When New Hampshire announced its intent to transition its mostly fee-for-service Medicaid program to a managed care system, it was touted as a pathway toward better care for beneficiaries and significant cost savings to the state. Since that 2012 announcement, it's been more like the movie Titanic but without the romance.

The state received initial approval from the Centers for Medicare & Medicaid Services on Sept. 1, 2012, for the New Hampshire State Plan Amendment, which outlined the state's plan to transition to managed care. Plans called for managed care to be in place by January 2013, first for acute-care beneficiaries. Officials hoped for savings of about $16 million in the first year of implementation, and factored that into the 2013 state budget. So far so good, right? Well, as in any movie, the plot thickens or a giant iceberg eventually appears.

Continuing on track, the state awarded managed care contracts to Boston Medical Center HealthNet, Centene Corp. and Meridian Health Plan, good for a three-year term and worth a combined $2.27 billion in that time. In the request-for-proposals process, the state scored each insurer, with auto-assignment of beneficiaries who do not select a plan weighted toward the insurer with the highest technical score: BMC HealthNet.

In approving New Hampshire's request, CMS requested monthly updates beginning Oct. 1, 2012, outlining, among other things, the sufficiency of each plan's provider network and the state's readiness to manage the health plans. In his letter of Feb. 1, 2013, New Hampshire's fifth monthly such report, Nick Toumpas, DHHS commissioner, suggested the state discontinue submission of the reports and stick to its regularly scheduled phone calls with CMS for updates. Apparently, it is easier to give bad news just once. Iceberg, straight ahead, anyone?

The letter indicated the problem. In the map denoting the adequacy of each MCO's provider network, in the columns of hospital access, primary care access, specialty care access and behavioral health access, there were no check marks. And blanks aren't good. None of the health plans have an adequate network to be given the green light by the state, and a solution doesn't appear imminent. Ten of New Hampshire's largest hospitals are currently embroiled in a lawsuit filed against the state over what it views as inappropriately meager Medicaid reimbursement rates, among other payment concerns, including uncompensated care payments. With those disputes ongoing, providers aren't eager to sign up for a Medicaid managed care contract, hence the MCOs earning incomplete marks.

Gov. Maggie Hassan is working to provide assistance in breaking the ice, so to speak, but there's only so much she can accomplish. The matter will come down to dollars and cents, and the hospitals are not budging. The managed care plans have contracts with the state, and if they choose to back out, well, things could get even messier.

The matter will likely be resolved, just not on the timetable anyone wanted. Once it is resolved, in year one, BMC HealthNet would earn 50 percent of the auto-assigned beneficiaries, with Centene and Meridian splitting the rest, for 25 percent each. The state contracts focus on outcomes and reaching quality targets. In year one, quality incentives are built into the contracts for several measures, including member satisfaction, smoking cessation among pregnant women, and hospital readmissions. The New Hampshire drug benefit will be carved into the managed care plans, with each health plan's formulary and prior authorization criteria subject to approval by the state DHHS. As for New Hampshire state officials they just hope all that eventually comes into play before any lifeboats have to be deployed.

Follow Ric Gross on Twitter at @RicGrossHLI


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