New state Department of Revenue guidelines will tax revenues from more hospital services
Hospital officials said the state's Medicaid Enhancement Tax penalizes the Dartmouth-Hitchcock Medical System because it integrates services between the hospital and its clinics.
The disagreement over what out-patient services are covered by the tax dropped MET revenues from $200 million annually prior to fiscal year 2011, to $176 million in fiscal year 2012 and $185 million in 2013.
Dartmouth Hitchcock director of government relations, former Sen. Matthew Houde, D-Meriden, told the commission the hospital paid $43 million in MET in fiscal year 2012 and $36 million in 2013. Hospitals pay this fiscal year's tax next month and Dartmouth expects it will owe $41 million or so.
Houde noted the hospital provided $816.8 million in services it was not paid for through charity care, unpaid bills, underpayments for Medicaid care and other arranagements.
Commission member and DRA commissioner John Beardsmore said his department has been consistent and has not changed its guidelines. He noted his department followed state and federal law, as well as the state's Medicaid plan in developing the guidelines it issued earlier this month.
Henry Lipman of Lakes Regional General Hospitals said the previous DRA commissioner said the MET was a self-reporting, or self-defined tax which meant the state's 26 hospitals developed their own ways of reporting. In areas where the new guidelines are consistent with the state Medicaid plan, there will be no problems, Lipman said, but where it is inconsistent they will be challenged. He said the key areas are laboratory and ambulance services, emergency room physician fees, rural health clinic revenue and "swing beds" for patients who initially need acute care but eventually move to nursing home-level care.
Hospitals say only the Medicaid payments are taxable, and also claim such things as laboratory fees, x-rays, physical therapy and professional services should be exempt. The state and hospitals generally agree on in-patient services subject to the tax.
At the same time, lawmakers stopped reimbursing the state's largest hospitals for uncompensated care, although the program continued for small rural hospitals.
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