NH DHHS - Federal Government Releases Determination in Audit of 2004 Disproportionate Share Hospital Program

Concord, NH – The New Hampshire Department of Health and Human Services (DHHS) and the New Hampshire Department of Justice (DOJ) announced today that the Centers for Medicare and Medicaid Services (CMS) will be releasing a decision affirming the 2004 Disproportionate Share Hospital (DSH) Audit conducted by the Office of the Inspector General (OIG). The State has the right to appeal the decision.

The OIG audit, completed in 2007, stated that New Hampshire had claimed $35,325,468 in federal funds in 2004 in unallowable DSH payments and recommended to CMS that the State be issued a letter of disallowance, requiring the State to pay back that amount of money to the federal government. The formal notice of disallowance from CMS is expected to arrive in the next few days.

In the State budget approved in 2005, the State made major changes to the DSH program to address concerns raised by CMS.

“We are disappointed in CMS’s decision,” stated DHHS Commissioner Nicholas Toumpas. “We believe the State has a strong argument as to why CMS’s conclusions are inaccurate.”

Under Section 1923 of the Social Security Act, the states make DSH payments to hospitals to contribute to the costs of their providing services to disproportionately large numbers of low-income patients. The DSH program has been in existence for over a decade and is included in all state Medicaid plans across the country. OIG claimed that NH Medicaid DSH payments for Federal fiscal year 2004 were calculated incorrectly and did not comply with Federal requirements.

However, CMS signed off yearly on the State’s DSH program and the federal reimbursement of DSH costs. When CMS raised concerns in 2004, the State acted promptly to address them with changes that were included in Governor John Lynch’s 2005 proposed budget and enacted in fiscal year 2006.

“New Hampshire will appeal CMS’s decision to the federal HHS Appeals Board,” stated Governor Lynch, “and I will continue to work with state officials in order to protect New Hampshire’s interests.”

“Our office will be carefully reviewing CMS’s letter when it arrives,” said NH Attorney General Michael Delaney, “ and we will work closely with NH DHHS on the appeal.”