to hospitals in 2008 by as much as one third due to a budget shortfall and then last year eliminated $115 million the state used to return to hospitals annually under the Medicaid Enhancement Tax.
The hospitals sued seeking a return to pre-2008 rates and asking the U.S. District Court to stop the state from imposing the new rates, which the court declined to do.
In his order, Judge Stephen J. McAuliffe said the hospitals have presented enough evidence the state has not followed its own and federal rules in reducing rates to deny the motion to dismiss.
McAuliffe wrote “plaintiffs have made a substantial showing that hardship is being suffered by both providers and Medicaid eligible patients due to the reduced rates, and that continuing enforcement of those rates, if unlawful, will at some point result in irreparable injury.”
However, McAuliffe said, he is unable to determine if the reductions were legally made without clarification from U.S. Health and Human Services officials.
The hospitals argued the sole reason for the rate reductions was budgetary, which cannot be the only factor under federal law.
The state argued the hospitals do not have standing to sue under the federal law and instead have to take their challenge to the Secretary of Health and Human Services who would decide if the state followed the proper procedure.
The state also noted the federal agency is currently reviewing the state's action.
McAuliffe noted the Secretary of Health and Human Services may decide the state's action is legal and does follow the state's Medicaid plan, but that has not been determined at this time.
The judge scheduled a Nov. 1 hearing and asked the Secretary or her representatives to appear to answer questions “with respect to her primary jurisdiction to administratively determine the validity of the rate reductions at issue under the Medicaid law.”
Other issues McAuliffe raised that need clarification include:
-- Whether the federal agency intends to take action against the state because of the cuts and when it might occur.
-- If the state's actions comply with the federal requirements in order to change rates.
-- Whether the federal agency will approve the new rates.
-- If the court should stay the new rates until there is a final decision.
grayno@unionleader.com
The state reduced provider payments to hospitals in 2008 by as much as one third due to a budget shortfall and then last year eliminated $115 million the state used to return to hospitals annually under the Medicaid Enhancement Tax.
The hospitals sued seeking a return to pre-2008 rates and asking the U.S. District Court to stop the state from imposing the new rates, which the court declined to do.
In his order, Judge Stephen J. McAuliffe said the hospitals have presented enough evidence the state has not followed its own and federal rules in reducing rates to deny the motion to dismiss.
McAuliffe wrote “plaintiffs have made a substantial showing that hardship is being suffered by both providers and Medicaid eligible patients due to the reduced rates, and that continuing enforcement of those rates, if unlawful, will at some point result in irreparable injury.”
However, McAuliffe said, he is unable to determine if the reductions were legally made without clarification from U.S. Health and Human Services officials.
The hospitals argued the sole reason for the rate reductions was budgetary, which cannot be the only factor under federal law.
The state argued the hospitals do not have standing to sue under the federal law and instead have to take their challenge to the Secretary of Health and Human Services who would decide if the state followed the proper procedure.
The state also noted the federal agency is currently reviewing the state's action.
McAuliffe noted the Secretary of Health and Human Services may decide the state's action is legal and does follow the state's Medicaid plan, but that has not been determined at this time.
The judge scheduled a Nov. 1 hearing and asked the Secretary or her representatives to appear to answer questions “with respect to her primary jurisdiction to administratively determine the validity of the rate reductions at issue under the Medicaid law.”
Other issues McAuliffe raised that need clarification include:
-- Whether the federal agency intends to take action against the state because of the cuts and when it might occur.
-- If the state's actions comply with the federal requirements in order to change rates.
-- Whether the federal agency will approve the new rates.
-- If the court should stay the new rates until there is a final decision.
grayno@unionleader.com
