Case 1:11-cv-00358-SM Document 50-54

Filed 09/23/11 Page 1 of 3

UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE **************************************** Dartmouth-Hitchcock Clinic and Mary * Hitchcock Memorial Hospital * d/b/a Dartmouth-Hitchcock, et al., * Plaintiff * * v. * Nicholas A. Toumpas, in his official capacity * as Commissioner of the New Hampshire * Department of Health and Human Services, * Defendant * * * ****************************************

11-cv-358-SM

AFFIDAVIT OF PAUL CASEY IN SUPPORT OF THE DEFENDANTS OBJECTION TO MOTION FOR PRELIMINARY INJUNCTION I, Paul Casey declare as follows: 1. I am currently employed by the New Hampshire Department of Health and Human

Services (DHHS) as a Business Administrator IV. I have a Masters of Science degree in Accounting and a Masters degree in business administration, both from Boston College. I have been employed by the state of New Hampshire for 34 years in various financial and auditing positions and I have been with DHHS for all 34 years. In my current capacity I am involved in Medicaid rate setting regarding Hospitals and calculation of other payments to Hospitals under Medicaid, such as disproportionate share hospital payments, known as DSH. I am also familiar with the databases and information available to DHHS regarding payments made by DHHS to Hospitals and other Medicaid providers. 2. I have reviewed the Medicaid payment numbers in the declarations by the financial

officers of the ten Hospital institutional groups involved in this lawsuit, Jill Batty from Cheshire Medical Center, Edward Dudley from Catholic Medical Center; Richard Elwell from Elliot

Case 1:11-cv-00358-SM Document 50-54

Filed 09/23/11 Page 2 of 3

Health Systems, Kevin OLeary from Exeter Health Resources, Robin Kilfeather-Mackey from Dartmouth Mary Hitchcock, Richard Plamondon from St. Josephs Hospital, John Marzinzik from Frisbie Memorial Hospital, Henry Lipman from LRGHealthcare, Michael Rose from Southern New Hampshire Health System and Peter Walcek from Wentworth Douglass Hospital that are attached in support of the Plaintiffs Motion for Preliminary Injunction. 3. From an accounting and auditing perspective the declarations are uniformly

unreliable and cannot be verified for accuracy because they fail to state the methodology on which they are based. For example, they fail to identify whether they are based on a cash or accrual accounting system, do not identify the source of the cost allegations, how total revenue is calculated and what is included or excluded. Compounding the difficulty of verifying the accuracy of the financial data is the that fact that none of the declarations identifies the relevant time period that comprises what they refer to as any given year. This is critical to any comparison as the state uses a fiscal year (FY) that runs from July 1 to June 30 and is referred to as the year in which it ends, i.e. the current FY, which began July 1, 2011 and will end June 30, 2012 is FY 2012. The federal government, which is responsible for the Medicare program, uses a fiscal year that runs from October 1 to September 30 and is also referred to by the year in which it ends. On information and belief, the federal charitable tax returns (Form 990s) of the ten plaintiffs demonstrate that they use at least three different fiscal years, January 1 to December 30, July 1 to June 30, and October 1 to September 30, and that they file their returns by the year in which the period begins. For example, the 2009 form 990 for Elliot Hospital demonstrates that they refer this period as July 1, 2009 to June 30, 2010. This is the reverse of the way in which fiscal years are referred to by the state. The same time period for the state is FY 2010. This demonstrates the lack of verifiability of the data submitted in the ten declarations.

Case 1:11-cv-00358-SM Document 50-54

Filed 09/23/11 Page 3 of 3

4.

Notwithstanding these deficiencies, I was asked to review the Medicaid payment

numbers in each of the ten declarations to determine whether they are each at least facially internally consistent. It is my conclusion that they are not consistent within themselves and that their numbers simply do not add up in several significant respects. Uniformly, the sum of the individual practice or service components for given year do not add up to the total Medicaid revenue claim for that year. The total Medicaid revenue figures in Table 1 of each declaration are overstated. 5. At least one effect of this overstatement is to incorrectly increase the percentage of

the Hospitals revenue that is dependent on Medicaid. 6. I have also compared the Departments payment data for the fiscal years in

question, using the federal fiscal year, to the total Medicaid revenue claim by each facility in the declarations. The Departments data also shows that the total Medicaid revenue figures in Table 1 of each declaration are uniformly overstated. I declare under penalty of perjury that the foregoing is true and correct to the best of my personal knowledge and the information available to me. Dated: 9/22/11

/s/ Paul Casey Paul Casey