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Friday, November 21, 2008

Medicare Outpatient Rates Cut

The Fiscal Committee this morning unanimously approved a significant cut to reimbursement rates to non-critical access hospitals. The State had been reimbursing 81.24% of allowable expenses for outpatient services, which was estimated to cost $69.4 million.

An increase both in hospital costs and increased caseloads pushed that cost to $95 million. In order to cut back the $25.6 million excess, DHHS Commissioner Nicholas Toumpas and Medicaid Director Katie Dunn requested that the reimbursement rate be cut to 54.04%. Representative Neil Kurk (R-Weare) explained that hospitals would either make up the difference out of their bottom line, or pass along the costs to insuruers. Many hospitals in the northern part of the state are classified as critical access hospitals, and will not be affected. Most hospitals in New Hampshire's southern tier are subject to the lower rate.

Senator Molly Kelly (D-Keene) led the questioning prior to the vote, expressing concern about how the rate cut would hit hospitals.

"I had concerns about the burden this would place on hospitals. Hospitals in my part of the state, which is in the souther tier; this will affect them," Kelly said after the hearing. "In my discussions with the (Lynch) Administration, they are committed to meeting the needs of people in this state. These are difficult times nationally. New Hampshire is not alone."

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