New Hampshire drug and mental health providers to rally for better payments

  • Officials, community members and current residents celebrated adding 42 licensed beds at Webster Place at Farnum North in Franklin Tuesday to help those fighting addiction. ELODIE REED

Monitor staff 
Published: 6/11/2018 5:01:57 PM

Without some action, the state’s newly approved Medicaid expansion program could saddle substance abuse and mental health treatment providers with lower payouts that could force cuts to staffing and services when the law takes effect next year, providers say. 

“We can’t afford to go backwards,” wrote the Manchester-based Farnum Center in a “call to action” email to supporters ahead of a rally Tuesday morning. “The last thing treatment providers need is less funding.”

The passage of a five-year extension of the state’s Medicaid expansion program was hailed as a boost to both health care services and drug treatment services across New Hampshire. With it came an expansive change, intended as a cost-effective improvement.

Under New Hampshire’s present expansion program, first authorized in 2014, recipients receive health care through the “Premium Assistance Program,” a mechanism by which the recipients could use program funds to receive care from private insurers. Under the new arrangement, recipients will receive care through managed care organizations – an insurance alternative designed to reduce health care costs. 

The side effect? That adjustment carries a much lower reimbursement rate for mental health and drug treatment providers. That means the present daily rate of $300 to $500 per patient would drop to $162.60 a day, according to Farnum. 

At that rate, beds might need to be closed down, advanced inpatient and patient programs reduced, and waitlists increased, Farnum said in its email.

“The treatment provider community, as a whole, cannot sustain these large rate cuts and continue to maintain treatment services for Medicaid patients,” the email read.

That isn’t quite the full story; the new law acknowledges that potential consequence and requires the Department of Health and Human Services to establish “sufficient” rates to ensure access to the programs. Those rates will be specified through the department’s requests for proposals (RFPs) in coming months as it seeks to design new contracts with the MCOs to carry out the new Medicaid expansion law. 

That law, Senate Bill 313, doesn’t specify what those adjusted rates should be, nor whether they should match the present rates paid under the Premium Assistance Program. But on Monday, Department of Health and Human Services Commissioner Jeff Meyers said the rates will likely be pegged to Medicare rates – higher than the $162 daily Medicaid rate but not as high as what insurance carriers had paid out before.

Meyers acknowledged the discrepancy, saying the department is “aware of (providers’) concerns” and has been meeting with them in recent weeks. “It is clear that commercial insurance carriers on the federal marketplace have chosen to pay rates far in excess of the rates provided by Medicare, which served as the benchmark for establishing the Medicaid fee schedule for the standard Medicaid program,” he said in a statement.

But he said that the department is working with an actuary to design payout rates that meet the statutory requirements of “sufficient” care for the 43,000 beneficiaries who are transitioning into managed care. And he said the department is looking to reduce costs for the providers themselves, which could in turn make those patients less expensive to treat.

“In the meantime, the Department will present to the Governor’s office potential ways to reduce the administrative burden that might lower treatment providers’ cost structure.”

Still, substance abuse recovery advocates remain worried. Providers say Tuesday’s rally is meant to underscore the urgency of the state’s role in ensuring the rates are raised. Beyond the MCO contracting process, organizers are asking legislators to consider appropriating last-minute, emergency funds to carry the facilities over in case the contracts prove insufficient. 

In a statement Friday, Cheryl Wilkie, chief operations officer of Farnum, called the situation “dire” and “immediate.”

“We all face dramatic reductions in services if we can’t resolve this before 2019,” she said. “We are asking the state’s leaders to step in and help us before it’s too late to help those in need.”

The rally is scheduled for 10 a.m. in the Legislative Office Building.

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

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