Under the agreement, the state’s 25 hospitals will continue to pay a hospital tax, but the state will use all of the resulting funds to support New Hampshire healthcare services, according to the report. Starting in fiscal year 2012, hospitals paid the tax — which the state uses to increase the funding available through a federal matching program — but the largest hospitals no longer received additional state funding for uncompensated care.
The loss of additional Medicaid payments led many hospitals to make considerable cuts, such as service eliminations and large workforce reductions. The largest hospitals were left paying a tax of $9 million to $17 million annually without offsetting payments from the state. Although the state will not restore all cut payments, the agreement is expected to bolster operating margins long-term, according to Moody’s. However, because the state won’t restore payments for another year, hospitals will not receive relief from short-term fiscal pressures.
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