AUGUSTA — Gov. Paul LePage announced Thursday that his administration will use a surplus from the state’s Medicaid program to provide $13.1 million in additional funding to the 106 nursing homes in Maine.

LePage and Department of Health and Human Services Commissioner Mary Mayhew, speaking at a news event at the Maine Health Care Association, a trade group for nursing homes and other long-term care facilities, said the funds include a combination of state and federal money. The state will provide $4.6 million in surplus Medicaid funds, which will pull in another $8.5 million in matching federal dollars.

They said the plan had been in development for some time, and the availability of surplus Medicaid funding reflects improvements in how the LePage administration is managing the $2.4 billion Medicaid insurance program, which operates as MaineCare.

Mayhew pointed to a history of cost overruns in MaineCare, which prompted lawmakers and previous administrations to delay paying off debt, especially to Maine hospitals, and repeatedly revise the state budget.

“This governor and this administration has changed all that,” Mayhew said. “We are paying our bills on time and we have stabilized the foundation of the MaineCare program.”

Thursday’s announcement was the latest development in a persistent drive by LePage, who is running for re-election in November, to focus attention on nursing home spending in Maine. That push, in which LePage has repeatedly accused Democrats of not doing enough, has created an air of urgency and suggested a sudden crisis has developed in nursing home care in Maine.


In fact, nursing home funding has been a chronic problem, rooted in state reimbursement rates for MaineCare patients, that state government and the private sector have wrestled with for years.

MaineCare is the primary funding source for nursing homes. It covers about 80 percent of assisted-living residents and 66 percent of nursing home residents statewide, according to the Office of MaineCare Services at the DHHS.

Assisted-living facilities charge private-pay residents $6,500 per month or more, but MaineCare reimbursements for assisted living average about $3,000 per month, according to the Maine Health Care Association. The gap forces many assisted-living facilities to shift the underfunded cost of MaineCare recipients to private-pay residents, which causes them to spend down their personal assets and wind up on MaineCare more quickly.

The reimbursement crunch is especially acute for nursing homes in rural areas, where there are fewer private-pay residents and more MaineCare recipients. Two homes in Pittsfield and Lubec recently announced plans to close.

Mayhew said Thursday it was unclear whether the new funding would prevent those closures, and LePage warned that his proposal was a temporary fix that did not address long-term funding issues at nursing homes.

“This is just bridge financing until we can get to the next Legislature,” LePage said. The plan he announced Thursday to allocate the Medicaid surplus to nursing homes does not need legislative approval.


Democrats, who control the Legislature, have criticized LePage for repeatedly demanding that party leaders call lawmakers back to Augusta for a special session to take up nursing home funding. They said that since 2013, the Legislature had passed two bills to increase funding for nursing homes by $38 million – measures that LePage either vetoed or allowed to become law without his signature.

House Speaker Mark Eves, D-North Berwick, said Thursday’s announcement was more proof that LePage has been playing politics.

“Why would he sit on $4.6 million in savings, when nursing homes were struggling?” Eves said in a written statement. “And why would he call on lawmakers to return to Augusta when he already had the funding? The timing of this announcement is clearly meant to distract from his poor track record for Maine seniors and his latest out-of-touch comment labeling Social Security as welfare. It’s smoke and mirrors.”

Senate Majority Leader Troy Jackson, D-Allagash, said Democrats had repeatedly asked to see the governor’s proposal for nursing home funding, but none was forthcoming.

“There’s no reason why we couldn’t have been working on this, except for the governor’s refusal to sit down and actually talk with people and decide what to do with this money,” Jackson said.

Democrats also questioned why the LePage administration was slow to complete a rulemaking process needed to release $12.3 million in state and federal funds to nursing facilities under one of the laws approved in the last legislative session. DHHS has not completed the rulemaking in time to provide the additional funding by July 1, as prescribed in the new law.


The governor and Mayhew said Thursday that the administration was waiting to find additional money before finalizing the rulemaking.

Rick Erb, CEO of the Maine Health Care Association, the trade group for Maine nursing homes, said the delay was not an immediate concern because nursing homes can’t bill for the month of July until August. He said he hoped the rulemaking would be completed by then.

“I’m feeling pretty good about it,” Erb said.

While Mayhew, the DHHS commissioner, touted the administration’s success in managing MaineCare spending Thursday, she also cautioned that tapping the surplus from the last fiscal year could create additional funding needs in the $2.4 billion program.

The MaineCare program has historically created budget gaps, either through inaccurate budgeting or unanticipated needs, including during the LePage administration. As recently as January, administration officials told lawmakers working on a supplemental budget that the MaineCare program could see a shortfall of roughly $100 million.

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