CONCORD — The Executive Council on Wednesday approved contracts worth nearly $1 billion to manage Medicaid in New Hampshire, adding a third managed care company to the government-funded health care program for 180,000 low-income Granite Staters.
The vote was 4-1, with Republican Councilor Ted Gatsas of Manchester opposed. Gatsas said he did not feel the state pressed hard enough for a better deal.
“I asked the three companies, ‘Did anyone ask you if you could do this for less?’ and all three responded, ‘No,’” Gatas said. “I can’t support these contracts when no one even asked them if they could reduce it by half a percent.
The former Manchester mayor maintains some of the Medicaid money, which comes from a combination of federal and state sources, is not being accounted for.
The contract requires the three companies to spend at least 85 percent of the contract on services, with up to 10 percent for administration and 1.5 percent for profit.
Gatsas asked DHHS Commissioner Jeffrey Meyers what happens to the remaining 3.5 percent.
“That is a big number that could come back to the state as additional funds to providers who are always looking to get more fund in service to New Hampshire,” said Gatsas. “I’m shocked that’s not a big concern.”
Meyers later said that in some years, the cost to the companies for services has been as high as 90 percent of the contract, and in some years lower, but never lower than 85 percent. The contracts are structured to allow for some wiggle room, given the complexity of medical services billing and reimbursement.
Companies have lost money on the deal and had to pull out in the past.
“That’s the risk the managed care companies take in the program,” said Meyers after the vote. In some years, depending on claims experience, the companies do get to keep more than 1.5 percent.
“But that doesn’t mean it all gets put to profit,” he said. “They often put money back into the program, so in other years when the costs are higher, they have a buffer.”
Many features have been added to the new five-year contract that place a greater burden on the managed care companies, said Meyers, including coverage for the highest priced prescription drugs which the state had previously paid for.
They will also now have to create and monitor managed care plans for the most medically frail clients and those with multiple prescriptions, while also providing staff to help emergency rooms deal with individuals in need of mental health services.
“I’m very excited that these contacts were approved,” said Gov. Chris Sununu afterward. “Going forward we’ll have a third option coming in, and that’s a very good thing. It’s more competition for the expanded Medicaid population we’re now serving. We feel confident with the contracts going forward that we can provide quality services for New Hampshire citizens.”
The two companies that have run the program for the past five years — Boston Medical Center’s Well Sense Health Plan and Centene’s NH Healthy Families — have established patient and provider relationships and a track record with the state. But the new provider, AmeriHealth Caritas, is largely unknown in New Hampshire.
The company has successfully run Medicaid in Pennsylvania and South Carolina for decades, but ran into problems in Iowa, which switched from fee-for-service to managed care for Medicaid in 2016. AmeriHealth bailed out of the Iowa program, claiming it was under-funded.
New Hampshire lost one company in the early days of its program as well.
The contracts with Wellsense and Centene expire June 30, but will be extended for three months to allow time for the new contracts to be implemented. Meyers had hoped for a council vote in time for a July 1 launch, but councilors wanted two information sessions with the providers that have since been completed.
Meyers will present a proposal April 17 to extend the two existing contracts to Aug. 31.
Open enrollment will begin in August for coverage under the new contract to begin on Sept. 1.