Editor’s Note: Gov. Kelly Ayotte issued the following news release Friday morning, but didn’t mention what the settlement includes or include the settlement. We asked the governor what the settlement includes and will update this story when she responds. Below is the statement the New Hampshire Hospital Association released April 15 about the lawsuit. — Nancy West

UPDATE at 2 p.m. RESPONSE FRIDAY FROM GOV. AYOTTE’s OFFICE ANSWERING QUESTIONS:

“This agreement delivers a budget neutral solution that benefits everyone, ensuring hospitals, especially small, rural hospitals, can continue to serve the patients and communities who depend on them. Total payments are consistent with what was requested by the hospitals while also delivering approximately $60 million in savings to the State from prior proposals.

The agreement between the State and plaintiffs: 

• Delivers approximately $1 billion in total payments to New Hampshire hospitals over three years.
• Makes tax revenue dollars go further for New Hampshire patients. Revenue comes from hospitals continuing to pay the MET. 
• Resolves 2018-2020 DSH payments issue to ensure compliance with federal rules.
• Structures the State’s payments around directed payments and rates, reducing risk due to potential federal policy changes.“

Original press release:
CONCORD, NH – Today, Governor Kelly Ayotte announced a settlement agreement of pending litigation between the State of New Hampshire and Dartmouth Health, Concord Hospital Health System, and the New Hampshire Hospital Association.  

Governor Ayotte released the following statement on the agreement:

“This agreement is a win for our state, for rural healthcare access, and, most importantly, for patients. I am proud of my team’s tireless efforts to reach a deal, and I thank Dartmouth Health, Concord Hospital, and the Hospital Association for coming back to the table to deliver the best possible outcome for everyone.”

Statement from Joanne M. Conroy, MD, CEO and President of Dartmouth Health:

“We are pleased that the State of New Hampshire, New Hampshire Hospital Association, Dartmouth Health and Concord Hospital System have reached a resolution regarding the Medicaid Enhancement Tax (MET) and Disproportionate Share Hospital (DSH) payments. This agreement is an important step toward ensuring that Dartmouth Health can continue to provide critical care to our patients and communities where and when they need it. We value our partnership with the state and are grateful for Governor Ayotte’s support to reach a resolution. We look forward to continued collaboration in support of a strong, sustainable healthcare system for our patients.”

Statement from Robert P. Steigmeyer, President and CEO of Concord Hospital Health System:

“We are encouraged that through this agreement with the State of New Hampshire quality, affordable health care will continue to be available to the patients and communities we serve at Concord Hospital Health System. We remain committed to working with state leaders to uphold our community-focused, charitable mission—now and for generations to come.”

Statement from Steve Ahnen, President, New Hampshire Hospital Association:  

“We are pleased that we were able to reach a settlement agreement with Governor Ayotte that will help strengthen the Medicaid program, support hospitals and other essential providers, and most importantly ensure continued care for the patients and communities who count on our hospitals to be there for them when they are needed most.”

NEW HAMPSHIRE HOSPITAL ASSOCIATION (NHHA) STATEMENT ON
LITIGATION CHALLENGING THE CONSTITUTIONALITY OF THE MEDICAID ENHANCEMENT TAX
April 15, 2025
Steve Ahnen, President of the New Hampshire Hospital Association

The New Hampshire Hospital Association, along with Dartmouth Health and its affiliated hospitals and Concord Hospital and its affiliates, today filed a lawsuit challenging the constitutionality of the Medicaid Enhancement Tax (MET) to protect access to important health care services for all patients.

The MET is levied exclusively on acute care hospitals and was established over 30 years ago to bring matching dollars to New Hampshire from the federal government to support the State’s Medicaid program. In return for paying the MET, hospitals receive payments to partially offset losses from uncompensated care.

Although two previous Superior Courts have ruled the MET was unconstitutional, hospitals have voluntarily continued to pay the tax over the last decade under two settlement agreements, which outlined a fair solution for hospitals that ensured access to patient care and a strong health care system for all Granite Staters. Those agreements have now expired.

Over months of good-faith negotiations with the State to craft a new agreement, the hospitals offered fair and reasonable proposals that would have delivered additional revenue to the State and the Medicaid system. But as of today, the State has not offered a fair or reasonable proposal and no resolution has been reached. During these negotiations, hospitals made clear that April 15th, the due date for hospitals to pay the MET, was the deadline for reaching an agreement on a new settlement. With no resolution in sight, hospitals have no choice but to file this lawsuit to protect access to important health care services for all patients.

The solution put forward by the Governor embraces the punitive cuts to hospitals and the 80% distribution formula put in place by the prior administration. Under that formula, hospitals lose $70 million annually, to the benefit of the State, and at the expense of patient care in local communities.

This year, the MET is anticipated to generate $348 million. That funding will be used to bring $485 million in additional federal funding to New Hampshire to support the State’s Medicaid Program. Without a new agreement the State would have to look to the general fund to finance the Medicaid program.

This tax increase will cause hospitals to lose $70 million and will have a rippling effect on their ability to deliver health care services to the communities who depend on them and will harm the ability of patients to get the care they need, when and where they need it. This will force hospitals to make decisions about the services they are able to provide.

Hospitals have been and continue to be willing to find a fair and equitable solution that works for the State, hospitals and Medicaid patients, but increasing the tax burden on hospitals is not a viable path forward.