CONCORD — New Hampshire will pay back $35 million in federal Medicaid funds a federal agency ruled should not have been sent to the state in 2004.
Under the agreement, the state will make quarterly payments over the next two years beginning in the first quarter of 2012 and ending in the last quarter of 2014.
The state will pay a total — including interest — of $35.8 million to the federal government, but does not acknowledge an error or wrongdoing in its use of the funds, according to the agreement state Health and Human Services Commissioner Nickolas Toumpas and Attorney General Michael Delaney signed Friday and federal officials in the regional office of the Centers for Medicaid and Medicare Services signed Monday.
At issue is the way the state distributed Disproportionate Share funds to reimburse hospitals for medical services patients did not pay for.
In a letter to Toumpas, the Center's regional director Richard McGreal said his agency is not planning to initiate an action to disallow the state's use of Disproportionate Share funds for years 2005 to 2009, but that does not preclude such an action in the future or an investigation by the Inspector General for the U.S. Department of Health and Human Services.
► Click here to see details of the agreement (.pdf).
The agreement will require the state to find $9 million in the current fiscal 2012 state budget and $18 million in the 2013 budget. The state will also have to address a $9 million obligation for the yet-to-be-written 2014 budget.
House Speaker William O'Brien said the agreement will mean a $27 million hole for the current biennial budget that will have to be addressed.
“While we certainly hoped that the federal government would reconsider the state's appeal, the reality that we are facing a $36 million hole — and a $27 million hole in this budget — is now upon us. That's why we introduced a bill (House Bill 635) to give the state the opportunity to make spending reductions to bring our budget back to balance,” O'Brien said. “Obviously, we have a lean state budget, but we are going to need to do what the working families across New Hampshire are doing right now: tightening their belts to live within their means. Clearly, this is going to involve the House, Senate and Governor working together to bring fiscal responsibility in order to resolve this old debt.”
Under the agreement, each party will pay its own attorneys' fees and costs. The state also waives its right to contest the federal agency's action before the U.S. District Court or any other court or tribunal.
State revenues are about $46 million less than anticipated for the current fiscal year due largely to the Medicaid Enhancement Tax hospitals pay the state. Until this fiscal year, the hospitals received most of that money back in Disproportionate Share payments. This year hospitals used federal rules to reduce their payments to the state by about $50 million.
In July the state asked a federal appeals board to reconsider its decision penalizing the state $35 million for Medicaid program errors dating from 2004.
State Health and Human Services officials said federal regulators reviewed and approved the state's use of a Medicaid Enhancement Tax to boost federal reimbursements. The state used the reimbursements to help balance the state budget.
HHS claimed the Centers for Medicare and Medicaid Services ignored evidence that federal administrators cleared the state to continue its practice through 2005.
They said the plan was agreed to after then-Gov. Craig Benson met with U.S. Health and Human Services Secretary Tommy Thompson.
However, the state lost its appeal in October and has been negotiating with the federal agency on how it would repay the money.
New Hampshire HHS Medicaid Agreement Under the agreement, the state will make quarterly payments over the next two years beginning in the first quarter of 2012 and ending in the last quarter of 2014.
The state will pay a total — including interest — of $35.8 million to the federal government, but does not acknowledge an error or wrongdoing in its use of the funds, according to the agreement state Health and Human Services Commissioner Nickolas Toumpas and Attorney General Michael Delaney signed Friday and federal officials in the regional office of the Centers for Medicaid and Medicare Services signed Monday.
At issue is the way the state distributed Disproportionate Share funds to reimburse hospitals for medical services patients did not pay for.
In a letter to Toumpas, the Center's regional director Richard McGreal said his agency is not planning to initiate an action to disallow the state's use of Disproportionate Share funds for years 2005 to 2009, but that does not preclude such an action in the future or an investigation by the Inspector General for the U.S. Department of Health and Human Services.
► Click here to see details of the agreement (.pdf).
The agreement will require the state to find $9 million in the current fiscal 2012 state budget and $18 million in the 2013 budget. The state will also have to address a $9 million obligation for the yet-to-be-written 2014 budget.
House Speaker William O'Brien said the agreement will mean a $27 million hole for the current biennial budget that will have to be addressed.
“While we certainly hoped that the federal government would reconsider the state's appeal, the reality that we are facing a $36 million hole — and a $27 million hole in this budget — is now upon us. That's why we introduced a bill (House Bill 635) to give the state the opportunity to make spending reductions to bring our budget back to balance,” O'Brien said. “Obviously, we have a lean state budget, but we are going to need to do what the working families across New Hampshire are doing right now: tightening their belts to live within their means. Clearly, this is going to involve the House, Senate and Governor working together to bring fiscal responsibility in order to resolve this old debt.”
Under the agreement, each party will pay its own attorneys' fees and costs. The state also waives its right to contest the federal agency's action before the U.S. District Court or any other court or tribunal.
State revenues are about $46 million less than anticipated for the current fiscal year due largely to the Medicaid Enhancement Tax hospitals pay the state. Until this fiscal year, the hospitals received most of that money back in Disproportionate Share payments. This year hospitals used federal rules to reduce their payments to the state by about $50 million.
In July the state asked a federal appeals board to reconsider its decision penalizing the state $35 million for Medicaid program errors dating from 2004.
State Health and Human Services officials said federal regulators reviewed and approved the state's use of a Medicaid Enhancement Tax to boost federal reimbursements. The state used the reimbursements to help balance the state budget.
HHS claimed the Centers for Medicare and Medicaid Services ignored evidence that federal administrators cleared the state to continue its practice through 2005.
They said the plan was agreed to after then-Gov. Craig Benson met with U.S. Health and Human Services Secretary Tommy Thompson.
However, the state lost its appeal in October and has been negotiating with the federal agency on how it would repay the money.
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