New Hampshire's nursing homes will receive millions of state dollars less than expected this year for the care they provide to poor, frail elders.

On average, the decrease will be 5 percent per resident, per day, according to predictions by Health and Human Services, the agency responsible for running Medicaid, a program that uses state, county and federal money to subsidize long-term care for poor seniors.

All facilities will feel the pinch, but cuts are particularly dire for county-run nursing homes, which tend to house high concentrations of residents on Medicaid. Merrimack County expects to lose nearly $700,000, while Belknap County will see about $375,000 less and Hillsborough County will come up roughly $900,000 short.

Health officials say they may recalculate some payments before the change goes into effect next month, but no matter the final tallies, lawmakers and county leaders are angry. The cuts, they say, run contrary to a law passed last year that gives elder-care providers more, not less, money this year.

"It clearly flies in the face of what the legislative intent was," Rep. Fred King, a Colebrook Republican, said at a State House hearing yesterday. King called the cuts "ridiculous" and predicted they would harm county taxpayers.

Health officials blamed the cuts on shortfalls elsewhere in the department's budget, as well as on lower-than-expected revenue from seniors who pay for a portion of their care through Social Security or other private funds. The department is also trying to unravel a billing error that left it with about $3 million worth of last year's services to pay out of this year's budget.

"Where the delay happened, we're not sure," Jonathan McCosh, an administrator with the health department, told the House Fiscal Committee yesterday. "It's something we're looking into."

Medicaid payments are just part of a sprawling, complex debate between the state and its 10 counties over how to subsidize long-term care. For decades, the state and counties have shared the responsibility with the federal government, but last summer the Legislature voted to remove the state from the equation.

Lawmakers had hoped the move would improve their cantankerous relationship with the counties, but the move made things worse. Now, the dispute is unfolding on two fronts: A lawsuit filed by the counties, alleging that the new law is unconstitutional, will be heard next month in Merrimack County Superior Court. Some lawmakers, meanwhile, have filed a bill that would flip the new arrangement on its head, taking counties out of the nursing home business altogether.

But when it comes to the new Medicaid payments, the state and the counties agree that nursing homes are being shortchanged. Last year, the Legislature approved a 2 percent increase to Medicaid payments, but that's money nursing homes haven't seen, says John Poirier, president of the New Hampshire Health Care Association, which represents the state's private nursing homes. He's even more flummoxed by the planned cuts.

"That's the mystery," he said. "The two don't mix."

Resident care won't suffer, nursing home administrators say, but they'll have to find the cash somewhere else. For private homes, it can mean increasing fees for seniors not on Medicaid or asking their parent companies for more help. County-run homes, meanwhile, must look to the taxpayers.

"Counties are very diligent about being efficient with taxpayers' dollars, so there is no give to our budget," said Lori Brown, the administrator of the Merrimack County Nursing Home. "It is what we need. We can't cut our expenses. The only way to make up for the $700,000 is through the tax rate."

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By MEG HECKMAN

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