Senate Finance Committee
HB 1-A and HB 2-FN-A-L Relative to the State Budget for SFY’s 2016 and 2017
May 5, 2015
Good afternoon, Madam Chairman, and members of the Committee. My name is Alex Walker and I am Executive Vice President for Operations and Strategy Development at Catholic Medical Center in Manchester and Chair of the New Hampshire Hospital Association’s Advocacy Task Force representing all of our state’s community and specialty hospitals.
I am pleased to share our thoughts with you as you begin the challenging job of developing a state budget for the next biennium. We appreciate the difficulty with which you begin your deliberations and look forward to working with legislators on both sides of the aisle and on both sides of the State House as this process moves forward in the weeks and months to come.
State funding for the Medicaid program has been the source of significant controversy over the past several years. It is absolutely essential that we have a vibrant, robust and effective Medicaid program that helps to ensure recipients are getting the right care, at the right time, and in the right place. The Medicaid program’s movement to a care management program is central to this, and while patients and providers have experienced challenges in the transition to managed care, we believe this is an important step to fulfilling the promise of delivering the right care, at the right time, and in the right place.
MET: Last session’s resolution of the longstanding challenges over the Medicaid Enhancement Tax (MET) and the Medicaid Disproportionate Share Hospital (DSH) program was a very important step in the direction of creating stability in the Medicaid program for patients, providers, and the State of New Hampshire. Absent this agreement between the State and the state’s hospitals, New Hampshire was facing lawsuits that threatened to disrupt the state budget, lower New Hampshire’s bond rating, and make it more difficult for patients to get the care they need.
The House-passed version of the budget honors the implementation of this agreement which is now moving forward with a key component fulfilled by the federal Centers for Medicare and Medicaid Services’ (CMS) approval of New Hampshire’s State Plan Amendments consistent with the provisions of SB 369 enacted last year and signed into law by the Governor. It should be noted that 26 community hospitals in New Hampshire paid a Medicaid Enhancement Tax to the State of New Hampshire of nearly $200 million just a couple of weeks ago, which is now being used to support the Medicaid program and to reimburse hospitals for the uncompensated care they provide.
Failure to honor the settlement agreement would be a significant step backwards and would put the entire agreement at risk. Settling the lawsuit is predicated on the successful, complete and timely implementation of the agreement, and any attempt to undo that agreement would mean those legal cases would continue, creating increased and even greater budgetary pressures for policymakers. We urge legislators to honor the agreement that was enacted into law last year.
NHHPP: As you have seen in reports that were published earlier this year by the New Hampshire Hospital Association, the number of patients without insurance seeking care in New Hampshire’s hospitals is on the decline…and as of the end of the first quarter of this year, based on a rolling 12-month cycle, that trend continues with hospitals in New Hampshire seeing a 27% reduction in the number of uninsured patient seeking care in the emergency room, up from 17% reported at the end of last year. That is incredibly significant as it means that these patients are now able to get the right care, at the right time, in the right place…and while our emergency rooms are incredibly important places to care for those truly in an emergency, they’re not the right place to care for things that can and should be treated in a more cost-efficient location like a physician’s office, clinic or community health center.
When the Legislature passed and the Governor signed into law the New Hampshire Health Protection Plan (NHHPP), our New Hampshire-based solution to providing private health insurance coverage to more low-income, uninsured Granite Staters, one of the primary goals was to reduce the hidden tax on businesses and those of us with insurance to help pay for the care of those without insurance. This early data shows that the NHHPP is working as planned, and we look forward to continuing to document and demonstrate in the months ahead that this plan is helping move us in the right direction and should be continued.
By making health insurance available to those who were previously uninsured, the NHHPP aims to bend the cost curve in health care and reduce cost shifting by ensuring people are able to get the right care, at the right time, and in the right place. The NHHPP helps ensure that people have access to health care that study after study shows is critical to improving the health of individuals and of lowering health care costs across the health care system. If we can better manage that care, we can provide more efficient, evidence-based and more cost-effective care.
But we cannot achieve these goals if people lack needed health insurance coverage that provides primary, preventive care that is the cornerstone of the new and emerging model of health care delivery that is focused on keeping patients healthy and avoiding utilization of more costly services that are not needed for healthier patients and the population as a whole.
Reauthorization of the NHHPP will provide more Granite Staters access to this type of primary, preventive care, thereby decreasing the amount of uncompensated care provided by hospitals, health centers, doctors and others, and reducing cost shifting and hidden taxes. We look forward to working with this Committee, members of the Senate, the Governor and her Administration, and members of the House to reauthorize this program to ensure that patients can continue to realize the benefits of this important private health insurance coverage.
Federal Cuts: As you begin your work on the budget, it is important to remind legislators that hospitals in New Hampshire have been significantly impacted by federal health care funding decisions over the past several years with dramatic reductions in both Medicare and Medicaid spending. As a result of federal sequestration and several other cuts to hospitals , Congress has reduced federal health care spending that has cut payments in 2015 alone to New Hampshire’s hospitals by $94 million. As Congress looks at attempts to balance our federal budget, hospitals could potentially be facing additional cuts in Medicare, amounting to $1.65 billion over the next 10 years, which would have a crippling effect on our hospitals’ ability to continue to serve the patients and communities who depend on them.
CON: We urge the Legislature to reexamine the decision to sunset the Health Services Planning and Review program, also known as “certificate of need/CON.” CON has been a controversial element for some time, and we certainly agree that changes are in order. In 2013, the Legislature adopted significant changes to the CON Board to modify its membership, structure and approach. Hospitals supported those changes. But the legislature also directed the CON Board to develop a State Health Plan so that its work could be executed within the context of a deliberate and comprehensive approach to health care services delivery in New Hampshire. That State Health Plan has not yet been developed, and we believe it would benefit policy makers and health care providers as to the type and form of health care services that are necessary across the state. We have long felt that a health plan should be completed before any decision is made on the future of the Certificate of Need program.
But we are open to looking at new approaches to ensure quality and safety in the services that are available and provided in New Hampshire. This is a significant decision that will have lasting implications on the future of health care in New Hampshire, and we should seek to avoid making any rash or premature decisions before understanding the implications on the health, safety and availability of important services in our state.
Behavioral Health: As you well know, there continues to be a significant backlog of patients in our state’s hospital emergency rooms awaiting admission to NH Hospital for inpatient psychiatric services. Unfortunately, the House passed budget delays by one year the opening of a planned 10-bed crisis unit at New Hampshire Hospital. This will mean long delays for necessary treatment for patients with severe psychiatric needs. It is essential that this unit be operational as originally planned for July of this year. Patients who require inpatient psychiatric care should not be held in hospital emergency rooms where they cannot be treated for their mental illness.
I appreciate the opportunity to share just a few of our key priorities for this coming budget session and would be happy to respond to any questions you might have.