New Hampshire to Contract Out Procedures For Low-Income Medicaid Patients to Low Bidders

Concord (NH) Monitor, June 30, 2007

Hernia operations and MRIs for New Hampshire’s Medicaid patients would be put out to bid and done by the lowest bidder under a plan cleared this week by the federal government.

All that’s stopping Health Commissioner John Stephen’s “GraniteCare Select” plan are state legislators, who put a provision into the budget that prevents the proposal from moving ahead without their clearance.

Health and Human Services spokesman Greg Moore said the plan would save the state $3.9 million over the next two years. The plan would put out to bid a variety of non-emergency procedures for pregnant women and children from low-income households, those Medicaid patients who are not covered by any other health plan.

“The low bids would get the work,” Moore said. “We know that there are specific differences between how much the Medicaid program pays” to different hospitals.

New Hampshire is the first state to obtain this kind of waiver from the federal government, Moore said.
The fiscal committee, composed of 10 state senators and representatives, must sign off before the plan can move ahead. Moore said the department will likely seek permission from the committee at their July 24 meeting.

Signs from the State House have not been good for Stephen. Legislators on the HHS oversight committee reviewed the proposal and opposed it, said Sen. Kathy Sgambati, a Democrat from Tilton and former acting HHS commissioner.

“The major problem is that it will create access problems for people,” said Sgambati, who is also on the fiscal committee. “It requires additional travel for people that already have challenges finding transportation.”

Moore said the department has plans to arrange for transportation for people or reimburse them for the cost of gas.

The plan caps the distance patients would travel for four different kinds of procedures – ambulatory surgery, diagnostic imaging, orthodontia and inpatient rehabilitation. For surgery, rural patients would travel a maximum of 65 miles and those who live in urban areas a maximum of 50 miles. For rehabilitation services, rural patients would travel a maximum of 95 miles.

Stephen’s budget this year had lots of projected savings that legislators questioned, said Rep. Marjorie Smith, a Durham Democrat who chairs the fiscal committee.

“There’s no question that we could save money if we decide not to deliver essential services,” Smith said. “That’s an easy way to save money. That’s just nothing we were willing to do.”

Stephen, who was appointed by former governor Craig Benson, has often battled with the Democratic Legislature. His term ends in October, and no one expects him to be reappointed by Gov. John Lynch. Many have speculated about his intention to seek elected office; in 2002, he ran for the Republican nomination for the First District congressional seat.

In a news release, Stephen touted the idea of bringing a market approach to Medicaid.

“New Hampshire’s taxpayers are the real winners of this program,” he said.

Smith vowed to hear Stephen out if he comes to the fiscal committee.

“I know that the commissioner was asked not to proceed this way. But he is the commissioner – or at least he is today,” she said. “And if any department submits something, they deserve the right to a fair hearing, and I will give a fair hearing.”

Moore said yesterday that the department was “in discussion with the attorney general’s office right now about how we should proceed.”

Elderly people and those with disabilities are generally also covered by Medicare, which handles their outpatient procedures. The people affected by this plan are pregnant women and children, said Thomas Grannemann, the department’s chief of the bureau of economic analysis.

“This was an initiative the commissioner has been pushing,” Grannemann said.

The department had originally asked hospitals and other health care providers to submit bids on a long list of procedures, from biopsies to tumor removal to MRIs, by July 6. But the budget, which goes into effect tomorrow, halts that process until the fiscal committee signs off.

Sgambati said her other concern is that the state will damage its relationship with Medicaid providers, who “already basically subsidize” the state. The state pays hospitals 58 cents on the dollar for Medicaid patients, said Leslie Melby, vice president of the New Hampshire Hospital Association.

Melby said she has a lot of unanswered questions about how the program would work.

“Why would a doctor in Concord seek admitting privileges to facilities in Manchester or Nashua?” Melby asked. “And how does the Medicaid patient figure that out? And once they do figure that out, how do they get there?

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