AUGUSTA – Recent press coverage has reported that state government achieved a surplus of revenue for the state fiscal year that ended in June. While revenues may have exceeded budgeted amounts, the state clearly does not have a true surplus when it has years of outstanding hospital bills that have not been paid.

The state says it had $70 million of extra money on hand at the end of June but it owes Maine hospitals $350 million in past due Medicaid bills, some dating back three years. The state’s share of that bill is about $120 million, with the federal government paying the other two thirds.

That “surplus” is a mere down payment on what the state owes hospitals for care they’ve already provided to Medicaid beneficiaries.

This is hardly a new story. State government has been unable to keep up with its Medicaid bills to hospitals for more than five years.

In 2006, the past due bill to hospitals was more than $330 million. To Gov. John Baldacci’s credit, he made good on an agreement he signed with the Maine Hospital Association and paid off the debt.

The problem is the state never fixed the core problem, which is that hospitals are not being paid for all of the Medicaid patients they are caring for.

Though the state isn’t paying its bill, the patients still show up, needing our care. So, the debt keeps accumulating and we’re almost back to where we started. the end of this year the amount owed will likely exceed $400 million. It accumulates at a staggering $2 million a week!

What is the impact? A crushing cash burden on hospitals that negatively affects jobs, salaries, investments in life-saving and cost-saving technologies, and is beginning to inflate the cost of health care for everyone else.

See, the difference is hospitals have to pay their bills. They pay their employees, suppliers, energy providers and all manner of other bills that they owe as part of keeping the doors open to take care of the sick and injured.

We don’t have the luxury of ignoring our obligations. It’s time for the state to stop ignoring theirs. Can you imagine any other business or individual not paying their bills without consequence?

Do banks just say “that’s OK, we’ll wait” if you’re unable to pay your mortgage? Does the electric company keep the power coming to your home or business if you simply choose not to pay the bill for years at a time? Is there any other good or service for which you can simply ignore paying the bill and continue to receive the product or service?

Of course not. But that is exactly what hospitals are facing and have faced for years from state government. It’s bad business, bad government and the consequences of this behavior are dire and unacceptable. It negatively affects our more than 30,000 hard-working hospital employees and it hurts local businesses and the economy.

It’s time that state government pays its bills and does so on time.

It’s not like the state isn’t getting a break on the cost of the service. They already pay 25 percent less than the actual cost of the care we provide to Medicaid patients so it’s certainly not the cost of care that’s causing this problem. We’re simply asking them to pay on time the already highly discounted amount they owe.

In an economy like this, can we really afford to leave all of that federal matching money in Washington? That’s $200 million that could be here in Maine creating and preserving jobs and investment. Can you imagine if the state ignored a $200 million federal grant for green jobs or roads and bridges? Unheard of!

Every candidate for governor and the Legislature needs to take this looming crisis very seriously and commit to paying the state’s bills once and for all. Our communities, patients and hospital workers deserve nothing less.

– Special to The Press Herald

 

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