Gov. Paul LePage turned up his criticism of the former leadership at the Department of Health and Human Services on Friday, saying his administration continues to learn about undisclosed financial issues and potential budget problems in the agency.

“The last administration, frankly, I think was anxious to get out of town and did not provide us with a lot of information that we needed to make a strong decision on the supplemental budget and the biennial budget,” LePage said while speaking to reporters in Eliot on Friday.

Former DHHS Commisisoner Brenda Harvey again brushed off the criticism as political, saying former managers didn’t hide any budget problems or leave anything but routine challenges for the new administration.

“It would not be surprising that a new administration is putting all this together and recognizing the complexity of what they are about to manage,” Harvey said. “If the expectation was that they were taking on a department with no (financial or regulatory) challenges to deal with, that’s not an expectation that would ever be realized.”

Last week, LePage issued a news release saying “New DHHS Leadership Uncovers Budget Errors.” On Friday, LePage issued another release under the heading, “$150 Million in New DHHS Financial Problems.”

The administration also attached internal documents it said showed that the former leaders of the department left problems unresolved or undisclosed.

Harvey said there were no errors or secrets, just unwarranted attacks on the department and its staff.

Here are key points of dispute.

n The DHHS has paid $66 million more than budgeted to hospitals, and the new administration is reducing payments for the rest of the fiscal year to balance the account.

The LePage administration maintains the problem occurred because DHHS failed to make accounting changes when it switched to a new system for issuing Medicaid payments to hospitals last fall.

It also says former managers did not fully explain the problem during the weeks and months leading up to the transition.

Harvey, on the other hand, said the temporary Medicaid overpayment was no error and was intended to help hospitals through the transition to the new payment system.

The need to reduce future payments to balance the budget also should have been no surprise to the hospitals or the new administration, she said.

LePage’s office on Friday released a Jan. 3 DHHS memo to the incoming administration. The memo gave an update on the Medicaid budget but made no mention of hospital payments being over budget.

On the other hand, a Dec. 8 memo from Harvey to the LePage transition team did show that the payments were $24 million over budget at that time, and a former DHHS manager said he told the new administration in January that future payments would have to be reduced.

n The U.S. Department of Health and Human Services Office of Inspector General will be coming to Maine to audit $138.9 million in federal Medicaid payments for school-based services from 2006 to 2008. It notified the Baldacci administration in November, but the LePage administration only learned about the impending audit on March 13, LePage said.

Dan Demeritt, LePage’s spokesman, said the outgoing administration should have mentioned it.

“When the federal government starts asking how you spent hundreds of millions that the taxpayers are accountable for, that’s something you’ve got to be concerned about,” Demeritt said.

Harvey said the department’s staff works frequently with the federal auditors, and such reviews do not automatically signify a problem.

“In any given year, there could be as many as 30 state and federal audits, which are critical elements of federal oversight and accountability,” Harvey said in a written statement Friday. “Such audits are common.”

n A state audit found that DHHS may have overbilled the federal government several million dollars for Medicaid claims because of a change in formulas.

The LePage administration said Friday the issue was another example of the financial problems coming to light in the department.

Harvey, on the other hand, said the department had asked for a ruling from the federal government on the issue, and believed it would not be held liable.

Harvey called the attacks on DHHS political. “I think the governor believes he inherited a mess and they are (using) every situation they have to manage as confirmation of the mess,” she said.

Demeritt said the governor simply wants people to know there are many problems to fix. “We need to make it clear to the public that the problems we face are not small,” he said.

The back and forth between LePage and Harvey is mostly playing out in the news media, although lawmakers have been watching.

DHHS Commissioner Mary Mayhew has briefed legislators on the issues and the administration’s efforts to review DHHS finances.

Sen. Earle McCormick, R-Gardiner and co-chair of the Health and Human Services Committee, said it looks to him as though some issues got left unresolved at the end of the Baldacci administration.

“There was so much going on there at the end of the year,” he said. “I don’t think there was anything intentional.”

Sen. Margaret Craven, D-Lewiston and a ranking Democrat on the committee, said the LePage Administration may feel surprised because it fired longtime administrators with institutional knowledge. But, she said, issues such as a federal audit are routine and not signs of mismanagement.

“If they knew how government worked, they would know that the federal government came in and audited constantly,” she said.

Craven also recalled that, as governor, Baldacci had to deal with problems with the DHHS budget when he came into office in 2003.

“He found invoices and unpaid bills stacked on his desk and he never ever pointed a finger,” she said. “He was a gentleman. He just picked them up and paid them.”

Staff Writer John Richardson can be contacted at 791-6324 or at: jrichardson@pressherald.com