Governor Vetoes State Budget Medicaid Rate Increases Stalled

The House and Senate passed a $12.9 billion biennial State Budget last week, but Governor Sununu delivered on his veto threat. The Legislature will “cool off” over the summer and return to work in the fall to try to reach an agreement with the Governor. Meanwhile, a continuing resolution funds state operations at current levels.

The budget passed by the Legislature includes $60 million to increase all Medicaid provider rates by 3.1% in FY 2020 and an additional 3.1% in FY 2021. Medicaid managed care organizations (MCOs) would be required to adjust all reimbursement rates by these amounts. For home health agencies that provide Medicaid skilled care, this would be the first increase in years. Medicaid PT and OT rates have been been unchanged since 1999 and the last adjustment for nursing and LNA rates was in 2008.

The rate increases would also apply to Medicaid waiver Choices for Independence (CFI) services. The Association advocated with other stakeholders for a special appropriation to prop up CFI reimbursement even more. Budget negotiators were unwilling to single out provider groups, citing a valid need for increases among all providers. We appreciate the outreach by many members who testified at public hearings and contacted legislators to warn them of burgeoning CFI wait lists and the critical need to fund long term services for seniors and vulnerable adults.  

The Medicaid rate increases will likely be a point of contention in budget negotiations. The Governor has suggested the $60 million appropriation should be reduced and targeted to provider groups, rather than spread among all. House Bill 2, which is the “trailer bill” that implements portions of the budget, was also vetoed by Sununu. Sometimes known as a “Christmas Tree Bill,” HB 2 often includes items that are unrelated to the budget. The Senate added an amended version of SB 255, which requires nursing homes and home and community-based providers to train all direct care staff on Alzheimer’s and dementia-related disorders. The requirement includes 6 hours of initial training within 6 months of hire and 4 hours of annual continuing education. SB 255 was retained by the House for further study because the bill needed more work to address provider concerns. The Association and other provider advocates opposed the inclusion of SB 255 in HB 2. The Conference Committee ultimately agreed to delay the effective date from July 1, 2019 to January 1, 2020. it is unlikely that this issue will be a negotiating point in the budget. Meanwhile, the House HHS Committee has pledged to forge ahead with refining SB 255 and will act on it in January.

One item that is not in HB 2 — a suspension of the Home Health Rate-Setting Law(RSA 126-A:18-a). The Governor included a suspension of this law in his original budget proposal. The House removed it. The Senate contemplated adding it back in. The Association convinced the Senate that suspending this law was a bad idea. We’ll work to keep the suspension out of the compromise budget.

To get a sense of the politics, read below: