Among the many state budget changes likely to be voted on today for the current fiscal year, lawmakers on the Appropriations and Financial Services Committee will consider two proposals to cut Medicaid funding to Maine hospitals. The combined measures would save $4.5 million out of the state’s General Fund this year, but would have a significantly larger impact due to the resulting loss of federal matching dollars.
A spokeswoman for the Maine Hospital Association said Thursday that the recommendations are an improvement over cuts originally proposed by the Department of Health and Human Services, but she said hospitals could be forced to cut services and lay off staff as a result of worsening economic stress.
“It is very troubling to consider what hospitals may be forced to do if they have to endure more MaineCare cuts,” said Mary Mayhew of the hospital association.
MaineCare is the name of Maine’s Medicaid program.
Mayhew said the cuts, if carried forward into the next biennial budget, could result in an estimated loss of $15 million to $16 million a year in combined state and federal funding for Maine hospitals.
The governor’s biennial budget for fiscal years 2010 and 2011 is expected to be presented to the Legislature around the first week of February.
The department’s supplemental budget proposal would have slashed MaineCare funding to Maine’s smallest hospitals and reduced payments for services delivered by doctors who are employed by hospitals.
Rep. Anne Perry, D-Calais, is House chairman of the Legislature’s Health and Human Services committee and served on the ad hoc subcommittee that reviewed the department’s proposal. Earlier this week, the subcommittee made alternative recommendations to the Appropriations and Financial Services Committee.
“There are a great many policy issues we could not address adequately in the time we had,” Perry said. “These changes are focused on the supplemental budget, but we are also laying the framework for policy considerations in the biennial budget.”
The recommendations are to:
ä Delay one weekly payment to all Maine hospitals into the next fiscal year, saving $2.6 million in the current fiscal year.
ä Decrease MaineCare reimbursements for hospital-employed physicians from 89.7 percent of the Medicare rate to 70 percent of Medicare effective Feb. 1, saving $1.9 million in the current fiscal year.
ä Form a task force to examine MaineCare reimbursement policies for services delivered by physicians and hospitals.
The subcommittee also recommended raising MaineCare payments to physicians who are in private practice from 57 percent of the Medicare rate to 70 percent in July of this year, bringing the payment on par with hospital-based doctors.
“We really feel we have to do this for the future,” Perry said. “We need to pay enough to make it worthwhile to care for our MaineCare patients.” Maine’s current rate of reimbursement to private physicians is lower than most other states, she said, discouraging many doctors from caring for people covered by MaineCare.
The Health and Human Services subcommittee also recommended paying hospitals a portion of the approximately $400 million in overdue MaineCare payments owed by the state, dating from 2005, using a portion of federal stimulus funds expected from the new administration of President Obama.
Mayhew said the Maine Hospital Association is supportive of that proposal.
“Paying these past bills would go a long way toward alleviating some of the difficulty our hospitals are experiencing,” she said.
At Eastern Maine Medical Center in Bangor, spokeswoman Jill MacDonald said cutting MaineCare payments for services delivered by hospital-employed physicians would affect EMMC more than any other hospital in Maine.
“There will be damage,” she said. “It is disappointing that this burden continues to be put on hospitals.”
EMMC employs 207 doctors, MacDonald said, and bills MaineCare for about 20 percent of the care it delivers. The hospital is owed about $74 million in overdue MaineCare payments, she said.