CONCORD — The Executive Council has tabled a nearly $1 billion contract for Medicaid services to hold public hearings and share more information about the three companies who will manage health care for one out of seven New Hampshire residents over the next five years.
The council decision on Wednesday means the five councilors will not be in a position to vote on the new contracts on March 13, as recommended by Commissioner of Health and Human Services Jeffrey Meyers.
“He wanted us to vote on March 13, and that’s not going to happen,” said Councilor Andru Volinsky, D-Concord. “We want at least another two weeks. It looks like a public hearing on March 11, for a detailed briefing.”
With a council vote on the contracts not likely until late March or early April, Meyers said he will be hard pressed to meet a statutory deadline of July 1 to implement the new Medicaid program.
“I’m not going to stand up a program on July 1 if I don’t think it’s going to work,” Meyers told the council at their breakfast meeting. “I cannot stand in front of you and guarantee that program will be up and running by July 1 if it (the council vote) goes beyond March 30.”
With 130,000 people on traditional Medicaid and another 50,000 served by expanded Medicaid under the Affordable Care Act, approximately 180,000 Granite Staters are eligible for the government-funded health insurance program, and it’s about to change in many significant ways.
The most significant change, based on bids that have received preliminary approval from DHHS, is the addition of a third company to the group of managed care companies Medicaid recipients will have to choose from.
The DHHS scoring sheet for the bidding on the contracts shows the two incumbent contractors — Wellsense and Centene — were bidders, along with newcomers WellCare Health Plans, based in Tampa, Fla., and Amerihealth Caritas, based in Philadelphia.
Out of a possible score of 1,000, Amerihealth had the highest score at 846; Centene was second at 835 points, and Wellsense third at 787. Contracts have been proposed for each.
If approved by the Executive Council, the three companies would share in a pool of $924 million in state and federal funds to administer and pay Medicaid claims from July 1, 2019 to June 30, 2024.
The contract requires 85 percent of the money be paid to providers, with a 9 to 11 percent allowance for administrative costs and an allowed margin of 1.5 percent.
The current contract with Wellsense and Centene expires on June 30, but would have to be extended on a temporary basis if the council has not approved the new contracts by then, according to Meyers.
Time for review
Part of the reason for the delay is to allow councilors more time to review the contracts and become acquainted with the new vendor, Amerihealth Caritas, which had problems administering its Medicaid contract in Iowa.
The Des Moines Register reported in August that Amerihealth Caritas “has yet to pay as much as $14.6 million for medical care provided to disabled, poor and elderly Iowans.”
Before AmeriHealth terminated its work with the state last year, Iowa’s Human Services had assessed hundreds of thousands of dollars in penalties against the company, the newspaper reported.
Meyers alluded to those issues on Wednesday.
“Every state includes in its managed care contracts provisions for liquidated damages, meaning if the managed care company fails to hit a certain metric or requirement in the contract then the state has the ability to assess whatever amount is established for that violation,” he told the council.
Afterward, he declined to elaborate, saying those details would be best left to officials from Amerihealth in upcoming public hearings.
“I’m not going to address any particular vendor right now,” Meyers said. “There are confidentiality requirements surrounding issues with respect to their penalties, but we are going to find a way around that in the context of the public information session.”
Volinsky said he is also uncomfortable with the fact that Amerihealth is a for-profit corporation.
Of the two existing providers, Wellsense is owned by Boston Medical Center Health Plan, a non-profit. Centene, operating in New Hampshire as Granite State Health Plan, is a for-profit corporation.
“I think there are a number of issues being discussed at the federal level to reduce the profit motive in health care and we are adding it," he said. "That may be OK, but I wanted to flag it and get better informed.”
The original timetable called for the contracts to be presented to the council at the end of 2018, “But the process needed more time,” said Meyers. “We wanted to make sure we got it right.”
Gov. Chris Sununu, after the meeting, said he has confidence in the DHHS vetting process, and believes a third company adds more competition, not complexity, to the program.
“HHS has investigated the issues in Iowa in terms of the penalties and why they came about,” he said. “You have to understand these systems are different in every state. But they definitely looked at that and took it all into consideration.
“I commend the Executive Council for taking a pause and providing the opportunity in a separate public session to bring in the department and the providers themselves, all three of them, to answer questions about everything, including past history in other states.”
Meyers pointed out that the new procurement process, the first in five years, gave the state the opportunity to negotiate many new features that will benefit health care in the state, including better care coordination for the most seriously ill, minimum requirements for expenditures on substance abuse treatment and mandatory funding for substance abuse peer recovery services.
“And,” said Meyers, “We’ve got tough provisions in these contracts if they don’t meet the metrics we’ve established.”
Jwanza Keita, an Amerihealth spokesperson, in an emailed statement, took issue with some of the Des Moines Register reporting.
“The $14.6 million is misleading because the figure identified is a claims reserve estimate ... The claims reserve estimate is not what is owed to providers, rather it is an estimate of the potential liabilities for claims that may need to be paid based upon historical information. The next quarterly filing will show a significantly lower figure.”