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State, hospitals again in dispute over uncompensated care

By DAVE SOLOMON
State House Bureau

April 16. 2018 6:53PM




CONCORD — State officials are again at odds with New Hampshire hospitals over payment for uncompensated care.

Last year, the state was forced to pay $33 million more than it had budgeted to the 26 hospitals for care provided to patients who, theoretically, had no ability to pay.

The liability for uncompensated care is split 50/50 with the federal government, and the $33 million was just the state’s share.

This year, a similar amount of state money is at issue, as hospitals claim to be owed $36 million, due by May 31.

The point of contention, this year as it was last year, is whether Medicare payments should count. The state has argued that a patient covered by Medicare should not be counted as uninsured, since the hospitals get some money.

The hospitals have been counting care to Medicare patients as “uncompensated care.”

Last year, the state relied on a notice by the Centers for Medicare and Medicaid (CMS) in the Federal Register, stating that Medicare reimbursements had to be included when calculating uncompensated care.

The hospitals challenged that rule change in court, claiming that a mere posting in the Federal Register was not adequate. Hoping the hospitals would lose, the state budgeted the lower amount. The hospitals prevailed, and the state was on the hook for $33 million.

The Centers for Medicare and Medicaid then went through the formal rule-making process and adopted the new rule requiring that Medicare payments be counted, in the hope that it would now stand up in court.

The hospitals sued again, and this time a federal district court judge ruled in March that the new rule, though properly produced, violated the underlying premise of the Medicaid statutes.

Just like last year, the state developed its budget in the hope that the rule would prevail, and is now on the hook for $36 million.

Deputy Attorney General Ann Rice wrote the hospitals on April 10 to say the state intends to comply with the law, although she noted appeals are pending. She stopped short of promising a $36 million settlement.

“The state fully intends to follow the law in the amount of payments that will be made by May 31,” she wrote.

Congress is expected to take up a bill to change the law so that Medicare and other third-party payments are included in the calculation of uncompensated care, in the hope of settling the matter once and for all.

In the meantime, state and hospital officials could come to a negotiated settlement on a lesser amount.

“The current agreement was inherited from the previous administration and does not provide long-term stability to the system,” said John Formella, chief counsel to Gov. Chris Sununu. “We are working to ensure that long-term stability is achieved.”

In any case, it’s extra money lawmakers will have to find, having already spent much of the state surplus from 2017 on infrastructure and school projects, while hoping to boost investments in the Division for Children, Youth and Families.

Rice’s letter suggests that the situation is likely to remain fluid right up to the May 31 deadline.

“Please note that in the event that the court order is overturned on appeal, the hospitals may be obligated to repay an over-payment,” she wrote.

Sununu spokesman Ben Vihstadt said the governor stands behind the decision to budget uncompensated care as he did.

“The governor and Republican leaders closely monitored legal developments last year and finalized the numbers only after CMS issued a valid and final rule that confirmed that the budgeted amounts for 2018-2019 were appropriate,” he said. “While the state is reevaluating the numbers in light of last month’s court decisions, the governor firmly stands by the budget decisions made last year.”

dsolomon@unionleader.com


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