Senate fails to override veto of substance use disorder rate hike bill

The New Hampshire Senate failed to override Gov. Chris Sununu’s veto on a bill to temporarily increase Medicaid rates Thursday, after Republican lawmakers said the rates should be raised in the budget instead.

In a 14-10, party-line vote, Democrats came two votes short of the two-thirds required threshold for a veto override on Senate Bill 5. The result halts an attempted $3 million appropriation for higher rates, in addition to $450,000 for emergency shelters in Manchester. And it represents a departure from a 23-0 vote by the Senate in favor of the spending in February, a point harped on by some Democrats.

“Today, Republicans chose to protect their governor instead of the people of New Hampshire,” said Sen. Cindy Rosenwald, the Nashua Democrat that sponsored the bill. “While SB 5 originally passed the Senate unanimously, I am disappointed that today my Senate Republican colleagues put politics before people with their failure to override the governor’s veto.”

To Republican senators, though, the unanimous support in February was driven by the hope the money would get to providers soon. Instead, it took until June to reach the governor’s desk – weeks ahead of the budget deadline.

Sen. Jeb Bradley, a Wolfeboro Republican, said he was taken “a little off guard” by the veto announcement of the bill, which he had strongly supported. But he argued that vetoing the bill would open the opportunity for a deal to be reached in the budget.

“What is important today is that we recognize that we have divided government, and that means that we have to figure out a way to meet in the middle, work across the aisle, be willing to compromise,” he said on the floor. “Two weeks from today, on June 27, we might be able to have that package of compromise together.”

Senate Bill 5 would have authorized a short-term increase in Medicaid reimbursement rates for providers of substance use and mental health treatment services, who saw their daily Medicaid rates plummet earlier this year after a change to the Medicaid expansion law.

In the past, Medicaid expansion recipients – roughly 51,000 Granite Staters – received insurance through commercial plans on the individual market. That meant commercial insurers set the reimbursement rates for the clinics and health centers: often up to $500 to $600 per patient, per day.

But in 2018, facing concerns over the program’s costs as well as the health of the individual market, lawmakers moved to take Medicaid expansion recipients off the individual market and instead administer their health care through state-contracted managed care organizations, similar to how most states with Medicaid expansion operate.

The upshot: The comfortable reimbursement rates set by commercial insurers disappeared, and the default Medicaid rates of $162 per person per day kicked in.

The Department of Health and Human Services raised that base rate to $247 for mental health substance use disorder outpatient services, or up to $347 for patients in certain programs. But substance use and mental health providers have said the drop-off is still forcing cutbacks and raising the risk of staff layoffs.

“We’re not getting by,” said Cheryl Wilkie, CEO of Farnum Center, which operates behavioral health facilities in Franklin and Manchester, earlier this week. “I’m trying to balance a budget based on the Medicaid rates, and I cannot balance that budget based on these rates.”

Senate Bill 5 was meant to address some of those rate drops earlier this year by appropriating $3 million in temporary assistance to raise them for a few months before higher rates could be included in the budget. But the bill got held up in House for months after sailing through the Senate, and it didn’t make it to the governor’s desk until late last month.

In issuing his veto last week, Sununu argued that it was too close to the budget to be appropriating the money and that the rate increases should be negotiated as part of the overall budget package.

The governor’s veto message included some falsehoods. He incorrectly asserted that SB 5 “provides for rate increases that would end July 1, 2019.” In fact, the bill labels the funds “non-lapsing,” allowing the department to spend them down into the next fiscal year after July 1.

But he said, more broadly, that the appropriation should not have been made outside of the budget.

“Rather than passing a collection of independent spending bills at random, we collect everything into the budget because it allows us to appropriately set priorities and ensure that we are living within our means,” Sununu said.

That prompted debate on the Senate floor. Rosenwald said the increases were an important component of a statutory provision added to the Medicaid expansion reauthorization law last year that substance abuse and mental health providers be given “sufficient” rates under the new component.

Bradley stressed that the push to raise Medicaid rates had the support of Republicans and the governor’s office. “There’s more that we agree on than that we disagree on,” he said. “And if we can find a way to resolve those disagreements, we can do what we need to do for substance abuse and mental health providers in the budget. It can be implemented in a timely fashion. That I think is our responsibility to try to do that.”

But Rosenwald disagreed.

“I totally agree with the senator from District 3 that there’s more that we agree on than we disagree on,” she said on the floor, referring to Bradley. “And Senate Bill 5 is something we agreed on.”

The budget bills will go before a “committee of conference”next week, comprised of House and Senate negotiators, before a final vote in both chambers June 27.