CONCORD — Executive councilors had some tough questions on Monday for the three companies that want to share a $1 billion contract to run New Hampshire Medicaid for the next five years, especially for the newcomer, Amerihealth Caritas, which bailed out of Iowa’s Medicaid program after a little more than a year in 2017.
“Have you satisfied yourself that Amerihealth Caritas will not develop the same or different types of problems necessitating a withdrawal from New Hampshire like what happened in Iowa?” said Councilor Debora Pignatelli, D-Nashua, directing her question to Health and Human Services Commissioner Jeffrey Meyers.
New Hampshire has good reason to be concerned, because it once had three companies managing its Medicaid program.
When New Hampshire launched managed care for Medicaid in 2013, three companies won bids to run the government-funded health insurance program for low-income families. But before the first year of the program was over one of them pulled out, forcing the state to develop a transition plan for more than 30,000 Medicaid recipients.
Five years later, the state is again looking to add a third management company to the program, and Executive Councilors want assurances that the state won’t see a repeat of 2013-14.
They pressed all three companies on their approach to attracting enrollees, the speed with which they will certify and pay providers, and the supplemental benefits each plans to provide.
Effective management of the state’s Medicaid program has implications that go well beyond the health and welfare of the 180,000 New Hampshire residents who rely on Medicaid for health care.
The nearly $1 billion in federal and state funds lowers uncompensated care costs for hospitals and health care providers, reducing cost-shifting to those with private insurance.
The program is also a key part of the state’s strategy to combat opioid abuse, as a large percentage of people in treatment are covered by Medicaid.
The expiration of the current five-year contract presents an opportunity for the state to bring in a new player and add new services, but it also comes with risks.
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, according to Amerihealth executives, but ran into problems in Iowa, which switched from fee-for-service to managed care for Medicaid in 2016.
“It is well-documented that all the managed care organizations in Iowa were losing hundreds of millions of dollars. The rates were not sufficient to cover the cost of the program,” said Russ Gianforcaro, regional president for Amerihealth, which is headquartered in Philadelphia and operates in 11 states.
“We negotiated for more than a year and made several proposals in an attempt to resolve the rate issue, and unfortunately we came to a mutual agreement with the state to exit the program,” he said.
Meyers expressed confidence that Amerihealth, which achieved the highest scoring in the DHHS bidding process, could build a sustainable New Hampshire provider network, and that the state would benefit from having a third managed care company offering Medicaid coverage.
If approved by the Executive Council, the three companies will 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 contracts with Wellsense and Centene expire on June 30, but may have to be extended on a temporary basis if the council has not approved the new contracts by the end of March, according to Meyers.