Hospitals sue New Hampshire over tax that supports Medicaid

Boston Globe

15-04-2025

Dartmouth Health and Concord Hospital have also joined the lawsuit, which was filed in Merrimack Superior Court on Tuesday.
It's not the first time hospitals have fought against the tax. A Superior Court judge
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But the 2014 decision 'imperiled the existence of the Medicaid program,' according to the lawsuit, and hospitals reached an agreement with the state to keep raising funds. Some of the money went to meeting federal match requirements to fund the Medicaid program, and hospitals also received a portion of the money back in a reimbursement.
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The state's latest agreement with the hospitals expired last June, and they were unable to reach a new agreement, leading to the lawsuit.
Governor Kelly A. Ayotte criticized the lawsuit in a statement, and said the state had put forward a solution that prioritizes patients and protects funding for critical access hospitals, the state's small, rural hospitals that often have tighter margins.
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'Unfortunately, the plaintiffs are only focused on driving more money to billion-dollar corporations and have resorted to playing political games and misleading the public,' Ayotte said. 'They should return to the table and come to an agreement that benefits all Granite Staters.'
But hospitals say the new reimbursement plan proposed by the state is unacceptable as it will cause them to lose $70 million a year, according to the lawsuit.
'This difficult decision was made after months of attempted negotiations with the state to convey the potentially devastating impact this loss of funding will have on our health system's ability to deliver patient care, at a time when the federal government is also threatening to withhold funding,' said Joanne M. Conroy, president of Dartmouth Health.
Under the current tax agreement, Dartmouth Health provides 30 percent of the hospitals' total tax payments but would carry 75 percent of the lost revenue, she said. That's because the hospital serves patients from Vermont, who contribute to its revenue but aren't included in its reimbursement.
Conroy said in the last three years Dartmouth, a nonprofit health system, has contributed $885 million in community benefits, including free and reduced-priced care and $682 million in uncompensated health care.
Steve Ahnen, president of the New Hampshire Hospital Association, said the governor's proposal would impose 'punitive cuts' on hospitals, while delivering an additional $137 million to state coffers.
'It has an immediate impact on access to care,' he said.
In recent years, hospitals in aggregate have received a 91 percent reimbursement, but the governor has proposed cutting that to 80 percent, according to Ahnen.
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He said the loss would hurt hospitals, coming at the expense of patient care and benefiting the state.
'We agree that generating more revenue for the Medicaid program is a good thing because it allows us to invest in behavioral health or substance misuse or other services that are needed in the community,' he said. 'But to do so in a way that harms hospitals is absolutely the wrong approach.'
According to Ahnen, the hospitals' payments of $348 million help generate $485 million in federal matching funds for the state's Medicaid program.
'We want to protect access to care for patients, and we think there's a way to do that,' Ahnen said. 'We're committed to finding a resolution that works.'
Amanda Gokee can be reached at