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Hospitals urge lawmakers to restore prior MET/DISH deal to preserve Medicaid match, state revenues
Summary
Hospital leaders told the Senate committee that reducing the hospital share of Medicaid‑enhancement tax proceeds to the state would strip millions from hospital budgets and leave some programs at risk; they proposed raising the assessment to 6% and structuring directed payments to secure federal match.
The Senate Health and Human Services Committee heard debate on Senate Bill 249, which addresses the Medicaid Enhancement Tax (MET) and disproportionate‑share hospital (DSH) payments that together fund hundreds of millions of dollars of Medicaid resources in New Hampshire.
How it works today: Hospitals pay a statutory assessment (MET) on net patient service revenue that is deposited into a state fund and used to draw federal matching dollars. The state then makes enhanced inpatient payments, directed payments and DSH payments so that hospitals receive a large share of MET proceeds while the state benefits from federal matching funds.
Stakeholder concerns: Hospital executives warned that the version of the MET/DISH arrangement in the governor’s budget — which reduces the share returned to hospitals to 80% (down from an earlier 91% arrangement) — would shift roughly $70 million in net funding away from hospitals. Witnesses said that outcome would threaten inpatient psychiatry units, maternity services and community programs (transportation, medication assistance, mobile clinics) and reduce access in rural areas.
What hospitals proposed: Hospital leaders urged lawmakers to adopt a framework that would raise the assessment rate to 6 percent and structure payments so that the state captures additional federal matching funds while limiting net losses to hospitals. Under that approach hospitals estimated the state would receive higher matched funds and many hospitals would see substantially smaller net reductions than under the governor’s 80% proposal.
Government response: Insurance and Medicaid officials said the state must weigh the competing goals of securing federal match, preserving hospital financial stability and funding other Medicaid priorities. Department staff said they will continue negotiations with hospitals to devise a compromise before the April funding deadline.
Next steps: Senators asked Governor’s Office and the hospital association to continue discussions; committee action will depend on whether the parties reach an agreement that preserves federal match while limiting disruption to hospital services.
