Legislative Update 
May 22, 2002

LEGISLATURE WRAPS UP 2002 SESSION                                                                                    

The 2002 Legislative session ended with lawmakers finally reaching agreement on funding the Medicaid Program through the last two months of the state’s current fiscal year. Without this additional funding, payments to hospitals and other health care providers would have ceased through June 2002 due to the state’s revenue shortfall. Forewarned is forearmed… Health care providers will need to work very hard during next year’s legislative session to educate legislators about the cost of health care and the need to pass a fair and reasonable health budget for the 2004-2005 biennium.

Legislators also addressed a variety of health care issues of concern to hospitals including managed care claim denials, county prison medical costs and disaster preparedness. Defeated proposals include a privacy bill that would have posed serious HIPAA conflicts for providers, as well as an increase in the Certificate of Need threshold for equipment acquisitions.

THE MEDICAID BUDGET (SB 456)
Legislators nearly closed the 2002 session with a $17.5 million shortfall, including an $11.8 million deficit in Medicaid Provider Payments. At the eleventh hour, legislators resolved a Medicaid shortfall that would have forced the State to immediately stop all payments to hospitals, physicians and other health care providers through June 2002. The Governor and Legislative leadership agreed to use excess federal funds and/or the Health Care Transition Fund.

managed care – retroactive denials (HB 1203)
The Legislature fixed a major problem providers have had with health plans denying previously paid claims. Effective January 1, 2003, health plans can no longer recoup funds without first notifying health care providers. Retroactive denials will only be allowed within 18 months from the date of payment unless the claim was submitted fraudulently; the payment was incorrect because the provider or insured was already paid; the service was not provided; the service should be covered by Medicare or Medicaid; or the claim payment is being adjusted with another payor or is subject to legal action. Finally, providers will be allowed six months to bill another insurer due to the insured’s termination of coverage.

County Prison Health Care Costs (HB 1365)
In an effort to hold down the cost of medical care for county prison inmates, the Legislature passed a bill requiring counties to pay hospitals 110% of the Medicare allowable rate for inpatient and emergency room care, or 125% of Medicare to hospitals with negative operating margins. The bill allows counties to waive the 110%/125% rate when necessary either to ensure inmate access to medically necessary care or in the event a county prison negotiates a better rate. It also permits hospitals to include allowances provided to counties as Community Benefits from pent-up demand (prior to their incarceration, prisoners typically are uninsured and access little, if any, health care); poor health; and violent behavior.

CERTIFICATE OF NEED (SB 342) 
The Legislature revisited the CON statute this year by defeating an effort to increase the CON review threshold for equipment from $400,000 to $1.5 million. In light of the ongoing work of the CON Task Force, created by the Legislature two years ago, it is premature to alter RSA 151-C prior to the Task Force submitting its findings and recommendations. After many twists and turns, this bill was killed by the Senate, whose members refused to concur with the House version.

Hospital Reporting (HB 1413)
The statute (RSA 151:31), which requires hospitals to report annually to the Attorney General’s Office on financial relationships with physician hospital organizations, has been expanded. While the original bill would have allowed the Attorney General to disclose all information in a report to the Legislature, the bill was amended to allow a hospital to request that certain information provided to the AG be considered confidential and not subject to public disclosure.  

HAZARDOUS WASTE (HB 1102)
The Legislature has created a Hazardous Waste Coordinator Certification Program within the NH Department of Environmental Services (NHDES). Any facility that generates more than 220 pounds of hazardous waste per month must have a NHDES-certified hazardous waste coordinator on staff. Each application for initial or renewal of a hazardous waste coordinator's certification must be accompanied by a non-refundable fee of $125 per year to cover NHDES expenses for conducting the certification program. The new program will begin January 1, 2003.

Emergency Preparedness (HB 1478)
Following the terrorist attacks on September 11^th and the anthrax bioterrorism attacks, the Legislature took action to improve its comprehensive statewide emergency response system and to increase the state’s readiness to respond to a biological disaster. Passage of HB 1478 also ensures that New Hampshire receives federal funds under the Emergency Supplemental Act of 2002 to allow hospitals to increase their capacity to effectively respond to a biological, chemical or nuclear incident. This legislation amends the communicable disease law to accommodate any illness or health condition that may be caused by a public health emergency, and it establishes a fund to be used for the administration of the radiological health program.

Medical Records Privacy (HB 1194)
An effort to pass a patient privacy bill was defeated due to major conflicts with the health information privacy requirements of the Health Insurance Portability and Accountability Act. Legislators realized that whatever they passed could conflict with future HIPAA regulations.

Property Taxes (HB 424)
The Legislature passed a bill to study the property tax exemption for not-for-profit hospitals. The study committee will report its findings by November 1, 2002. The Legislature has studied hospital business practices in numerous study committees over the past five years, and has reported no problems with hospitals’ tax-exempt status.

WORKFORCE
Efforts to adopt the nurse licensure compact were thwarted. While the legislation on its face appeared to have merit in helping with the State’s nursing shortage, it would not have solved a variety of problems with the multi-state licensure compact, including the lack of recourse to deal with nurses licensed by states that have lower requirements than New Hampshire.

In a related matter, the Legislature extended the reporting date of the legislative Healthcare Worker Shortage Committee to November 2002. This committee will most likely address the issue of a multi-state nurse compact.

For more information on bills being tracked by NHHA, click here or contact Leslie Melby at lmelby@nhha.org.