Trustees of 10 New Hampshire hospitals, including the Dartmouth-Hitchcock health care system, claim that the state violated Medicare law by reallocating $130 million in federal Medicaid reimbursement funding to balance the state budget without analyzing the new plan's impact on access to care for Medicaid patients. In an April 26 letter to Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, 165 trustees requested federal intervention in halting the state plan, which they said inhibits the quality and accessibility of health care services at their centers.
The request for federal intervention represents the hospitals' follow-up effort to a lawsuit filed last year against Nicholas Toumpas, state commissioner of the Department of Health and Human Services, according to Vice President of Government Relations at Dartmouth-Hitchcock Medical Center Frank McDougall. By pursuing both remediation and justice through the federal courts, the trustees hope to compel the state to alter its funding plan, he said.
"The New Hampshire program has been pushed past the breaking point, and federal intervention is now necessary to stop any further deterioration of the Medicaid delivery system," the trustees wrote in the letter.
State Medicaid Director Katie Dunn said that the state is "aware" of the hospitals' concern but said they have "mischaracterized" the funding plan. New Hampshire has been working with the national Center for Medicaid Services over the past "eight or nine weeks" to document access to care measurements within the state, she said.
"We're not able to concur with the trustees' statement that the New Hampshire Medicaid system is broken," she said.
New Hampshire ranks 51st in Medicaid reimbursement rates among the country's states and territories, according to McDougall, who said that the state has been "aggressive" in reducing rates since 2008. The state ranks near the top of the list in per capita Medicaid spending, Dunn said.
DHMC treated 43,000 Medicaid patients at a cost of approximately $90 million in 2011, according to McDougall. The hospital was reimbursed for $28 million by the state, a "significantly lower" percentage than in other state policies, he said.
To compensate for the increase in cost, the hospital laid off five percent of its employees, increased its charges to commercial insurance providers and is currently considering eliminating some of its children's health specialists, McDougall said.
The cut in reimbursements is aggravated by a hospital "bed tax," imposed last year, which cost the hospital an additional $43 million, he said.
Other providers, such as Lakes Region General Hospital, Cheshire Medical Center and Southern New Hampshire Medical Center, have been forced to suspend regular care for Medicaid patients or discharge patients, he said.
"We have been forced to take actions we abhor in response to the state's fiscal irresponsibility," the trustees said in the letter, stating that the state plan is an attempt to shift New Hampshire's financial burden onto its hospitals.
The state expects hospitals to absorb the cost increases by maximizing efficiency of operations, according to Dunn. The hospitals that did not join in the suit or sign the letter have found alternative ways of maintaining their business, she said.
The decision to reduce care ultimately lies with the hospital, and Medicare patients who face reduced or eliminated care can request state assistance in locating an alternative provider, she said.
"If a hospital's primary care practice no longer wishes to provide that care, we have had no problem in finding other primary care providers who would be willing to take on new Medicaid patients," she said.
DHMC often acts as a "safety net" for patients who cannot afford to pay for care at other hospitals, but the trustees are concerned that maintaining the same level of care is "unsustainable," McDougall said.
"You can't sustain losses of this magnitude regardless of your size and still succeed in mission you stand for," he said. "We want to treat everyone who comes in the door. We don't ask about your ability to pay."
McDougall said that the federal government could take action by refusing to approve state waivers or planned amendments or by withholding Medicare funding from the state.
Dunn said she does not expect the federal government to exercise those options.
"That would be a drastic step to put individual health care and in some cases lives at stake," she said.
