The state will conduct a comprehensive review of its Medicaid reimbursement rates for treatment of mental health and substance abuse as well as for adults with intellectual disabilities and developmental disorders.

The review, which could affect Medicaid services at hospitals, nursing homes, outpatient clinics and nonprofit agencies, will be done by a yet-to-be-hired consultant to the Department of Health and Human Services and is expected to be completed by November, with recommendations to follow.

About 330,000 Mainers are covered by Medicaid, a health insurance program primarily for low-income people. Gov. Janet Mills implemented Medicaid expansion in 2019, adding about 43,000 people to the program, which is funded by federal and state dollars.

Nonprofits that provide services for some of the most vulnerable Mainers – including those with intellectual and developmental disorders and mental health conditions – have complained for years that services are at risk because reimbursement rates are so low. The problem has been exacerbated by increases to the minimum wage, which has fueled a worker shortage because many nonprofits can’t afford to pay enough to retain workers. Maine’s minimum wage increased to $12 per hour this month.

At the same time, waiting lists for services have lengthened to hundreds or thousands of people, depending on the program.

“A competitive market requires competitive pay,” said Laura Cordes, executive director of the Maine Association for Community Service Providers, in a statement. “With an hourly wage below minimum wage, we know that direct care workers who are on the front lines supporting families and Mainers with intellectual disabilities and autism, can’t wait. They continue to struggle to make ends meet and are forced to leave the workforce for higher paying jobs.”


Michelle Probert, the state’s Medicaid director, told the Legislature’s Health and Human Services Committee on Tuesday that many programs have gone several years without reimbursement rate increases.

“We cannot currently explain why some of our rates are at the amount where they are,” Probert said. In addition to potential rate increases, the consultant will also examine ways to make the rate structure simpler and more efficient.

Malory Shaughnessy, executive director of the Alliance for Addiction and Mental Health Services, which advocates on behalf of nonprofit providers, said reimbursement rates are so low that providers can’t afford to wait until November for a recommendation. Shaughnessy said she’s not against a rate study, but some rates should be increased now to avoid cuts in services.

“Today in Maine, a number of behavioral health services are at risk of reduction or outright closure, which will translate to reduced access to services, especially those for adults with severe and persistent mental illness and for children’s home and community services,” Shaughnessy said. “Some of these services are teetering on the brink right now.”

Lawmakers have introduced bills in the current session that would increase some rates immediately, such as a 30-percent increase for some behavioral and mental health treatment for children.

Probert told the committee that DHHS may increase some rates before the study is done in November, if it’s determined that the affected services require a rate hike sooner. Also, rate studies that are already underway for services to clients with intellectual and developmental disabilities, brain injuries, and behavioral and mental health will continue and be included in the final report, she said.

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