The Department of Health and Human Services says the federal government wants it to step up its collection of $244 million in still outstanding double payments sent out to Medicaid providers during the department’s billing system debacle – money the state says it needs to balance the books.

To do that the state plans to not pay 25 to 35 percent of the new claims submitted from providers who still owe back payments until the amount owed is whittled down to nothing. The state is also considering not paying bills dating back to 2005 that have finally been approved by the system to accomplish the same thing.

Kirsten Figueroa, a deputy commissioner in charge of finance at DHHS, said pressure is coming from the Centers for Medicare and Medicaid Services (CMS) to get the money back.

“They have seen more than a half a billion dollars go out on the street… and a significant amount of it and it has been paid twice,” said Figueroa. The owed money includes federal matching funds, which are paid on a two-to-one basis.

If the federal government demands its share back before the money is returned, she warned a group of providers at their monthly advisory group meeting last week, the state would run out of cash to pay ongoing Medicaid bills.

Over the last year and a half, the state has sent out $509 million in interim payments to nursing homes, doctors, dentists and other health care providers to cover bills the new Medicaid billing computer could not process. Once the system started working, the state started paying actual claims to create an accurate accounting record, leading to the double payments.

The state already has recovered $265 million of those double payments, but that leaves $244 million still owed. While some providers have promised payments by the end of this fiscal year on June 30, 2007, others are still in negotiation or have yet to be contacted by the state. Some are reluctant to pay money back because they say the system isn’t working properly yet, but Figueroa said the state is out of time.

“Everyone needs to be a part of this solution,” Figueroa said, or the state could end up capping weekly payments to all providers or running out of money.

Letters will be going out to all providers who owe money within the next 30 days explaining the new collection process.

Gordon Smith of the Maine Medical Association and a member of the MaineCare Providers’ Advisory Group warned some of his doctors are “not going to be very happy.”

“We understand you’d like to have the money back, but the system isn’t completely fixed yet,” Smith said.

Acting Medicaid Director Mike Hall said the money is needed so the state can keep paying Medicaid bills.

“We put half a billion dollars out on the street to protect your providers. I don’t believe they thought there was a bottomless pit out of which that money was going to come,” Hall said. “You can’t manage cash flow when you still have $250 million out.”