Dartmouth-Hitchcock Joins Nine NH Hospitals in Lawsuit against State

July 25, 2011
Lebanon, NH

Suit claims state violating Medicaid rules; federal court action seeks to enjoin state from enacting budget

Dartmouth-Hitchcock has joined nine other New Hampshire hospitals in a federal lawsuit against the state of New Hampshire, seeking to enjoin the state from enacting its fiscal 2012-13 budget.

The suit, filed today in U.S. District Court in Concord, claims that the state is violating the Medicaid Act by not providing sufficient reimbursement to hospitals and their physicians providing care to Medicaid patients. Medicaid is a federal/state partnership and New Hampshire is not fulfilling its legal obligations under this joint program.

Under the current state budget, which went into effect July 1, hospitals are assessed a 5.5 percent tax on net patient service revenues.  Over the course of the two-year budget, the state's hospitals would be taxed more than $250 million. Dartmouth-Hitchcock is subject to a $40 million assessment under the tax this year alone, and it now faces the prospect of paying more to the state of New Hampshire than it receives in Medicaid reimbursements for caring for patients.

"This budget fundamentally threatens not only Dartmouth-Hitchcock, but the people throughout the region who rely on us for their health and well being," said Dartmouth-Hitchcock Boards of Trustees Chair Wayne Granquist. "We are determined to stand up for our patients and for the committed people who deliver care to them. This lawsuit comes after we have exhausted all other avenues to express to the state legislature the impact of these draconian budget cuts."

Other hospitals listed as plaintiffs in the suit include Elliot Health System (Elliot Hospital) and Catholic Medical Center of Manchester, Wentworth-Douglas Hospital in Dover, Exeter Health Resources, Inc. (Exeter Hospital) in Exeter, Southern New Hampshire Health System and St. Joseph Hospital in Nashua, Cheshire Medical Center in Keene, Frisbie Memorial Hospital in Rochester, and LRGHealthcare (Lakes Region General Hospital) in Laconia.

Dartmouth-Hitchcock will be subject to a $40 million tax on top of the $60 million it loses in under-compensated care provided to New Hampshire Medicaid patients. New Hampshire, which has one of the lowest Medicaid reimbursement rates in the nation, reimbursed Dartmouth-Hitchcock only $28 million of its costs in fiscal year 2010, against $88 million in care provided by the hospital to state Medicaid patients. Last year, 43,000 individual New Hampshire Medicaid patients were served by Dartmouth-Hitchcock, with more than 2,000 admissions and more than 154,000 office visits.

About Dartmouth-Hitchcock: Dartmouth-Hitchcock is a national leader in evidence-based and patient-centered health care. The system includes hundreds of physicians, specialists, and other providers who work together at different locations to meet the health care needs of patients across northern New England. In addition to primary care services at local community practices, Dartmouth-Hitchcock patients have access to specialists in almost every area of medicine, as well as world-class research at Dartmouth Medical School and centers such as The Dartmouth Institute for Health Policy & Clinical Practice (TDI).

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