Manchester, NH. 26 New Hampshire hospitals have struck a seven-year deal with the state of New Hampshire to provide the hospitals with an estimated $1.7 billion in reimbursements for uncompensated care, defined as health care services provided to patients who cannot pay for the care they received.
As part of the deal, the acute care hospitals will receive a seven-year commitment that provides much needed certainty and security on what will be paid in exchange for reduced reimbursements in the first two years.
In 2014, the hospitals reached a deal to resolve ongoing litigation in exchange for disproportionate share payments (DSH) to supplement uncompensated care. The deal worked well in the initial years until the Centers for Medicare and Medicaid Services (CMS) enforced the dual eligibility payment policies first in FAQs 33 & 34 and then through its Final Rule. The New Hampshire hospitals sued and won. The federal district court issued an injunction and the First Circuit affirmed.
When CMS pressed its new regulation with the same policy, the hospitals sued again. While that case was pending, another court vacated the rule. This meant that the hospitals would receive $70 million more in uncompensated care reimbursements than the state had budgeted for state fiscal year 2018. Unhappy with this outcome, the state of New Hampshire wanted to pull the plug on that deal. The hospitals, with legal counsel from Nixon Peabody LLP, prepared yet another action to force compliance with the existing payment obligations.
“This is a major development for New Hampshire hospitals and the patients that they serve,” said Scott O’Connell, Nixon Peabody partner and lead counsel representing the 26 hospitals. “This agreement brings to an end the nearly decade-long process of policy setting by litigation. Under this agreement, the hospitals and state receive certainty and security regarding payments, which is so important in the ever changing health care landscape.”
Nixon Peabody’s Litigation team was led by chair of the firm’s Litigation Department, Scott O’Connell and included associates Morgan Nighan, Kierstan Schultz, Marx Calderon and Julianna Malogolowkin.