Politics

February 22, 2013

Maine's debt to hospitals approaches $500 million

Hospitals are urging the state to begin making overdue Medicaid payments so they can also collect the much bigger federal match.

By Kelley Bouchard kbouchard@pressherald.com
Staff Writer

Interactive: MaineCare settlements due to Maine hospitals
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Click to explore how much Maine hospitals are owed in outstanding MaineCare reimbursements as of December 2012.
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Maine Medical Center in Portland. Owed $484 million in overdue Medicaid reimbursements, Maine's 39 hospitals are pushing state lawmakers to find a way to start paying off a debt that's forcing some hospitals to reduce staffing, delay capital improvements and borrow money to pay bills. Maine Medical Center is owed $68 million.

Gregory Rec / Staff Photographer

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Owed $484 million in overdue Medicaid reimbursements, Maine's 39 hospitals are pushing state lawmakers to find a way to start paying off a debt that's forcing some hospitals to reduce staffing, delay capital improvements and borrow money to pay bills.

The state's share of the debt is $186 million. Some of it dates back to 2009, and it must be paid to free up about $298 million in federal matching funds that some hospital officials say they need desperately.

Their lobbying effort -- advertisements in newspapers and meetings with lawmakers -- comes as the Legislature prepares to deal with a projected $120 million revenue shortfall in Maine's current budget for MaineCare, the state's version of Medicaid.

The reimbursement debt affects hospitals large and small across the state, from Maine Medical Center in Portland ($67.7 million), to Central Maine Medical Center in Lewiston ($50.2 million), to Aroostook Medical Center in Presque Isle ($12.4 million).

Central Maine Medical Center is leaving jobs unfilled, including a vice president's position, and delaying all but emergency capital spending, including long-planned building projects for obstetrical and primary care services.

"This can't continue," said Chuck Gill, the hospital's spokesman. "When you have a bill, you have to pay it. We provided care two or three years ago, in some cases, and we're still waiting for payment."

A few blocks away at St. Mary's Regional Medical Center in Lewiston, officials announced this month that they plan to restructure and eliminate as many as 25 positions if they don't get their Medicaid reimbursements, which now total $28.8 million.

Eastern Maine Medical Center in Bangor, the state's top Medicaid creditor, is waiting for $72 million in reimbursements. In the last fiscal year, the seven hospitals in the Eastern Maine Healthcare Systems lost a total of $4 million in interest they would have earned on savings used to cover operating expenses, said Lisa Harvey-McPherson, vice president of continuum of care.

"That money is lost," she said. "That could have gone into patient care and services. It puts all hospitals in Maine in a challenging cash-flow position."

The current reimbursement debt accumulated from June 2009 through June 2012. During that period, the Maine Department of Health and Human Services had a unique practice of paying estimated weekly amounts for hospital services and leaving millions in reimbursements unpaid each year.

The debt grew as eligibility expanded for MaineCare, which covers low-income families and individuals. In the mid-2000s, the number of Mainers receiving Medicaid benefits grew from about 200,000 to 300,000, said Jeff Austin, spokesman for the Maine Hospital Association.

"The result was a total reimbursement gap of $80 million to $120 million per year," Austin said. "It's a pain to carry forward that kind of receivable. The last meaningful payment (the state issued to hospitals) was $70 million two years ago. The age of this debt is getting people antsy."

(Continued on page 2)

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Additional Photos

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St. Mary's Regional Medical Center in Lewiston. Owed $484 million in overdue Medicaid reimbursements, Maine's 39 hospitals are pushing state lawmakers to find a way to start paying off a debt that's forcing some hospitals to reduce staffing, delay capital improvements and borrow money to pay bills. St. Mary's is owed $88 million.

  


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