Federal officials questioned whether state auditors were biased in evaluating conditions and enforcing compliance issues at the Riverview Psychiatric Center before they decided to cut off $20 million in annual funding to the state hospital in Augusta.

William Roberson, associate regional director for the federal Centers for Medicare and Medicaid Services, made those assertions during a conference call on Aug. 14. Last week, his agency stripped Riverview of its funding.

His assertions were fiercely disputed by Kenneth Albert, director of the Maine Division of Licensing and Regulatory Services, whose auditors paired with federal regulators to identify problems at the 92-bed hospital earlier this year.

The dispute – documented in a memo Aug. 15 from Albert to federal authorities – raised more questions about a crisis that is forcing state officials to assess their ability to take in new psychiatric patients, with the loss of over half of the hospital’s $36 million operating budget.

Members of the Legislature’s budget-writing committee hoped to answer those questions Wednesday when they got a briefing about Riverview from Health and Human Services Commissioner Mary Mayhew. But some Democrats on the panel left the meeting uncertain about the long-term prognosis for Riverview, which they said is plagued by understaffing and management issues.

Mayhew challenged that assessment during the long – and occasionally testy – briefing, saying the federal government’s decision was unrelated to safety, staffing or quality-of-care issues.

Rep. Mike Carey, D-Lewiston, cited a federal report that said Riverview was out of compliance because it had staff members tending to both civilian patients and forensic patients – those committed as part of criminal proceedings.

“It’s very simple,” Carey said after the briefing. “You can’t have one person doing two things. Hire another person. One does one job, the other does another job. It’s really basic. We haven’t heard that they understand that or that they’re going to fix it.”

Mayhew said the Centers for Medicare and Medicaid Services was concerned more about billing of staff hours because one set of patients qualifies for federal reimbursement and the other does not.

The different interpretations of what led the federal agency to find the hospital out of compliance – staffing or billing issues – emerged as the sticking point between Mayhew and Democratic lawmakers.

Republicans on the committee backed Mayhew, saying the federal government wrongly interpreted its guidelines or adjusted them as the state tried to comply.

“As long as quality of care and patient safety isn’t affected, you would think that CMS, in order to maintain quality of care for these patients, would keep the federal funding and just approve a plan of correction,” said Rep. Deborah Sanderson, R-Chelsea.

Albert, the director of the Division of Licensing and Regulatory Services, told lawmakers Wednesday that his auditors found compliance issues at Riverview, but none that would lead to the loss of funding.

Federal officials’ suggestion of bias by state auditors emerged when Albert’s Aug. 15 memo was made public at the meeting.

In his memo to Roberson, the federal agency’s regional director, Albert rebutted claims made during the conference call Aug. 14 that state auditors were biased and too lenient on Riverview.

Albert’s auditors were commissioned by the Centers for Medicare and Medicaid Services after an assault on March 16 in which a patient at Riverview allegedly attacked a mental health worker. While Albert and the state auditors work under the state Department of Health and Human Services, they are supposed to be independent when auditing for compliance with federal rules.

Albert wrote in his memo, “Your team has expressed, on more than one occasion, a concern and guidance that (DLRS) should carefully monitor any bias it may have related to Riverview, another state entity.”

Federal auditors accompanied state regulators “to mitigate” those concerns, but Roberson apparently remained unconvinced.

In the memo, Albert directed his frustration at a federal employee at the regional office in Boston, who he said failed to defend the state auditors.

He wrote that the “integrity of our state/federal relations has been challenged not so much by what you and your team said, rather by what you failed to say … I will not soon forget.”

Albert wrote that he was insulted by claims that his auditors were biased and that they hadn’t taken “a more aggressive technical assistance and enforcement posture with Riverview to bring them into compliance sooner.”

Albert, who attended Wednesday’s briefing of the Appropriations Committee, defended his memo. Mayhew said little about it.

Afterward, she said the DHHS is pushing the federal government for an expedited appeal of its funding decision – made more difficult by the partial shutdown of the federal government.

The loss of funding has raised questions about Riverview’s financial capacity to admit new civilian patients. The hospital will be reimbursed only for patients who arrived before Sept. 2 – the cutoff for federal dollars. If the state wins its appeal, reimbursements could be retroactive, according to Mayhew.

Asked how long the state can fund the hospital before rejecting patients, Mayhew said incoming patients are evaluated on an “individual basis.”

“We are looking at the budget for the hospital and all the resources within the department to ensure that we are able to appropriately serve the patients that are at Riverview today,” she said.

Democratic lawmakers, however, said they still didn’t know whether the department has a long-term fix for the hospital.

“We heard a lot of detail, we didn’t here a lot of answers,” Carey said. “She talked a lot about how the department is managed but not what the dates are, who’s responsible and how much money it’s going to cost to fix the problems that the federal government says that Riverview has.

“It’s going to cost the state a lot of money,” he said.

Steve Mistler can be contacted at 791-6345 or at: smistler@pressherald.com

Twitter: @stevemistler