Where did NH’s funding for addiction treatment and recovery go?

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How NH’s Alcohol Fund failed and what the future of recovery and treatment looks like in the midst of an opiate epidemic.

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MANCHESTER, NH  – When Gov. Maggie Hassan announced her 2016/2017 budget last week, Timothy Rourke was among those who applauded what it represents – a giant step in the right direction and a new era for New Hampshire funding of recovery and treatment options, in light of our opiate addiction epidemic.

One significant step was tripling the amount of the state’s mandated Alcohol Fund, which since 2000 should have been funneling 5 percent of the state’s multi-million dollar annual profits from alcohol sales ($626 million sold in 2014) directly to addiction treatment, recovery and prevention.

Because it hasn’t.

Instead, that 5 percent has only been fully funded one time since the law went into effect, leaving the state with limited resources to battle addiction. With the exception of the 2003 budget, the formula in place for the Alcohol Fund has been suspended by New Hampshire lawmakers every budget cycle, and the dollars instead have gone into the general fund.

Tym Rourke
Tym Rourke

Rourke says in that way, Hassan’s biennium plan bodes well for New Hampshire, as the state continues to forge a new forward path for those struggling to find treatment, recovery and hope.

“The budget brings the total biennial level of the Alcohol Fund from $3.5 million to $10 million – an incredible advancement in our state’s ability to address our heroin epidemic and pursue strategies articulated in the state’s five-year Alcohol and Drug Plan,” says Rourke, who chairs the Governor’s Commission on Alcohol and Drug Abuse Prevention, Treatment and Recovery.

Where did the state’s Alcohol Fund go?

Linda Paquette, Executive Director of New Futures, a non-profit advocacy organization, says not fully funding the Alcohol Fund for more than a decade has certainly made it more difficult to meet the current need for treatment.

“New Hampshire takes great pride in selling alcohol. Profits from the sale of alcohol are the fourth-largest contributor to the general fund,” says Paquette.

To illustrate just how much profit from alcohol sales was diverted over the past 15 years due to suspension of the fund or executive order since the Alcohol Fund was enacted (figures provided  by New Futures):

  • 2000-2002: $0 (Due to how the funding mechanism worked, the Alcohol Fund did not kick in until FY 2003.
  • 2003: Actual funding: $3.3 million (fully funded).
  • 2004/2005: Actual funding: $1,859,250 (should have been $10 million based on 5 percent of alcohol sales revenues.)
  • 2006/2007: Actual funding: $4.6 million (should have been slightly more than $10 million.)
  • 2008/2009: Actual funding: $7.5 million (should have been $11.2 million.)
  • 2010/2011: Actual funding: $7.2 million (should have been $15 million.)
  • 2012/2013: Actual funding: $3. 2 million (should have been $15 million.)
  • 2014/2015: Actual funding: About $3.6 million with $20,000 per year designated for Communities for Alcohol and Drug Free Youth (should have been $16.8 million.)
Linda Paquette
Linda Paquette

Paquette also points out that the underlying economic impact of addiction on the state should not be overlooked.

A 2014 report by PolEcon, “The Corrosive Effects of Alcohol and Drug Misuse on NH’s Workforce and Economy,” showed the direct and indirect financial costs of substance misuse in NH was at least $1.84 billion in 2012.

Not using alcohol sales profits to help individuals in need due to addiction is counterintuitive, Paquette says.

The report points to why more resources – not fewer – are warranted.

“One-point-eight-four billion. That’s an astronomical number, and it’s enlightening to note that two-thirds of those costs fall on businesses for lost worker productivity. So not only are our residents sick and dying because of drugs, but the costs to our state in healthcare, criminal justice, corrections and other revenues are just another reason why we need to be thinking about investing in prevention, treatment and recovery,” Paquette says.

New Hampshire needs to follow some of the “best practices” emerging in other New England states, says Paquette, including Vermont and Connecticut, where recovery centers and an infrastructure for recovering addicts that includes vocational support and recovery coaches or groups are more the norm.

“That’s something critical to success and hugely lacking here, and it’s relatively inexpensive compared to treatment,” Paquette says.

‘Alcohol runs through my courtroom like a river’

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Former NH State Sen. Ned Gordon was a prime sponsor of the 2000 Alcohol Fund legislation. He says the fact the fund has only been fully funded one time in all these years is disturbing – particularly from where he sits – he’s now a district court judge in Franklin.

“Alcohol runs through my courtroom like a river. Add to that the proliferation of heroin, methodone and other drugs in the courtroom, and yes, it’s a big concern for us. Addiction seems to drive everything in the court  – from criminal activity, and small claims cases where people are unable to pay their debts, to marital matters with regard to relationships, and kids who are growing up in household where there is substance abuse,” says Gordon, who also serves on the Governor’s drug and alcohol commission, with Rourke.

He says the intention of the Alcohol Fund was mainly to address the fallout from addiction related to alcohol. With the current proliferation of opiate addiction, it’s needed now more than ever.

“We need to take some responsibility for the effort we make to market this drug alcohol, and set a side a portion of the huge profits to address the problems it creates. Setting aside 5 percent wasn’t intended to take money out of the state’s profits, but rather just assign a portion of the growth of those profits, over time, for those who need help,” Gordon said.

“Of course I’d like to see the Alcohol Fund fully funded every year. But one of the things the commission has done in this last year is to look at not just raising funds for treatment and recovery, but looking at how the funds we do have available can be applied most effectively,” Gordon says. “Tym [Rourke] does a superb job at leading the commission, and in taking a giant step forward toward solutions.”

New Era of funding: NH’s 5-Year Plan

Drug deaths in 2014 exceeded 300.
Drug deaths in 2014 exceeded 300.

Rourke says the next giant step will be continuing the Commission’s work with leaders from the House and Senate, if there is to be true progress going into the next biennium.

Rourke is quick to point out that there are still hurdles to face – including the Institutions for Mental Diseases (IMD) exclusion, a broad and quirky federally-mandated loophole enacted 50 years ago that is now affecting the 25 states with expanded Medicaid under provisions of the Affordable Care Act, including New Hampshire.

The intent of IMD was to make sure states, not the federal government, took primary financial responsibility for funding inpatient services in treatment centers with more than 16 beds.

However, most of New Hampshire’s existing inpatient treatment centers have more than 16 beds, which is how the IMD exclusion threatens to cut off funding for residential treatment centers at places like the newly renovated Farnum Center in Manchester, which has 20 beds.

“Centers for Medicaid Services (CMS) needs to fix the IMD exclusion – it’s a problem. We can’t afford to lose a single bed, or to lose capacity only because of a federal rule that isn’t germane to the substance abuse disorder treatment system,” Rourke says.

But New Hampshire, like other states facing the loss of treatment dollars, are “figuring a way to manage through it,” says Rourke, a process which includes transforming how we treat addiction and recovery, and how the existing money is used.

“It’s a challenge as we face one of our most complex diseases, and it was never going to be without its bumps in the road,” says Rourke.

The IMD loophole is not a new bump in the road

In fact, it’s something NH’s congressional delegation has been working on for “quite some time,” along with the state’s collective substance use resources, including the Department of Health and Human Services, New Futures, and the Alcohol and Drug Service Providers Association, says Rourke.

New Hampshire service providers have known for at least a year that changes under the Affordable Care Act would affect federal funding, and there are other states that have been lobbying the CMS for years to fix the loophole.

Although the non-profit Legal Action Center cautions that full repeal of the IMD exclusion could encourage inpatient treatment even in cases where outpatient care is more appropriate, it’s another why there needs to be a shift in the conversation about addiction treatment and recovery, says Rourke, toward relevant treatment options.

Here in New Hampshire many residential treatment centers have already made program adjustments to become IMD compliant, says Rourke. According to the NH Providers Association, which has been monitoring the issue, treatment options in New Hampshire are evolving.

“It’s important to note that not every opiate addict requires inpatient, residential treatment. For instance, one of the new services that becomes available on March 1 is Medically Assisted Treatment (MAT), which can complement both outpatient and inpatient treatment for better outcomes. Often people infer that substance use treatment has to be residential – and although it needs to be for some, that’s based on a clinical assessment. Others need outpatient, intensive outpatient or another level of care which is not only available, but currently growing in capacity,” says Rourke.

UPDATE, March 2, 2015: According to Paquette, a Feb. 23 memo released by the NH DHHS indicated that the IMD exclusion does not apply to NH’s managed care environment, which means the “IMD problem is averted,” Paquette said. The content of the memo follows:

February 23, 2015 To: Residential Providers of SUD Services Enrolled as a Comprehensive SUD Program From: Katie Dunn, Associate Commissioner and Medicaid Director Re: IMD Exemption for Residential SUD Services Providers In anticipation of the roll out of the next phase of Substance Use Disorder (SUD) benefits for the NH Health Protection Program (NHHPP) population, the Department has reviewed the Medicaid IMD exemption as found in 1905(a) of the Social Security Act and in 42 CFR 435.1009. The Department has concluded that under the CMS managed care regulations; the IMD exclusion does not apply in a Medicaid managed care model. This includes the period of time between eligibility determination and first day of coverage by one of the managed care organizations. Thus as of March 1, 2015 providers of residential substance use disorder (SUD) treatment services that are enrolled in Medicaid as a “comprehensive SUD program” and that have contracts with one or both New Hampshire Medicaid Managed Care organizations will be able to provide and bill for the residential treatment benefits that will become available to NHHPP clients.

While the proposed $60 million annual price tag attached to the state’s five-year Alcohol and Drug Plan as outlined by the Governor’s commission may sound steep, Rourke says it’s a sturdy three-pronged approach that takes into account that, under provisions of the state’s Health Protection Plan, people should now be able to pull out their insurance cards to receive substance abuse treatment.

“So in this new era, the Alcohol Fund will still be needed, but instead of funding beds, it will fund resources and services not covered by insurance, things like community-based services that will narrow the pipeline of future addicts, and treatment for those by way of ongoing support, so they’re less likely to relapse, and more able to stay sober,” says Rourke.

Why Are so many battling addiction in NH?

Far beyond the growing need for services for those caught up in a drug epidemic with no end in sight, the question lingers: How have we arrived at a place where so many people are battling addiction in New Hampshire – and across the U.S.?

Ned Gordon was honored in 2011 by New Futures with the Tom Fox Award for Excellence.
Ned Gordon was honored in 2011 by New Futures with the Tom Fox Award for Excellence.

“I’m just a small-town judge, but my feeling is there needs to be a culture change,” says Gordon. “Many kids I see are plagued with short-term values, or with what gives them value in the short term – the right pair of sneakers or getting high. They aren’t for some reason thinking in terms of where they want to be in the future. Certainly there are good kids in the world, but the ones I see in court are the ones that have no vision.”

The advent of drug court in New Hampshire is one way out for young people, says Gordon.

“Drug courts work very well, and should be supported. But the other side of that is when you look at the size of the problem, the numbers are relatively small, and a person will only get in to drug court if you have some criminal activity,” Gordon says.

“I think in many ways as a culture we’re too accepting of drugs. I’m by no means a tea totaler. But I also believe people should act reasonably,” says Gordon. “What concerns me greatly is the idea that around the country there are states that are basically promoting marijuana sales. I’m not sure why it bothers me so much – perhaps that’s the correct cultural decision, but knowing the fallout, I think as a culture today we’re not as much concerned about drugs as we should be.”

Some bulleted points from Gov. Hassan’s 2016/17 budget relating to addiction and recovery efforts moving forward:


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About this Author

Carol Robidoux

PublisherManchester Ink Link

Longtime NH journalist and publisher of ManchesterInkLink.com. Loves R&B, German beer, and the Queen City!