Kurk proposes new tax on health care servicesBy Dave Solomon
State House Bureau
April 17. 2018 8:57PM
CONCORD — With only six weeks left in the legislative session, the chairman of the House Finance Committee introduced a proposal on Tuesday for a 5.4 percent tax on health care service providers.
A spokesman for the N.H. Health Care Association said the tax, if approved, would have “catastrophic consequences for these facilities.”
Democrats called the proposal an income tax on health care professionals, and claimed the proposal was too far-reaching to be tacked on as an amendment to an unrelated bill in the waning days of the session.
“This amendment was brought in at the 11th hour with the minimum permissible notification under the Legislature’s rules,” said Mary Jane Wallner, D-Concord, ranking Democrat on the House Finance Committee. “Proposing a massive tax increase via a last-minute amendment is poor management. The complexity and implications of this proposal require an entire session to vet.”
The amendment is being sponsored by Finance Committee Chairman Neal Kurk, R-Weare, who described the proposal as a way to resolve a dispute between state officials and New Hampshire hospitals over the state’s Medicaid Enhancement Tax.
The MET, a 5.4 percent levy on net patient revenues, has for years been paid by the 26 hospitals in the state, which have challenged the constitutionality of the tax in court.
Courts have thus far agreed with the hospitals that the tax is unconstitutional because it taxes a specific kind of business (hospitals) rather than an entire class or category, although the matter is on appeal. By expanding the tax to include most other health-related businesses, Kurk said he hopes to settle the constitutional question.
His amendment would add non-hospital health care providers to the tax base, including nursing homes, ambulatory surgical centers, therapists, midwives, nurse practitioners, private duty nurses, laboratory and X-ray services.
Kurk said expansion of the tax could also help the state raise money needed to resolve a dispute with the hospitals over how much money they are owed for uncompensated care. (See related editorial, Page A6)
“I cannot tell you exactly how much additional revenue this will raise, but there’s no doubt it will raise some that will help us resolve this problem,” he said.
Gina Balkus, CEO of the N.H. Home Care Association, led off the string of opposition testimony with a warning that many of her member organizations could not survive a 5.4 percent tax on net revenue.
“With declining Medicare and Medicaid payments, most have slim margins, if any at all,” she said. “We are already seeing the closure of these agencies in New Hampshire because of losses. Any new tax will jeopardize the viability of these organizations and they will have to close.”
Also testifying against Kurk’s amendment were Nick Vailas of Bedford Ambulatory Surgical Center; Steve Ahnen, president of the N.H. Hospital Association; a representative of the N.H. Health Care Association and the Nurse Practitioners Association; and a spokesmaon for New Futures health policy advocates.
“We have some of the highest health care costs in America, and now we want to tax the lowest cost providers,” said Vailas. “It makes no sense.”
The amendment is attached to SB 590, a Senate-passed funding bill for the Division for Children, Youth and Families now working its way through the House.
“I call on Republicans in the House Finance committee to get serious about child protection and pass SB 590 as is,” said Senate Democratic Leader Jeff Woodburn, D-Whitefield.
Republican Rep. J.R. Hoell, R-Dunbarton, speaking for the conservative Freedom Caucus, said that group opposes the amendment as well. House Finance has yet to vote on whether it will endorse or reject the Kurk amendment.