SB 313-FN - AS INTRODUCED

2018 SESSION

18-2956

01/03

SENATE BILL 313-FN

AN ACT reforming New Hampshire's Medicaid and Premium Assistance Program.

SPONSORS: Sen. Bradley, Dist 3; Sen. Morse, Dist 22; Rep. S. Schmidt, Carr. 6; Rep. Umberger, Carr. 2; Rep. Danielson, Hills. 7; Rep. Kotowski, Merr. 24

COMMITTEE: Finance

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ANALYSIS

This bill establishes the New Hampshire granite advantage health care program which shall replace the current New Hampshire health protection program.  Under this program, those individuals eligible to receive benefits under the Medicaid program and newly eligible adults shall choose coverage offered by one of the managed care organizations contracted as vendors under the Medicaid program.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

18-2956

01/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eighteen

AN ACT reforming New Hampshire's Medicaid and Premium Assistance Program.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1  New Chapter; New Hampshire Granite Advantage Health Care Program.  Amend RSA by inserting after chapter 126-Z the following new chapter:

CHAPTER 126-AA

NEW HAMPSHIRE GRANITE ADVANTAGE HEALTH CARE PROGRAM

126-AA:1  Definitions.  In this chapter:

I.  "Commissioner" means the commissioner of the department of health and human services.

II.  "Department" means the department of health and human services.

III.  "Program" means the New Hampshire granite advantage health care program.

126-AA:2  New Hampshire Granite Advantage Health Care Program Established.

I.(a)  The commissioner shall apply for any necessary waivers or state plan amendments to implement a 5-year demonstration program beginning on January 1, 2019 to create the New Hampshire granite advantage health care program which shall be funded exclusively from non-general fund sources, including federal funds.  The commissioner shall include in the necessary waivers submitted to the Centers for Medicare and Medicaid Services (CMS) a waiver of the requirement to provide 90-day retroactive coverage.  To receive coverage under the program, those individuals in the new adult group who are eligible for benefits  shall choose coverage offered by one of the managed care organizations (MCOs) awarded contracts as  vendors under Medicaid managed care, pursuant to RSA 126-A:5, XIX(a).  The program shall make coverage available in a cost-effective manner and shall provide cost transparency measures, and ensure that patients are utilizing the most appropriate level of care.  Cost effectiveness shall be achieved by offering cash incentives, waiving the cost of applicable deductibles, and other forms of incentives to be offered to the insured by choosing preferred lower cost medical procedures and treatment.  Loss of incentives shall also be employed which may include, but not be limited to, a requirement that the insured pay a deductible for the higher cost medical procedure or treatment.  MCOs shall employ reference-based pricing, cost transparency, and the use of incentives and loss of incentives to the Medicaid and newly eligible population.  The department shall ensure through managed care contracts that MCOs incorporate measures to promote continuity of coverage and personal responsibility through the use of co-payments, deductibles, premiums, incentives, loss of incentives, and case management to the greatest extent practicable.  For the purposes of this subparagraph, "reference-based pricing" means setting a maximum amount payable for certain medical procedures.

(b)  Prior to submitting the waiver or state plan amendment to CMS, the commissioner shall present the waiver or state plan amendment to the governor and the fiscal committee of the general court for approval.  The program shall not commence operation until such waivers or state plan amendments have been approved by CMS.  If all necessary waivers and state plan amendments are not approved prior to June 30, 2018, the commissioner shall immediately notify all program participants that the program will be terminated in accordance with the Special Terms and Conditions No. 11-W-003298/1 issued by CMS.

(c)  In order to combat the opioid and heroin crisis facing New Hampshire, reimbursement rates to providers of behavioral health, including substance use disorder and mental health services shall be higher than rates in existence under the former premium assistance program as of December 31, 2018.

(d)  Any person transitioning from the premium assistance program to the program shall not lose coverage due solely to the transition.

II.(a)  To receive benefits under this section, the individual shall:

(1)  Provide all necessary information regarding financial eligibility, assets, residency, citizenship or immigration status, and insurance coverage to the department in accordance with rules, or interim rules, including those adopted under RSA 541-A;

(2)  Inform the department of any changes in financial eligibility, residency, citizenship or immigration status, and insurance coverage within 10 days of such change; and

(3)  At the time of enrollment acknowledge that the program is subject to cancellation upon notice.

(b)  If allowed by federal law, all resources which the individual and his or her family own shall be considered to determine eligibility under this paragraph, including cash, bank accounts, stocks, bonds, permanently unoccupied real estate, and trusts.  The home in which the individual resides in, furniture, and one vehicle owned by the individual applying for benefits shall be excluded from the eligibility requirements for benefits under this paragraph.  If, after counting or excluding the individual's household's resources, the total countable resources equal or fall below $25,000, he or she shall be considered asset eligible.

III.(a)  Newly eligible adults who are unemployed  shall be eligible to receive benefits under this paragraph if the commissioner finds that the individual is engaging in at least 20 hours per week upon application of benefits, 25 hours per week after receiving 12 months of benefits over the lifetime of the applicant, and 30 hours per week after receiving 24 months of benefits over the lifetime of the applicant of one or a combination of the following activities:

(1)  Unsubsidized employment.

(2)  Subsidized private sector employment.

(3)  Subsidized public sector employment.

(4)  Work experience, including work associated with the refurbishing of publicly assisted housing, if sufficient private sector employment is not available.

(5)  On-the-job training.

(6)  Job search and job readiness assistance.

(7)  Vocational educational training not to exceed 12 months with respect to any individual.

(8)  Job skills training directly related to employment.

(9)  Education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency.

(10)  Satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate.

(b)  If an individual in a family receiving benefits under this paragraph refuses to engage in work and related activities required in accordance with this subparagraph, the assistance shall be terminated.  The commissioner shall adopt rules under RSA 541-A to determine good cause and other exceptions to termination.

(c)  This subparagraph shall only apply to those considered, able-bodied adults as described in section 1902(a)(10)(A)(i)(VIII) of the Social Security Act of 1935, as amended, 42 U.S.C. section 1396a(a)(10)(A)(i).  In this subparagraph, "childless'' means an adult who does not live with a dependent child which includes a child under 18 years of age or under 20 years of age if the child is a full-time student in a secondary school or the equivalent.

(d)  This subparagraph shall not apply to:

(1)  A person who is temporarily unable to participate in the requirements under subparagraph (a) due to illness, incapacity, or treatment as certified by a licensed physician, an advanced practice registered nurse (APRN), a licensed behavioral health professional, a licensed physician assistant, a licensed drug and alcohol counselor (LADAC), or a board-certified psychologist.  The physician, APRN, licensed behavioral health professional, licensed physician assistant, LADAC, or psychologist shall certify, on a form provided by the department, the duration and limitations of the disability.

(2)  A person participating in a state-certified drug court program, as certified by the administrative office of the superior court.

(3)  A parent or caretaker as identified in RSA 167:82, II(g) where the required care is considered necessary by a licensed physician, APRN, board-certified psychologist, physician assistant, or licensed behavioral health professional who shall certify the duration that such care is required.

(4)  A parent or caretaker of a dependent child under 6 years of age or a child with developmental disabilities who is residing with the parent or caretaker.

IV.  All veterans who are current New Hampshire residents shall receive medical and medical-related services from any hospital in this state providing services to the newly eligible Medicaid population.

V.  A person shall not be eligible to enroll or participate in the program, unless such person verifies his or her United States citizenship by 2 forms of identification and proof of New Hampshire residency by either a New Hampshire driver's license or a nondriver's picture identification card issued pursuant to RSA 260:21.

VI.  No person, organization, department, or agency shall submit the name of any person to the National Instant Criminal Background Check System (NICS) on the basis that the person has been adjudicated a "mental defective'' or has been committed to a mental institution, except pursuant to a court order issued following a hearing in which the person participated and was represented by an attorney.

126-AA:3  The New Hampshire Granite Advantage Health Care Trust Fund.  

I.  There is hereby established the New Hampshire granite advantage health care trust fund which shall be accounted for distinctly and separately from all other funds and shall be non-interest bearing.  The trust fund shall be administered by the commissioner and shall be used solely to provide coverage for the newly eligible Medicaid population as provided for under RSA 126-AA:2, and to pay for the administrative costs for the program.  The commissioner may accept any gifts, grants, donations, or other funding from any source and shall deposit all such revenue received into the fund.  No state general fund appropriations shall be deposited into the fund.  All moneys in the trust fund shall be nonlapsing and shall be continually appropriated to the commissioner for the purposes of the trust fund.  The trust fund shall be authorized to pay and/or reimburse:

(a)  The cost of the employee share of premiums, co-insurance, co-payments, deductibles, and supplemental cost-sharing, plus the cost of any wrap-around services that are determined by the department to be cost effective to licensed health insurance carriers and/or private employers for coverage under employer sponsored health insurance.

(b)  The cost of medical services, including without limitation, premiums and wrap-around benefits for those newly eligible adults who obtain health coverage as provided in RSA 126-AA.

(c)  The cost of premiums, co-insurance, co-payments, deductibles, and supplemental cost-sharing plus the cost of any wrap-around services as provided in this chapter.  

(d)  The costs of implementing the work requirements.

(e)  Any other costs that are fully reimbursable by the federal government pertaining to the program.

II.  The commissioner, as the administrator of the trust fund, shall have the sole authority to:

(a)  Apply for federal funds to support the program.

(b)  Notwithstanding any provision of law to the contrary, accept and expend federal funds as may be available for the program.  The commissioner shall notify the bureau of accounting services, by letter, with a copy to the fiscal committee of the general court and the legislative budget assistant.

(c)  Make payments and reimbursements from the trust fund as outlined in this section.

III.  The commissioner shall submit a report to the governor and the fiscal committee of the general court detailing the activities and operation of the trust fund annually within 90 days of the close of each state fiscal year.

126-AA:4  Commission to Evaluate the Effectiveness and Future of the New Hampshire Granite Advantage Health Care Program.

I.  There is hereby established a commission to evaluate the effectiveness and future of the New Hampshire granite advantage health care program.

(a)  The members of the commission shall be as follows:

(1)  Three members of the senate, appointed by the president of the senate, one of whom shall be a member of the minority party.

(2)  Three members of the house of representatives, appointed by the speaker of the house of representatives, one of whom shall be a member of the minority party.

(3)  The commissioner of the department of health and human services, or designee.

(4)  The commissioner of the department of insurance, or designee.

(5)  A representative of an insurance carrier that offers policies for sale in New Hampshire on the exchange, appointed by the senate president.

(6)  A representative of a hospital that operates in New Hampshire, appointed by the speaker of the house of representatives.

(7)  A public member, who is a taxpayer, appointed by the senate president.

(8)  A public member, who currently receives insurance coverage through the program, appointed by the speaker of the house of representatives.

(9)  A licensed physician, appointed by the governor.

(10)  A licensed mental health professional, appointed by the governor.

(11)  A masters level licensed alcohol and drug counselor, appointed by the governor.

(b)  Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.

II.(a)  The commission shall evaluate the effectiveness and future of the New Hampshire granite advantage health care program.  Specifically the commission shall:

(1)  Review the program's financial metrics.

(2)  Review the program's product offerings.

(3)  Review the program's impact on insurance premiums for individuals and small businesses.

(4)  Make recommendations for future program modifications, including, but not limited to whether the New Hampshire advantage health care program is the most cost-effective model for the long term versus a return to private market managed care.

(5)  Evaluate non-general fund funding options for longer term continuation of the program.

(6)  Review up-to-date information regarding changes in the level of uncompensated care through shared information from the department, the department of revenue administration, the insurance department, and provider organizations and the program's impact on insurance premium tax revenues and Medicaid enhancement tax revenue.

(b)  Any funding solutions recommended by the commission shall not include the use of new general funds.

(c)  The commission shall solicit information from any person or entity the commission deems relevant to its study.

III.  The members of the commission shall elect a chairperson from among the members.  The first meeting of the commission shall be called by the first-named senate member.  The first meeting of the commission shall be held within 45 days of the effective date of this section.  Eight members of the commission shall constitute a quorum.

IV.  The commission shall make an interim report on or before December 1, 2020 and a final report together with its findings and any recommendations for proposed legislation to the president of the senate, the speaker of the house of representatives, the senate clerk, the house clerk, the governor, and the state library on or before December 1, 2022.

126-AA:5  Evaluation Report Required.

I.  The program shall employ an outcome-based evaluation of its Medicaid program annually to:

(a)  Provide accountability to patients and the overall program.

(b)  Ensure that patients are making informed decisions in carrying out health care choices and utilizing the most appropriate level of care.

(c)  Ensure that the use of incentives, the loss of incentives, cost transparency, and reference based pricing have been effective in lowering costs.

II.  The results of the evaluation conducted under this section shall be in the form of a report to be provided to CMS, the president of the senate, the speaker of the house of representatives, the governor, and the fiscal committee of the general court by December 31 of each year beginning in 2019.

2  Insurance Premium Tax; New Hampshire Granite Advantage Health Care Program.  Amend RSA 400-A:32, III to read as follows:

III.(a)  Except as provided in subparagraph (b), the taxes imposed in paragraphs I and II of this section shall be promptly forwarded by the commissioner to the state treasurer for deposit to the general fund.

(b)  Taxes imposed attributable to premiums written for medical and other medical related services for the newly eligible Medicaid population as provided for under RSA [126-A:5, XXIV-XXVI] 126-AA shall be [deposited into the New Hampshire health protection trust fund, established in RSA 126-A:5-b.  The commissioner shall notify the state treasurer of sums for deposit into the New Hampshire health protection trust fund no later than 30 days after receipt of said taxes] used for the administration of the New Hampshire granite advantage health care program, established in RSA 126-AA.

3  Plan of Operation for the High Risk Pool.  Amend RSA 404-G:5-a, IV(b)-(d) to read as follows:

(b)  Established no later than November 1 in the year preceding the calendar year for which the carrier's experience shall be used to calculate the assessment; and

(c)  Anticipated to be sufficient to meet the high risk pool's funding needs [and the association's share of the costs of the program, as defined in subparagraph (d); and

(d)  For the period of January 1, 2017 through December 31, 2018, an amount not to exceed 50 percent of the remainder amount, as defined in RSA 126-A:5-c, I(b), less the amount made available to the program pursuant to RSA 404-G:11, VI.  The association shall transfer all amounts collected pursuant to this subparagraph and the amount made available to the program pursuant to RSA 404-G:11, VI to the New Hampshire health protection trust fund, established pursuant to RSA 126-A:5-b].

4  New Hampshire Granite Advantage Health Care Program; Federal Match.  Amend 2014,3:10, I as amended by 2016,13:13 to read as follows:

I.  The New Hampshire granite advantage health care program, established in RSA 126-AA, shall be financially administered and managed not to exceed the amount of federal funding provided which shall include consumer price index medical inflation.  If at any time the federal match rate applied to medical assistance for newly eligible adults under RSA [126-A:5, XXIV-XXV between July 1, 2014 – December 31, 2016] 126-AA is less than [100] 90 percent[, less than 95 percent in 2017 and less than 94 percent in 2018,] of the amount as set forth in 42 U.S.C. section 1396d(y)(1), then RSA [126-A:5, XXIV and XXV] 126-AA [shall be] is hereby repealed 180 days after the event under this [subparagraph] paragraph occurs upon notification by the commissioner of the department of health and human services to the secretary of state and the director of legislative services.  The commissioner shall immediately issue notice to program participants of the program's pending repeal.

5  Individual Health Insurance Market; Purpose.  Amend RSA 404-G:1, II to read as follows:

II.  Create a nonprofit, voluntary organization to facilitate the availability of affordable individual nongroup health insurance by establishing an assessment mechanism and an individual health insurance market mandatory risk sharing plan as a mechanism to distribute the risks associated within the individual nongroup market and to support the [marketplace premium assistance program established in RSA 126-A:5, XXV] New Hampshire granite advantage health care program established in RSA 126-AA.

6  Individual Health Insurance Market; Definitions.  Amend RSA 404-G:2, X-a to read as follows:

X-a.  "Plan of operation'' means the plan of operation of the risk sharing mechanism, the high risk pool, support for the program established in RSA [126-A:5, XXV] 126-AA, and the federally qualified high risk pool, including articles, bylaws and operating rules, procedures and policies adopted by the association.  

7  Managed Care Law; Right to External Review.  Amend RSA 420-J:5-a, II(a) to read as follows:

(a)  Health care services provided through Medicaid, the state Children's Health Insurance Program (Title XXI of the Social Security Act), Medicare or services provided under these programs but through a contracted health carrier, except where those services are provided through private insurance coverage pursuant to the [marketplace premium assistance program under RSA 126-A:5, XXV] New Hampshire granite advantage health care program under RSA 126-AA in which case all provisions of this chapter shall apply.

8  Insurance Department; Administration Fund.  Amend RSA 400-A:39, VI(a) to read as follows:

(a)  Based on the annual statement filed in such year by each insurer under RSA 400-A:31, RSA 420-A:20, RSA 420-B:9, RSA 420-F:9, or other financial statement filed under RSA 415-E:11, the commissioner shall ascertain each insurer's amount of gross direct premiums written, including policy, membership and other fees, service charges, policy dividends applied in payment for insurance, and all other considerations for insurance originating from policies covering property, subjects, or risks located, resident or to be performed in New Hampshire after deducting return premiums and dividends actually returned or credited to policyholders.  The premium for Medicaid managed care coverage provided by a health carrier contracting with the department of health and human services under RSA 126-A:5, XIX shall not be included in an insurer's assessable premium, except where that coverage is provided through the purchase of insurance coverage pursuant to the [marketplace premium assistance program under RSA 126-A:5, XXV, or through the health insurance premium payment program under RSA 126-A:5, XXIII] New Hampshire granite advantage health care program under RSA 126-AA.  If any such insurer does not otherwise timely provide the commissioner with the information necessary for such ascertainment, it shall do so on or before May 1 of each year.

9  New Subparagraph; Application of Receipts; New Hampshire Advantage Health Care Program.  Amend RSA 6:12, I(b) by inserting after subparagraph (339) the following new subparagraph:

(340)  Moneys deposited in the New Hampshire granite advantage health care trust fund under RSA 126-AA:3.

10  Severability.  If any provision of this act or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act which can be given effect without the invalid provisions or applications, and to this end the provisions of this act are severable.

11  Contingency.  RSA 126-AA:2, II(b) as inserted by section 1 of this act shall take effect on the date of certification by the commissioner of the department of health and human services to the director of legislative services and the secretary of state that 42 U.S.C. section 1396a(e)(14)(c) has been repealed or amended to permit the application of an asset test.

12  Repeals.  The following are repealed:   

I.  RSA 404-G:2, X-c, relative to the marketplace premium assistance program.

II.  RSA 126-AA:4, relative to the commission to evaluate the effectiveness and future of the New Hampshire granite advantage health care program.

III.  RSA 126-AA, relative to the New Hampshire granite advantage health care program.

IV.  RSA 126-A:5-c, relative to funding the state share of the New Hampshire health protection program.

V.  RSA 126-A:5-d, relative to voluntary contribution.

VI.  RSA 126-A:5, XXX, relative to the New Hampshire health protection program.

VII.  RSA 6:12, I(b)(340), relative to the moneys deposited in the New Hampshire granite advantage health care trust fund.

13  Effective Date.

I.  Paragraph II of section 12 of this act shall take effect December 1, 2022.

II.  Paragraphs III and VII of section 12 of this act shall take effect December 31, 2023.

III.  Section 1 of this act shall take effect upon its passage.

IV.  RSA 126-AA:2, II(b) as inserted by section 1 of this act shall take effect as provided in section 11 of this act.

V.  The remainder of this act shall take effect December 31, 2018.

LBAO

18-2956

Revised 1/25/18

SB 313-FN- FISCAL NOTE

AS INTRODUCED

AN ACT reforming New Hampshire's Medicaid and Premium Assistance Program.

FISCAL IMPACT:      [ X ] State              [    ] County               [ X ] Local              [    ] None

METHODOLOGY:

This bill creates a new chapter, RSA 126-AA, establishing the New Hampshire Granite Advantage Health Care Program (Granite Advantage Program), which will become effective on December 31, 2018 and replace the New Hampshire Health Protection Program (NHHPP), scheduled by law to terminate on that date.  The Granite Advantage Program will differ from the NHHPP in that, rather than making coverage available by purchasing health plans certified for sale on the federally facilitated marketplace, it will offer coverage via Medicaid managed care organizations (MCO).  As with the NHHPP, the Granite Advantage Program will make coverage available to individuals with incomes up to 138% of the federal poverty level.

The existing NHHPP is funded via: (1) federal funds, which as of January 1, 2018 cover 94% of program costs, declining to 90% on January 1, 2020, (2) insurance premium tax revenue attributable to premiums purchased under the NHHPP, and (3) other non-general fund revenue sources. These other non-general fund revenue sources consist of an assessment on insurers under RSA 404-G, as well as voluntary contributions accepted under RSA 126-A:5, d.  This bill retains funding source (1), since federal funds will remain available regardless of delivery type, as well as funding source (2), since MCO coverage will remain subject to the state's insurance premium tax.  The bill modifies funding source (3) by removing the requirement that a "remainder amount" (i.e., costs remaining after funding sources (1) and (2) have been exhausted) be calculated and split evenly between the insurance assessment and voluntary contributions.  While the bill allows for the possibility of using gifts, grants, and donations to fund the Granite Advantage Program, it does not specify that they be used to fund any particular share of program costs.  Likewise, the bill allows for an insurer assessment under RSA 404-G, but, as noted by the Insurance Department, does not specify what level of financial support the assessment is expected to provide. Given this, it is unclear how remaining program costs will be funded if federal revenue and State Insurance Premium Tax Revenues are not sufficient.  The bill does, however, make clear that State General Funds shall not be used to support the program.

The Department of Health and Human Services states that, due to limited detail about the design and operation of the Granite Advantage Program, it is unable to provide a detailed analysis of the bill's fiscal impact.  For informational purposes, the Department's contracted actuary prepared a report in October 2017 on the cost effectiveness of an MCO model versus that of the existing model, and concluded reimbursement rates to providers would, on average, be lower under an MCO model, resulting in lower overall program costs.  Using assumed expenditures of $378 million for the non-medically frail population served by the NHHPP in FY 2018, the analysis projected that expenditures for the same period under an MCO model would be approximately $167 million. Since the State's share of program costs in FY 2018 is 6% of the total, the actuary projected that State expenditures under the MCO model would be approximately $10 million versus $22.7 million under the existing NHHPP.  These numbers do not include the cost of the medically frail population, which is currently served by MCOs and would continue to be served by MCOs under this bill.  The report did not address such factors as the impact on uncompensated care claims, disproportionate share payments to hospitals, Medicaid Enhancement Tax revenue, or Insurance Premium Tax Revenue.   

The Insurance Department projects that, once federal funding drops to 90% in calendar year 2020, federal funds plus Insurance Premium Tax Revenue will collectively fund 92% of program costs.  The Department based this projection on an estimated enrollment of 46,000 and an estimated per member per month cost of $350, as well as assumed Insurance Premium Tax revenues attributable to the program of $2.6 million in FY20, $2.7 million in FY21, and $2.8 million in each of FY22 and FY23.  The Department estimates that if the insurer assessment under RSA 404-G is expected to fully fund the remaining State share of program costs (which, as noted above, is not specified by the bill itself), the assessment will need to raise approximately $15 million per year.  The assessment needed to raise this amount will be approximately $2.75 per member per month on the base of approximately 475,000 covered lives.

The New Hampshire Municipal Association assumes the bill will reduce expenditures by an indeterminable amount due to a decrease in costs for local welfare assistance.

The Department of Corrections is unable to determine the bill's fiscal impact.

The New Hampshire Association of Counties assumes the bill will have no impact on county finances.     

AGENCIES CONTACTED:

Departments of Health and Human Services, Administrative Services, Corrections, and Revenue Administration, Insurance Department, New Hampshire Municipal Association, and New Hampshire Association of Counties