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FARMINGTON — After San Juan County Commissioners on Thursday passed an ordinance to make quarterly payments to a statewide fund for uncompensated health care coverage, the question remains whether the county will have to raise taxes to deal with the expected deficit.

"If the county does nothing, makes no cuts (in providers in the indigent health care fund), in fiscal year 2016, the county would have a $9 million deficit" in the program, County Executive Officer Kim Carpenter said.

The county's indigent fund spends about $7 million a year to reimburse hospitals, clinics and other health care providers, according to the fund's documents. Under the indigent program, health care providers in fiscal year 2013 billed the county for 8,715 claims, according to county documents.

A law passed in the recent legislative session created the statewide Safety Net Care Pool Fund. The law requires all counties contribute one-twelfth of 1 percent of their gross receipts taxes to the fund. That means San Juan County must contribute about $3 million from its indigent fund to the statewide fund.

Hospitals with fewer than 25 beds will receive 60 percent of the collected funds. But larger hospitals, like San Juan Regional Medical Center, will receive none of the funds. The Farmington hospital closed its Bloomfield clinic earlier this month, shifting staff to the Aztec clinic, to prepare for the funding deficit.

"I think it's a lousy deal," said Sen. Steve Neville, R-Aztec, adding counties were "kind of forced into it."

When Neville voted for the legislation, he believed the Farmington hospital would be paid about $14 million from the statewide health care fund, he said. He says officials in the New Mexico Human Services Department led him and other lawmakers to that conclusion. But the distribution formula was switched, he said.

"All of the votes were based on a distribution formula that the counties (and) the state had more or less agreed to," he said.

Carpenter said even if the county cuts health care providers from the indigent fund, as the law is now worded, the fund will face a deficit.

Commissioner Scott Eckstein said the county will have to raise taxes if the state doesn't alter the legislation that passed the statewide health care fund.

The new law allows counties to implement three separate taxes on gross receipts taxes for three years. But Gov. Susana Martinez line-item vetoed a clause in the legislation that required counties provide those funds for only three years. Now, according to the legislation, counties are required to provide the funds even after the newly imposed taxes expire.

Repeated efforts last week seeking comments from officials in Martinez's office and the New Mexico Human Services Department, which is the agency that will distribute the statewide funds, were unsuccessful.

On Thursday, county administrators briefed the commission on three options to reduce the deficit.

All three options included cutting the county's reimbursement rate from 70 percent to the Medicaid rate of 33 percent. The fund's deficit ranged among the options from a little more than $1 million to about $5.5 million, depending on the providers removed. And in fiscal year 2016, those deficits increase by several million dollars, according to county documents.

Childhaven, ambulance services, the Family Crisis Center and a substance abuse treatment program are among the programs listed as possible cuts. Those programs were listed only as examples of "worst case scenarios," Carpenter said.

He described the legislation that passed the statewide health care fund as "doomed," a "failure" and a "very poor effort" to cooperate with counties.

"In the 27 years in my career in public service, I've never seen relations between the state and local governments as vulnerable as they are today," he said.

Eckstein said the legislation is "extremely cold" and "extremely, extremely frustrating."

Commissioners don't want to raise taxes, and some have vowed not to, he said. But commissioners didn't expected the state would "basically rob" funds the county depends on to "survive," Eckstein said.

Carpenter said he expects counties will challenge the legislation in court.

It "backs us right into a corner," he said, "and I've got nothing. I'm naked. I've got no rabbit, no hat."

Dan Schwartz covers government for The Daily Times. He can be reached at 505-564-4606 and dschwartz@daily-times.com. Follow him @dtdschwartz on Twitter.