Feds Give N.H. Ultimatum on Medicaid Funding for 2019

Aug 12, 2017

Federal officials have warned New Hampshire that the funding structure underlying the state’s Medicaid expansion plan might be invalid — and they’re giving state officials until the end of next year to fix it, or risk losing future federal funding for the program. 

The federal government is raising concerns over New Hampshire’s use of “donations” from hospitals and insurers to cover the state's share of the costs of Medicaid expansion

That funding structure was a key part of a compromise plan that paved the way for New Hampshire to reauthorize expanded Medicaid last year, because it earned support from Republicans opposed to putting state money toward the program.

Neither the state nor the individual health providers have disclosed details about the donations funding expanded Medicaid. As reported by the Concord Monitor earlier this year, some at the state level have also raised questions about the legality of this arrangement.

The federal government’s warning to the state was first made public Friday night, when Gov. Chris Sununu’s office released a two-week-old letter the Center for Medicare and Medicaid Services sent to the state’s Department of Health and Human Services. (You can read CMS’s full July 25 letter to DHHS here.) 

It’s unclear when CMS first cautioned New Hampshire that its Medicaid expansion funding structure might put its Medicaid funding in jeopardy. Before Sununu took office, Sen. Maggie Hassan oversaw the rollout of the expansion during her term as governor.

"CMS under the Obama Administration had raised questions about New Hampshire's state funding system as established by the Republican legislature given its unique and complicated structure,” Hassan spokesman Aaron Jacobs said, “but the Governor's office and New Hampshire's Department of Health and Human Services worked with the Obama Administration to address concerns and CMS continued federal funding for the program."

Hassan's office also characterized the latest warning from CMS as "a deliberate attempt by the Trump Administration to sabotage New Hampshire's bipartisan Medicaid expansion plan."

In a statement, Sununu said his office first became aware CMS was reviewing the state’s payment structure in June and “immediately began comprehensive negotiations” with federal officials to ensure the program wouldn’t be disrupted in 2018. 

The governor said the federal government “raised the possibility that federal funds may be withheld, which under New Hampshire law would have resulted in the termination of the program.” While changes will need to be made by 2019, those enrolled in expanded Medicaid won’t see any changes to their coverage in 2018, Sununu said. 

“Regardless of whether you support Medicaid expansion or not, it would have been grossly unfair to strip medical coverage from the thousands of Granite Staters who rely on the program without a sufficient alternative in place,” Sununu said. “This transition period will allow New Hampshire's leaders enough time to carefully consider and deliberate the future of Medicaid expansion given this new guidance from CMS.”

The future of New Hampshire’s Medicaid expansion was already likely to be front-and-center when lawmakers return to the Sate House in January. The program began in 2014 but only on a temporary basis, and had to be reauthorized again in 2016. Last year’s reauthorization only extended the program through the end of 2018

Nearly 52,000 residents are covered through the program, according to the most recently available data from the state. https://www.dhhs.nh.gov/ombp/pap/documents/nhhpp-enroll-demo-080117.pdf