State News (NJ, DE) – Nemours may exit NJ Medicaid

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[MM Curator Summary]: That $20M for a DE hospital from NJ taxpayers? Still not enough.



State budget dedicated $20M to keep Nemours in NJ Medicaid system, but the provider may pull out — and still collect the money

Credit: (Nikita No Komment via Flickr)


NJ’s special-needs children

File photo

When New Jersey lawmakers tweaked the state budget to enable a Delaware-based specialized children’s hospital system to collect nearly $20 million more this fiscal year, they expected the system to remain part of the state’s Medicaid network in return.

But a month later Nemours Children’s Health has offered no guarantee it will stay in-network for the majority of patients. Nemours said Friday it had reached an agreement with one of three managed-care organizations that insure a total of 11,000 New Jersey children with significant health needs. But it appears more than 10,000 of these young patients could still be phased out of managed care at Nemours over four months, starting Tuesday. That would force some families to coordinate critical care with a new set of doctors for children with highly specialized medical needs.

The lack of clarity from Nemours has frustrated at least one of the New Jersey lawmakers who helped secure the additional funding in the budget, which took effect July 1, in hopes of keeping the hospital group in the New Jersey Medicaid system. “I find it troubling after this infusion of funding from state government” that Nemours has not announced its intention to remain in-network or initiated new negotiations with insurance companies, said Assemblyman Herb Conaway Jr. (D-Burlington), who chairs the health committee in that house.

“The expectation on the part of the legislature was certainly that this funding support to Nemours would allow them to (remain) in network,” Conaway said Friday, shortly after meeting with one of the insurance companies that covers Medicaid managed-care patients that use Nemours, a Delaware-based system that also has hospitals in Florida. “To find out the two sides are well apart,” Conaway said, “this is problematic.”

Nemours still qualifies for funds

Even if Nemours does phase out the vast majority of its in-network Medicaid patients, the hospital system could still collect the funds under the parameters outlined in the New Jersey budget that took effect July 1. The allocations include a $10 million state-funded grant available through the New Jersey Department of Health, part of more than $340 million in state and federal funds set aside for hospital infrastructure and programs.

New Jersey lawmakers also budgeted $4.5 million in state funds to increase Medicaid rates for Nemours to a level that is essentially 150% of what New Jersey hospitals would get paid for the same services. That makes Nemours eligible to obtain another estimated $4.5 million from the federal government under the Medicaid program, which provides insurance for low-income Americans using a mix of state and federal funds.

It appears more than 10,000 young patients could still be phased out of managed care at Nemours over four months, starting Tuesday.

Nemours officials declined to say last week if the system intended to seek the $10 million grant from the health department, but it appears they have not yet done so and the process could take some time to complete. Officials in the health department said it would reach out to Nemours once a formal notice and application is posted on the agency’s list of grant opportunities. No immediate timeline for this posting was available.

Nemours informed patients and doctors in late April that it would no longer accept managed-care plans in New Jersey Medicaid, also known as FamilyCare. The schedule the system shared calls for patient services for this group to begin to wind down in August, with the process stretching over at least four months. The news sparked concern among a number of families and led one mother to launch a petition urging the nonprofit hospital system — founded with money from the Alfred I. DuPont estate to provide charitable care — to continue accepting FamilyCare. It has now garnered more than 1,800 signatures.

Faulting NJ’s Medicaid reimbursements

Nemours officials said they were committed to caring for special-needs children, but the difficult decision reflected the reality of New Jersey’s low Medicaid reimbursement rates, which are among the lowest in the nation. An analysis late last year found that a surge of patients after the COVID-19 pandemic combined with higher costs and general inflation drove up costs. But limited reimbursements meant Nemours lost “tens of millions” on this group of New Jersey patients, company officials said.

On Friday, a spokesperson for Nemours told NJ Spotlight News it had reached a deal with one system and continued to talk with others, despite what Conaway had said about a lack of negotiations: “Nemours Children’s Health has reached an agreement with WellCare NJ Family Care, so coverage for those patients will continue. Network negotiations such as these are very complex. Unfortunately, they do typically go up until the last minute, and such is the case with this situation. We have continued discussions scheduled with the remaining MCOs before Tuesday, and we are working hard to continue our relationships with all three MCOs in the state of New Jersey.”

‘The expectation on the part of the legislature was certainly that this funding support to Nemours would allow them to (remain) in network.’ — Assenblyman Herb Conaway Jr. (D-Burlington)

NJ Spotlight News was not able to immediately confirm this with WellCare, which insures roughly 5% of New Jersey’s managed-care members statewide. Nemours declined to say Friday how many of its patients would benefit from the new deal with WellCare.

The New Jersey Department of Human Services, which oversees the state’s $20 billion Medicaid plan that covers some 2.2 million residents, declined to comment on the current situation. Leaders there said they were disappointed by Nemours’ decision earlier this year to pull out of the Medicaid system.

Officials with several of the other insurance companies that manage care for New Jersey Medicaid members said they remain confused and surprised by Nemours position, especially since they said Nemours just demanded a rate increase that took effect at the start of this year. As of Friday, Nemours had not rescinded its notice announcing its intention to leave the Medicaid network, starting Tuesday, they said.

Undercutting managed care

Ward Sanders, president and CEO of the New Jersey Association of Health Plans, which represents the managed-care insurance companies, also shared concerns about the additional funding set aside for Nemours in a July 18 email to rulemaking officials at Human Services. The legislative changes to the budget were enacted with little public or stakeholder input he said, and setting rates in this manner undermines the managed-care process, which seeks to reward quality and efficiency.

Sanders also noted — pointing to a recent story in — that while the new funding was designed to keep Nemours in-network, there is no requirement that it remain to access the additional money. “The state’s favorable treatment of certain out-of-state hospitals appeared to come with the expectation that facilities would stay in-network to serve Medicaid beneficiaries. Yet recent reporting indicates that there was no promise to remain in-network and so far at least one affected facility has not confirmed whether it intends to retract its contract termination notices,” he wrote.

Conaway, a physician himself, is also concerned about the impact on children and families. Many of the children now receiving treatment at Nemours may be able to continue to access services there through single-case agreements, the price of which is negotiated between the hospital and the insurance company, he said.

“Some patients will struggle to get care,” Conaway said, and it is likely to cost parents more time on the phone or online to fill out insurance paperwork — a process he said lawmakers had hoped they could avoid by increasing Nemours funding.

Insurance companies acknowledge it will require more work, but note they are responsible for ensuring each child has access to appropriate care, regardless of where the hospital is located or if it is in-network with New Jersey Medicaid. “Their well-being is protected,” Conaway said, “but there’s the stress one would hope would have been avoided. That was the expectation, at least.”


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