N.H. reliance on ‘voluntary’ donations to pay for expanded Medicaid questioned before 

  • State Sen. Jeb Bradley speaks in favor of a Medicaid expansion plan on the Senate floor on March 31. The Republican-controlled Senate approved the bill to continue the plan for another two years.

Monitor staff
Published: 8/16/2017 1:36:19 PM

The federal government’s warning that New Hampshire must change the way it pays for expanded Medicaid or risk losing funding isn’t the first time the state’s reliance on “voluntary” contributions has been questioned.

By law, New Hampshire requires donations from the state’s hospital and insurance associations to make up the difference as federal funds decline. Because of that funding structure – expected to be about $50 million over a two-year period – there’s no way to know which hospitals or insurers pay how much, and according to what formula.

On Friday night, Republican Gov. Chris Sununu announced that the Centers for Medicare & Medicaid Services, or CMS, expected New Hampshire’s legislators to come up with a new funding mechanism next session or lose federal funds – which would, in effect, end the program.

But back in January, Steve Norton, head of the New Hampshire Center for Public Policy, questioned the transparency and legality of not being able to track the source of the money.

“I think the lack of transparency is there by design to get around this question that CMS is raising,” Norton said this week.

The Centers for Medicare & Medicaid Services told the state in July that provider-related donations are typically prohibited, except in very narrow circumstances.

As the state has been raking in multimillion-dollar checks from a blind trust under the control of the New Hampshire Hospital Association, neither the state nor the association has revealed how much each hospital contributed. The lack of information makes it hard to tell whether the state plan is complying with the complex federal rules for Medicaid funding.

In a letter to Health and Human Services Commissioner Jeffrey Meyers, CMS director Brian Neale said the agency believed New Hampshire’s use of provider donations might constitute a “hold harmless” practice. A provider is considered to be held harmless when their donation is returned through Medicaid payments, or when Medicaid payments are conditioned on the donation itself.

The plan to use the donations was meant to avoid using state taxes to pay for expanded Medicaid. If not fully funded, the program faces repeal within 180 days, and the 50,000 low-income adults covered by expansion would be off their insurance plans.

Even though CMS has brought up questions under the Obama administration, U.S. Sen. Maggie Hassan, who signed off on the plan in 2016 when she was governor, blamed the latest concerns on politics.

“This is a deliberate attempt by the Trump Administration to sabotage New Hampshire’s bipartisan Medicaid expansion plan that is providing quality, affordable health care,” Hassan spokesman Aaron Jacobs said in a statement. “Over the past months, the Trump Administration has shown a pattern of trying to end Medicaid expansion and decimate the Medicaid program, and this development reflects a continuation of these efforts.”

Hassan had to wrangle with CMS specifically about whether or not the state’s proposal held providers harmless when New Hampshire first pitched its plan, Jacobs said. But at the time, CMS was still willing to fund the state’s program.

“When CMS during the Obama administration raised concerns that the funding structure constituted a so-called ‘hold harmless’ – a view then-Governor Hassan and the state’s Department of Health and Human Services strongly disagreed with – then-Governor Hassan worked to ensure continued funding for the program,” Jacobs said.

(Lola Duffort can be reached at 369-3321 or lduffort@cmonitor.com.)

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