December 1, 2012

Questions surround Maine's Medicaid shortfall

The magnitude and timing of a $100 million shortfall stunned lawmakers on a state committee.

By Steve Mistler
Staff Writer

(Continued from page 1)

Lawmakers, spurning LePage's proposal earlier this year to eliminate coverage for adults without children, instead banked on a forecast that those recipients would cycle out of the program, saving an estimated $11 million. Mayhew said virtually no money has been saved.

Another $5 million in savings was booked through a MaineCare redesign task force, which was designed to find efficiencies. Mayhew said the task force uncovered only $1 million in savings.

Mayhew has also blamed the shortfall on the state's inability to recover from the loss of one-time federal stimulus funding and a decreased federal match rate.

But skeptics note those factors were known well in advance and should have been calculated into the budget. The criticism feeds into a larger sentiment that DHHS, in this administration and the ones before it, has based its budgets on unreliable data and assumptions.

"I have never felt good about the numbers that we have," Hill said. "All the numbers and the forecasting are so mercurial."

Katz suggested that some of the problems may originate in a DHHS computer system that has plagued the state for years.

"It's certainly had a tortured history," he said. "I've said that we don't need an (Internet technology) person there, we need an exorcist, because it continues to be a huge problem."

Nonetheless, the largest driver of the shortfall is not yet clear. Mayhew believes it will end up being a combination of unachieved savings and "an inability of the state to recover from the loss of federal dollars."

Mayhew also said the state's new billing system enabled the state to see its debt "in real time."

Before this year, the state reimbursed hospitals based on prospective Medicaid claims. Hospitals then sent additional bills to the state when the claims exceeded the original payments.

However, the hospital bills didn't always line up with the state's budget, so hospitals would have to wait as long as two years to receive payment.

The new state billing system now pays Medicaid claims every week.

Documents show that the DHHS has been an average of $2.5 million over budget every week since July 1.

So why is Mayhew just now delivering the bad news?

She said her agency waited to see whether the effects of phased budget initiatives would offset the overspending.

She said it is impossible to build an accurate shortfall forecast based on weekly or monthly payments.

Nonetheless, questions remain for Mayhew, and the MaineCare shortfall will test the new Legislature.

"It's frustrating for the public and for legislators," Hill said, "but you can't come up with solutions without first nailing down the problem."

Staff Writer Steve Mistler can be contacted at 791-6345 or at:


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