Ayotte has accused the hospitals of prioritizing profits over patient care, asserting that the state has offered reasonable solutions that benefit both patients and smaller hospitals.

On April 15, 2025, Dartmouth Health, Concord Hospital, and the New Hampshire Hospital Association filed a lawsuit against the state of New Hampshire, challenging the constitutionality of the Medicaid Enhancement Tax (MET).

The hospitals argue that the state's proposed reimbursement plan could lead to a $70 million annual loss, severely impacting patient care and hospital operations.

Established in the 1990s, the MET is designed to help the state secure additional federal Medicaid funding, with a portion returned to hospitals to offset costs for uninsured patients.

The MET generates over $348 million annually for New Hampshire's Medicaid program and is crucial for leveraging an additional $485 million in federal matching funds.

Governor Kelly A. Ayotte's proposed changes aimed to improve funding for mental health services and support smaller hospitals, but the New Hampshire Hospital Association criticized it as punitive, predicting significant financial losses.

The failure of negotiations between the hospitals and the state led to the lawsuit, as the deadline for MET payments approached.

Hospital leaders have expressed concern that without a new agreement, hospitals would face severe cuts, jeopardizing their ability to provide essential health care services.

Despite previous court rulings deeming the MET unconstitutional, hospitals have continued to pay it due to expired settlement agreements that were intended to support patient care.

Joanne M. Conroy, CEO of Dartmouth Health, emphasized that the proposed changes would significantly impact the hospital's finances, particularly given that a substantial portion of its revenue comes from Vermont residents.

Steve Ahnen, president of the New Hampshire Hospital Association, stated that the state's proposals have not been fair, prompting the lawsuit to protect patient access to care.

Ahnen highlighted that the anticipated financial losses from the MET changes would create access challenges for patients and affect the services hospitals can provide, making the lawsuit necessary.