Addiction treatment centers warn of looming cuts in services
By DAVE SOLOMON State House Bureau
Manchester Fire Chief Dan Goonan calls for higher Medicaid rates for addiction recovery services that support the Safe Station program at fire stations throughout the state's largest city.
Dave Solomon / Union Leader
CONCORD — Drug abuse treatment providers across the state are warning of looming cuts in addiction services, with some facing closure if the state goes ahead with a plan to cut certain Medicaid rates in 2019.
Representatives of agencies like the Farnum Center and Families in Transition took turns at the podium in a State House press conference on Tuesday, outlining the likely consequences of a 45 to 67 percent rate cut to providers for clients in the expanded Medicaid population.
The Farnum Center in Manchester would have to cut 49 beds from its residential facility, according to chief operating officer Cheryl Wilkie. “We are millions of dollars short of what we need from the state to cover basic costs and break even in providing care to our Medicaid clients,” she said.
Southeastern N.H. Alcohol and Drug Abuse Services predicted a loss of 16 beds, while Manchester Fire Chief Dan Goonan and Mayor Joyce Craig said the financial shortfall threatens the future of the highly successful Safe Station program.
“If current Medicaid rates are not adjusted, the decrease in treatment beds and the limiting of outpatient services for Safe Station partners will affect people from across the state,” Craig said.
The problem stems from a change in the design of the state’s expanded Medicaid program, which covers about 43,000 low-income residents, many of whom use the program to access substance abuse treatment.
For the past two years, people on expanded Medicaid used a state subsidy to purchase health insurance plans on the online exchanges at healthcare.gov. Those market-based plans paid between $300 and $500 a day for residential treatment.
Starting in January 2019, the expanded Medicaid population will no longer get a subsidy to buy commercial plans in the marketplace. Instead, they will join the other 100,000 or so individuals in the traditional Medicaid program, which pays much lower rates to providers.
New Hampshire was among 33 states that expanded Medicaid eligibility as part of the Affordable Care Act, with the goal of reaching a portion of the population not qualified for Medicaid at the time, but not earning enough to buy subsidized policies through the online marketplace.
The state already had more than 100,000 households on traditional Medicaid before the expansion.
The current Medicaid reimbursement rate for in-patient addiction treatment is $162 a day, while the cost to provide the service is about $275 a day, according to the providers.
The higher rates paid by insurance companies for the expanded Medicaid population helped subsidize the lower rates paid by traditional Medicaid, but if that subsidy goes away, rehab centers across the state say they will face a fiscal crisis.
“This rate increase is being requested so we can simply protect the status quo,” said Larry Gammon, president and CEO of Easterseals N.H.
He urged Health and Human Service Commissioner Jeff Meyers to negotiate with the managed care companies that run the Medicaid program to set higher rates “to help us avoid service cuts in January.”
Getting rates for expanded Medicaid clients to the level sought by the providers would require an additional $10 million a year from the state, according to Gammon.
The providers warned of the potential shortfall as the legislature debated the fate of Medicaid expansion.
The expansion bill that passed, SB 313, recognized their concerns, stating “in order to combat the opioid and heroin crisis facing New Hampshire, the Department of Health and Human Services shall establish behavioral health rates sufficient to ensure access to, and provider capacity for, all behavioral health services, including specific substance use disorder service rates.”
Meyers said DHHS has been in discussions with residential treatment providers in recent weeks, is aware of their concerns and working on the problem.
“The department is working with its actuary to develop rates for (substance abuse) treatment and all other medical services for the 43,000 expanded Medicaid beneficiaries that will transition to managed care in January 2019,” he said.
In the meantime, he said, the department will soon present the governor with potential ways to reduce the administrative burden on providers in an attempt to lower their costs.
In addition to the Farnum Center and Families in Transition, other organizations warning of potential cuts include Phoenix House (Dublin, Keene and Franklin), Keystone Hall in Nashua, Southeastern New Hampshire Alcohol and Drug Abuse Services in Dover, and Green Mountain Treatment Center in Effingham.