Warmington concerned about Sununu’s ‘unilateral’ move to reduce Medicaid reimbursements for hospitals

By PAULA TRACY, InDepthNH.org

CONCORD – City Councilwoman and Democratic gubernatorial candidate Cinde Warmington expressed deep concern about the future financial health of the state’s 26 hospitals and outgoing Republican Gov. Chris Sununu’s “unilateral action” to cut federal funding payments to those hospitals by $35 million a year over the next decade.

“I am concerned that the conversation somehow ended abruptly and the governor took unilateral action to cut funding to our hospitals without assessing the damage,” Warmington said after speaking on the issue at the Executive Council meeting on Wednesday.

“I am very concerned about the impact of reducing the hospital tax rate that is repaid from 91 percent to 80 percent” and diverting some of that money to community Medicaid providers that provide both health care and mental health care and do not pay the tax.

“I think this is a big concern for hospitals, and I know they are very afraid that there will be a reduction in their services,” she said.

Warmington said she had heard lawmakers could do something on Veto Day in September, but she didn’t know what that would be or whether Sununu would accept it.

Any revived bill would also need approval from Sununu, who did not appear to be interested in further negotiations on the issue when he answered questions from InDepthNH.org at a press conference in his office last week. It would also require a two-thirds majority in both the House and Senate.

Instead, he has ordered Health and Human Services Commissioner Lori Weaver to present the Biden administration with a new formula for the next decade that would reduce reimbursements and redirect the money to community-based care facilities that cover everything from physical health to mental health to substance abuse treatment.

Steve Ahnen, president and CEO of the New Hampshire Hospital Association, said his organization is in discussions with all potential gubernatorial candidates and elected officials in the hopes that the governor’s plans will change.

“We are trying to find a way forward,” Ahnen said in a telephone interview.

Attempts to obtain comments on the issue from Democratic gubernatorial candidate Joyce Craig and Republican candidates Kelly Ayotte and Chuck Morse were unsuccessful Monday.

The other Democratic gubernatorial candidate, Jon Kiper, who refused to commit to opposing a broad-based tax for New Hampshire, said:

“For decades, our state legislature has shirked its responsibility to the Prevention and Treatment Fund, preferring to use the revenues for other projects. Sununu and the NHGOP are cutting corners. Republicans regularly neglect entire programs and hope that the consequences do not occur before their term ends…

“Because of foolish commitments like The Pledge, state legislators have relied on budgetary tricks like this hospital program, all to avoid raising the revenue needed to run a state. Now we are running out of revenue sources to keep our state running,” Kiper said.

Ahnen said the deal introduced by Senate President Jeb Bradley (R-Wolfeboro), which would have increased the current reimbursement rate from 91 percent to 93 percent, would have actually benefited the state, earning it $22 million more annually than what it now receives.

He said it comes at a time when hospitals are at risk after Covid-19, but it is time to renew a 10-year agreement after two courts declared the tax unconstitutional in a 2014 settlement.

When legislation for a new deal failed to pass, Sununu used it as a “political cudgel” to put pressure on hospitals, he said.

A conference committee that drafted a bill that would have increased MET payments to 93 percent was supported by the Senate conferences but rejected by House Democrats in Bill 1593 https://www.gencourt.state.nh.us/bill_status/billinfo.aspx?id=1369&inflect=2.

Sununu and the hospitals have been at loggerheads for some time, but it really began when 15 hospitals joined the ACLU in suing the state over the crisis in mental health care in emergency rooms, rather than working with the state over the lack of beds to treat those individuals.

Sununu said he had not understood in the past why they had not acted as team players on this issue with the state and blamed them for taking him to court instead of working together on the crisis.

Now the hospitals say he is taking a tough approach.

Ahnen said it was actually the American Civil Liberties Union that filed the lawsuit, arguing with the courts that these people in emergency rooms must be given a timely hearing on their involuntary admission. An out-of-court settlement was reached between the two, and while the state has made progress in increasing bed capacity to treat people in mental health crises, it was unable to meet the May deadline.

Warmington, a Concord-based attorney with expertise in hospital and nursing issues, said a nearly $35 million drop in hospital reimbursements could lead to a loss of services at community hospitals across the state.

Nearly half of the state’s hospitals will receive less money under the plan. Some will even get a little more.

Sununu, speaking to reporters and others on the issue after an Executive Council meeting, said hospitals “believe that political pressure that may have helped them in the past with other parts of government is not going to work here” and the time for negotiations is over.

“Ultimately, it’s about the individual and their access to health care,” through the use of community health centers and mental health centers, which will be more heavily funded.

“No, no, we had a great compromise and a great middle ground that they rejected.”

He pointed out that today, July 1, is the deadline for implementation.

Asked by InDepthNH.org if there is more time.

Sununu replied “no.”

The tariff change will come into effect on July 1.

The Executive Council was faced with crises and rescue plans for community-based health care in rural areas, including the Mascoma Health Center in Enfield, which nearly closed its doors during the COVID-19 pandemic due to lack of reimbursement and uncompensated care.

Ahnen said Friday that New Hampshire hospitals have among the lowest Medicaid reimbursement rates in the nation and that this is a means to fund the program so patients have access to hospital care.

A $319 million tax, he said, would raise at least another $319 million in federal revenue to support the Medicaid program.

“So if we lose $35 million of that funding, and I will say, keep in mind that even after the pandemic, hospitals are still going to have financial problems, with significant labor shortages, reliance on traveling staff, nurses and others, supply chain bottlenecks, drug shortages, inflation, the inability to discharge patients from the hospital, when nursing homes and skilled nursing facilities and others are unable to accommodate patients who can be discharged from the hospital, they end up staying in the hospital, taking away a bed from a patient who may need it, and hospitals are no longer getting reimbursed for that patient who no longer needs that level of care,” Ahnen said. “That backlog is a real challenge.”

The governor’s statement that hospitals would only get 80 percent of this tax back, even though the state collects all of the subsidies, plus 20 percent as opposed to the current agreement, will cause serious problems for hospitals, according to Ahnen.