Dartmouth Health has joined a coalition of New Hampshire hospitals suing the state over its Medicaid Enhancement Tax.

New Hampshire Hospital Association, DH and its affiliates and Concord Hospital and its affiliates filed a lawsuit on Tuesday challenging the constitutionality of Medicaid Enhancement Tax, which dates to the 1990s.

The state uses the tax money to qualify for additional federal funding for Medicaid. Some but not all of the tax payments are returned to hospitals who pay it to help offset the cost of care for patients who cannot afford to pay.

The two sides had been negotiating a new payment agreement since last year when then-Gov. Chris Sununu proposed changing how the tax payments are calculated and redirecting some of the money away from hospitals.

“Hospitals have been and continue to be willing to find a fair and equitable solution that works for the state, hospitals and Medicaid patients, but increasing the tax burden on hospitals is not a viable path forward,” the hospital association said in a prepared statement.

The plaintiffs said they had warned the state that without a new agreement by April 15, a lawsuit would be the next step.

“With no resolution in sight, hospitals have no choice but to file this lawsuit to protect access to important health care services for all patients,” the hospital association said.

Dartmouth Health said in a prepared statement from CEO Joanne M. Conroy on Tuesday that the most recent terms proposed by Kelly Ayotte’s administration would have a “devastating” financial impact.

Dartmouth Hitchcock Medical Center is particularly disadvantaged by the payment scheme, in large part because of its location on the Connecticut River, Conroy said.

“Vermont residents comprise 40% of the patient service revenue on which the MET payment for DHMC is calculated, yet the state of New Hampshire does not provide supplemental payments on that portion of the MET,” Conroy said.

In a statement, Ayotte accused DH and its fellow plaintiffs of “playing political games and misleading the public.”

Ayotte said the state’s latest proposal would have helped fund mental health treatment and provide funding for the state’s smaller critical access hospitals, which include Alice Peck Day, Valley Regional and New London Hospital in the Upper Valley.

“(The hospitals) should return to the table and come to an agreement,” Ayotte said in the statement.

In is statement, the hospital association said Ayotte’s proposal for an agreement was “punitive” for hospitals.

“Under that formula, hospitals lose $70 million annually, to the benefit of the state, and at the expense of patient care in local communities,” the statement read.

The hospital association says the tax payments help bring in an additional $485 million for the state’s Medicaid program, and that without an agreement, lawmakers who are in the midst of preparing the next two-year budget would have to make up the shortfall elsewhere.