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Sununu vetoes rate increase for substance abuse, mental health treatment providers 

  • Gov. Chris Sununu celebrates his re-election victory on Nov. 6 in Manchester. AP

Monitor staff
Published: 6/10/2019 6:30:20 PM

Gov. Chris Sununu vetoed a bill to increase funds to substance abuse and mental health treatment providers Friday, frustrating the bill’s supporters and some providers who said the bill would have provided much-needed temporary aid. 

Senate Bill 5, passed by both chambers in early May, would have set aside $3 million in short-term funds to allow the Department of Health and Human Services to raise reimbursement rates to those providers under Medicaid and Medicaid expansion.

Supporters of the bill said the funding was urgent for the providers, who have faced dramatic funding cut-backs after changes to the Medicaid expansion law last year.

Cheryl Wilkie, CEO of the Farnum Center, a substance use treatment organization with facilities in Manchester and Franklin, said the funding reductions have taken a toll.

“We’re not getting by,” she said. “I’m trying to balance a budget based on the Medicaid rates, and I cannot balance that budget based on these rates.”

Wilkie said Farnum was banking on the passage of the $3 million in rate hikes, after seeing its own rates drop from nearly $500 to between $200 and $350 per person per day, depending on the service.

“I never expected this,” she said of Sununu’s veto.

In his veto message, Sununu said the money, which he called “a policy worthy of consideration” should be added and debated in the FY 2020-21 budget, not as a standalone bill. The latest version of that budget passed the Senate last week and heads into a period of negotiations between the House and Senate before heading to the governor’s desk by the end of the month.

“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.

And he said – incorrectly – that the money would run out at the end of the month.

“This legislation provides for rate increases that would end July 1, 2019,” the veto message reads. “Passing this bill might have made sense in January, but we are now less than 30 days away from its end date.”

In fact, the funds would be available far past that. The bill would provide “non-lapsing funds,” meaning they would be available to the Department of Health and Human Services into the new fiscal year beyond July 1.

A spokesman for the governor did not directly address the factual error Friday.

An attempted correction

To the bill’s supporters, the funds were necessary to correct for an overhaul to Medicaid expansion made last year.

In order to save money, Republicans and Democrats opted to move recipients of Medicaid expansion off the private-insurance-driven individual market and into the state’s managed care model.

That allowed the state to cut back premium costs that had skyrocketed in New Hampshire’s individual market. But it also meant that providers that take in many Medicaid expansion recipients – those making up to 135% of the federal poverty line – were no longer paid by private insurance companies, whose per-person daily rates sometimes exceeded $600.

The new rates for mental health and substance abuse treatment providers: Up to $347 per person per day, set by the state in December and paid out by the managed care companies. The last $100 was only eligible for users with opioid use disorder, paid for through the State Opioid Response grants from the federal government.

It was a large increase from the default rate under Medicaid had nothing happened: $162 per day. But for some providers, the compromise still represented a significant cut.

Since the rate drops, Wilkie said the organization had had to cut back on opening hours, eliminating weekend intake entirely despite a growing demand from Manchester Safe Stations and the hub and spoke system.

Senate Bill 5 was meant to alleviate that somewhat, by providing a short term infusion of cash to tide providers over until the budget could provide a more steady rate increase. The temporary money could be matched with federal funds, either doubled for Medicaid recipients, or increased nine-fold under Medicaid expansion.

“It was a key underpinning of that bipartisan Medicaid deal,” Democratic Sen. Cindy Rosenwald said Friday.

“We want to make sure we support behavioral health providers consistent with the bipartisan Medicaid expansion bill that Gov. Sununu is walking away from,” said Majority Leader Dan Feltes.

Sununu and his Department of Health and Human Services commissioner, Jeff Meyers, have argued the new rates should be set by an actuary and based on comparable state Medicaid rates, not necessarily commercial insurance. And he’s said that the state under the old system often overpaid via commercial rates that didn’t suit the actuarial demand.

“The analysis conducted by our actuaries is useful for trying to set residential SUD treatment rates through the end of the current budget cycle,” Meyers said back in December, when the Department announced the new behavioral health rates would be $347.

That number would help “bring reimbursement to a level more in line with other New England states,” Meyers added.

But for Wilkie, January’s boost in rates from the Department of Health and Human Services was too little, too late. The prior system has been dismantled, she said.

“We have a governor who’s just totally chopped it to pieces,” Wilkie said. “I don’t know why he isn’t trying to make this work.”

Significant delay

Introduced in January, the bill encountered delays as it worked its way through the Legislature. It was originally intended to provide the rate increases only until the end of the fiscal year on June 30, at which point any money not spent would “lapse” back to state coffers.

But in February, senators tweaked the funds to be “nonlapsing,” meaning there was no time limit for their use. The bill cleared the Senate unanimously in February, but was tied up in the House Finance Committee for months.

In the end, it only became enrolled in late May – much later than originally intended.

Now, Sununu says the rates should instead be set in the budget. And his spokesman accused Democrats’ objections to the veto as gamesmanship.

“The state intention for the funding provided by this bill was always as a bridge until the next budget,” spokesman Ben Vihstadt said Friday. “The concerns now being expressed demonstrate that the true intention of some was to attempt to avoid the budget process for the upcoming biennium.”

It is unclear whether Democrats will fight to include the $3 million in the budget during negotiations with the House next week or attempt to override the veto itself. A total $5 million in specific rate hikes already exists in the budget passed, which would supplement the 6.2%, two-year increase in rates for all Medicaid services.

Neither Feltes nor Rosenwald would detail how they would press for the funds.

“All options are on the table,” Feltes said Monday, without elaborating.

(Ethan DeWitt can be reached at, at (603) 369-3307, or on Twitter at @edewittNH.)

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