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Hospital proposal approved

Licensing review would be waived

The House voted 198-161 yesterday to let for-profit specialty hospitals build in New Hampshire without undergoing the rigorous state review required of other hospitals. The bill also gives those hospitals a possible exemption from a Medicaid tax other hospitals pay.

House Majority Leader D.J. Bettencourt of Salem, one of the bill's co-sponsors, said it would bring jobs to the state by making it easier for hospitals to come to New Hampshire.

'If you understand that occasionally you have to support legislation that will create jobs and improve the state's economy,' you will support this bill, he said.

Opponents like Rep. Rich DePentima, a Portsmouth Democrat, argued against the legislation, saying it would increase health care costs. Specialty hospitals take only insured or wealthy patients, he said, leaving the community hospitals with patients who are underinsured or covered by Medicaid.

'(Community hospitals) will have to increase their rates to cover the losses because Medicaid covers only 30 to 40 percent of (a hospital's) cost,' he said. '(The legislation) will increase health care premiums for businesses, which is why the state Business and Industry Association was opposed to it.'

The bill now heads to the state Senate. Legislators had asked that it first get a second review from the House Ways and Means Committee, which typically reviews bills that could have financial implications for the state. House Speaker Bill O'Brien, another of the bill's co-sponsors, declined the request.

House Democrats issued a statement after the vote.

'Why would we give an out-of-state company an unfair advantage that we do not provide for our health care facilities in New Hampshire?' said Minority Leader Terie Norelli of Portsmouth. 'The Legislature should not be picking winners and losers.'

'I am also concerned that the House Republicans would offer a floor amendment that would likely have a significant fiscal impact without sending it to the proper committee to examine the costs to our state,' she said, referring to O'Brien's decision not to send the bill to the House Ways and Means committee.

The legislation that passed yesterday is somewhat different than the version first introduced.

That bill, brought by Rep. Marilinda Garcia, a Salem Republican, sought an exemption from state review for just specialty cancer hospitals. Garcia was working with one in particular, the Cancer Treatment Centers of America.

But center executives said they were unlikely to build in New Hampshire if they had to face the state's 'certificate of need' board, which prohibits new hospitals, hospital expansions and purchases of new medical equipment if those additions would create an 'over supply' of medical services in the state.

The cancer center's executives complained the board is instead focused on eliminating competition because most of its members come from the state's existing hospital community. A majority of House members agreed with that assessment earlier this month and voted to disband the review board.

That repeal bill is pending in the Senate.

The bill that passed the House yesterday applies to all specialty hospitals, which are defined as hospitals with 50 or fewer beds that provide diagnostic, therapeutic, treatment and rehabilitative care to in-patients and out-patients.

The bill also says 65 percent of a specialty hospital's patients would have to come from out of state. That requirement is intended to prevent the specialty hospitals from 'cherry picking' too many in-state patients, the bill's supporters said.

DePentima questioned that assurance because there is no penalty in the bill for a hospital that violates the 65 percent threshold. 'This is like a stop sign in Italy,' he said. 'It is just a suggestion.'

The bill's third provision caused particular concern for Rep. Neal Kurk, a Weare Republican. It would require state health officials to seek an exemption from the federal Medicaid Enhancement Tax for all specialty hospitals.

Nearly all other hospitals in the state pay that tax, which is matched by the federal government and then returned to the state to compensate hospitals that take Medicaid patients. The idea is to make up for some of the money hospitals lose on Medicaid patients.

Rep. Stephen Stepanek, a Milford Republican, noted that one of the few specialty hospitals already in the state does not pay that Medicaid Enhancement Tax. He identified the Hampstead Hospital in Rockingham County, which is a private hospital that treats depression and drug and alcohol addiction.

'No one has ever questioned that,' he said. 'Why should we expect other (specialty hospitals) to (pay the Medicaid Enhancement Tax)?'

Kurk warned that asking for an exemption would expose the state to another audit and potential refiguring of its Medicaid Enhancement Tax program. The last time the federal government assessed the state's account, it cut $35 million from the $200 million in annual payments, he said.

Kurk said the federal government could reassess the state's reimbursements each time a waiver is requested. 'I say it's not worth it,' he said.

(Annmarie Timmins can be reached at 369-3323 or atimmins@cmonitor.com.)