SB 249 revises New Hampshire’s uncompensated care and Medicaid funding structure for hospitals. It redefines “hospitals” for purposes of the fund, establishes a nonlapsing uncompensated care and Medicaid fund, and directs the Department of Health and Human Services (DHHS) to use money collected under RSA 84-A, along with federal matching funds, to make hospital Medicaid-related payments and support Medicaid services. Beginning in state fiscal year 2026, DHHS must direct 91 percent of the prior year’s collections to hospital payments, using whatever Medicaid payment mechanism is most effective and federally permissible, including supplemental payments, directed payments, increased rates, or disproportionate share hospital (DSH) adjustments.
The bill gives DHHS broad discretion to choose the payment method, but requires the department to work with hospitals, seek to avoid year-over-year reimbursement reductions, and pursue the highest available federal match. It also requires CMS approval for payment arrangements and limits state liability if federal approvals, federal funding, or hospital-earnings conditions change. The bill further creates a separate DSH fund, clarifies which hospitals may receive DSH payments, and specifies how uncompensated care costs are calculated for those payments.
In addition to the funding changes, SB 249 establishes a legislative study committee to examine the Medicaid enhancement tax, DSH payments, their relationship in New Hampshire, and the feasibility of moving to a directed payment plan. The committee is tasked with taking testimony, reviewing the issue’s history, and drafting follow-up legislation by November 1, 2025. The bill also requires DHHS to notify the fiscal committee before implementing payment methodology changes, though committee approval is not required.
The bill’s impact on state law is significant because it restructures how hospital-related Medicaid funds are allocated and administered, while preserving flexibility for DHHS to adapt to federal rules and funding changes. It also sunsets the current statutory provision governing the percentage of funds used for Medicaid payments to hospitals on July 1, 2027, signaling that the payment framework is intended to be revisited after the study committee reports.
Overall sentiment appears generally supportive and policy-focused, with the bill framed as a technical and structural update to preserve hospital funding and federal matching opportunities. Because there are no recorded committee transcripts or votes in the provided material, there is no direct evidence of opposition or debate in the record supplied. The main likely points of contention are the department’s broad discretion over payment methods, the shift toward directed payments, the 2027 repeal of the existing hospital-payment percentage, and how the changes may affect hospital reimbursement levels, state budget exposure, and the distribution of funds between hospitals and other Medicaid providers.
SB 249 amends RSA 167:63 and RSA 167:64 to change the administration of the uncompensated care and Medicaid fund, create a separate disproportionate share hospital fund, and direct DHHS to allocate most of the Medicaid enhancement tax revenue to hospital payments beginning in FY 2026. It also requires at least 9 percent of collections to support other Medicaid services and provider payments, with priority for community mental health centers, federally qualified health centers, substance use disorder providers, and other Medicaid providers. The bill authorizes DHHS to use CMS-approved payment methods, requires federal approval for implementation, and repeals the current hospital-payment percentage provision effective July 1, 2027.
Based on the bill text alone, the measure appears to have a pragmatic, administrative tone aimed at preserving hospital funding and maximizing federal matching dollars. The absence of committee transcripts and recorded votes means there is no documented public debate in the provided materials, but the structure of the bill suggests an effort to balance hospital interests, Medicaid financing stability, and compliance with federal requirements. The inclusion of a study committee indicates that lawmakers expect further review and possible follow-up legislation rather than treating this as a final resolution.
The most likely areas of contention are the allocation of Medicaid enhancement tax revenue between hospitals and other Medicaid uses, the use of directed payments versus other reimbursement methods, and the extent of DHHS discretion in choosing payment structures. Hospitals may favor the bill’s effort to preserve reimbursement and federal matching, while other stakeholders could question the 91 percent hospital allocation, the 9 percent minimum for non-hospital Medicaid services, or the 2027 repeal of the existing statutory formula. Another possible point of dispute is the bill’s reliance on CMS approval and its provision that the state is not liable if federal funds or approvals are reduced or unavailable.