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Judge denies NH motion to dismiss Medicaid lawsuit

October 2, 2012

A federal judge in New Hampshire last week denied the state's motion to dismiss claims by Dartmouth-Hitchcock Clinic and other New Hampshire hospitals that significant rate reductions implemented by the state in 2008 violate the Supremacy Clause of the U.S. Constitution. Instead, the court will ask Health and Human Services Secretary Kathleen Sebelius to comment on whether the rate reductions meet the requirements of the federal Medicaid Act and other questions raised by the lawsuit. The hospitals claim that rate reductions of 10% for inpatient services and 33.5% for outpatient services implemented by the state in 2008 violate the Supremacy Clause, in part because federal Medicaid law requires "that Medicaid reimbursement rates be set at a level sufficient to both assure quality of care and enlist enough providers to deliver medical services to Medicaid beneficiaries to the same extent such care is available to the general population." The lawsuit also challenged the state's failure to meet the procedural requirements for changing hospital payment rates. In March, the court ordered the state to initiate a public notice and comment process regarding its use of reduced Medicaid reimbursement rates for hospitals.