CONCORD, N.H. (AP) -- New Hampshire has changed key rates to entice medical providers to participate in a managed care network for Medicaid clients currently stalled for lack of providers.
Health and Human Services Commissioner Nicholas Toumpas said Tuesday that the agency adjusted the rates to give three managed care companies under contract with the state more flexibility in negotiating with providers.
Toumpas believes moving to a managed care system will not only save the state money but in the long run improve the health of the state's Medicaid participants. It could also be an important factor in the state's ability to handle an expansion to Medicaid under the federal health care law, if such a measure passes.
Hospitals, mental health clinics and other providers have refused to participate in the managed care system because of low reimbursement levels for treating Medicaid patients.
Toumpas said he has been calling the heads of the state's hospitals and is hopeful the rate changes will be enough for them to participate.
"The rates are at a level to provide greater flexibility to the managed care operators to negotiate with the providers," said Toumpas.
The current budget, written by Republicans, also cut state hospital aid for all but a handful of critical access hospitals. The 10 largest hospitals then sued over Medicaid rates, which complicated efforts to negotiate over managed care.
Gov. Maggie Hassan's budget would restore about half of the $200 million in aid cut in the last two years — but only if the hospitals pay taxes on their revenues at much higher amounts than the Senate believes is realistic. The state parcels out the hospital tax revenue to pay medical providers, for general state spending and as aid to hospitals.
The combination of low rates and the aid cut stalled negotiations over hospitals joining the managed care system until recently, according to Toumpas and state Medicaid Director Katie Dunn, who announced the rate changes at a Senate Finance Committee meeting.
The state had hoped to put the system into place during the last budget cycle and counted on saving $15 million from the switch from paying on a fee-for-service basis. Now, it appears unlikely the system will be up and running on July 1 as hoped, which means some of $23 million in savings the agency hopes to get in the budget for the two years starting in July won't be realized.
Toumpas said his agency would like to have the system in place by the end of the year to handle the expansion of Medicaid under the federal Affordable Care Act. The House budget that passed last month includes money to administer the expansion, but the Senate is controlled by Republicans who are more skeptical of the federal government's long-term funding promises.
"We're buying into something pretty big here," Senate Finance Chairman Chuck Morse told Dunn.
Toumpas said the state can't feasibly expand Medicaid under the federal health care overhaul law without a managed care program in place to handle the 35,000 to 50,000 in estimated new clients.
The expansion would add anyone under age 65 who earns up to 138 percent of federal poverty guidelines, which is about $15,000 for a single adult.
A report commissioned by the state health department estimates that expanding Medicaid would boost enrollment by 58,000 people by 2020, and together with the federal law's other provisions, would reduce the number of uninsured residents from roughly 170,000 to 71,000. The report estimates that expansion could cost the state $85 million during that period, but the state would get $2.5 billion in federal funding.