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Garry Rayno's State House Dome: Crunch time for fixing Medicaid tax woes

State House Bureau

May 10. 2014 10:55PM

The Senate and the House will pass bills this week aimed at fixing the Medicaid Enhancement Tax problem now that two superior court judges have found it unconstitutional and two bond rating agencies have told the state it better do something.

About $185 million a year in state revenue is at stake, although all but $72 million goes back to the hospitals either through provider payments under the Medicaid program or as uncompensated care payments to help with unpaid bills.

Senate President Chuck Morse laid out a plan last week that would phase out the tax over time and begin lowering the 5.5 percent rate on hospital services by one-quarter of 1 percent a year beginning with the next biennium.

His plan would offset the MET loss by using insurance tax revenues generated when 50,000 of the state's adult poor join the state Medicaid program under the Affordable Care Act and by garnering additional federal matching money for health care services.

While Morse wants to reduce the money hospitals would have to pay, he also wants to boost what they receive for Medicaid services. New Hampshire has the lowest reimbursement rates in the country, paying about 50 cents on the dollar for what services cost.

The House Ways and Means Committee last week heard two proposals: one to expand the MET to other health care providers while lowering the rate, and another that would ensure the money collected would be used only for health care services. The proposal also would reinforce the state's position that the MET is constitutional.

The sponsors of both proposals reiterated they are just suggestions and could be changed before any solution is found.

The committee took longtime member Rep. Neal Kurk's suggestion and approved both amendments. The Weare Republican said that would give conference committee members more alternatives to work with when they begin negotiations.

Everyone knows the House and Senate plans will go to a conference committee, where key lawmakers will try to reach a consensus, although that looks nearly impossible given the differences between the proposed approaches.

There simply may not be enough time to reach a compromise by the time lawmakers are scheduled to leave Concord June 5.The problem is not only among lawmakers. Hospitals also cannot agree whether the MET tax should be eliminated or continued. Those who want it eliminated say they won the lawsuit, why negotiate; the other side says the tax provides significant federal and state money.Hospitals are doing the math to see which approach would be the best financial arrangement for them.

Morse warned last week that any agreement lawmakers reach would have to have all the hospitals on board to go forward, not just one or two, or even a dozen.

No one believes a final solution is possible in the time left this session, but a short-term fix is almost a necessity or the next budget becomes even more difficult to balance, and the bond rating agencies are watching.

A downgrade would make borrowing more expensive for everyone: cities, towns and counties.

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Social Media: There is no better example of the kinds of games that are played this time of year between the House and Senate than several bills dealing with social media accounts and what employers and educational institutions can or cannot require employees or students to do with their accounts.

Last week, the Senate approved House Bill 1200 by attaching the bill it passed prohibiting colleges and universities from requiring or requesting their students to disclose or provide access to a personal social media account.

When the House passed HB 1200, it included educational institutions serving students from kindergarten to 12th grade as well as colleges.

The Senate took that provision out before approving HB 1200. The House took the Senate bill and added the restrictions for kindergarten to 12th grade.

The Senate tabled HB 1200 after passing it. Why? So negotiations would be over the Senate bill, which they believe will give them the upper hand.

Similar shenanigans occurred with bills dealing with what employers can require of employees and their social media accounts.

Another example is House Bill 1635, which deals with how the state will pay for the settlement reached on its mental health system. The Senate leadership has been hot on sending any spare money to the state's rainy day fund, while the House wants to divert surplus money to the settlement and Health and Human Services Department, which took a $30 million haircut in the final budget.

The Senate attached an amendment to use 10 percent of any settlement the Attorney General's Office receives over $1 million for the rainy day fund.

The House amended Senate Bill 283, which deals with funds obtained by the attorney general, to put 10 percent of settlements over $1 million in the state's general fund.

This is going to be a busy conference committee season.

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Sex Offenders: Election year politics may have gotten in the way of a little common sense.

Two courts have told Dover and Franklin that restricting where sex offenders can live is unconstitutional.

But people with young children do not want a sex offender living nearby, so they pressure local officials to pass restrictions.

House Bill 1237 would have made it easier for communities to say "No" when pressure mounted for such ordinances. The bill would have prohibited local ordinances with sex offender restrictions.

The bill passed the House, 231-97, but the Senate Judiciary Committee voted, 5-0, last week to send the bill to interim study, effectively killing it.

This is not the first time the Senate has killed such a prohibition, but supporters believed this session was the best opportunity for passage in some time.

It probably would have been possible, but not this year, not as the election season fast approaches.

There is nothing like election-year politics.

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