Warmington Concerned About Sununu’s ‘Unilateral’ Action Reducing Hospital Medicaid Reimbursements

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Paula Tracy photo

Gov. Chris Sununu is pictured with Medicaid Director Henry Lipman and Health and Human Services Director Lori Weaver at last Wednesday's Executive Council meeting.


CONCORD – Executive Councilor and Democratic gubernatorial candidate Cinde Warmington said she is very concerned about the future financial health of the state’s 26 hospitals and the “unilateral action” taken by outgoing Republican Gov. Chris Sununu to reduce federal return tax payments to them by $35 million a year for the next decade.

“I am concerned that the conversation sort of abruptly ended and the governor took unilateral action to decrease funding to our hospitals without an assessment of the harm,” Warmington said after speaking on the issue at the Executive Council meeting Wednesday.

“I am very concerned about the impact of decreasing from 91 percent to 80 percent,” the Medicaid tax on hospitals which is repaid, and redirecting some of that money to community Medicaid providers who deal with both health care and mental health care, and do not pay the tax.

“I think it’s a serious concern to the hospitals and I know they are very worried that this will lead to a reduction of services,” she said.

Warmington said while she hears there is something that the legislature can do on veto day in September, she did not know what that would be and whether Sununu would accept it.

Any resurrected legislative deal would also have to be approved by Sununu who sounded unlikely to do any more negotiating on the subject, when he answered InDepthNH.org’s questions last week at a press briefing in his office. It would also require a two-thirds vote of both the House and Senate.

Instead he has directed Health and Human Services Commissioner Lori Weaver to send to the Biden Administration a new formula for the next 10 years which reduces their reimbursements and redirects money to community care facilities that cover everything from physical health, mental health and substance misuse treatment.

Steve Ahnen, president and Chief Executive Officer for the New Hampshire Hospital Association, said his organization is talking to all the potential candidates for governor and elected leaders in hopes of a change in what the governor has laid out.

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

Attempts to get comments from Republican candidates Kelly Ayotte and Chuck Morse on the subject were not successful on Monday.

Former Manchester Mayor Joyce Craig said: “The state continues downshifting costs to our residents and communities, greatly increasing the cost of living in New Hampshire. Now we’re seeing the same thing happen to our hospitals, as the state foots them with a $300 million MET tax.”

“Our hospitals and health care workers dedicate their lives to keeping Granite Staters healthy, and drastic cuts to hospital funding put necessary services like obstetrics, inpatient psychiatric care, and emergency operations at risk. It’s time New Hampshire had a Governor who is committed to partnering with the communities and industries in our state to ensure our state works for everyone. That’s what I did as Mayor and it’s what I’ll do as Governor,” Craig said,

The other Democrat running for governor, Jon Kiper, who has refused to take The Pledge against any broad-based tax for New Hampshire, said:

“For decades, our state legislature has dodged its responsibility to the Prevention and Treatment Fund, opting to take that revenue for other projects. Sununu and the NHGOP are penny wise and pound foolish. Republicans make a practice of neglecting entire programs, hoping the consequences won’t come before their term is up…

“Largely due to foolish commitments like ‘The Pledge,’ state lawmakers have relied upon fiscal shenanigans such as this hospital scheme, all to avoid raising the proper amount of revenue needed to run a state. Now we’re running out of sources of revenue to keep our state functioning,” Kiper said.

Ahnen said the deal brought forward by Senate President Jeb Bradley, R-Wolfeboro, which would have increased the current reimbursement from 91 percent to 93 percent would have actually benefited the state, providing $22 million more annually for the state above what they now get.

He said this comes at a time of vulnerability for the hospitals after COVID-19, but it was time to re-up a 10-year agreement after a 2014 settlement in which two courts found the tax unconstitutional.

When the legislation for a new deal could not be forged, he said Sununu used it as a “political club” to beat the hospitals.

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

A spat between Sununu and the hospitals has been ongoing for some time but it really began after 15 hospitals joined with the ACLU to take the state to court over the emergency room boarding crisis for mental health patients, rather than work with the state on its lack of bed capacity to help treat these individuals.

Sununu said in the past he did not know why they were not team players in the matter with the state and chided them for taking him to court instead of working on the crisis together.

Now the hospitals say he is playing hard ball.

Ahnen said it was really the American Civil Liberties Union which began the suit arguing and backed up by the courts which maintained that these individuals in emergency rooms needed to be given a timely hearing on their involuntary admission. A deal out of court was struck between the two and while the state has made progress on increasing the bed capacity to treat those in mental health crisis, it has not met the May deadline.

Warmington, a Concord attorney with expertise in hospital and medical care issues, said a drop by almost $35 million in hospital reimbursements could lead to loss of services at community hospitals across the state.

Almost half of the state’s hospitals will get less funding under the plan. Some will get a bit more. 

Sununu, speaking to reporters on the matter and others following an Executive Council meeting said the hospitals, “thought that political pressure which has maybe done them good in the past with other parts of government is not going to work here,” and the time for negotiation is over.

“At the end of the day, it’s about individuals and their access to health care,” by using community health centers and mental health centers which will receive more funding.

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

He noted today, July 1, is the implementation deadline.

Asked by InDepthNH.org  if there is more time.

Sununu replied “no.”

The rate change goes into effect on July 1. 

The Executive Council has faced crises and bail out plans for rural community based care including Mascoma Health Center in Enfield which almost had to shut its doors during COVID-19 for a lack of reimbursements and uncompensated care. 

Ahnen said Friday that hospitals in New Hampshire get some of the lowest Medicaid reimbursement rates in the country and this is a means to pay for that program so that patients have access to care at hospitals.

A $319 million tax, he said, generates at least another $319 million in federal revenue that supports the Medicaid program.

“So when we lose $35 million in that funding, and I would say, remember, hospitals continue to struggle financially as we come out of the pandemic with significant labor shortages, reliance on traveler staff, nurses and others, supply chain shortages, drug shortages, inflation, the inability to discharge patients coming out of the hospital when nursing homes and skilled nursing facilities and others aren’t able to accept patients who are ready to be discharged from the hospital, they end up staying in the hospital, taking a bed from a patient that might need it and the hospitals are no longer being reimbursed for that patient who no longer needs that level of care,” Ahnen said. “That backlog is a real challenge.”

For the governor to now say that hospitals are going to get only 80 percent of that tax back when the state collects all of the match plus now 20 percent versus the current agreement, Ahnen said there will be serious issues that the hospitals will be facing.

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