Charges over state Medicaid rate cuts prompt federal inquiry

The Centers for Medicare & Medicaid Services is demanding that New Hampshire health officials provide a better explanation as to why they say Medicaid payment rate cuts are not impeding patients’ access to care. The request comes after several hospitals and health professionals sued the state over a series of rate reductions that started in 2008.

In a May 23 letter from CMS to the New Hampshire Dept. of Health and Human Services, Cindy Mann, the CMS deputy administrator and director of the agency’s Medicaid center, said the state has failed to demonstrate fully that patients are not being compromised by the Medicaid pay cuts. CMS gave New Hampshire officials 30 days to provide additional data or face possible federal penalties.

CMS “shares a responsibility with New Hampshire to assure that the Medicaid program provides its beneficiaries access to care, and that New Hampshire is operating its program in accordance with its approved state plan,” Mann wrote. “Over the past several months, CMS has received and shared with you information that strongly suggests New Hampshire’s Medicaid program may have access issues for physician services and home health services.”

Mann referenced the pending legal challenge against the state, noting testimony alleging that thousands of Medicaid patients have been asked to find alternative medical care because their current medical facilities said they no longer will accept them under Medicaid rates. In other instances, it appears that medical centers are refusing to take on new Medicaid patients, she said.

In a response to CMS, Nicholas Toumpas, the commissioner of the New Hampshire health department, defended his state’s Medicaid program, insisting that cuts have not decreased access to care.

“To the dismay of this administration, your letter characterizes the conduct of this department in an inaccurate manner and acknowledges neither the prompt, responsive actions taken by the department, nor most of the documents submitted to you over the past three months,” Toumpas wrote in a June 1 letter.

He later added, “With respect to New Hampshire’s future plans and efforts, we recognize that the work is ongoing and that more data and analysis will need to be submitted. Your office should have acknowledged, however, that the department already submitted a detailed description of our activities and plans for expanding our access measurement tools and a comprehensive set of reports.”

The number of patients impacted by the rate cuts has been “greatly overstated,” Toumpas stated, adding that patients who have required a new source of care have been able to do so at other facilities.

At this article’s deadline, the New Hampshire health department had not returned calls seeking additional comment. In an email, CMS said it is working with the state to address concerns that it may be violating federal rules regarding pay rates and access. A CMS spokeswoman, who asked not to be identified, declined to address whether the state’s federal Medicaid funding could be at risk. In CMS’ letter, the agency said only that the state’s failure to provide additional requested data in the allotted time could result in a “compliance action.”

Court case still pending

After being faced with a projected decline in general revenues, the New Hampshire health department in 2008 asked permission from the state Legislature’s fiscal committee to reduce Medicaid payments for noncritical access hospitals. The fiscal committee approved and the state enacted a 33% reduction for outpatient services and a 10% cut for inpatient care at those facilities. Ten hospitals in 2011 sued New Hampshire over the cuts, alleging that the state failed to provide them with notice and an opportunity to comment on the reduced rates. The state also ignored how the cuts would impact needy patients, the hospitals said.

In March 2012, a federal judge said it appeared that the state did not go through the proper process to approve the cuts, failing to give health professionals a chance to voice their concerns before enacting the reductions. The judge declined to halt the rate reductions immediately, but he ordered Toumpas to provide justification for the cuts to those affected and to explain the methodologies behind the rate revisions. He also ordered the state to hold a public comment session over the cuts.

“The court recognizes that the described injunctive relief falls short of providing plaintiffs with the substantive relief they seek,” said Steven J. McAuliffe, a judge with the U.S. District Court for the District of New Hampshire. “Nevertheless, the critical nature of the subject matter — medical care for the state’s most vulnerable citizens — strongly militates in favor of holding the commissioner to his federally mandated obligations to give adequate notice to, and to fairly consider the views of those most affected, before he sets Medicaid reimbursement rates.”

The New Hampshire Medical Society is not involved in the lawsuit and has taken no position on it, said Janet Monahan, the society’s deputy executive vice president. However, the society is concerned about access to care for Medicaid patients and is closely watching the situation, she said.