March 11, 2013

Democrats unveil own plan to repay Maine hospital debt

By Steve Mistler
State House Bureau

AUGUSTA — Democratic legislative leaders Monday revealed a plan that would repay Maine's hospitals in $484 million in backlogged Medicaid reimbursement payments by September this year.

The plan was unveiled 30 minutes before a full day of public hearings on Gov. Paul LePage's proposal to use a renegotiated liquor contract and revenue bond to repay the state's share of the hospital debt.

Unlike the governor's plan, the Democratic proposal includes no borrowing. Instead, it would use an upfront payment from the liquor contract to pay the hospitals by September.

The current liquor contract doesn't expire until 2014.

Democratic leaders touted the proposal, saying it would pay the hospitals by a specific date. They added that the timetable for LePage's plan was uncertain given its use of a revenue bond and concerns that the plan as currently written may violate a provision in the state constitution.

The Democratic plan will be accompanied by several measures designed to address the high cost of health care, including billing transparency and cost containment. 

"It's important to remember that this issue is not just about debt, it's also about high health care costs," Senate President Justin Alfond said. "And, any plan to pay off debt to the hospitals should also address the cost drivers and reforming our system to prevent this debt from building up again."

Democratic leaders also said the repayment plan should coincide with state participation in Medicaid expansion included in the federal health care law.

Jodi Quintero, a spokeswoman for House Speaker Rep. Mark Eves, D-North Berwick, said the other reform efforts were not included in the debt repayment plan.

A no-strings proposal appears to key to support from Maine's hospitals. 

Jeff Austin, the lead lobbyist for the Maine Hospital Association, said the debt payment plan should be separate from any other reform efforts. 

"The debt was accrued when we provided services at terms that we’re in law at the time," Austin said. "We shouldn’t have to go back and bargain for that, meaning we shouldn’t have to agree to support or oppose anything else." 

Austin also refuted claims that the hospital association, considered a key voice in the Medicaid expansion debate, has publicly wavered on expansion because it's waiting for lawmakers to settle the debt. He said Monday that the Maine's hospitals were "very interested" in Medicaid expansion, however, it was waiting for a specific proposal before weighing in on the issue. 

Rep. Linda Sanborn, D-Gorham, has submitted a bill that proposes expanding Medicaid eligibility, but it's details have not been published.  

LePage said in December that he doesn't support participating in expansion. However, hospital support for the program could change the conversation. Republicans have been urged to reject the program because it's included in President Obama's Affordable Care Act.

However,  several high-profile Republican governors have agreed to participate because the federal government has agreed to pay 100 percent of the state's costs for the expansion from 2014 to 2016. In subsequent years, reimbursements would gradually decline to 90 percent of the state's costs.

Skeptics, including the LePage administration, question whether the federal government will maintain the 90 percent reimbursement.

Adrienne Bennett, LePage's spokeswoman, said it "is very clear that the federal government intends to back off full payment over time."

"With record deficits in Washington and a promise that states will have to pick up at least 10 percent of an expansion tab in the future it is unfair to put higher welfare costs on the back of the Maine taxpayers when those costs could skyrocket in the future," Bennett said. 

In each state where Republican governors have agreed to participate in expansion, hospital groups have backed it.

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