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AZTEC — Officials say San Juan County faces a roughly $4.2 million deficit after new legislation will force the county to impose a tax to contribute to a statewide pool for uncompensated health care coverage.

"This is the most frustrating piece of legislation I've dealt with," County Executive Officer Kim Carpenter said after Tuesday's county commission meeting.

The Safety Net Care Pool, which passed in the recent legislative session, mandates San Juan County dedicate about $3.2 million a year from its indigent fund to a statewide fund that pools money from New Mexico's counties and distributes it to hospitals. The law requires counties to provide one-twelfth of 1 percent of their gross receipts taxes to the fund. The indigent fund compensates hospitals, clinics and other health care providers by partially covering uninsured medical bills for county residents.

But Carpenter said he is frustrated with the legislation because it collects funds that will benefit hospitals in other counties and not San Juan Regional Medical Center in Farmington.

The New Mexico Human Services Department will distribute no revenue from the fund to hospitals with more than 200 beds, such as San Juan Regional Medical Center, according to figures the hospital's CEO, Rick Wallace, provided the commission Tuesday. The Farmington hospital has 254 licensed beds, according to its website.

The state department will hand down 60 percent of the revenue in the fund to hospitals with fewer than 25 beds.

San Juan Regional Medical Center now needs to find another source to pay for its uncompensated medical bills because it won't receive any money from the Safety Net Care Pool. Wallace said the program is being rolled out prematurely, requiring health care providers to shoulder the cost of uncompensated coverage before the Affordable Care Act is fully implemented.

"This is the problem," Wallace said. "People are taking away money before people are signing up for insurance."

In addition to the $3.2 million the county must allocate to the Safety Net Care Pool, the county needs to also find about $1 million to cover the cost of inmate medical bills, Carpenter said. Because of the Safety Net Care Pool, the hospital no longer has available funds to cover the cost of inmate care.

"We're already a million in the hole," Carpenter said, "and that leaves zero money for providing any services at our DWI treatment facility. ... It leaves no money to administer the indigent funds to people who need them in the community, and it leaves us no money to pay any kind of dental at the incarceration facilities or in the community for people who have dental claims."

During the meeting, the commission approved an ordinance that permits the county to make quarterly payments to the new fund, instead of the New Mexico Taxation and Revenue Department directly taking the money monthly.

The county already takes one-eighth of 1 percent, or $4.2 million, from its total tax receipts annually and deposits that revenue in the indigent fund, said the fund's director, Liza Gomez in an interview before the meeting.

The county is also obligated to pay one-sixteenth of 1 percent of its total gross receipts to its County Supported Medicaid Fund, which is a roughly $2.1 million annual payment, she said.

County Commission Chairman Jack Fortner said when the bill — Senate Bill 268 — was passed, local lawmakers believed it incorporated a distribution model that would have given San Juan Regional about $18.5 million from the Safety Net Care Pool.

But after its passage, he said, the distribution model was changed.

Fortner in the meeting told Wallace he would try to arrange a meeting with Gov. Susana Martinez to address the problem.

"We have to explain to her that what was presented to the Senate Finance Committee and what is actually happening are two different things," he said.

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