The state of New Hampshire and Lebanon-based Dartmouth Health, Concord Hospital Health System and the New Hampshire Hospital Association have reached a settlement agreement on pending litigation over the state’s Medicaid Enhancement Tax and Disproportionate Share Hospital payments.
The settlement, announced May 23, resolves a lawsuit filed in April challenging the tax.
The Medicaid Enhancement Tax is imposed on net patient services revenue of certain hospitals, the New Hampshire Department of Revenue Administration website states.
Hospitals pay the tax and receive a significant portion back through Disproportionate Share Hospital payments, according to New Hampshire Public Radio.
Hospitals and the state have been in an ongoing dispute over the funding. In 2024, then-Gov. Chris Sununu shared his plan to adjust the process and redistribute some of the Medicaid Enhancement Tax dollars to community mental health and federally qualified health centers, according to a news release from current Gov. Kelly Ayotte.
The New Hampshire Hospital Association, Dartmouth Health and Concord Hospital sued the state in April when the parties were unable to reach an agreement.
The hospital association said at the time that hospitals would collectively lose about $70 million under New Hampshire’s proposal, according to New Hampshire Public Radio.
Ms. Ayotte released the following statement on the recently announced 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.”
Joanne Conroy, MD, CEO and president of Dartmouth Health, said in a statement:
“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 and Disproportionate Share Hospital 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.”
Robert Steigmeyer, president and CEO of Concord Hospital Health System, said in a statement:
“We are encouraged that through this agreement with the state of New Hampshire, quality, affordable healthcare 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.”
Steve Ahnen, president of the New Hampshire Hospital Association, said in a statement:
“We are pleased that we were able to reach a settlement agreement with Gov. 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.”
