Dartmouth Health statement on litigation challenging the constitutionality of the Medicaid Enhancement Tax

Dartmouth Health has joined the New Hampshire Hospital Association (NHHA) and Concord Hospital and Concord Hospital-Laconia in a lawsuit against the state of New Hampshire, challenging the constitutionality of the Medicaid Enhancement Tax (MET) to protect access to important healthcare services for all our patients. This difficult decision was made after months of attempted negotiations with the state to convey the potentially devastating impact this loss of funding will have on our health system’s ability to deliver patient care, at a time when the federal government is also threatening to withhold funding.

Despite two previous Superior Court rulings that MET was unconstitutional, Dartmouth Health has voluntarily continued to pay the tax over the last decade under two settlement agreements, which outlined a fair solution for our hospitals ensuring access to patient care. Those agreements have now expired forcing our decision to pursue legal action.  

Under the current tax agreement, Dartmouth Health provides 30% of the overall MET payment yet would carry approximately 75% of the burden of lost revenue from the state. This is largely due to Dartmouth Hitchcock Medical Center’s (DHMC) geographic location as a border hospital with Vermont. Vermont residents comprise 40% of the patient service revenue on which the MET payment for DHMC is calculated, yet the state of New Hampshire does not provide supplemental payments on that portion of the MET. 

As an academic, non-profit health system, we are invested in caring for the people in our communities. Over the past three fiscal years, we have contributed $885 million in community benefits, including free and reduced-price care and $682 million in uncompensated healthcare. Additionally, Dartmouth Health made a significant investment in the mental health of the Granite State’s children and adolescents when we partnered recently with the state of New Hampshire to include Hampstead Hospital, the state’s only youth mental health facility, as a part of Dartmouth Health, an action saving the state $23 million in annual losses. 

We are supportive of and heartened by the actions of the NHHA as they continue to seek an appropriate financial arrangement with the state that allows us to carry out our mission to provide the right care at the right time to any patient who requires it, regardless of their ability to pay.