Division III approves 3% Medicaid rate reduction and delays June 2027 MCO capitation payment to ease near‑term budget gap

House Finance Division III adopted two fiscal measures directly affecting Medicaid cash flows and provider reimbursement: (1) a 3% across‑the‑board Medicaid rate reduction as part of the division’s contribution to the biennial savings target, and (2) a timing change that delays the June 2027 managed‑care capitation payment into the next fiscal year. The timing shift was described by the chair as a “one‑month” maneuver that yields immediate budget relief for the current biennium but increases the fiscal need in the next.

Why it mattered Committee members framed the combination of actions as necessary to meet an assigned reduction target for Division III. “We have to hit a number,” the chair said, urging members to balance priorities. The measures together were intended to shrink a large back‑of‑the‑budget cut and leave the Department of Health and Human Services with a smaller operating reduction to manage.

Provider testimony and concerns Multiple witnesses told the committee the measures would materially affect care access and the ability of providers to retain staff. - Ben Bradley, vice president of state government relations for the New Hampshire Hospital Association, urged caution and asked the committee to consider exempting hospitals from a general 3% reduction; hospitals had previously asked to redirect increases into community services and had accepted prior adjustments. - Greg White, CEO of Lamprey Healthcare, said primary care and behavioral health services operate on narrow margins and estimated the reduction could produce a six‑figure impact to an individual health center. - Kelly Ann Totten, representing home‑health and hospice providers, said home and community‑based programs were still stabilizing after prior rate increases; she warned a cut would accelerate workforce loss and drive patients into more expensive institutional settings.

Committee action and vote The committee approved the MCO payment timing shift (amendment 14‑23 H) on a roll call; the recorded vote was 6‑4 in favor. The committee also approved amendment 14‑22 H, the 3% Medicaid rate reduction, by the same margin (6‑4 as reflected in Division III proceedings). Members voting in favor said the measures were necessary to meet the division’s fiscal target; members opposed urged the legislature to seek revenue options and expressed concern about service destabilization.

What the department may do next Committee discussion noted the Department of Health and Human Services can return to the fiscal committee if actual expenditures exceed appropriations. Several members urged the department and the MCOs to work together to limit service disruption. Chair and staff directed OLS and fiscal staff to prepare formal amendment language and detailed change sheets for the full finance committee and the Senate.

Ending Lawmakers described the action as difficult but framed it as the division’s contribution to meeting Ways and Means’ revenue allocation. Provider groups signaled they will press the Senate and budget conferees to restore funding or limit the distribution of reductions to reduce service and workforce impacts.