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November 27. 2012 7:25PM

Health and Human Services seeks $321 million more for health care

CONCORD - The state's largest agency seeks $321 million more in state funding for its upcoming two-year budget.

Health and Human Services officials say they need most of the money to restore funds for hospitals that treat the state's poorest residents and to increase what the state pays nursing homes for Medicaid patients.

Speaking at the Governor's Fiscal Year 2014-15 Operating Budget Hearing on Tuesday, Health and Human Services Commissioner Nicholas Toumpas said about 80 percent of his department's increase is to restore uncompensated care payments to hospitals and for additional payments to nursing homes.

Ten of the state's largest hospitals sued the state last year over rate reductions in the Medicaid program, including the elimination of uncompensated care payments to the state's largest hospitals. The suit is still pending.

The agency's requested budget includes $202 million in uncompensated care for hospitals in fiscal 2014 and $219 million in 2015. The money would not come from the state's general fund.

The department's request also includes reinstating hospital medical education payments, payments for catastrophic cases and a settlement with hospitals on outpatient reimbursement costs for Medicaid recipients.

Nursing homes sued the state when it reduced per-patient payments after budget writers failed to appropriate enough money to pay the rates it set for Medicaid patients. The resulting 2011 court ruling said the state has to pay the rate it sets.

Toumpas said the state has been paying nursing homes less than their costs to provide services.

He said the agency's budget request does not include increases in rates for other service providers or for additional administrative costs.

The agency's total budget increase tops $1 billion, including federal and other funding.

The department's request amounts to a 25 percent increase in state general fund spending and an overall increase of 29 percent for the next two-year budget cycle.

The agency's case loads - with the exception of the food stamp program - have stabilized, Toumpas said, although they are at an all time high.

Senate Finance Committee Chairman Chuck Morse, R-Salem, grilled Toumpas about the Medicaid program's transition to a managed-care system, and when it would begin. The system was supposed to begin July 1, but has been delayed as some hospitals have balked at reaching agreements with the three managed care companies that will run the program.

"I believe that managed care has to happen," Toumpas said. "I don't have a plan B; the system we have right now is not sustainable."

Budget writers had hoped to save $15 million this year through managed care. Toumpas said he couldn't say when managed care would be up and running because it was out of his hands.

Community college system

Like the University System of New Hampshire, the New Hampshire Community College System wants lawmakers to restore funding the last Legislature cut.

The community college system is asking for $42.5 million in each of the next two years of the biennium, an increase of $10.5 million a year from what was approved in the fiscal 2012-2013 state budget.

System chancellor Ross Gittell said the $10.5 would restore state funding to 2011 fiscal year levels of $37.5 million, with $3 million to reduce tuition 5 percent and an additional $2 million to meet the state's commitment to help train workers for Advanced Composite Manufacturing which is building a new facility in Rochester.

Corrections

State Corrections Department officials say they need additional money for equipment and additional personnel that have been delayed due to prior budget restraints.

Commissioner William Wrenn said that while his department has saved a considerable amount of money by not filling vacant positions, the overtime budget has escalated and managing the system is very difficult.

Total budget

Overall, state agencies and institutions have asked for an additional $3.3 billion in spending to be funded by state tax dollars for the next two fiscal years, a 26 percent increase.

The total request - including federal and other funding - is an additional $11.9 billion in spending or 19 percent.

Governor-elect Maggie Hassan said on Monday that departments' requests are unrealistic given the state's fragile economy and slow growing revenue stream.

The hearings are the first of many steps before the state's two-year operating budget is finalized in June.

Hearings continue Friday.

grayno@unionleader.com

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