Capital Beat: Medicaid rates a growing sticking point in budget shutdown

Monitor staff
Published: 8/3/2019 11:18:43 PM

The stories Carolyn Virtue tells speak louder than she can alone.

As an official at an organization helping those with disabilities or old age connect with vital services, Virtue knows the difference access to quality care can mean. She also knows that losing those services can make a life-or-death difference.

One woman her organization tried to serve was discharged to a homeless shelter, according to Virtue. There were no better beds available. She was forced onto the street when the homeless shelter closed.

One man had a partly amputated limb and was discharged to an apartment that required walking up stairs. Unable to get the services he needed, he lost the other limb.

Another man with cancer couldn’t find a bed for treatment in the state. He was transferred to Lowell, Mass., where he soon died. His 84-year-old mother had been on her way to meet him.

That one gave Virtue pause Thursday, midway through a testimony before a joint House and Senate committee over the ongoing budget breakdown.

“I’m sorry,” she said, her voice breaking. “This case still bothers me.”

Virtue owns and operates Granite Case Management, an organization that helps coordinate care for elderly and disabled adults under a federal program. The intent is to find the right care for low-income people in need and connect them with organizations.

But with federal and state funding for New Hampshire home care services among some of the lowest in the country, that work has become taxing.

“Long term care has been ignored in New Hampshire for too long,” she said.

Since 1988, the case management rate – the amount paid out to cover services by Virtue’s 20-odd employees – has been raised once, by 2.5%, Virtue says.

“This needs to be fixed,” she said. “...I think it’s quite sad that New Hampshire’s claim to fame is going to be that we have not cared for our elders.”

You may have seen these words before: “Medicaid provider rates.” For dozens of providers and their clients, the level at which New Hampshire sets these rates determines how many low-income people they can serve, where they can set wages, and how many workers they can attract.

But as budget talks drag on, Medicaid rates continue to be one of the key areas in which Gov. Chris Sununu and legislators remain distant. In Sununu’s budget proposal, back in February, the governor didn’t include any rate increases. By the time the budget left the full legislature, it included a 6%, two-year across the board rate increase – at a price tag of $52 million.

Bridging that divide will require lawmakers to navigate a difference in approach. Sen. Cindy Rosenwald and other Senate Democrats favor a universal 3% increase in rates for all providers, a boost they say would still be a fraction of what facilities could use.

Sununu, meanwhile, has expressed openness to raising rates for some Medicaid providers, after leaving them out of his budget. But he has strenuously opposed across-the-board increases, arguing the boosts should be prioritized to certain Medicaid services over others.

“They’re looking at increasing provider rates across the board,” he said at a press conference Thursday, speaking of State House Democrats. “Some rates are okay. Some rates need more than 6% or 7%. So what I have asked is that you let the Commissioner of Health and Human Services – who can see those discrepancies, who can see how we compare to other rates and providers across New England, kind of our competition – to make sure that those who need a little more, can get a little more.”

Driving Sununu’s hesitation are two factors. First, the governor has raised concerns that hiking rates would not actually translate to higher wages for workers – an idea that providers strongly reject.

“A lot of time we increase rates, and the organizations absorb all the money, and you don’t see the pay raises that you’re expected to see from the front line workers” Sununu said, suggesting that lawmakers write into the budget language specifying how Medicaid reimbursement dollars should be spent.

More broadly, the governor has long been averse to any spending that isn’t one-off. Sweeping increases to Medicaid payments that need to be maintained years into the future – through financial bust and boom – may fall outside of that budgetary view.

For now, with a vetoed budget, no one is getting rate increases. Some providers are lobbying for them in the eventual compromise. That was the scene in the hearing room Thursday, where health care official after health care official painted portraits of dire need.

“We provide the services literally on a knife edge,” said Jeff Dickinson, advocacy director for Granite State Independent Living, which provides home health services. “And I say it’s on a knife’s edge financially because the rates that we get barely cover all the costs.”

Dickinson serves at the other side of the equation from Carolyn Virtue. Where Virtue’s organization handles case management for elderly and those with developmental disabilities, Dickinson’s Granite State Independent Living coordinates and provides the actual in-home services to them.

That means helping people get out of bed, get dressed, eat, and, in some cases, get ready to work in their communities.

The low reimbursement from federal and state dollars is proving devastating, Dickinson testified.

“We are having a very difficult time employing personal care workers and recruiting and keeping personal care workers,” he said. “Because the rate is low to the point that there are better opportunities elsewhere in the economy – in the fast food industry or service industries.”

Of all the questions holding up progress – from where to set business taxes to how to fund schools – Medicaid rates are perhaps the hardest to predict. That’s because the math of lowering business taxes and raising education spending is pretty straightforward: Something else needs to give to pay for the second while lowering the first.

For some of Sununu’s supporters, that something might be the hikes in Medicaid rates. Franklin mayor Tony Guinta, a director of project development for Nobis Engineering, Inc., and a supporter of Sununu’s veto, said his two priorities as mayor and businessman are lowering those taxes and getting more money into Franklin’s struggling schools.

Making that work financially could require reductions in the proposed rate increases, Guinta argued. “It’s an area to look at,” Guinta said.

But despite the suggestion, it’s not clear whether Sununu would ever push to drop the Medicaid rate hikes entirely. The governor has stressed that he does support all increases in rates – just targeted ones.

“Having the Legislature just arbitrarily write a big check to everybody doesn’t really make sense,” Sununu said.

That might be a tough sales pitch to Democrats, who argue their proposed increases are modest to begin with. Still, one key negotiator says he has an open mind.

“We can work with anything, provided it’s in the best interest of the people we serve,” said Democratic Sen. Lou D’Allesandro, the chairman of the Senate Finance committee, responding to Sununu’s suggestion.

D’Allesandro emphasized that however it’s done, raising rates – many of which haven’t been increased since 2006 – is key.

“That doesn’t mean you can’t think about changing it to some extent,” he said. “But the rate increases are there. They have to be there in order to give the providers a proper fee for service.”

Whether Medicaid rates prove a point of bipartisanship or are lost as a bargaining chip in coming budget negotiations remains to be seen. Providers in the state will surely be watching.

(Ethan DeWitt can be reached at or on Twitter at @edewittNH.)

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