NH Medicaid 'modernization' is pure smoke and mirrors

July 24, 2004

By Jonathan Baird

DHHS Commissioner John Stephen has attempted to create a sense of crisis to justify an overhaul and downsizing of an essentially successful program.

Over the last two months, the Department of Health and Human Services has sponsored a series of public forums around the state about the future of Medicaid in New Hampshire. At each of these forums, numerous Medicaid recipients have spoken about their need for Medicaid services and their fear of program cuts

Commissioner Stephen has stated that these forums will inform his reorganization plans, but there is no indication that he is listening to any Medicaid recipients. Stephen has hired a national consulting agency, Maximus Inc., and he has dubbed his plan Medicaid Modernization.

Calling this process "modernization" is an attempt at definition in the best tradition of George Orwell: pure smoke and mirrors. Modernization implies bringing things up to date and getting rid of outmoded ideas. It vaguely implies reform without specifying any substance.

Unfortunately, what actually is going on is a budget-cutting exercise veiled behind a misleading term. There is no crisis in Medicaid.

Medicaid is a largely successful program that provides essential health services to more than 175,000 vulnerable New Hampshire residents.
Commissioner Stephen has attempted to create a sense of crisis to justify an overhaul and downsizing of an essentially successful program.

The commissioner continues to provide the public and the media with the mistaken impression that New Hampshire's loss of $50 million per year in federal "Mediscam"money requires equivalent cuts and cost containment measures in New Hampshire's Medicaid program and services.

For years, the Legislature has balanced the budget by using an excess Medicaid billing scheme popularly known as Mediscam. Taking advantage of loopholes in the law, the state has drawn down federal Medicaid money and used the dollars for budget needs not related to Medicaid like roads, bridges and paying the state police. In fact, Mediscam dollars are not and never have been used to fund Medicaid programs and services in New Hampshire.

Not surprisingly, the federal government has been unhappy about Mediscam. Medicaid exists to serve the essential health care needs of poor, elderly and disabled people. Medicaid was not meant to be an all-purpose expense account for purposes unrelated to necessary health services.

The federal government is now narrowing the Mediscam loophole. As a result, New Hampshire will receive $50 million less each year, starting in fiscal year 2006. It is this reduction in Mediscam dollars that is driving the commissioner's "Medicaid Modernization" efforts.

The reduction in Mediscam money is an important revenue issue for all in state government, meriting thoughtful and creative responses from the legislative and executive branches. But a loss of federal funds that were never used for Medicaid services should not be borne by the vulnerable persons who depend on such services.

As the "modernization" process has unfolded, the public comments from Commissioner Stephen have been less than forthcoming. Although he has stated at the public forums that everything is on the table, he has not publicly disclosed the highly detailed plans and timeline designed and known only to Health and Human Services officials.

New Hampshire Legal Assistance recently acquired a considerable body of information about the Health and Human Services Medicaid plan from doing a right-to-know request pursuant to state law. This new information shows a big variance between the public face of Health and Human Services at its forums on the one hand and its private, behind-the-scenes internal plan on the other. No one from Health and Human Services has explained why these draft modernization plans (or a summary) have not been provided to the public at the Medicaid forums.

Commissioner Stephen has publicly claimed at the forums that he welcomes the input of the public and the Legislature. Yet when the Legislature's fiscal committee sought oversight, he fought the amendment tooth and nail even though his plans are of intense public interest.

It remains unclear whether the commissioner will still try to work around the Legislature and whether he will genuinely share all modernization documents with the fiscal committee.

When I asked the commissioner at the Manchester forum whether his agency had any contract relationship with Maximus, he did not directly answer. The right-to-know request materials have shown there is such a contract and that Maximus will prepare a Medicaid Modernization Findings Document, a Concept Paper, a Draft and Final Modernization Plan and a Section 1115 Medicaid Waiver.

Health and Human Services expects to submit a formal waiver proposal to the Center for Medicare and Medicaid Services, the federal agency, by Sept. 2. They hope to get federal approval for their Medicaid restructuring waiver proposal by Oct. 29. This is an extremely fast-track approach.

The public has a right to know about waiver proposals that could dramatically reshape the financing and entitlement guarantees established by law in the Medicaid program. Such proposals could result in dramatic cuts to essential health services for vulnerable populations, greatly reduced federal money coming to New Hampshire over the long haul and a downshifting of costs to local taxpayers and to counties, cities and towns.
It is a mystery how Commissioner Stephen will improve services and enhance service delivery while cutting millions of dollars from the Medicaid program.

We are fortunate that the Legislature's fiscal committee will have an opportunity to review any proposed waiver of Medicaid rules. It is doubtful that Commissioner Stephen and Gov. Benson would have given the public any such opportunity.

Jonathan Baird of Wilmot is a lawyer at New Hampshire Legal Assistance, and a member of the NH CAN Steering Committee.