Three of Maine’s residential treatment and shelter programs for drug addicts and alcoholics are scrambling to move dozens of adults into alternative services so the programs don’t lose the federal funding they need to operate.

Milestone Foundation and Serenity House in Portland and St. Francis Recovery Center in Auburn will not qualify for federal Medicaid reimbursements starting Nov. 1 unless they quickly reduce the number of treatment and shelter beds they provide.

The agency that oversees Medicaid says programs with more than 16 beds do not qualify.

Milestone is an emergency shelter and detox program for alcoholic and drug-addicted adults. It routinely reaches capacity and sends people to an overflow shelter. Portland officials and other social service agencies are meeting with Milestone’s director this morning to help search for an alternative shelter for 41 men and women.

“This is an immediate solution that we need to come up with,” said Douglas Gardner, director of Portland’s Health and Human Services Department.

Serenity House and St. Francis Recovery Center provide residential treatment for addicts and alcoholics. They are expected to move residents into outpatient programs, which means the state would lose 33 residential treatment beds at a time when prescription drug abuse is fueling record demand for the services.

“There are waiting lists because of the need,” said Guy Cousins, director of Maine’s Office of Substance Abuse.

It’s not clear how much federal funding is at stake for the three agencies. Directors of the programs could not be reached Wednesday, and Cousins said he did not know what their reimbursement levels have been. Medicaid reimbursements help pay for treatment and care, not for room and board, he said.

The reduction in federal Medicaid funding, which was finally determined last week, is the result of a technical definition that had never been applied to Maine’s private treatment programs, officials said.

The Centers for Medicaid and Medicare says programs that provide more than 16 beds are Institutions for Mental Disease, a category that doesn’t qualify for federal reimbursement.

The bed limit is one of several federal standards intended to encourage community-based services rather than institutional care. The rule has existed for many years but has not been applied to the three programs until now simply because it was overlooked, said a federal spokeswoman. The issue was noticed during a routine review of Maine’s reimbursement rules this summer.

“We weren’t aware that these facilities were this size,” said Roseanne Pawelec, who is based in the Boston office of the Centers for Medicaid and Medicare.

Maine’s Department of Health and Human Services, which processes the federal reimbursements, was told in August to review the eligibility of residential programs statewide. It determined last week that the three agencies fit the federal agency’s definition of institutions.

North Carolina is going through the same review because it has similarly designed private treatment programs, said Cousins. Other states apparently have operating or funding structures that fall within the federal standards.

Cousins said all three agencies are moving to meet the eligibility standard by downsizing.

Milestone is planning to maintain 16 detox beds for adults who are breaking dependence on alcohol or drugs. Its 41 shelter beds are part of a network of about 250 emergency beds for adults in Portland that was overflowing all summer.

“The timing of this couldn’t have been worse,” said Mark Swann, director of Preble Street, a nonprofit that provides food and shelter to the poor and homeless.

It’s unclear whether Milestone and others will try to create a new shelter in two weeks, or find a way to fit the beds into existing facilities.

“There will be a lot of people wanting to help,” Swann said. “Relocating a shelter or opening a shelter — those are hard things to do.”

The loss of beds for residential addiction treatment also comes at a difficult time, said Eric Haram, president of the Maine Association of Substance Abuse Programs. “These are the sickest of our sick folks.”

If addicts aren’t in treatment, he said, “they’re going to be in the emergency room or the jail, at a much, much higher cost.”

Staff Writer John Richardson can be contacted at 791-6324 or at:

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